The Case for Progressive Tax

As a nerd for politics and economics, the debate between a flat, or “fair,” tax system and a progressive, marginal tax system intrigues me. I have listened to many debates about the two ideas and it's a subject discussion that I love. I used to be a fan of the flat tax idea, where everyone pays the same rate, but in recent years I've joined the side of favoring the current system of progressive, marginal tax rates, where the poor pay a smaller portion of their income, or none, and wealthier people pay a greater share in each higher bracket of income. Here is my analysis:

The main argument for a flat tax is that it is simple, cost effective to implement and regulate, and considered fair as a standalone concept. If the tax rate was 12% of your income, then everyone would pay just that. Wealthier people still pay more because 12% of $250,000 is much more than 12% of $40,000, which is $30,000 vs. $4,800 respectively. The rich pay more because they make more, but it is still the same equal percentage of their income.

Arguments in Story Form: PragerU released a video in 2014 titled, "The Progressive Income Tax: A Tale of Three Brothers" which became quite popular and had more than 16.6 million views on YouTube as of late 2020. I felt like I should include my rebuttal to the points made in that video because it includes many examples of why people think the progressive tax system is bad. I actually liked the video and how they depicted the whole scenario, but I believe the message is inaccurate with a few flaws.
 
The three brothers are supposed to represent the general public of our society divided into three economic classes: Rich, middle-class, and poor. The first mistake is assuming that everyone has the exact same starting life circumstances and exact same opportunities. Conservatives love to think America is a perfect meritocracy and everyone has the same, fair chance at success if they just want it by making the right choices and working hard. While it is important to do those things and some people can find success even with bad backgrounds, we do not all have the exact same opportunities or paths to success. Even people in the same career fields can have vastly different economic outcomes. 
 
The video also insinuates that people that aren't financially successful just don't make good choices and don't want to work. Market forces do not compensate based on how hard people work. Conservatives have this obsession with the idea that the harder your job is and more hours you're putting in (if you're even allowed to put in more hours at work), then you'll make exponentially more money. 
 
The poor and middle class are described as not saving or investing by choice because they don't care, never mind the fact that the cost of living for basics is using up every dollar they've got, or at least a large portion of it. It's easier to save and invest when you have more disposable income to save and invest. I also noticed that the wives of the three brothers have very different careers which can affect the family's economic outcome. It's a lesser point in general, but the wives could come from varying family/wealth situations which will also have an economic impact. Besides the different careers they have, what about details such as how much debt they had before getting married including things like student loans, car loans, and credit card debt? Maybe the parents of the rich wife paid for her college and gifted her a car. She's already much better off than the others because of things like that.
 
The community the three brothers move into is supposed to represent the country as a whole. The improvements are a representation of the three classes of society working together to build and improve the country. It costs money, in taxes, to build and maintain the country's infrastructure and security, so the flat tax argument is made stating that it's fair because everyone pays the same proportion of their income and enjoys the same benefits. In the microcosm setting of this video, yes, the progressive tax does seem unfair, but the analogy fails to accurately represent all factors at play in the real world. 
 
Harry, the rich brother, is upset that under the progressive tax he must pay 80% of the bill even though they're all receiving the exact same benefits, but are we all really receiving the exact same benefits that living in this country has to offer? This video depicts our society as everyone having the same exact opportunities and backgrounds and enjoying the same or similar quality of life and benefits while making Harry (the rich) pay for it. Sure, we all enjoy the same public use facilities, infrastructure, and military protection, but people can enjoy those basic things in many, or most countries of the world. What we hope makes America, or any country, a better place than others is the quality of life and opportunities for economic advancement afforded to its citizens. A flat tax sounds fair but does not produce the best quality of life for a society and limits the amount of opportunities the poor will have because their tax burden inhibits savings and discretionary income.
 
