Is it ethical to make rich pay more taxes?

by Lore 98 Replies latest jw friends

  • Lore
    Lore

    I'm having trouble getting behind the idea of making rich people pay more taxes just because they HAVE more.

    Aside from the obvious: "I'm not rich so lets tax them instead of me." The three reasons I hear most often are:

    1: They may have "earned" their wealth but they don't deserve it!

    2: The taxes fund government programs which benefit rich people more than poor people like roads and military.

    3: If we don't tax them more then they'll get too powerful.

    Here's why I don't like those reasons:

    1:They don't deserve the money they earned.

    This is not so much a reason TO tax them so much as it is an excuse why it's ok.

    How to you objectively tell whether someone 'deserves' what they own? Who deserves their money more:

    The president of a huge company who went to business school for several years, worked his way to the top, hired the best and the brightest and employs thousands of people

    Or the the pizza delivery boy working for $6 and hour plus rare tips who always holds the pizza crooked so the cheese spills to one side and never delivers in 30 mins or less?

    You might argue that the wealthy are just luckier than average people and so because it all comes down to dumb luck we should feel free to charge more successful people.
    Well that's stupid. Luck might have something to do with it. And sometimes it might have a LOT to do with it. The second daughter of a family in china is probably gonna end up not being as wealthy as the only son of a U.S congressman.

    But even if we grant that getting your wealth through luck makes you less entitled to it, that doesn't mean that EVERY wealthy person is just lucky.

    In addition, luck isn't everything. 1 in 3 Lottery winners go broke again within 5 years. . . Just because they suck at handling money.

    Being wealthy requires some kind of skill, why don't they deserve what that skill earns them?

    2: The taxes fund government programs which benefit rich people more than poor people like roads and military.

    Lets take the military defense as an example. An illustration I've heard is that if you are poor it costs less to insure your stuff than if you're wealthy. So since the military protects MORE of your stuff than mine, then you should pay more for the military.

    This is absurd.

    First of all the military is not an insurance company. If a terrorist gets by the military and blows up Bill Gates house, the military isn't going to pay to fix it, maybe his insurance company will (which he pays more for by the way) but the military doesn't protect him more than it protects Pizza Guy Bob in New York. So if Gates gets the same protection as Bob from the military, then why should he pay more for it?

    If I have a $3,000 care and it's insured for $2,000. And my neighbor has a $50,000 car and it's insured for $2,000. Then it doesn't matter WHAT his car is worth or that he has more to protect, he still shouldn't have to pay more for insurance.

    Rich people get the SAME military protections as poor people. So rich people shouldn't have to pay more for it, even if they have more to protect.

    3: If we don't tax them more then they'll get too powerful.

    That might be true. But without the possibility of world domination, what do I have to strive for? I may as well give up now. Go have 10 kids, quit my job and live off the pity of others for the rest of my life. . .

    Seriously though, what does it mean to be 'too powerful' ? Even if youre a super billionaire it's still illegal to build a nuclear missile or raise an army of mutant clones. If it just means having the financial clout to get stuff done the way you want then I posit that we NEED super rich people for this stuff. Google is 'to powerful' in a lot of ways. But without them who would pay for an armada of google cars to take street view pictures of everything? Or who would pay for robot car research? We need really rich people to get stuff done that a lot of little average people couldn't do on their own. All these reasons for taxing rich people much more than average people seem to fall pretty flat. Am I missing a major factor? Or do we all just selfishly agree to steel money from people who earned it because we don't wanna pay anything or cut spending ourselves?
  • sir82
    sir82

    I don't think any of your 3 reasons make much sense, so of course it's easy to knock those ideas down.

    How about this simple reason: The wealthy should pay more in taxes because they have more money.

    It doesn't make much sense to expect, say, $250,000 in taxes from someone who earns $15,000 in a year.

  • SixofNine
    SixofNine

    lol, you game out that society and get back with us when you have the math working ;)

  • NomadSoul
    NomadSoul

    I'm on the line on this one. Just because if I was rich I wouldn't want to be paying more percentage of taxes just because I was smart enough to make more. But since I'm not I do like the idea. lol

  • ProdigalSon
    ProdigalSon

    If the big corporations, especially the ones like Exxon-Mobil, paid their share of taxes, none of us would have to.

