Progressive Taxation Increases Incentives to Work for the Vast Majority of People

7 Dec


Unbelievable, the amount of shit this guy is talking. For all the fucking idiots who are so convinced that raising taxes reduces any incentive for people to work and innovate, think about this.


The wealthiest 1% earn at least $800,000. The median salary is around $30,000. That means that an individual chosen at random has a 1% chance of becoming really wealthy and living a very comfortable life.


What kind of incentive is that? No matter how hard you work, how smart you are, how cleverly you play the markets, statistically speaking only 1 in 100 of you are going to translate that hard work and talent into vast wealth. Are we really suggesting that only 1 in 100 people work hard enough to ‘deserve’ the mega salaries of the 1%?


The price of failure to break into a the upper echelons? A salary somewhere around the median – either a little above or below $30,000.


For me, that seems like a really fucking BAD system of incentives. The pie doesn’t increase proportionately to the total ‘volume’ of hard work people are putting in to making themselves well off. No, instead, the vast majority of people work their asses off and DON’T MAKE IT into the elite, and end up sitting on a $30,000 salary for the rest of their lives.


Wouldn’t it be more of an incentive for wealth to be spread more evenly? What if the richest 30% were earning an average of $300,000 and the median salary was $80,000? Doesn’t that say to the average person – there is a MUCH BIGGER CHANCE that if I work hard I WILL BE COMPENSATED for my hard work!


Yes, it’s entirely possible that a more progressive taxation system will reduce total growth, and lead to a pie which grows at a slower pace, or even shrinks for a period. But it’s also OBVIOUS that in this scenario it’s very possible that a vast majority of poorer people stand to gain – and that this number is vastly larger than the number of rich people who will inevitably stand to lose.


Given the assumptions of economic theory about self interest, why wouldn’t this in fact be desirable? Given that everyone is rationally self-interested, why is it that 99% of the population chooses to ignore the possibility of increasing their own share of the pie through progressive taxation?


Don’t listen to the dogma about loss of incentives through progressive taxation. Think about it properly.


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