Posted at PeaceAndFreedom.org:
Regressive taxes are those which hurt poor people more than they do the rich. Flat taxes, which charge the same percent, are the most regressive.
Income tax in the United States is “graduated.” People who earn less money pay a lower percentage on that amount. As you earn more, you pay a higher percent on the greater amounts of income. The recent tax cuts reduced the percentage of taxes on higher incomes, making the tax flatter.
The social security tax is like a flat income tax, only worse. Everyone pays the same percent tax on the first $90,000 they make. After $90,000, the tax stops. Some people want to continue the tax on income over $90,000 to help fund social security. That is “raising the ceiling.”
The most regressive thing about taxes is that they almost always get money people work hard to earn, but usually miss the wealth people and corporations get just for already being rich.
We all pay sales tax on shoes and clothes, but people with extra money do not pay sales taxes on stocks and bonds. They only pay taxes on the money they make when they sell the stocks. That is the “capital gains” tax. It’s lower than the tax on the money that you work to earn, and has been going still lower since the Clinton administration.
Taxes on the profits corporations make have gone down enormously. Meanwhile, we work harder and produce more, so profits are going up. It makes sense to tax those profits to support the older workers who created them.
This article appeared in issue #20 of the Partisan (April 2005). It was written by Marsha Feinland.
Brian,
My patience has no limits 😉
I do, however, find it interesting that you seem to want to paint me into the corner particular corner I’d have chosen to be in myself if we had been having the argument you seemed to think we were having.
That corner, roughly defined, is the corner from which, when I see claims that a tax is Pigouvian or results in the capture of Pareto or Kaldor-Hicks efficiencies, I will counter that those claims are unprovable due to knowledge problem and/or calculation argument considerations.
Don’t get me wrong, Lake, I’m actually a big fan of your art work:
Thx again for proving my point,
do not hurt your head any more
on the monkey bars or the teeter totter!
So sorry.
I didn’t realize you were having time perception problems.
By the way, did you ever call our complaint department at 1-900-EAT-SHIT?
paulie [put that tube down!]
YOU are the one whom manufactured the [non extistent] complaint/ insult/ gripe!
YOU called me every thing but a white man in a non necessary non needed’reply’!
Not only was as no one implying that you, TPW or IPR were in error! You made it up in YOUR head! Again, you are proving my point [that you are spoiled kindergarten brat!]
I had trouble with the time line, BUT DID NOT BLAME YOU! I merely ‘high lighted the obvious’ which I conclude is a problem FOR YOU!
Lake, have you been sniffing glue?
The CP posted their press release in August, but I didn’t find it until September. If you are having trouble with that timeline, or with expressing your thoughts, don’t try to pin it on me.
Where is your head at ??????
What is your basic problem ??????
No reference, besides in you pea picking brain, was made to paulie, TPW, IPR. It was a general comment, mostly, indirectly pointed at the CP!
Hello, hello, hello !
Thank you for proving my point!
And the good anti Dem and anti GOP Pro American patriots deserve more, they [and I ] are entitled to more than standard Democan and Republicrat clap trap illogic. Like I have said time and time again, kindergarten stuff!
You [see below] first manufacture an insult and then illogically went to town on a [vastly unnecessary] reply.
You keep implying that I am welcomed to put up my key board and leave the fellow ship of the anti Establishment Duopoly! Do the reader ship deserve more than you have given? Does the ‘Get Out of Town’ signage apply to you also?
Again, thx for proving my point!
COMPLETE Replies of Don Lake and pauli whom ever he is: // Sep 17, 2009 at 8:49 am
“Apparently not important enuf to post the same month as the Stop The Cameras rally ……..
[THAT’S IT, IN IT’S ENTIRETY!]
[paulie’s reply:] Don [Lake] is being a pest again.
A) We did another article about it last month, which I linked.
B) The CP does not put their press releases on their front page, unlike most other parties, so I just now saw it.
C) This is not my job. I don’t get paid to write here. It’s a hobby. I do a hell of a lot, and you’ll get what you get.
D) If you don’t like it, you can either
1. Pay me. This would be much appreciated, especially right now, as I am about to run out of money in about a week or so and have no idea what I’m going to do about it. If anyone enjoys my writing and wants to make a contribution to keep me afloat but does not know how to get a hold of me, let me know and I’ll put you in touch.
2. Start your own blog (it’s free), and show us how it should be done.
Of course, critics like Don will probably only bitch from the sidelines.