  • james_woods
    james_woods

    Of course the rich have to pay more taxes - as was said, they have more money. Even under a completely fair flat tax, they would obviously pay more taxes.

    The ethical question here (I think) is this: Is it ethical for the bottom 50% or so of society to be required to pay NO TAXES?

    Another ethical question is whether it is legitimate to constantly demonize the rich with class-warfare statements.

  • Lore
    Lore

    Sir82: OK I may have not been clear. If the taxes are based on a percentage rather than a set dollar amount, then this issue doesn't happen.
    Rich guy buys a 2 million dollar house and pays 5% tax.
    Poor guy buys a 60 thousand dollar house and pays 5% tax.

    They are paying the same percentage, which seems fair to me. But the idea with the latest tax reforms is to charge them a higher tax RATE. A higher tax RATE means a higher percentage of their total earnings. So while a normal guy might pay 25% of his profit per year as taxes. A rich guy might have to pay 50% or even 91% like in 1946. . . that's just absurd!

    Sixofnine: Very well thought-out response. I see you've done your research and your opinion CLEARLY isn't being influenced by a selfish desire to pay less taxes. . .

    Nomad: I think that's the crux of it. Everyone realizes it's not really FAIR to take money from successful people just because they're successful. But they'll vote to charge them more anyway, cause it's either that or we have to pay more ourselves.

    Everyone seems to talk about rich people with disdain and acts like we are somehow ENTITLED to take their money. . . as if, by virtue of being poor we deserve to take from wealthy people without any other justification.

  • botchtowersociety
    botchtowersociety

    If the big corporations, especially the ones like Exxon-Mobil, paid their share of taxes, none of us would have to.

    Corporate taxes are stupid and should be eliminated. Corporate profits get passed on to employees and shareholders, which all pay income and capital gains taxes. Corporate taxes are treated as a cost of doing business. The cost only gets passed on to the consumer in the form of higher prices.

    We have the highest statutory corporate tax rates in the industrialized world. This chart is somewhat out of date (from 2008), because Japan has lowered its rate. The US is now the highest in developed, wealthy nations.

    Comparing U.S. State Corporate Taxes to the OECD

    OECD Overall Rank

    Country/State

    Federal Rate Adjusted

    Top StateCorporate Tax Rate

    Combined Federal and State Rate (Adjusted) (a)