In reality, the three brothers (or classes of people) would never live in the same community with the same benefits. Rich Harry wouldn't want to live in the same poor neighborhood as Tom. Harry would want to live somewhere with less crime, cleaner and well-maintained property, and larger, more luxurious homes. Tom can't afford better. Also, most poor people don't just work a mere 20 hours per week. They still work 40 hours or more with multiple jobs sometimes that just don't pay as much because they aren't in white collar, high paying careers. Market forces do not compensate based on how hard people work; and to portray the lower-earning class of society as just choosing to work less is offensive and incredibly ignorant.
 
The video indicates that Harry (the rich), is being forced to pay for all the upkeep of the country as if no one else is invested in the country and economy in any other way. The poor and middle class still provide the majority of labor to fill jobs in the economy and manage/operate businesses for the rich investors, creating wealth for themselves and especially for the rich. In a progressive tax system, the rich pay the most in taxes to pay for the country's security and infrastructure and the poor pay for the luxurious lifestyle of the rich through their time and services working for their companies and through the consumption of the goods and services offered by the businesses and investments.
 
This PragerU video is also hinting at the idea that what you pay to the government in taxes should reap proportionate benefits. No. Paying taxes isn't shopping from the government as if you're buying fruit by the pound. You don't necessarily get more benefits directly from paying more taxes, and you don't receive less for paying less. You also don’t get a say in what specific programs you want to dedicate your taxes to. That’s only generally done through elected officials. However, there are indirect benefits as I will expound on later.

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I came across two more allegories that try framing a progressive tax system as unfair and absurd that I want to comment on:

2nd Allegory: You are now the tax collector assigned the job of collecting taxes & deciding the fair share of each person. There is a new government program called Beautify Our City (BOC). It provides jobs for low-income folks, reducing the number of people collecting unemployment, and also helps make the city beautiful and increases property values. The unemployed now will provide lawn mowing, bush trimming, etc. for each home in the city. The program is mandatory for all residents to pay for. Your job is to knock on doors to introduce the new program to each home.

You go to the first home, one that could really use this program. The grass is tall, the bushes are overgrown, etc. You knock on the door and a man in his 30s answers the door. There is a distinct smell of too many dogs in the house. You explain the new program. The man says that sounds great but what is it going to cost him because he doesn't have any money. He was laid off from his job 6 months ago & he is collecting unemployment. You mention that the new BOC program has a job for him, but he explains that he's been sick and can't do that. So you say, "That's OK. If you don't have any money, your cost is zero."

You go to the next house and explain the new BOC program. This house has an immaculate lawn. The bushes look beautiful and clearly, extra attention and money, has been lavished on this property. The man at the house says he doesn't need this program. He takes good care of his property and likes doing it. You patiently explain that it's a mandatory program. The man says ok, but what is it going to cost? You reply, "How much do you have?"

The man responds, "What!?" You patiently explain that each person must pay their fair share. The price for the lawn care is 'progressive' meaning people that have more money must pay more for the same services that others pay less. The man gets angry and slams the door.

The BOC program is mandatory and, as a city official, you have police powers. So the next day you knock on the man's door again. But this time you have 2 uniformed police officers with you. They are carrying firearms. You knock on the door and the man answers. You patiently explain the BOC program again and emphasize that it's mandatory.

Seeing the two police officers the man sighs, realizing he doesn't have any choice. So he again asks how much. You reply, "How much money do you have?"

3rd Allegory: You go to the grocery store to buy eggs, but you don't see a price tag on the eggs. Hmm. So you ask the first clerk you see and ask, "What is the price?" The clerk says you have to go to the front office & tell them how much money you make. When the front office knows how much money you make, only then will they be able to tell you the price you must pay. That's the only way to determine a "fair" price for you to pay.

My response: The underlying problem these stories share is that people that have more money are being asked to pay more for the exact same products/services others receive at lower prices. They're arguing the moral case of how this is unfair for them to be tasked with the burden of funding society's programs that others are using for less of a cost. I think this is a childish viewpoint of oversimplification and misunderstanding the purpose of taxes and an organized society. The purpose of taxation and its subsequent spending is to strengthen the economy by providing safety and infrastructure for good commerce and providing opportunities for everyone to flourish, make the American Dream possible.

