What is a Fair Tax?

An unsigned editorial in today’s Projo explains how high-tax advocacy is often driven more by ideology than by considerations of what makes good policy…

Some folks say that taxes should always go up and/or stay up to pay for new or expanded public programs. After all, human needs and/or wants are infinite. And many people consider the very existence of rich people a moral and aesthetic affront, and would like to do away with them — to make everything perfectly “fair,” at least economically. Better to have everyone poor. That was tried in communist states. The effect, besides the deaths of millions, was economic paralysis, which wasn’t very fair even to poor people, and the creation of the new sole class of rich and privileged people: the ones running the government.
One group that states their ideological approach to taxation is the Institute for Taxation and Economic Policy, cited yesterday in the Projo by the Rhode Island Poverty Institute‘s Ellen Frank in a letter to the editor arguing that high taxes are not stopping people from settling in Rhode Island. The ITEP’s introduction to “Tax Fairness Fundamentals” declares that fair taxation is based on one simple principle…
A fair tax system asks citizens to contribute to the cost of government services based on their ability to pay.
Is ITEP saying that the ideal government operates on the principle of “From each according to their ability, to each according to their need”? I won’t go there just yet, but I will point out that, under the ITEP definition, the following system would be considered “fair”…
Everyone gets to keep $1,000 of their own income to spend.
Citizens making $20,000 per annum must pay $19,000 to the government each year.
And citizens making $200,000 per annum must pay $199,000 to the government each year.
Do the supporters of strongly progressive taxation agree that this system meets the definition of fair? Or would they like to offer a few qualifiers and concede that “fair” taxation cannot be defined without also taking into consideration the size and scope of government, and what it is exactly that tax-money is being used to paid for?

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JimboJimbo
JimboJimbo
18 years ago

The only fair tax is what Laffey says it is!!! He is really the man!!

Laxpat
18 years ago

There is no fair tax! Fair itself only works in an entitlement environment and anybody who espouses a ‘fair’ tax identifies himself to me as a socialist.

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