ManusJustus said:
HappySqurriel said:
The free market will protect people with valued skills that are in demand, but these tend to be people who are not being "protected" by a progressive tax system anyways. While not all engineers and software developers are high earners for their field, they tend to be in the top 25% of income earners and (generally speaking) pay a proportionate percentage of tax gathered.
Its the bottom 50% that suffer because their skillset is not rare or valued, and when enough people are laid off because of companies cutting costs to recover money to pay increased taxes, the company they work for has a lot of power to adjust their income as they see fit.
Now, when taxes are low enough that companies thrive and unemployment is low the low wage earners have far more power to demand more equatible incomes because the companies cannot operate without their work. The reason a flat tax helps with this is that when 100% of people become aware that they have a stake in the total tax rate there is an increased focus on controlling unnecessary spending.
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Your argument is full of logical fallacies and assumptions.
First of all, the tax system has little to nothing to do with people's perception of government spending. Even so, your argument suggests that poor people will care more about government spending when they are taxed more, and that rich people will care less about government spending because they pay less taxes. I really dont see how this huge assumption works to validate your argument.
Secondly, you assume that when poor people are taxed more they will become more powerful and able to demand more wages. That is not true at all, their wages will still be decided by the free market, and labor supply and demand will still be decided by the free market.
Thirdly, you assume that business will be better because rich people pay less taxes and poor people pay more. Its true that rich people will have more money to spend, but for every extra dollar they get poor people get a dollar less. Poor people participate in the economy just as much as rich people, and the only difference betweeen ten poor people buying $100 in groceries and a rich person buying a $1000 chair is what type of good was purchased. If anything, the effect of giving rich people more money and poor people less would be a change in demand of types goods, which would have a negative short-term effect on the economy and no long-term net gain.
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Do you have problems with understanding someones argument and responding to it appropriately? What is so hard to understand about this:
"when taxes are low enough that companies thrive and unemployment is low the low wage earners have far more power to demand more equatible incomes because the companies cannot operate without their work."
In what way did I say that increasing taxes on anyone increased their power?
Beyond that, if I take you (or anyone) out to dinner and I pay the full bill are you more or less motivated to keep the bill at a reasonable cost than if you are expected to pay a portion of the bill? If you insist on always increasing taxes on the top 5% of income earners to what extent do 95% of people have on keeping control on government spending?
Finally, the economy is not better when you shift the tax burden around (because, regardless of who you tax only those who don't have the ability to pass the cost of the tax on are the ones who pay) the economy is better when the tax burden of everyone is minimalized to only cover the services that the government can provide more efficiently than the private sector.
Why can't people look at Seattle spending $165,467,625 for every mile of their light rail transit system, and the Canadian government going 10,000% over budget on their gun registry system, and the hundreds of other examples of government waste that are reported every year and start to realize that the government "loses" more money than it spends efficiently when they undertake a project. Why wouldn't we leave the money in the hands of people who would (probably) cancel a project if it starts to cost more than double what any experienced external contractor would have charged to complete the project?