Friday, December 30, 2011

Fairness, Again?

I was reminded of the issue of "fairness" again the other day in an e-mail. It was suggested that one's property tax be based on one's wealth, not necessarily the value of one's home. Of course, "that's only fair." Certainly it is; if one has more money, one should without question pay more in taxes.

Of course that's "fair." For example, two guys go to the same restaurant and order the same meals. But the wealthier guy pays more for it than the other guy. Isn't that "fair?" Who could argue with that? The rich guy has more money, so his hamburger should cost him more than the exact same one bought by the guy without so much money. How about ballgame tickets? Two guys in the grandstand, sitting right next to each other don't pay the same price. The guy who is richer pays more for the exact same tickets. But, isn't that "fair?" After all, he has more money than the other guy....

A lot of folks forget that those with more income do pay more taxes, even with a flat tax rate such as here in Michigan. Simply put, 4.4% of $400,000 is more than 4.4% of %50,000. But the issue here, as brought up in the e-mail, was a progressive tax, where the person with more income pays a higher rate, not just more tax (see the previous sentence). Again, it is offered, "that's only fair."

I guess my question is "why?" Why is that "fair?" Who says? I don't think I do. Consider this (and, to avoid pointing fingers at anyone else, I'll use my own experiences: Oh, about 15 years or so ago, at the dinner table one night, Matt asked from out of nowhere, "Mom, how come Dad has, like, five jobs and you have only one?" We laughed and joked about it at the time. But I think it is instructive. I'm not sure I had "five jobs," but I was drawing paychecks from five different places. Now, I obviously made more money than had I just had one, my primary, job. But should I, with four other "jobs," have paid at an even higher rate? Let's examine that. First, I put myself in the position to get those other four jobs. I took the initiative to find them. I worked to give myself the experience, the education/resume, the abilities to do those other jobs. I could have sat back and watched "The NFL on CBS" or other boob tube shows all the time, but I didn't. Second, I took the initiative to find those jobs. Nobody came knocking on my door to ask me if I wanted any of them. Third, I gave up two or three evenings a week and my Saturdays to work at these jobs, either at home or away. But, again, I wasn't just sitting home watching the boob tube. OK, I'm out of the way. What about that guy who just sits home and watches television every night and all weekend? Let's add someone who didn't graduate from college or even high school, that is, goofed off and didn't prepare himself. He ignored everything people told him about the future and jobs. In these instances, this other person might well make less money that I did. But consider the premise behind the progressive income tax. Because I was ambitious, took initiative, prepared myself, I should be penalized? Because he was lazy or at least not ambitious and took no initiative, he should be rewarded? There is something seriously flawed with that sort of reasoning, if it can be called that.

I'm late on a deadline, but there's another aspect that needs to be examined, at a later time. Where does the money involuntarily taken from the person who was ambitious, prepared himself, took initiative, worked instead of played, go? Can we surmise that a lot of it goes to the ones who weren't ambitious, didn't prepare, took no initiative, played instead of worked? But, that's for a later time to discuss.

1 comment:

Grant said...
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