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What is the argument for making poor/working class folks shoulder the burden of taxes? (self.nostupidquestions)

submitted 1 month ago* (last edited 1 month ago) by ccunning to c/nostupidquestions

54 comments fedilink hide all child comments

I’m looking for serious answers to understand the mentality. Please avoid the snark. I know it’s low hanging and tempting but I’m pretty sure most, if not all, of use here on Lemmy “get it”.

I just can’t get out of my head how absurd it is that we, in the U.S. anyway, put so much of the tax burden on working class folks instead of those most benefiting from our economic system.

It seems to me the standard deduction should be at least the median personal income (~$40k) if not the mean(~$60k) with progressive tax brackets adjusted to cover costs thereafter and possibly a supplemental wealth tax.

But I’m not an economist so trying to understand why I’m wildly wrong and this would be a terrible idea either from an economic perspective or from a political perspective.

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[–] [email protected] 17 points 1 month ago

It's the same as in every business: those making decisions think that the decision making is the hardest and most important part of the equation. Not only that, they believe that it is their right and that they worked very hard to get where they are.

There are two reasons they have to believe that:

if they didn't, they'd feel that they didn't deserve it
it also explains (to them at least) why there is inequality

The common argument that is brought up against change now is capital flight: "if businesses and rich people were taxed too much, they'd leave the country". There is a great fear that they will leave and take all the good jobs with them. The counter argument to that is: they aren't the only ones with brains to get a business going. Rich people aren't smarter than non-rich people, businesses that leave did employ people from whence they left and they also probably sold to the people in that area or country.

Now, of course the speed of departure, the political reaction, and the location are important.

Speed: instant departure can have a serious impact as the jobless might not be able to find other employment quickly. A graduated departure allows that however and also makes it possible for people to focus on other jobs/specialisations in the first place.

Political reaction: depending on where you are, providing recertification and training courses, having good welfare programs, and most importantly having an exit tax can help soften the blow of departure

Location: A big employer leaving a small town can be devastating. A small employer leaving a city, less so. A big employer leaving a city can burden the city, but the other factors are important.