Conference turris::womannotes-v3

    'progressive taxation' = 'the more you make the more they take'
    
    A variant on the 'sock the rich' theme that plays so well among
    the envious.

    "Sock the rich" also plays well among the poor, who are the ones
    who have been socked the most during the Reagan years. 
    
    While there was no money for pre-natal care for poor women (Chicago,
    for instance, has an infant-mortality rate comparable to that of
    Third World countries), people in the upper-income tax brackets
    were getting income-tax cuts of 50 percent. Not only that, but
    when these women bear unhelathy children, it then costs millions
    of dollars in medical care to save their lives.
    
    Eileen

         
    	I've never understood this... why is it unfair to tax everyone in
    	the middle to higher incomes at the same rate? Why does the tax
    	rate decrease for incomes over $150K or whatever the higher cutoff
    	is - what's the reasoning for it?
    
    	-Erik  

One cynical comment
|         
|    	I've never understood this... why is it unfair to tax everyone in
|    	the middle to higher incomes at the same rate? Why does the tax
|    	rate decrease for incomes over $150K or whatever the higher cutoff
|    	is - what's the reasoning for it?
 
 I've always understood the reasoning to be that most laws are made by 
people with incomes above $150K.   

				Nigel   
 

    The rate of taxation for the higher income bracket is in the proper
    relationship to those of lower income.  The inequity comes in the
    taxing of earned income vs. unearned income and the variety of
    loopholes that a person with a large spendable income has.

    >The rate of taxation for the higher income bracket is in the proper
    >relationship to those of lower income. 
    
    	Huh? That one really threw me for a loop.
    
    	Having people who earn less than a minimum income pay less taxes I
    	can understand. It makes sense under the principle of "Everyone
    	pays their percentage share, except those who are not as fortunate
    	as most are allowed to pay less on a sliding scale." That I
    	understand.
    
    	Why a reverse sliding-scale for those with much larger than average
    	incomes? Was there ever any reasoning explained for this?
    
    	-Erik [who's glad he never became an economist :-)]  
    

   "Progressive" and "Regressive" are technical terms in taxation with
   relatively precise definitions.

	A progressive tax is a tax which takes a larger percentage as income
	(e.g) increases.

	A regressive tax is one that affects people with less (income) to a
	greater degree.

   Traditionally "flat rate" taxes are regressive because they impose a larger
   tax burden on poorer people than richer. The reason is that for any given
   income poorer people pay a larger percentage of their incomes for fixed
   living expensese (food, shelter, transportation) than do richer people.
   Since these costs are fixed for all people, a flat rate tax on all income
   imposes a bigger burden on someone making less money. As an example, let's
   assume everyone has $5000 in fixed living expenses, and there is a flat 20%
   income tax. Someone making $10000 would pay $2000 in taxes, and $5000 fixed
   living expenses, leaving $3000 disposable income. Someone making $100000
   would owe $10000 in taxes. That combined with $5000 in fixed living
   expenses leavess them with $85000. Doubling the tax rate to 40% leaves the
   first person with only $1000 and the second person with $75000.

	       >>>> RATHOLE ALERT <<<< >>>> RATHOLE ALERT <<<<

   Lotteries (to pick one of my favorite examples) are very regressive for a
   number of reasons. First, they attract the less educated who are usually
   poorer (sometimes cynically and unfairly called a "Tax on stupidity"),
   secondly they come off the top of disposable income, which as we see above
   affects the poor disproportionately - $10 a week may be pocket change to a
   rich engineer, but not to a poor family. Last, it is a tax on the hopeless,
   who see it as a means to escape from their condition. I hate lotteries,
   unfortunately I hate governmental prohibitions even more. There are no easy
   answers.

	-- Charles

I would disagree with the statement that "living expenses" are fixed regardless
of income, unless you define "living expenses" as "that which is necessary to
keep you from starving to death and living on a heating grate, but nothing 
more".

However, it is certainly true that they don't increase in proportion with 
income.