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      02-10-2012, 06:20 PM   #102

Drives: M3
Join Date: Jul 2010
Location: sitting down, facing the keyboard

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Taxes exist to fund governmental activities, from building bridges to paying firefighters and teachers, etc.

These expenses are paid for in absolute dollars. Not relative percentages. It costs x dollars to build a bridge or pay a teacher for a period of time, or whatever.

I am not a member of the 1%. My boss is. When we both drive across the same bridge, we are both enjoying the same value of that service. Due to the tax structure, he pays more in absolute dollars than I do. So, he has in effect paid for a bigger piece of that bridge than I have. Depending on how clever his accountant is, his net effective tax rate may be less than mine, but I know that the total dollars he pays is more than me. Since the price of the bridge does not change depending on the tax rate paid by those who drive across it, that proves that he has paid for more of that bridge than I have.

I can also assure you that he does not enjoy more value from that bridge than I do, despite the fact that he paid more than me for the right to use it. To get to the same point on the other side, he saves the same number of minutes as I do, compared to driving around. Therefore, the cost he pays per minute to enjoy that extra "free" time is higher than what I pay.

I suppose I could argue that his rate should increase even further, so that difference between his cost per minute and my cost per minute is even greater, if I were interested in some naive form of "social justice" or "class fairness".

However, at some point he would probably come to the conclusion that the gap in cost to him, compared to the gap in benefit (which is nothing), is too much to grin and bear it, and would start to look for other opportunities elsewhere. The economy is global, just ask anyone whose job has moved overseas. Do you really want to give those in power another incentive to shift things even more? Do you really think the financial acumen of the 1%ers is such that their understanding of the laffer curve will be trumped by some idealistic desire to enforce some kind of social equality?

Note: I'm not asking if you think they SHOULD act that way, I'm asking if you think they WILL act that way. For every Warren Buffet there are many others who are notably silent regarding their desire to be taxed more.