So what exactly is the good or service the government provides that makes the rich pay more for and the poor pay less of. Safety? Infrastructure? These stories make it sound like you should be mad when you have to pay for emergency services when you’ve never needed to call for police or a fire department. Should I be mad that I have to pay for road construction and maintenance on highways I never use? Never mind the fact that maybe delivery trucks and employees of my favorite stores may use those roads and highways. 

Having a rich person pay more for eggs like the 3rd story above, is like asking a tall person to reach something on the top shelf for you instead of making all the poor have to buy stools. A poor person doesn’t make enough to get by with basics on the lower wage jobs they work to provide cheaper goods and services for all, so they need financial subsidies and you get mad that you have to pay higher taxes to pay for those subsidies? Then say crap like these low wage jobs should only be done by teenagers or starter jobs even though the position needs to be filled during school hours, or how raising wages means costs go up for everyone. Ok, so you like cheap goods, but it’s really at the employee’s expense then because they can’t afford to live on the low wages. The main point for this topic is not about minimum wage issues, though. It’s about comparing a flat tax to a progressive tax. If the poorest among us are paying the same level of taxes, it will cost them more of what’s needed for basic survival, not just costs in luxuries and additional comforts. It doesn’t make sense to have them pay for their own subsidies, services, and infrastructure when they already can’t afford much as is. If you like cheap goods and services, and having a safe, cohesive society, and a strong economy where more people have disposable income to contribute to growing businesses both big and small, then it makes sense to me to have the higher earnings pay for more to offset the costs. Everyone pays the same rate in certain income brackets. Those tat make more in excess of those average amounts will pay a greater percentage and they still reap a greater reward of living in comfort that our society and economy provide.  
 
People should do what they can to get better jobs, but there’s always going to be low wage jobs needing filled. I think asking the rich to pay for the roads their customers and employees use to work at and patronize their businesses which make them rich is fair. It’s still a positive trade off. I’m not asking for complete communism equality. I only suggest a progressive tax system is more effective at providing for a stronger economy.

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I created my own story using the example of the same three brothers to represent economic classes in society. Each of those brothers had a daughter, so this next generation of three cousins decided to make a living by going in together on buying an orchard. Harry's daughter has no debt, her education, first car, and a down payment on a house has been provided for by her father Harry. She was married a rich fellow and was willing to pay for more than half of the orchard to own with her cousins. Dick's daughter had some college paid for, but still worked hard to build a successful career. She made a good contribution to invest in the orchard and will work as the manager of it. Tom's daughter grew up poor, but worked her way through school with the help of student loans and carries that debt burden. She doesn't have any savings but was able to make arrangements to buy into the orchard with her cousins with her labor. The girls were going to live by the fair standards their fathers originally intended and split the costs evenly according to their ownership portion. If they each paid 12% of their income, the costs will be covered. 

The orchard produced well and grew in popularity, but over time the land around it started developing and costs began increasing. The rich woman pays the most in costs because she takes most of the fruit sale proceeds, but this still feels like a fair arrangement. She is unaffected by the increase in costs as the orchard is still quite profitable to her lifestyle. She doesn't really work the orchard, just checks in occasionally and voices her opinion on decision making. Dick’s daughter, serving as the manager, pays her dues and is still able to take some home, but that portion is becoming less with rising costs of running things. She works the administrative side of things and often helps out with the labor.
 
The poor woman operates the most physical work required to run the orchard and does a great job, but she has little left to get by on after the costs are deducted. She needs government assistance until she can find ways to improve. More people on assistance leads their local government to increase tax costs. The poor woman's tax increase is offset by the benefits she now receives to help with basic needs. Manager cousin is mad that she gets even less now after all the hard work she puts in, and rich cousin is annoyed, but her lifestyle is still mostly unscathed by the changes.