The results that can lead to are
1. Me responding like this
2. Me not responding at all; not likely due to my advanced case of responditis, but that’s what the complaint actually merits.
or
3. Me writing here less or stopping altogether if it really gets to me at some point – which it almost has a few times.”
More precisely:
Citizens For A Better Veterans Home // Sep 17, 2009 at 4:40 am
Apparently not important enuf to post the same month as the Stop The Cameras rally ……..
Lake,
What you said was something about us not covering it in the same month as the CP’s press release. Don’t get it twisted.
“there are, in fact, likely differences between the qualitative and quantitative burden in any given instance” sounds like “people can have different utility functions”. OK, as promised, I won’t argue with that. 🙂
@ 18, there’s a difference between “finding division” and seeking someone’s help in exposing the weaknesses in your positions. Tom is really good at the latter, and so I end up selfishly testing the limits of his patience.
“September 16th, 2009 · 34 Comments
From CP press release archive, first paragraph slightly rewritten:
The Constitution Party has joined a massive effort to stop the country’s largest (per capita) “spy cam” program in this city of 55,000. A protest [was held on] Saturday, August 29th [See here]. ”
At no point did I mention pauli, TPW, INDEPENDENT Political Report ……
I merely said [sacastically] that if the issue was sooooooooo important, that the [implied: group that has a non veterans veterans group, which claims growth while entire states have had ballot access truncated. Not some less (minor) population states but places like California and Texas] party was lacking in broad casting such IMPORTANT [more sarcasm] news.
Again, not one inference on paulie, TPW, IPR.
ONE of many such responses. Remember, Don Lake is the bad guy, I am the no- good- nik!
Kaldor-Hicks Efficiency
If you go to law school today, you’ll rarely hear the words “justice,” “morality,” or “fairness.” No, the word used most often to assess the legal order is “efficiency.” From the ever-forthcoming William Allen & Reinier Kraakman, Introduction to the Law of Enterprise Organizations:
Pareto reasoned that a given distribution of resources is efficient when and only when resources are distributed in such a way (within a different group or territory) that no reallocation can make at least one person better off, while leaving no person worse off.
Economists refer to this hypothetical state as Pareto Efficient or a Pareto Optimal state…
[This is] a difficult definition to use in non-theoretical settings. Another definition of efficiency loosens the constraint of this condition. Two English economists, Nicholas Kaldor and John R. Hicks, each addressed the problem of externalizations in their conception of efficiency…………
Lake,
I do? When/where?
Tom: paulie does the same thing
finding fault where there is none,
finding division where there is none,
finding agument where there is none
creating injury where there is none.
Brian,
You’re not seeing a rebuttal or a defense because I’m not in an argument.
– I AGREED with you, contra Friedland, that the term “regressive” should be applied only to taxes which quantitatively impose a greater relative burden on the lower, rather than higher, end of the scale of that which is being taxed.
– One basis for that agreement was to avoid language which is CONFUSING by sticking with the commonly understood meaning of the terms “progressive” and “regressive.”
– Another basis for that agreement was that Friedland’s implicit qualitative argument represents insuperable calculation problems when applied beyond an extremely small scale on which the utility functions of all taxpayers could conceivably be known.
If you want to keep yourself wrapped around the axle over the fact that I noted that there are, in fact, likely differences between the qualitative and quantitative burden in any given instance, well, enjoy yourself. But please don’t do so under the misimpression that you’ve been arguing with anyone other than yourself.
Tom, I’m still not seeing your rebuttal to my point about a one-penny tax. Your hypothetical defended a logic that could classify all taxes as regressive (if it classifies any of them as regressive). Yes, you followed it up with a hypothetical showing that a hardcore Austrian shouldn’t call any tax qualitatively regressive, due to the All-Obscuring Cloud of Calculatory Ignorance, and perhaps that’s how you think you’ve rebutted my penny argument. But since that rebuttal doesn’t rescue Friedland’s claim that a flat tax is regressive, I’d be happy to drop the subject there.
Paulie, I plead guilty to sometimes using names for concepts instead of explaining them. (Technically, any language user is always guilty of that practice, with pretty much every word they utter.) But it’s pretty easy to tell when a term I’ve used causes a chache miss in one’s vocabulary, and it’s easy to go look them up. (I had to go check and make sure I meant Kaldor-Hicks rather than Pareto, I confess.) If there is a Knappipedia somewhere that can tell me what Tom is trying to defend based on the defenses he actually offers, I’ll happily go do the lookups myself. 🙂
Brian,
You write:
“Tom, is anything you wrote supposed to rebut — or even disagree with — where I said ‘[your] logic defines all taxes as regressive?'”
