Comment by readthenotes1
Comment by readthenotes1 4 days ago
Even Georgism style taxes will face the problem that if the tax is high enough, it will be worth hiring some really smart person to figure out how to work around it.
Of course, you're also going to have to face the problem that representative democracy includes the ability to buy loopholes.
And then, there are unintended consequences because representatives aren't necessarily the most financially savvy. I'm thinking about the 401k program that disproportionately advantages high income people when it was touted as a savings route for middle class people.
The 401k statute didn't actually grant any additional abilities to people: It set limits on a tax dodge you could already do. If I'm a CEO at $MEGABUCKS, and I make vastly more money than I need each year, I'm paying in a high tax bracket. I could instead strike a deal with my employer: cut my pay in half, and then keep paying me after I stop working here (pausing payments if I get another job), until the difference between what I would have made and have made is eliminated. All perfectly legal. But what I've done is taken money that was destined to taxed at a high tax bracket, and deferred it into a lower one (by spreading it across multiple years).
401k identifies this loophole and sets limits. Setting contribution caps, limiting withdrawals until retirement, etc. Then they incentivized offering it to the poors, too, because working out an ad-hoc agreement like that is the sort of shit only really high power people in a company have the opportunity to do.
In short, the primary purpose of 401ks wasn't to benefit the middle class, it was to slightly reign in the rich.