Friday, June 26, 2009

Flat Tax or Progressive Taxation?

What is more fair, redistribution of wealth or a flat tax? A liberal would say redistribution of wealth is more equitable because it means that everyone has the same or closer to the same amount of money. It would mean the end of material inequality, which sounds a lot like justice -- on the surface.

But where does this difference in wealth originate? Why wouldn't one person have as much money as another person? Usually the richer guy just receives more income, which means he either works for a more successful company, has a different occupation, or works harder doing the same thing. If he has a different, higher paying job it must be more valuable to his employer because it's harder to find someone to fill the position, or the position requires more work. If few people are willing to select such a lucrative career it has to involve something unpleasant (commonly being an extensive education).

In the case that the more well-to-do person simply happens to work for a more affluent market competitor, the situation might again appear to be slightly unfair. However, let me ask another question. What made the company settle on the man they did? Well, if you made the decision you would want to choose the better, more qualified worker, am I right? So everyone else would be eliminated and you would hire the man who displayed the best credentials and the sharpest work ethic. Each credential was earned somewhere, no one is born with them, and work ethic can vouch for itself. Let's even say that the worker of more humble means is equally or slightly more qualified and can work just as hard if not harder, but he didn't actually get to compete with the other applicant. If this is in fact the case, the other man has still earned his position through experience on the job.

The last two paragraphs prove that every cent of difference in income is justified by the effort of its owner. Every man is completely entitled to any wealth he might hold by right of the hard work he invested in its creation. There is no way to cheat life. Therefore, how can redistribution of wealth be thought fair, considering how much was put forth by its original possessor? How can we merit equal income when no two people exert an equal amount of industry?

Now, a flat tax would be the very definition of a fair system. Everyone involved would pay the exact same percentage of their income. The poor would not be burdened any more than the rich, and hard workers who pull in upwards of six figures would not have to sacrifice 40 to 90 percent of what they spent their life earning.

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