iKotomi
[10] Knight
You do realize that even though you are taxed more, because you have more income, you are able to save a larger percentage of your income after taxes? The idea behind the progressive tax is that the marginal utility of an additional dollar is much higher for a poor person than a rich person, since regardless of income, there is a fixed amount of consumption that is necessary to live.
Should a person that spends 30% of his income on necessities pay the same percentage of his income in taxes as a person who spends 5% of his income on necessities (not because he's spending less, but he's earning more)? The richer person may pay more in nominal value, but the poor person pays more in relative value of his money. If you study economics at all, the first thing you need to understand is the fact that relative valules are much more important than nominal values. To me it seems the most fair when the relative value of the last dollar a person has paid in taxes is equal across income brackets, and that so happens to require a progressive system due to its relationship with nominal values.
Should a person that spends 30% of his income on necessities pay the same percentage of his income in taxes as a person who spends 5% of his income on necessities (not because he's spending less, but he's earning more)? The richer person may pay more in nominal value, but the poor person pays more in relative value of his money. If you study economics at all, the first thing you need to understand is the fact that relative valules are much more important than nominal values. To me it seems the most fair when the relative value of the last dollar a person has paid in taxes is equal across income brackets, and that so happens to require a progressive system due to its relationship with nominal values.
