Thursday, October 30, 2008

Income Redistribution for Everyone!

It's a weird phenomenon that people get so accustomed to a particular situation that they'll fail to see it for what it is. And so it is with our constant debate about taxation, and whether or not taxes should be progressive or not. Because people always talk about this as if it's an issue of whether rich people should pay more than poor people. Yet...I've only encountered perhaps two or three people in my life who actually think rich people should pay the same as poor people. Even the Flat Tax and Fair Tax people think rich people should pay more taxes than poor people.

Because it's like this: Whether or not you think rich people should pay a higher percentage of their income than poor people, if you're using a percentage system, then you think that rich people should pay more. If you think everyone should pay a flat 20% of their income, than you think rich people should pay more than poor people. Because 20% of $250,000 is far more than 20% of $25,000. Similarly, no matter how regressive the so-called Fair Tax is, it would still make rich people pay more in overall taxes than poor people, even if they were paying a higher percentage of their income than the rich people. And in all cases, this means that poor people are receiving more in benefits than rich people; and thus, income is being redistributed.

And the alternative to this would be if we came out with a system that said something like "Everyone pays $10,000 annually." That would be a true flat tax. Everyone would pay the same amount, no matter how much money they earned. And while I think I've debated a few people over the years who really did suggest such a system, I have no idea who they were and have never heard anyone important propose such a system. Because it would be utterly insane. It's simply not done.

And so it's weird to read arguments as if this is what we're talking about. As if anyone is seriously suggesting that poor people actually pay as much as rich people do. As if income redistribution isn't built into McCain's plan. Because it is. The only issue is how much income redistribution we're talking about, not whether it should happen.

And once we realize this, it changes the entire face of the debate. Because by the McCain-Palin definition, we're all just socialists trying to determine how socialist to be. And that's an entirely different ballgame.

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