The three cousins schedule a time to discuss the affairs of the orchard. The poor cousin thinks the rich cousin should pay a more "fair share" of the costs because she's still taking most of the proceeds. “If you’re taking 50% of the profits, you should be paying 50% of the costs too," she contended.

The rich cousin scoffed, “I AM paying half the costs. Do the math. And, of course I am taking the most profit. I invested the most, so I deserve the most. We are all paying an equal portion for the same benefits. Isn't that fair enough?"

The manager cousin knew that having the rich cousin pay more because she could would mean that she herself would be able to keep more of what she made as well. Besides, she worked hard with her contributions to the orchard as well, so she chimed in, "I don't think you could really say we all benefit equally." Nodding to the direction of her poor cousin she continued, "She and I are the ones providing all the work here too, but only receiving enough to barely make ends meet. We soon won't be able to even afford the transportation or housing to get to work here. Also, we are losing sales because the neighbor workers can't afford anything else either.  They used to buy from us, but now they can't afford it since the cost increases. Listen, without your investment, we wouldn't have this big, successful orchard; but without us working it, you wouldn't be enjoying the large profits either. We need each other. Besides, it's not like you're hurting any if you pay a little more."

The rich cousin was offended. "Fine. If you two are against me, then maybe I'll just sell it and leave." The other two were stunned. It was still a profitable enterprise. If their rich cousin didn't want to enjoy the benefits, then maybe splitting it with more of their other friends and family would appreciate it. They were able to get other people to split the difference and some even helped work the land as well. 

End of story. Ok, maybe sloppy, go ahead and poke it apart. I tried, but I hope I got at least a summation of my thoughts across. Is it unfair to require the richest to pay more just because they can do so easier? You know? I'll admit, it does look that way, but it's also unfair, in the grand scheme of an economy, when the people staffing the business that the rich own and invest in, can't even afford to live with the basic housing, food and other necessities to be able to keep working at these places. It's not fair when the rich gain disproportional influence in politics and control over markets with their wealth. See this post.

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Now to further build on the concept I brought up earlier about the benefits populations enjoy from taxes. What are the benefits and privileges enjoyed by the rich and poor and how does it compare to what they have to pay for in taxes?
 
People argue that we all enjoy the same benefits and general opportunities, like the PragerU video states, but does that just mean sharing the use of public infrastructure and safety through regulations and military protection? That’s it? Seems like a pretty low bar since most countries have basic infrastructure, safety, and varying degrees of rights and ability to do business. Big whoop.

What about economic power and opportunities? I consider the quality of life afforded by the country's peace and prosperity to be the most important benefit of good governance and optimal tax policies. For example, a person who owns a Rolls Royce pays more for insurance than a person who owns a Ford Fiesta. They’re both cars that drive, but one is travelling in much more prestige and luxury, so they pay more in insurance to cover it for protection. Thus, the assets of the rich are more luxurious and protected by our society’s gains, so they should be paying more in taxes to protect that lifestyle and those assets.
 
The indirect benefits the rich enjoy include profitable investment opportunities, markets for business opportunities, a large supply of skilled and educated workforce, a thriving entertainment industry with movies, music, social media, and events, big money in many different sports industries, and the many, many luxury goods and services a wealthy, safe, and stable country provides to those who make the most money to access these. Even the poorest have a better quality of life compared to other nations, but I think it can be even better.

