I think you read his post wrong Akuma.

He is saying that everyone with money generates it off the poor and middle class. If you raise there taxes, they will just raise the cost of there goods and services to offload the expense to the middle class and the poor.

He was saying it because he thinks the rich are not "kind, benevolent, and pass along every extra dollar they can to those beneath them".

Replace the beverage with water and change the setting to a desert. Now do it again.

If you did that, in most of the world, the 6 people who can pay would just kill the 4 that couldn't.

Its a microcosm. Because the beverage is beer, then its assuming that the person could do without i.e. a luxury. If its a necessity then it changes the dynamic, doesn't it?

My response was kind of a joke.

To make more of an on point response, if you changed it to water, all of them can afford it. The right way to do it, is government (the bar), should only provide the people what is required from government (in this case, water). If they did that, everyone could afford to pay for it.

The problem, imo, is we just do way to much as a government. We didn't even have permanent income tax until 1913. We had it in a little to pay for wars off and on from 1862 to 1895, but in 1895 it was deemed unconstitutional.

When it did come back in 1913, the tax rate for most Americans was 1%. Today it's over 20 times that.

So in this example, everyone should be provided water at a price then can afford (flat tax), and if you want beer, your on your own (non government provided resource).

Is that what the progressive taxation is like in the USA? that extreme

Huh, I thought it was more like the UK where it is progressive but only by a margin of perhaps 18% between the wealthy and the poor.

As TheRealMafoo pointed out I think you misread the post ...

A progressive taxation system only works if you make the assumption that wealthy people have no ability to pass their costs onto someone else, or that they're kind and benevolent and are willing to take the losses for the greater good. While that may be true in a couple of isolated cases, wealthy people generally have far greater control over their companies payroll and what they charge other people for their product; and they will manipulate these things in order to maintain their standard of living.

In contrast, the peon in Sector 7-G has no (real) ability to dictate their own wages and has no way to pass increased costs along to anyone else; so when they get a 2% pay increase in a year (rather than the 4% they would have gotten otherwise) and the cost of everything they buy goes up by 6% (rather than the 4% it would have gone up otherwise) they're the ones who are paying the tax increase on the wealthy.

Win.

That's the way it works everywhere. What this points out, is when cut taxes, there are two ways of looking at it. One is the percentage rate you cut, and one is the pure dollar savings. People look at the pure dollar savings when talking about unjust cuts.

So for example, in the US, the top 1% pay 25% of US taxes, while the bottom 50% pay 3% of them. This is not because the tax rate is so much higher for the rich, it's because the rich have so much more money.

If you cut the rich tax rate by 10%, and the poor by 50% (5 times the cut), the rich will see a lot more savings, as 50% of 3% is 1.5% real dollars saved, and 10% of 25% is 2.5%