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Comment by jstanley | Hacker News Reader

Why do you believe the taxes should be proportional to what they earn rather than what they cost the government?

Because the profits a company makes are a good proxy for the amount they cost the government, because larger companies require much more state intervention. I think I covered that above already.

Turning the question back on you, how would you measure the cost to the government? Per patent, per line of copyrighted material you are protecting? Per mile driven, per minute the regulator had to spend on them? Per employee they take on? Per police call perhaps? Per crime they were a victim of? Per minute the politicians had to spend on them? Per the amount of debt that the government is allowing them to run up, whilst offering limited liability?

That sounds like a pretty expensive return to fill out?

I don't have any idea how taxes should be based on what you cost, but I don't see punishing success as a fair way to do it.

For me personally, it's quite clear that in years where I make more money and therefore pay more taxes, I haven't cost the government any more.

>I don't have any idea how taxes should be based on what you cost

The system is unfair, but better than any other system then?

> punishing success

Is an emotive term, and nonsense. How is it a punishment? I know Zuckerberg looks like he can't afford a suit, but he doesn't seem to be particularly oppressed by the state. In fact he seems to have scrimped and saved $70bn despite the pillaging. How about a different term, 'sharing success with the society that helped create it'?

> For me personally, it's quite clear that in years where I make more money and therefore pay more taxes, I haven't cost the government any more.

And your business operations come at no cost to society, and don't use any of the benefits society created? Could it be the inverse is true, in the years where you were less profitable the government reduced your tax burden below your actual cost to nurture and encourage your enterprise? And later you earned more and paid something back towards it?

I see a dangerously double-edged argument. To base the deriving of society’s expenses per a person on that person’s earnings is odd. Especially if you limit your view to the 99% of population who are either just normal employees, or their dependents, or even welfare receivers of some kind. If I am making 50% more in my 30s than I did in my 20s - do I really cost more? In my 70s I would likely make nothing, except the pension, but my healthcare bills would grow.

So taking your point to extreme - should my “taxes” (on what?) be the highest in my 70s?

The OECD suggest that one measure of good taxation is it's efficiency. Progressively taxing profits seems to meet that goal. 'Cost to the government' sounds tricky to measure however

>The OECD suggest that one measure of good taxation is it's efficiency.

This suggests we should not tax at all. This suggests we should simply invent money as-needed. Destroy it when not-needed.

Some call that "Marxism".

I think you may have misunderstood. When the OECD talk of efficiency, they mean a tax that is efficient to collect. It is one of the fundamental principles of taxation in the study of economics.

"Efficiency: Compliance costs to business and administration costs for governments should be minimised as far as possible."

That is a quote from

OECD (2014), "Fundamental principles of taxation", in Addressing the Tax Challenges of the Digital Economy, OECD Publishing, Paris.

This seems like a fair criticism of the post above where something other than a progressive income/profit tax was being suggested.

RE: Marxism

I don't really think you have taken the time to find out who the OECD are. The OECD are the "Organisation for Economic Co-operation and Development". Their role is to spread the market economy, and in particular work on double taxation treaties between countries. The antithesis of Marxism.

> This suggests we should simply invent money as-needed. Destroy it when not-needed.

This is the kind of misunderstanding you get when you model national finance like a household budget. Money is created and destroyed constantly by governments, and even more so by banks. When banks lend money it comes from nowhere. Governments run deficits for years, where they create money that didn't exist before.Taxation is exactly the destruction of money. This is not Marxism, it is economics.

Not the OP but one reason to tax by earnings could be to capture unmeasured externalities, like fewer choices in the absence of competition. (Although that example would assume earnings strongly relates to marketshare.)

Does that mean a society where we have the disabled and sick pay extra? And those who have children and attend school services should also potentially pay extra? And those who are rural should also pay extra?

Yes

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