Monday, December 08, 2008

Reality Hates Progressives

Most people have come to accept that some sort of progressivity in taxation is morally justified. Progressives, self identified, still call for continually more punitive tax rates on a decreasing portion of wage earners.

To wit: California. It was already within crunching distance of the budgetary lee shore when the latest economic storm arrived.

As it happens, the California take is so progressive that 144,000 wage earners pay 50% of the state's income taxes.*

That base is so small that it doesn't take much of a hit to cause tax receipts to sink like a greased safe.** Which will, of course, hit women, children, people of color and the elderly the hardest.

Unlike, say, a much more broadly based tax regime, which the Progressives hate.

Even though it would pummel rather less the aforementioned groups.

* I saw it in USA Today, or the WSJ, or maybe even the NYT. Since I remember the quote far more clearly than the source, and have too little time at the moment to chase down a link, you may either take what I say on faith, or chase it down yourself.

** Enough with the water metaphors, already.

3 Comments:

Blogger erp said...

Progressives are much more interested in punishing the captains of industry than raising revenue.

It's never been explained how they think they'll stay afloat if the ship of state sinks.

December 08, 2008 2:15 PM  
Blogger David said...

This is actually a serious policy problem. The marginal income of high income earners is highly variable with the economy. Getting all our revenue from the last dollar earned by a hand full of rich folks is a good way of not getting much revenue is the economy turns bad. No capital gains, no capital gain tax revenue.

Also, the rich can much more easily defer income until taxes are lower, either through a cut or because their income has returned to earth.

December 08, 2008 3:01 PM  
Blogger Duck said...

The rich can much more easily move elsewhere.

December 08, 2008 7:54 PM  

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