Everything I wrote did rebut your claim that my logic defines all taxes as regressive.
All I did was point out that your claim that “A flat tax imposes the same burden (relative to resources) on the poor as on the rich” while quantitatively true, may not be be qualitatively true in all circumstances.
I then agreed that the term “regressive” is best applied to quantitative burdens in the way you specify, as it would be confusing (likely even impossible) to find a way to apply it to qualitative burdens beyond a very small scale (i.e. two people with known utility functions).
“You said that something I wrote is ‘open to dispute,’ but if your point is just that people can have different utility functions, then I don’t think you’ll find anyone willing to dispute that.”
My point was not that different people have different utility functions. It was that the existence of differing utility functions militates against an all-encompassing claim of “equality of burden (relative to resources),” and was intended as a suggestion that you be more specific in the claim.
I think you may have become over-sensitized — I’ve noticed that recently it has become impossible to agree with you outside the scope of “what Brian said — EXACTLY what Brian said” without you assuming that a fight is being picked.
“I was disagreeing with your apparent statement that ‘qualitatively dissimilar’ impacts of a flat tax can mean that it’s defensible to consider ‘regressive tax’ as a synonym for ‘tax.'”
In other words, you were disagreeing with a hallucination. I made no such statement, “apparently” or otherwise.
“I stand by my implicit claim that to defend Feinland’s regressivity definition is to defend the calculating policy implications that follow from the widespread use of progressive/regressive as normative terms rather than merely positive.”
And I heartily agree with that claim.
“Readers here can judge for themselves whether it was reasonable to read you as offering a defense of her definition.”
Yes, they can.
If I mis-read you, then you might consider dumbing down your writing style so people like me can understand you.
LOL. Good one. You may both want to consider that even most readers here have probably never heard of “Kaldor-Hicks efficiency,” much less have any idea what it means.
I don’t even believe there is such a place as Austrian Hell — at least, not outside Alabama.
No, that’s Austrian Heaven.
Even if Cheaha isn’t quite the Alps.
Tom, is anything you wrote supposed to rebut — or even disagree with — where I said “[your] logic defines all taxes as regressive”? You said that something I wrote is “open to dispute”, but if your point is just that people can have different utility functions, then I don’t think you’ll find anyone willing to dispute that. I was disagreeing with your apparent statement that “qualitatively dissimilar” impacts of a flat tax can mean that it’s defensible to consider “regressive tax” as a synonym for “tax”. I don’t consider that merely “unduly confusing”; I just consider it illiterate — i.e. the writer is simply unschooled in the linguistic community whose language she’s trying to use.
I was just teasing you about Austrian Hell — I know you know better than to actually try to defend the implications of the position that you elaborately claimed was defensible right before you said it was “unduly confusing”. “In point of fact”, I don’t even believe there is such a place as Austrian Hell — at least, not outside Alabama.
I stand by my implicit claim that to defend Feinland’s regressivity definition is to defend the calculating policy implications that follow from the widespread use of progressive/regressive as normative terms rather than merely positive. Readers here can judge for themselves whether it was reasonable to read you as offering a defense of her definition. If I mis-read you, then you might consider dumbing down your writing style so people like me can understand you.
Oops — I omitted a final response.
Holtz: “the canonical leftist response here is to point out the declining marginal utility of money — i.e. that a marginal dollar has more utility for a pauper than for Bill Gates. But if you grant this insight to be politically actionable, you are vulnerable to arguments that wealth and income redistribution can be Kaldor-Hicks efficient.”
Knapp: I don’t grant it to be politically actionable in the sense implied. I’ve seen no reason to believe that it’s possible to accurately calculate utility functions across a large population, or to measure whether or not the alleged efficiencies are actually achieved, with sufficient granularity to make Pareto or Kaldor-Hicks efficiencies relevant.
I do, however, consider marginal utility as a general principle to be politically useful.
Brian,
As is so often necessary, I’ll remind you that it’s probably better to respond to what I wrote rather than to what you imagine I wrote or to what you wish I had written.
Holtz: “that logic defines all taxes as regressive”
Knapp: Which part of “I do agree that using ‘regressivity’ versus ‘progressivity’ to describe the phenomenon of disparate qualitative effect is unduly confusing” did you not understand?
Holtz: “And of course, you’re now doomed to Austrian Hell for daring to ‘calculate’ that the poor mom values a non-starving baby more than the rich mom values the $86 bottle of perfume in her shopping cart that she now cannot buy.”
I made no such calculation. In point of fact, I did not even address the valuations the women placed on the item(s) in their carts at all. I simply pointed out that quantitatively similar actions can have quantitatively dissimilar effects.