    Iowa

    35

    12

    41.6

    Pennsylvania

    35

    9.99

    41.5

    Minnesota

    35

    9.8

    41.4

    Massachusetts

    35

    9.5

    41.2

    Alaska

    35

    9.4

    41.1

    New Jersey

    35

    9.36

    41.1

    Rhode Island

    35

    9

    40.9

    West Virginia

    35

    9

    40.9

    Maine

    35

    8.93

    40.8

    Vermont

    35

    8.9

    40.8

    California

    35

    8.84

    40.7

    Delaware

    35

    8.7

    40.7

    Indiana

    35

    8.5

    40.5

    New Hampshire

    35

    8.5

    40.5

    Wisconsin

    35

    7.9

    40.1

    Nebraska

    35

    7.81

    40.1

    Idaho

    35

    7.6

    39.9

    New Mexico

    35

    7.6

    39.9

    Connecticut

    35

    7.5

    39.9

    New York

    35

    7.5

    39.9

    Kansas

    35

    7.35

    39.8

    Illinois

    35

    7.3

    39.7

    Maryland

    35

    7

    39.6

    North Dakota

    35

    7

    39.6

    1

    Japan

    30

    11.56

    39.54

    Arizona

    35

    6.968

    39.5

    North Carolina

    35

    6.9

    39.5

    Montana

    35

    6.75

    39.4

    Oregon

    35

    6.6

    39.3

    2

    United States

    35

    6.57

    39.27

    Arkansas

    35

    6.5

    39.2

    Tennessee

    35

    6.5

    39.2

    *Washington

    35

    6.4

    39.2

    Hawaii

    35

    6.4

    39.2

    3

    Germany

    26.38

    17.0

    38.9

    *Michigan

    35

    6

    38.9

    Georgia

    35

    6

    38.9

    Kentucky

    35

    6

    38.9

    Oklahoma

    35

    6

    38.9

    Virginia

    35

    6

    38.9

    Florida

    35

    5.5

    38.6

    Louisiana35838.5
    Missouri356.2538.4

    Ohio

    35

    5.1

    38.3

    Mississippi

    35

    5

    38.3

    South Carolina

    35

    5

    38.3

    Utah

    35

    5

    38.3

    Colorado

    35

    4.63

    38.0

    Alabama356.537.8

    4

    Canada

    22.1

    14

    36.1

    *Texas

    35

    1.6

    36.0

    Nevada

    35

    0

    35.0

    South Dakota

    35

    0

    35.0

    Wyoming

    35

    0

    35.0

    5

    France

    34.43

    0

    34.4

    6

    Belgium

    33.99

    0

    33.99

    7

    Italy

    33

    0

    33

    8

    New Zealand

    33

    0

    33

    9

    Spain

    32.5

    0

    32.5

    10

    Luxembourg

    22.88

    7.5

    30.38

    11

    Australia

    30

    0

    30

    12

    United Kingdom

    30

    0

    30

    13

    Mexico

    28

    0

    28

    14

    Norway

    28

    0

    28

    15

    Sweden

    28

    0

    28

    16

    Korea

    25

    2.5

    27.5

    17

    Portugal

    25

    1.5

    26.5

    18

    Finland

    26

    0

    26

    19

    Netherlands

    25.5

    0

    25.5

    20

    Austria

    25

    0

    25

    21

    Denmark

    25

    0

    25

    22

    Greece

    25

    0

    25

    23

    Czech Republic

    24

    0

    24

    24

    Switzerland

    8.50

    14.64

    21.32

    25

    Hungary

    20

    0

    20

    26

    Turkey

    20

    0

    20

    27

    Poland

    19

    0

    19

    28

    Slovak Republic

    19

    0

    19

    29

    Iceland

    18

    0

    18

    30

    Ireland

    12.5

    0

    12.5

    *Michigan, Texas and Washington have gross receipts taxes rather than traditional corporate income taxes. For comparison purposes, we converted the gross receipts taxes into an effective CIT rate. See footnote 2 for methodology.

    (a) Combined rate adjusted for federal deduction of state taxes paid

    Source: OECD, http://www.oecd.org/dataoecd/26/56/33717459.xls

    http://www.taxfoundation.org/news/show/22917.html

    And if you argue that "well, loopholes and so on" make the real rates lower, well, even accounting for that, we still have some of the highest effective rates on new investment (which is what creates economic growth) in the industrialized world (and not so industrialized) after adding that in.

    http://taxprof.typepad.com/taxprof_blog/2011/02/us-effective.html

    U.S. Effective Corporate Rate Highest in the OECD

    OECD average. The U.S. rate is also higher than the average rate in the G-7 nations, and is much higher than the average rate in our full sample of 80 countries.

    The high U.S. effective tax rate is the result of a high federal statutory rate of 35 percent plus state-level corporate income tax rates. In addition, state and local sales and asset-based taxes on capital add to the tax burden on new investment. The latter taxes add about 7 percentage points to the U.S. effective rate, but only about 2 percentage points to the effective rate in other countries.

    http://online.wsj.com/article/SB10001424052748704635204575242241281902852.html

  • THE GLADIATOR
    THE GLADIATOR

    In my humble opinion - rich people should pay the same rate of tax as everybody else. The government acts as if it owns peoples income and gives back enough for them to live on. The money belongs to those that earn it. The rich also spend more and so incur more tax.

    Plundering peoples earnings to compensate for the greed and corruption in politics and banking is theft. Most taxes come from ordinary working people because there are so many of them. If this tax raid goes on people will be no better off than communists, making people work for nothing while paying their utility bills and giving them pocket money.

  • SixofNine
    SixofNine

    I'm curious Lore, why do you think Adam Smith disagreed with you? Did he just not have a well developed sense of "fairness"?

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