Principles of fairness in Taxation
We just saw a parody of tax "reform" in the Republican's Tax bill in 2017. Anyone can call anything "reform." But to be actual reform one has to be applying strategies that minimize public misery and optimize the public good. If we want to avoid corruption, we need to define what the parameters (boundaries & rules) of tax reform are about.
- Taxes should encourage actual capital investment*,
- Facility or Ability to Pay, be affordable to the ones paying them,
- regulate behavior, (encourage beneficial spending/discourage waste, fraud and harmful behavior)
- not hurt people.
Additionally Taxation must take into account:
- Progressive Versus Regressive taxes
- Shiftability and Incidence, who ultimately pays a tax.
- Earned versus unearned income
- Privilege versus Compensation
- Wealth Versus Actual Capital
- Ability to Pay versus Fee For Service
- Natures Tax Collectors or Rent Seekers
If they meet those criteria then one can say they are fair. Once we understand these principles we can debate the details and come up with a tax system that is fair and sustainable. When taxes don't meet those criteria they are oppressive.
Sources and Further Readings
- Disambiguating Actual Capital From Simple Wealth and The Trouble with Capitalism
- Critiquing PikettyCapital Versus Unearned Wealth
- Facility Versus Ability to Pay
- Henry George Quotes:
- Rick's pages:
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