Alex Tabarrok kicks off an interesting discussion about federal taxes and progressivity with
this post showing who pays how much by income quintile. The interesting stuff is really in the comments rather than the original post -- people dissect the table, add additional information, and argue the economics and the politics. One comment I especially, liked, from someone responding to the fact that the people at the low end of the economic scale account for very little of tax income, was this:
As a mild libertarian I have to ask what is the point of taxing the poor and middle class. Why not just start taxing income over 80 K at a flat 15 percent rate and leave it be. Why do we need to tax people making below 80 K when obviously their tax contributions are meaningless to the federal government?keph, please read and tell me what you think.
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optic
Comments
i agree w/the commenter who said that this isn't as interesting/useful without being broken down by state taxes
2. If the lower-middle and lower income classes paid nothing, it would create extreme resentment between those further up the ladder and those paying nothing. I'm not saying that a class war is bad, but pitting two adjacent classes against each other would cause more problems than what it's worth.
So for social, not economic reasons would eliminating taxes for a portion the population be idiotic :)
on the no tax under 80k thing, the thing there is that it would provide incentive not to make more than 80k unless you could make more than 100k as the post tax rate would be a wash. actually there would disincentive into even a higher range due to diminishing returns. a phase in is really the only approach.
i agree digraph as well on sense of ownership and class conflict. there are a lot of countries where you see this in action (Philippines come to mind).
that is just my surface reaction, i haven't had a chance to dig through all the comments yet.