We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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Taxation and theft A nice analogy from the inestimable Tim Blair, posting temporarily on Tim Dunlop’s blog due to an outage at his own.
High-income earners pay a higher rate of tax than people on low incomes. So why is it unfair, as Kim Beazley argues, that high-income earners receive a larger tax cut?
An analogy: your house and your neighbour’s house are both burgled. You lose a television. He loses a DVD player, microwave, his collection of Chomsky memorabilia (it’s an inner-city house), and a unique framed Leunig depicting Mr Curly’s pedophilia arrest. Would it be unfair if police were to return all of this fellow’s belongings, and you were only to get back your 24-inch Sony?
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We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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Just in case anyone’s wondering “who the hell is that”?
Tim Dunlop – an Australian lefty blogger. Tim Blair and Tim Dunlop are a true odd couple. Whenever one’s blog goes down, he migrates to the other’s for the time being and starts posting a bunch of stuff that sends the politically diametrically opposed commentariat bonkers. Think of Anti-Idiotarian Rottweiler posting on DailyKos – you pretty much have it.
Kim Beazley – Labor Party leader, leader of the opposition in Australian Federal Parliament. Mate of Tony Blair. Got shitty about the nature of the tax cuts handed down in the recent Oz budget because of the greater nominal amount of tax relief granted to higher income earners.
Leunig – Michael Leunig, an irritating lefty cartoonist in one of the large Melbourne daily papers. Recently caused a stir in an article he wrote “commemorating” ANZAC day, where he wondered why we honour the ANZACs – in fact, he wondered what sort of person would volunteer to go to war. It was very inappropriate for ANZAC day.
Mr Curly – a cutesy character Leunig created who appears in many of his cartoons. I’m assuming Curly is supposed to be some kind of pretentious moral sentinel.
To give you some more perspective on Leunig – the man, I just culled this from his website:
Yep, he’s a tosser all right.
Not so much “unfair” as “surprising that anyone got anything back when the police were involved”, I think…
.david – You beat me to it. I was going to say it would be astonishing.
Of course it’s logical that the higher brackets should get a bigger cut if it is a percentage across the board.
But there are people who want progressive taxes in the first place, so they want “those who have too much” to pay more, and it is illogical to them the cut “the rich’s” taxes pro-ratedly, if at all. They want them to pay more, and even more yet. That’s the way socialists have always been. Also, they don’t quite think that it is stealing, so a refund certainly doesn’t have to be fair. We expect a linear reduction when the whole affair is based on feel-goodism anyway?
And, for the millionth time, people spend too much time on the tax side of the equation, griping, nipping, tucking, flat-taxing, etc etc etc, when the problem is SPENDING. All the rhetoric in the world doesn’t accomplish much if the spenders can just borrow.
Which leads to a third problem, one that has grown quite a bit the last few decades, and that is stealth taxes via regulation. Every dime cut from the upper end ends up being placed right back on the shoulders of the ‘haves’ via anti-market interventions in health care and insurance etc.
In my estimation, having the upper brackets concentrate on this sort of bickering is precisely what the bureaucrats want as they engage in more subtle engineering of the economic landscape. Give’em a few more bucks that they can put in pocket 1 only to fall out of the hole in pocket 2, plus a few of its friends.
safe to assume “isfma” meant this ironically.
Verity said:
Well, you said it a lot more eloqently 🙂
I’m not really awake at 7.20AM.
It’s not the job of the state to make things fair, though, is it?
I think Perry said on this site that the most important safeguard on liberty is people having a general expectation that they should be free. Therefore, I think it would move liberty forward more to have as few people paying taxes as possible. Calculating taxes on basis of fairness is a form of planning, no?
I believe there’s also evidence (from Cato?) that high taxes on “the rich” generate pressure for cutting the size of government. I don’t know if the effect is the same at the other end of the income scale.
I don’t think the ‘to make people think, you must make them pay’ applies to the tax system, as taxation is not a market transaction and so not really a “payment”.
Kit,
I don’t know if you were responding to me or not, but I agree, all I was saying is that those who wish to have progressive taxes aren’t going to be persuaded by the argument that reductions in taxes should be linear over the whole tax base, and therefore, logically, those who pay more initially are going to save more after a reduction.
And second, the issue isn’t just taxes, it is spending. I guess if one assumes that the government will just default on its obligations in the future, and that it is just a matter of cash flow at a specific time, then lower taxes is good. But governments (like the US) aren’t in the habit of defaulting, they merely play with money and the cost of credit and inflation and market regulation so that there is de facto taxation/redistribution and the theft of savings.
I worry less about taxation than I do about spending, and future promises to spend, that lead the masses to make all sorts of misallocations of their resources. Current taxation is only a mild manifestation of a broader collectivist sickness, and we need to concentrate more on the harsher manifestations first. Topsy-turvy markets and blind allocations of resources are going to come back and bite us in the ass to greater degree than if I’m paying a marginal rate of 35% or 39% next year. The money I ‘save’ will simply be hijacked later through some other more subtle means. That, and much more, unless the socialist mindset as whole is turned back.
Kit, I think that limiting the tax-paying class to the fewest number of citizens, as you suggest, is profoundly anti-liberty, because it insulates the vast majority of citizens from any responsibility for funding the government that they vote into office.
The more people pay taxes, and the more painful those taxes are to pay, the more pressure there will be to reduce taxation, and that is a good thing. Things like progressive taxation, payroll deduction, and the like are bad because they make taxes invisible and/or nonexistent for large classes of voters, leaving those voters with no reason not to vote for taxnspend politicians.
Toolkien is, of course, right – we need to be hammering down spending as our first priority, because whatever the government spends is paid for by taxes, whether now or later.