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Why it’s needed: The problems a flat tax causes come from the way it effects the poorest. There is a certain level of income needed where families no longer need every last dollar just to afford all their basic bills and then after that point people start to have savings and discretionary income where they can participate more in growing an economy. Like my example at the beginning, if a family only earning $40,000 has to pay a flat tax of 12% of their income, which is $4,800, what can they no longer afford now? What have you taken from them? Maybe 3 months’ rent. 4-5 months of food. 4-5 months car payments, etc. They are pinching every last penny just to pay for basic shelter, groceries, utilities, and a few other necessary goods. They have nothing left to save or pay into other things in an economy. Take 12% from someone who makes a million dollars a year and what necessities can they no longer afford? What comforts are denied to them? Virtually none. They still have $880,000 left over to afford almost every comfort on earth. 12% of the middle class $150,000 is $18,000, which can feel like it hurts, but they should still easily have basic needs met and a good amount of discretionary income. The cost of living creep is real where having a bigger house or more stuff because you have more money is a factor, but the poorest are already living pretty low standards comparatively and there’s not much worse they should be forced to endure just to pay the tax bill of the flat tax.
 
Instead of going without food, healthcare, vehicle maintenance, and other needs, the millionaires and upper middle class might have to take less extravagant vacations and essentially just lose out on more frivolous luxury instead of necessity. There's a big difference in sacrifice between the two groups!
 
The problem with going after the poorest with regressive taxes, even a flat tax which will hurt them more, is that when people have to struggle even more than they already are, resentment and unrest build. The economy becomes stagnant with more people having less resources, killing demand. Economic inequality will continue to grow apart, leading to more crime, more civil unrest, an increasingly polarized nation, and the rise of more extremism in politics. 
 
Now I'm not arguing for full equality where everyone should have the same income, but I believe there should be more equality in opportunities and at least quite a bit less inequality for a more happy and stable society. People that work hard to avoid debts and go through rigorous school programs for high-paying careers do deserve their reward, but having them pay a larger percentage in taxes after reaching high earning numbers doesn't hurt their overall well-being and contributes to a stronger society. Even when a larger percentage of their income is paid to taxes, they still take home more than everyone else and can still afford a more comfortable lifestyle than everyone else and provide for a better society at the same time.
 
The remaining take home pay for the poor isn’t enough. People need government subsidized housing, food, medicine, and more just to have basic needs met. Some may argue we’d be better off if government just didn’t provide those because people and markets would just “figure it out.” We had that chance to see this in history before these programs were implemented. They didn’t figure it out. There was crippling poverty and suffering.

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Why it’s better:
If you want to keep your lower wages and cheap goods, then you need to provide for the subsidies people need to live. People working full-time jobs aren’t earning enough to make ends meet. People should do what they can to get better jobs, but these are still jobs that need filled. People that do them shouldn’t be forced to endure an impoverished lifestyle.
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If people are keeping more of their own money after meeting basic needs, that extra disposable income goes into the economy. More people would then have the power to save, invest, and maybe start their own business ventures.
 
I believe I have covered the reason why it is fair to ask for the rich to pay a greater share and the poor to pay less or nothing at all from the poorest among us, but If I need to clarify that further please let me know. To answer why a progressive tax is better, comes down to combatting economic inequality by providing better equality for economic opportunity and fostering economic growth. Both are done through strengthening the middle class. 
 
Building on PragerU's three brothers analogy, Harry's children in the future of the video will have much better opportunities and earning/savings potential than their cousins from Tom & Dick's families because Harry's kids are far more likely to attend good private schools, have college and/or other major expenses paid for, and receive greater financial gifts or job networking from their parents. I agree that Harry is allowed to support his children in those ways, but you can quickly see how the economic opportunities will already be different. Maybe Tom's kids had to work through college or put off college because the family needed their income for support due to rising costs. Maybe Dick's family suffers from crippling medical debt when either Dick or his wife are now unable to work due to a medical condition. Their kids will not have the same access to the opportunities Harry's kids enjoy. Yes, everyone in the next generation can work hard and make good choices, but a greater investment in policies that foster middle class growth can help even the playing field of opportunity to compensate for these differences, such as providing affordable education, healthcare, and social safety nets.
 
