JP wrote:
Quote:You raised the issue of percentage of income spent on travel. I meerely pointed out that the only way this would ever be equal was if everyone had equal income. I did not mean to suggest that you were advocating that... just merely questioning the validity of it.
I brought it up because it is germane to the issue of who pays what amount of tax. It is valid because it points out that wealth can be increased at an accelerating rate because less of it, proportionately, is spent on the necessities of life, leaving more for investment to create a return on the wealth--an opportunity not available to those who haven't the wealth to invest.
Quote:I answered that in my response to Joe
I don't believe that you did. I believe your response was simply an oversimplified and naive statement which equates the benefits of a well-organized society among individuals. To take the single example of fire protection: if a man's house burns down, he has lost the value of the property--but he might have the recourse to insurance, and he should have the benefit of firefighters to attempt to save as much of his property as possible. If a warehouse or factory burns down, society spends more for the firefighters needed to fight the fire, and the more so as they must fight the fire to protect other people's property from a greater threat than that entailed in a single house fire. Furthermore, that property is subject to inspection by fire marshalls so that society may minimize the risk, as well as workplace safety inspections for that purpose and to protect employees. All of those protections entail costs to society, for which it is not unreasonable to bill the wealthy more, as they stand to benefit more from the protections. Otherwise, you have small wage earners paying as much a portion of their income to protect them from the potential consequences of the greater risk entailed in a fire at a warehouse or factory. All of these considerations apply right across the board to police protection, to the maintenance of highways and port facilities, to the cost of govermental regulation and inspection bureaucracy and the cost of licensing and protection from fraud. The investment of capital benefits society, but it also costs society more than the mere protective and regulatory functions attendant upon a family of citizens living in a house and earning an income.
Quote:On items of neccesity Joe Blow may pay more percent of his income but on non-necessary items Joe Millionaire pays more than Joe Blow because he buys more... is this unfair too?
It is not unfair, it is untrue. Poor men need a single washing machine, and it costs a significant amount of their income to buy one. Rich men need but a single washing machine, and its purchase is but a pittance in the scale of their wealth. It is either naive or disingenuous to suggest that someone who makes ten times as much as i do perforce purchases ten times the amount of necessities as i do--do you suggest that the rich man eats ten times as much, wears ten times as much clothing on any given day, requires ten times as much space to live in? Wealthy men and women spend the largest portion of their income on luxuries, or reinvest that money.
Quote:Anybody can take advantage of the capital gains tax. I am about to sell my house and the amount of money I hope to make on it, while pocket change to some, will be infinitely helpful to me, a lower middle class hard working Joe Blow. The reason I can use that tax advantage is because I invested. Anyone had the opportunity to buy the same house I did, but I am the one that made the investment and took the risk. A heavy capital gains tax would decrease my profit and seriously hamper my ability to better life for me and my family. This isn't only something the super rich can take advantage of.
It is, however, something the "superrich" can take advantage of on a scale out of all proportion to that available to the wage earner. That is why i earlier mentioned economies of scale. You can buy one house, and profit from its sale. A wealthy man can buy property, line up investors, hire contractors and build many houses, from which they will realize a greater return
proportionately[/i] than you will from the sale of a house which is neither new, nor free of the finance charges you paid but which the home builder did not pay. Additionally, a host of social services such as inspection and regulation required on the building site are paid for by all taxpayers. At all events, the point is that capital gains is just another tax dodge for the wealthy--i don't say they should pay more for their capital gains, simply that it be taxed as is any other form of income.
