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Monday, November 17, 2003

More Taxing Thoughts

One of the things I neglected to mention re. my recently considered tax scheme is that net worth needs to take into account the worth of the individual themselves. The 6% figure neglects that. But the only simple way to take it into account that I can think of is via a flat tax beneath the capital tax, where there's some assumption about the net worth of a human being (in terms of productive ability; again, I'm relying heavily here on my original treatise for the basic reasoning to support all of these wacky sounding ideas). But of course, net worth varies greatly from person to person depending on their basic physical and mental makeup, education, and so forth. So the irony of all this is that suddenly the income tax sort of makes sense, as the ultimate empirical measure of someone's inherent net worth.

Toward that end I did a little digging to see how income tax compares to a would-be net-worth tax in terms of distribution of the burden among people of varying net (financial) worth. Roughly speaking, it appears to be a wash--for example, the most wealthy 1% of the population own something like 37% of the country, but in the same year they paid something like 36% of the taxes. (I'm not positive I am remember the exact numbers correctly, but I believe those are they, and in any event that was the qualitative result.) I had expected to find it much more in favor of the wealthy. (It's still possible that there is a skew if I were to look at a smaller percentile; but I seem to recall mention of similar results when looking at just the Forbes 400 [wealthiest 400 individuals in the country].)

So anyway, after all this, I think I care less now about the nature of the taxes and reserve all my concern for the underlying factor that remains most important: how the money is spent (which includes, of course, how much is spent, and hence ultimately how much is taxed).

But I have nothing new to say about that. :)

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Simon Funk / simonfunk@gmail.com