Sunday, May 6, 2012

The Total Taxes People Pay

One of the biggest focuses of political debate is how much taxes people should pay relative to each other in different income brackets and if either the poor or the rich are paying "their fair share". If you just listen to liberal pundits, you may imagine the wealthy are all paying half the taxes the rest of us are. If you just listen to conservative pundits, you might think that the wealthy are paying at least 50% in taxes and almost everyone else pays nothing. That's because a lot of people choose to talk about only specific situations in specific areas of our tax code, not the overall picture. For instance, there's been a lot of talk lately about how around half of Americans pay no federal income taxes. It's true, but people get misled because they think of that as all our taxes, or at least as all the taxes that are deducted from your paycheck, which isn't the case.

So here's an interesting graph on how much the average person in various income groups pays, as a percentage of their income, in total taxes:

It's much more evenly distributed than most would probably guess.

* found this from Wonkblog.

Tuesday, May 1, 2012

Money & Grades Are Different

Over time, I think I've seen this argument made on facebook by 4 different people now. The argument is that "liberals" who favor wealth redistribution or progressive taxation are contradicting themselves if they don't also think grades should be redistributed in school. And we all agree it'd be ridiculous to redistribute grades, so the conclusion is it must be ridiculous to redistribute wealth (or just tax it differently). But nowhere have I seen anyone even try to make that connection - why are grades and money analogous in this way? You can't just say they are without giving a reason.

The main reason not to take this argument seriously is that nobody believes we should have the same principles about redistribution of grades and money anyway. Maybe you believe the government shouldn't redistribute money at all. But you still believe that *you* can redistribute your money, either by purchasing something or just giving it away. Does that mean you must believe we should be able to redistribute our own grades? If I have a 4.0, can I sell .5 of that to someone? No... there's not a single person who believes money and grades should be treated the same with regards to rules of redistribution. That's not a contradiction - we have different rules for different things because they are ... different things.

Grades and money are both things we invented and use because they make society work better. As our inventions, we get to make up the rules for how they are used. The best rules for each one would just be whatever produces the best results; there's no reason we have to pick one rule to apply to both things. There are valid reasons to believe a variety of things about how best to treat money, but "it must be the same way we treat grades" is just not one of them.

And besides that argument not making any sense, it is also strange to me when people think it's just "liberals" who support wealth redistribution. I've never met anyone who opposes public roads, education, police, national defense, etc. And yet those are things that everyone benefits from regardless of how much you pay for it, if at all. And they are provided to everyone by taking money from some people and giving it to other people. The differences along the political spectrum aren't about whether or not you support any "redistribution", it's just about the amounts and forms of it.