Well
by ufl (2024-02-17 17:56:04)

In reply to: I'm also not an economist!...  posted by Kbyrnes

Cannot Reply Return to Political

I guess there are two issues: (a) the definition of progressive/regressive and (b) the justification for progressive taxes.

If the taxes paid by an income group as a percentage of that income rises with the level of income the tax is progressive. If this falls as income rises the tax is regressive. Of course the categorization depends on a calculation of who actually pays a tax and economists have their own way of doing this.

The justification for progressive taxes is not usually based on fairness. Economists find this to be a slippery concept. The argument is utilitarian: Progressive taxes produce less pain for a given amount of revenue raised. The idea is that the reduction of utility (pain) caused by depriving someone whose income is $200,000 of $50,000 worth of consumption is less than the reduction of utility caused by depriving someone whose income is $40,000 of $5,000 worth of consumption.

Replies: