Economics Dictionary of ArgumentsHome
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| Progressive tax: A progressive tax in economics is a tax system where the tax rate increases as income or wealth rises. Higher-income individuals pay a larger percentage of their income in taxes, aiming to reduce income inequality. It is designed to ensure that those who can afford to contribute more to government funding do so. See also Taxation, Neutral tax._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Progressive Tax - Dictionary of Arguments
Rothbard III 924 Progressive Tax/Rothbard: (…) no principle of taxation can be neutral with respect to the free market. Progressive taxation, where each man pays more than proportionately to his income, of course makes no attempt at neutrality. >Neutral taxation/Economic theories, >Neutral taxation/Rothbard, >Free market/Rothbard. Proportional tax: If the proportional tax embodies a principle destructive to the entire market economy and the monetary economy itself, then the progressive tax does so still more. Labour: For the progressive tax penalizes the able and effcient in even greater proportion than their relative ability and effciency. Progressive rates are a particular disincentive against especially able work or entrepreneurship. Consumption: And since such ability is engaged in serving the consumer, a progressive tax levies a particular burden on the consumers as well. Rothbard III 925 Market: While the progressive principle is certainly highly destructive of the market, most conservative, pro free-market economists tend to overweigh its effects and to underweigh the destructive effects of proportional taxation. Income tax: Proportional income taxation has many of the same consequences, and therefore the level of income taxation is generally more important for the market than the degree of progressivity. Degree of progressivity: Thus, society A may have a proportional income tax requiring every man to pay 50 percent of his income; society B may have a very steeply progressive tax requiring a poor man to pay 1 / 4 percent and the richest man 10 percent of his income. The rich man will certainly prefer society B, even though the tax is progressive - demonstrating that it is not so much the progressivity as the height of his tax that burdens the rich man. Incidentally, the poor producer, with a Iower tax upon him, will also prefer society B. Rothbard: This demonstrates the fallacy in the common conservative complaint against progressive taxation that it is a means "for the poor to rob the rich." For both the poor man and the rich man have, in our example, chosen progression! The reason is that the "poor" do not "rob the rich" under progressive taxation. Instead, it is the state that "robs" both through taxation, whether proportional or progressive. Vs: It may be objected that the poor benefit from the state's expenditures and subsidies from the tax proceeds and thus do their "robbing" indirectly. VsVs: But this overlooks the fact that the state can spend its money in many different ways: it may consume the products of specific industries; it may subsidize some or all of the rich; it may subsidize some or all of the poor. Inequalities: The fact of progressivity does not in itself imply that the "poor" are being subsidized en masse. Indeed, if some of the poor are being subsidized, others will probably not be, and so these latter net taxpayers will be "robbed" along with the rich. In fact, since there are usually far more poor than rich, the poor en masse may very well bear the greatest burden of even a progressive tax system. >Excess Profits Tax/Rothbard._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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