From: jwh@citi.umich.edu (Jim Howe)
Subject: Re: NO! Re: flat taxes - yes!!!
Date: Mon, 16 Nov 92 10:11:36 EST
Organization: IFS Project, University of Michigan
Reply-To: jwh@citi.umich.edu
Keywords: flat tax

In article <1992Nov14.114618@bk-kgnaix11.aix.kingston.ibm.com>, mjones@bk-kgnaix11.aix.kingston.ibm.com (Mike Jones) writes:
|> 
|> In article <V_C=LA+@engin.umich.edu>, jwh@citi.umich.edu (Jim Howe) writes:
|> > In article <1992Nov11.103204.3702@ee.ubc.ca>, jmorriso@ee.ubc.ca (John Paul Morrison) writes:
|> > |> In article <markts.721352037@mcl> markts@mcl.ucsb.edu (mark.) writes:
|> > |> > flat taxes for everyone. people and corporations.
|> > |> > the 13% idea from jerry brown was the only
|> > |> > good idea out of the democratic primaries.
|> > |> > you think this lets the rich off the hook?
|> > |> > check out how much the really rich actually
|> > |> > pay in taxes now.
|> > |> > flat taxes will benefit the middle class.
|> > |> shouldn't people who use a service, pay for it?
|> > Yes.
|> 
|> This is so obvious that it should immediately make one skeptical. Here, the
|> unstated assumption is that of government as business, and taxes as fees.
|> This is far from a universally held or provably correct opinion.
|> 

There are 'services' provided by the government which can and should be
treated as a business/fee arrangement.  

|> > |> I think the rich should pay more taxes in some areas: it costs more in 
|> > |> policing to keep the rich at a comparative level of safety.
|> > I disagree.  Ask yourself where most crime occurs.  It's not in
|> > wealthy suburbs, its in poor neighborhoods.
|> 
|> For violent crime, yes. Property crimes are more spread. Remember Willie
|> Sutton, the bank robber? When asked why he robbed banks, his reply was,
|> "That's where the money is." So-called "white-collar" crimes are spread even
|> more widely still, and organized crime (above the level of street drug
|> sellers) operates mostly in wealthy neighborhoods. One might further observe
|> that violent crimes are often the least costly to solve, usually reqiring no
|> judicial intervention until the trial; search warrants, wiretaps, boats and
|> helicopters are seldom involved in your average mugging or domestic violence
|> complaint. There's also the point that, to some extent, police act as
|> insurance. We count on them for deterrent effect as well as for justice
|> after the fact. In this sense, of course people who are more wealthy should
|> pay more for police protection, because they have more to lose.
|> 

I would say that police provide very little 'insurance' value unless they
provide more frequent and visible patrols.  Of course, police protection
is a local issue, not a federal issue and is therefore pointless in any
discussion about why the 'rich' should pay more in federal taxes.  In
general I believe that you will find that the 'rich' will often purchase
private 'insurance' in the form of private security companies, alarm
systems, etc. as opposed to relying on the police for their protection.

|> > |> After all,
|> > |> they are more of a target. Rich people should probably pay more for
|> > |> fire fighting: all those big houses take more firemen to put out
|> > |> big fires when big houses catch on fire. (OK, perhaps I'm assuming
|> > |> alot about crime patterns. But it does seem like there is more incentive
|> > |> to rob and kidnap well off people)
|> > Where do most fires occur?  Most likely in older buildings.  Who
|> > tends to live in older buildings, the poor.
|> 
|> Yes, but. That's only one of the two criteria to determine indemnity. You
|> may have high insurance rates because your house is a firetrap (even though
|> it is cheap), or because it would be very expensive to replace (even though
|> it might be very safe). By the way, who *owns* those older buildings the
|> poor live in? It's a safe bet they don't. I'd wager that in many (if not
|> most) buildings, the value of the building swamps the value of the contents.
|> The poorer the tenants, the more likely this is to be true. Oh, yes...the
|> poor are not really very likely to have fire insurance, anyway.
|> 

And of course, once again, fire protection is not a Federal issue and is
therefore meaningless in any discussion about why the 'rich' should pay
more Federal taxes.


James W. Howe                  internet: jwh@citi.umich.edu
University of Michigan             uucp: uunet!mailrus!citi.umich.edu!jwh
Ann Arbor, MI   48103-4943         
Newsgroups: sci.econ