Wednesday, June 22, 2011

Bounds on Taxation (part 1)

I was recently asked to put some concrete bounds on what I think acceptable levels of taxation are.  This seems like a reasonable question, and I put out so much pie-in-the-sky stuff that I figure it's worthwhile to lay out what sort of constraints I tend to think under.  So, first some general principles:

1. Taxes should never make you earn less money when you make more money.
2. No one should ever have to choose between paying taxes and purchasing essential goods and services... if you can't afford a place to live and food to eat you shouldn't have to pay taxes
3. Governance without taxation is clearly impossible, so let's not pretend that 0% taxes across the board are possible or desirable.

Together, these principles suggest a stepped tax code basically similar to the one we have today.  It protects the poor from having to choose between obeying the law and eating, and it protects the rich from losing money by making money.  Now, this isn't terribly constructive, since no serious proposal violates these constraints, so let's see if I can't get further into things next time.

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