14 May 2009

All Taxes Are Regressive

One point that gets overlooked in all our debates about spending, taxing and borrowing -- and that is particularly germane to the debate over turning our economy upside down because of global warming -- is that we present-day Americans aren't nearly as rich as future Americans. Given that, and given our social consensus in favor of progressive taxation, why do we tax ourselves for their benefit? Aren't all taxes regressive, if time is considered?

It would have been nonsense for the US to have abstained from World War II because it couldn't be paid for out of tax revenue. We benefit, we're better off, it's entirely just that we should pay.

What other costs should we shove off on the future?


Bret said...

If we embark on a huge effort to try and affect the climate, isn't it possible that future Americans might be far poorer than current Americans?

We can only "shove off" costs to the future in a very limited sense. If the U.S. was a completely closed system (i.e. no foreign trade), the borrowing and savings have limited impact on the future. For example, if your left hand borrows from your right hand, are you, as a whole, poorer? Does that left hand to right hand transaction change your future?

Maybe, but not much.

Borrowing overseas changes the equation a little, but not much.

joe shropshire said...

But we don't tax ourselves for their benefit. We tax ourselves for ours. The purpose of progressive taxation is to punish the wicked and reward the virtuous, but mostly the first one. That is its own reward. Also, while it is likely that future people will be rich, and rich people are wicked, it is also true that future people are from the future, which progress guarantees will be virtuous compared to the wicked present, which is us. This is why in the future people whiz around the galaxy in starships that cost a brazillion dollars apiece but don't have any money.

Harry Eagar said...

Present-day Americans also aren't as rich as recent-past Americans -- most of us.

It is not the goal of Reaganomics to make future Americans richer than present-day Americans, either.

I was never a big fan of Jack Kennedy, but he was especially wrong about a rising tide lifting all boats. The Reaganauts figured out a way for that not to happen. Sweet for them, though.

joe shropshire said...

Hmm. Spent an hour today responding to a request from somebody from corporate: the "American Recovery and Reinvestment Act Capture Team", to be exact. They were wanting to know what opportunities might be out our way to help our country recover from the long Reaganomic nightmare. I'm told that our team is up to something like 120 people. Can you imagine what the law school tuition must have added up to for all those folks. All in a good cause, I guess -- they called in from Greenbelt MD, so I know they've got mortages. Anyway, thank God the long Reaganomic nightmare is behind us now.

joe shropshire said...

How big is everbody else's team on this, by the way? just curious.