In point of fact, it was precisely the calculation argument that I had in mind when I stated my aversion to referring to quantitatively neutral taxation as “regressive.” There’s no mechanism for calculating the qualitative effects over a large population.
Perhaps the lady who was taxed 50 cents doesn’t give a damn about her baby and stick it in the corner, let it starve, and take her $4.50 over to the liquor store for a cheap bottle of vodka.
Perhaps the lady who was taxed $10 had planned to donate that particular $10 to cancer research, and perhaps her $10 would have been the amount that put said research over the threshold for finding a cure.
While your tendency to elaborate specific statements of fact (“same burden [relative to resources] may be quantitatively true, but is not necessarily qualitatively true”) into claims that were neither made nor implied by the person stating them sometimes produces interesting results, it’s also a persistence in fallacy on your part.
Tom, that logic defines all taxes as regressive. If a tax takes away 99% of Bill Gates’ billions, but only takes a penny away from a mom spending her last $5 on baby formula, then you could call the tax “regressive”.
And of course, you’re now doomed to Austrian Hell for daring to “calculate” that the poor mom values a non-starving baby more than the rich mom values the $86 bottle of perfume in her shopping cart that she now cannot buy. As a good Austrian, you should know that it is verboten to make interpersonal comparisons of utility here unless the two moms start trading perfume and baby formula on the spot.
No, the canonical leftist response here is to point out the declining marginal utility of money — i.e. that a marginal dollar has more utility for a pauper than for Bill Gates. But if you grant this insight to be politically actionable, you are vulnerable to arguments that wealth and income redistribution can be Kaldor-Hicks efficient.
Mike Seebeck … I thought I was the only one that calls George Snufalufagus. LOL
Most flat tax schemes I’ve seen exclude X amount from taxation. Therefore, the flat tax is progressive in the sense that the effective rate increases with income….
Brian,
You write: “A flat tax imposes the same burden (relative to resources) on the poor as on the rich.”
That’s quantitatively true. Whether or not it’s qualitatively true is very much open to dispute.
Hypothetical:
Two women, with babes in arms, are standing in the checkout line at the grocery store with baby formula in their carts. The cost of the formula is $5.
The tax collector makes a snap visit to the store to collect the new 10% “flat tax” on current cash holdings.
One lady has $100 in her purse. The tax collector takes $10 from her.
The other lady has $5 in her purse. The tax collector takes 50 cents from her.
The burden is quantitatively similar (each woman paid 10% tax).
Qualitatively, however, the burden is very dissimilar. One woman checks out with her formula, the other one goes home with a starving baby.
I do agree that using “regressivity” versus “progressivity” to describe the phenomenon of disparate qualitative effect is unduly confusing, though. If “progressive” is to be used to indicate a rate that increases as income increases, then “regressive” should be used to indicate a rate that decreases as income increases — such as with Social Security taxes (where the rate decreases to zero above a set income cap), or Wayne Allyn Root’s income tax proposal (which he inexplicably mislabels as “flat,” even though it has two rates, a higher one for lower incomes and a lower one for higher incomes).
A flat tax imposes the same burden (relative to resources) on the poor as on the rich. A 10% flat tax takes a dime away from each dollar you make, no matter how many dollars you make.
A troll starving himself — that sight alone would be worth the price of admission here.
Wow, talk about taking things out of context.
The line following the Wikipedia definition Mr. Holtz himself cites is: ” In simple terms, a regressive tax imposes a greater burden (relative to resources) on the poor than on the rich”.
This is entirely consistent with Ms Feinland’s usage and in no way ‘flagrantly redefines’ regressive tax.
I should just take my own advice and stop feeding the trolls.
Uh, they’re revisiting an article from 2005 why?
All taxes are regressive, and none are progressive, plain and simple.
Hell, even George Snufalufagus, in a rare moment of clarity, got taxes right while interviewing the ACORN-in-Chief this weekend (read: Chief Nut).
There’s no sales tax on houses, either. Marsha apparently doesn’t know the difference between taxing sales and taxing investment. She also flagrantly redefines “regressive tax”, which even Wikipedia knows is “a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases.”
Social Security and Medicare payroll “contributions” aren’t supposed to be considered a tax, according to nanny-state dogma. What kind of an “insurance” policy is priced according to an uncapped fraction of your income? Answer: the government kind.
End all taxes on peaceful labor, clean production, and voluntary exchanges. Tax only landholding and resource pollution/depletion/congestion.
Don’t feed the ….. oh wait, never mind.