Progressive Income Tax

FairnessFairness is a highly subjective topic. Everyone has a different philisophical view of what is "fair". In my view, the progressive tax is unfair. It discriminates against high income earners by taking a larger percentage of their income. I understand, however, that others have a different view of fairness. The real issue here is whether the government should be taxing based on what the people in government see as "fair" or whether the government should be taxing in a way that maximises the standard of living of the citizenry. I hold that boosting the standard of living of people should be prioritized over tax "fairness". After all, the people in a country with a higher standard of living are certainly better off than the people in a country with a lower standard of living and a "fairer", according to some people's view, tax system. I hold that a progressive tax system lowers the standard of living for a country. Economic Impacts of Progressive TaxationProgressive income taxation has significant negative effects on economic performance. The reason for this is that progressive tax systems have higher marginal tax rates for higher skilled workers, investors, and entrepeuners. These high marginal tax rates discourage these individuals from engaging in productive behavior like working, investing, and taking more risks because the potential reward is reduced. Progressive tax systems also tax businesses at high rates. This means that successful businesses have less capital to reinvest and expand their businesses. It is extraodinarily important to the operation of the price and wage system that successful businesses have the necessary capital to reinvest in new equipment, higher wages, and new jobs. My opponent's economic argument for the progressive tax is that lower income people have a higher prospensity to consume. So, a system that taxes the poor more lightly than the rich would allow people to consume more. However, my opponent has the process of economic growth entirely wrong. Investment, not consumption, drives economic growth. Consumption is the ends of economic growth, not the means. Production and investment are the means. After all, nobody can consume what is not first produced. If there is no or little investment, there will be no or little productivity gains. Progressive tax systems tax away capital and disincentivize capital investment. This makes it very hard for economies with high progressive taxes to grow. The empirical evidence also supports the conclusion that progressive taxes hurt economic growth. In 1989, Reinhard Koester and Roger Kormendi looked at data from 63 countries and found that higher marginal tax rates and more progressives tax systems reduce economic growth [1]. This supports the conclusion that progressive tax rates reduce economic growth. Income InequalityMy opponent claims that progressive taxes reduce income inequality. This may or may not be true. However, income equality is not necessarily a good thing. Most would agree that it is better to be unequally wealthy than equally poor. I have shown above that progressive taxes do decrease the wealth of a nation. My opponent also cites a book, The Spirit Level, that claims that inequality reduces health and other social indicators. However, this book has been widely criticized for statistical dishonesty. Many of the correlations are found to not even exist when using complete datasets. Likewise, the correlations that do exist appear to be the result of a different thing that simply correlates with inequality [2]. In other words, inequality does not create social problems, but some things that are correlated with inequality, like crime, do. RevenueMy opponent claims that progressive tax systems increase government revenue. While I do not support increased government revenue, as larger governments do a lot of harm, it is not true that progressive tax systems necessarily mean more revenue. In fact, a flat tax system would probably bring in more revenue because it would lead to a larger economy with more incomes to tax. Progressive taxes can be low. They also lower economic output which lowers revenue. ConclusionI have shown that a progressive tax system is not desirable. Sources:[1] . http://onlinelibrary.wiley.com...[2] . http://online.wsj.com...