The first point addresses economic opportunity. The second point for why the progressive tax is better addresses fostering economic growth. An economy doesn't grow much without demand. Businesses need customers and operating money, but customers also need money from wages earned at their own place of employment. Business is cutting costs wherever you can while maintaining or improving efficiency for profit. Employee wages are costs. Employee benefits are costs. Sponsoring community events and little league teams are costs. When the concentration of wealth is too lofty in the top, demand and growth is stifled. When the cost of living is too high and wages too low the cash flow from customers dries up and the general economy starts to stagnate or decline. 
 
Less people controlling more of the nation's wealth and investment stifles growth. It's putting bottlenecks in the cycle. Instead of hurting the well-being of the poorest as a flat tax would, a progressive tax takes a larger share from the pool at the top and, if executed properly, reinvests it into jobs, infrastructure, education, healthcare, and other social safety nets, creating more equal economic opportunities for people to take risks on their own business ventures, provide more opportunities for more people to become investors,  and create an environment for businesses to thrive on new and growing demands. Nobody's overall well-being would be hurt by this. Even the richest paying the highest percentage of their income in taxes are still reaping the rewards of their industry, still have more money than anyone, and can still afford virtually every comfort on earth. If more people have money to purchase the goods and services provided by the rich, then they'll still grow richer despite the taxes.

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In closing, I wanted to include some comments about taxes in general that really irritate me. A big one is the notion that the rich are the "producers" and "productive" members in the economy, insinuating that everyone working for wages and earning less than...a lot, are just lazier and don't contribute very much to society.

I've heard the argument that a tax on capital gains, interest, and dividends is a tax on capital and this is bad because "You're shifting from the productive sector of the economy to the unproductive. Don't tax the 'producers' and 'investors.' You're penalizing people who produce! Progressive taxes are unjust!" Then, they continue to talk about how the rich deserve everything they earn because they are "more productive" and useful to society. Yes, Tom Cruise, the Kardashians, LeBron James, Mr. Beast, and the assortment of wealthy YouTube and streamer stars are far more productive and useful than most Americans, right? I guess you could make an argument for that, but no I think they're only thinking of wealthy executives, business owners, and wealthy professionals when they are referring to people that are "productive." 

In fact, rich people, in their opinions, should maybe pay less in taxes because they create jobs and growth in the economy, right? If you work, you should pay more in taxes than those simply living off of investment income and business profits, not working. They've done enough for society and their wealth continues to bless us all. Let us pay their taxes for them to thank them for their service to society. Let’s give them a free ride so they can create more jobs with their great benevolence. Nonsense!

This argument leads to the gist of the conservative, trickle-down economics theory and here's where I find problems with it:

1.   It ignores demand. Rich people don't just open up businesses or create jobs at random unless there is a demand for their product/services to make a profit. They also don't grow and hire people unless the demand requires it because they are doing so well and need hired help to get bigger. Maybe there are niche cases of someone doing a favor for a connection.

2.   This philosophy assumes businesses aren't growing simply because they don't have enough money, so their taxes are cut to let them keep more of their earnings to have more money available. Again, it's a demand issue. Not enough people are buying their products/services to warrant growth. Getting funding is easy for businesses that are doing well and want to expand. Tax cuts can often provide short-term growth by accelerating expansion plans with the extra money, but if the demand and customer base is low then they aren't likely to expand, even with the extra money. 

3.   This idea is that the rich, or job creators, should never pay any taxes because they create jobs with that money instead. All employees be damned. They should pay for all of society's needs, but if the employees pay more of the taxes and receive poor wages, there's less money to be used to grow business anywhere. All their money is being used up on basics like housing, groceries, utilities, and transportation. No discretionary income for anything else, no demand for other goods and services, no economic growth.
 
