No. of Recommendations: 9
Doesn't it make sense, isn't it fair, isn't it logical, that the people who pay the most taxes in the first place should also be first in line for tax relief?

Your questions can't be answered without some numbers. What is the difference in income between those paying "the most taxes" and those paying less? What is the difference in taxes they pay? What is the basic level of income needed to sustain a reasonable living? What is the income needed to maintain a reasonable level of government and national infrastructure? Depending on these figures, the answer to your question may change.

To take a hypothetical example, consider a tropical island with three people on it. Suppose Person A makes $30,000 selling trinkets to tourists, while Person B and Person C make $10,000 each. "Taxes" are collected and pooled together to maintain the roads, buildings and other infrastructure on the island. A pays 50%, or $15,000, while B and C pay 50% as well, or $5,000 each. Person A clearly pays the most taxes out of the whole population, but, in some sense, taxes are fair, in that everyone pays at the same rate. If there is a reduction in taxes, it would make sense that they share the windfall equally.

However, if it costs $6,000 per person to provide them with reasonable food, shelter and clothing, then it might make more sense to tax A more heavily, so that B and C don't have to starve. B and C might instead only be made to pay $3,000 in taxes each, to allow them to continue to live on the island, while A would have to take up the slack and pay $19,000 in tax to maintain the island. Whether or not this is "fair" becomes a much more complicated issue (perhaps A uses the roads more, having a SUV whereas the others do not, and thus should pay more for road maintenance).

The questions you pose may be phrased simply, but the answers aren't clear-cut, especially without supporting numbers.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.