This whole subject becomes a debate on finding equilibrium between supply-side and demand-side economics. "What comes first the business or the customer?" Business? Ok, where did the business come from? Investor(s) that wants to make money from a profitable business. Businesses are profitable from lots of sales and good margins. Lots of sales come from customers. We get more growth by investors putting in new businesses, right? If pure capitalism creates jobs, why can't we easily fix any recession and develop any region by putting in more car dealerships? Those create jobs, but they won't last because there isn't money flowing or a demand! Build luxury goods stores in the poorest neighborhoods to provide great-paying jobs to the poor people in need. No. There's no demand, no customers because the people don't have little to no discretionary income.

Obviously, those are examples of terrible business placement decisions, but a whole mall with a variety of in-demand stores could be built during a recession or to develop an area, but the majority would still fail because customers don't have enough money and those jobs pay so terribly that employees can't even afford to shop at each other's stores. 
 
Here's the big takeaway: Supply without demand is waste, demand without supply is opportunity. That opportunity is when businesses are built. There is much more to investment than rich people and corporations just not having enough money. They already have plenty of money or easy access to more if needed. It's the poor and middle class that need more money to grow and start their own businesses.
 
Doesn't the job have to come before demand because that's where people get their money? Yes and No. Yes, most people get their money from jobs, but the owner of my company isn't paying me from his personal money under his mattress. He's paying me with money earned from clients because of the work I do. I do all the work for the clients, but he takes a cut for facilitating the transaction by providing the business and supplies. Sure, I wouldn't have a job without his business, but he also wouldn't have a business without me doing that particular job. He can't do all of the jobs himself and THIS is why it bothers me when people refer to the rich as being “more productive.” 
 
I'm glad for people that live their dream of obtaining financial success, but don't discredit the hard work that all wage earners put in, regardless of how much or how little they earn on an hourly basis. They are the ones actually working and providing the service or product the business sells, sometimes right alongside the company owners.
 
What many people complain about the most is how much of the money earned from doing the job is taken as the owner's cut for providing the business and supplies. I do agree it's fair for them to take a modest amount, but what really rattles people is when business owners and executives suck up all the money and "rob" employees of their earnings they provided through their work by paying them poverty wages. So the question is asked, why is it considered "robbed" if wages are fairly based on supply and demand? That’s a question I’d like to explore another time in deciding where the line is and what’s considered fair.
 
Business owners and executives are compensated greatly when successful, but employees are most often just compensated with the same low wages, regardless of making record sales. Maybe a small bonus will be there somewhere at the end of the year. 

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P.S. Additions

Another argument made is that rich people will be disincentivized to earn another dollar if they reach the ceiling and the next tax bracket it too high, or that progressive taxes incentive laziness. People that say this might not understand what marginal taxes means. If you're taxed at 12% to $100,000, then 15% at $100,001, that doesn't mean you all the sudden have to pay $15,000.15 for 15% of all your income! No! You will pay $12,000.15 - 12% of the $100,000 and 15% of every dollar earned after that. The point is, you still earn money! I guess businesses are going to turn away customers instead of growing and making more money? Then maybe new businesses will take those customers that were turned away and the market share is spread, increasing competition, which is good for customers and employees, right? Solutions business owners could do to avoid that scary tax ceiling they're so scared of is either a)pay employees more to not make so much profit to be taxed, b)charge less for products/services, c) shut down for the year and deal with hiring seasonal employees or new people every year, or d) continue to grow and expand to make more money, but at a lesser rate moving forward. I can only understand being disincentivized to continue operations if the tax is so incredibly high that it actually is prohibitive. I’ve had to clarify this last point several time to people. I am not advocating for everyone to make equal pay or close to it. I just advocate for having the rich and richest pay more, but also not an unrealistic, impossible amount. I’m still trying to be fair and reasonable here!
 
Another point I want to mention is that people often say that higher taxes infringe freedom. How? Just because there's less money for you to use as you please? Ok, I guess, so then you would agree that the poor and lower middle-class people are enslaved with hardly any freedom because they have hardly any money? I guess I can maybe be persuaded to see that you have less freedom if the government is taking too much of your earnings. Again, there is a better balance that can be found.