https://www.theguardian.com/business/2012/jul/21/global-elite-tax-offshore-economy

The less money you have, the less effectively you can use it, and this scales all the way up. If you make enough money to afford a car, you don’t have to go to the shitty grocery store across the street, and can head to one with better prices that’s out of walking distance. If you make more, you might be able to afford a Costco membership, and buy your groceries in bulk sizes, which is a lot cheaper. And maybe you can trade in that shitty used car that was all you could afford before for something that gets more MPG and doesn’t require costly repairs every six months. And instead of buying a cheap pair of sneakers you’ll have to replace in a half a year, you might be able to buy yourself a decent pair of shoes that’ll last you a few years. In many cases, you end up paying less in the long-run by paying more in the short-run.

So having more money means you can use it more effectively, giving you more bang for your buck. But it also gives you more opportunity, and not just opportunity to lead a better life, but more opportunity for upward-mobility.

Think of the costs associated with getting a job. To work in fast food, you presumably need some clean clothes, maybe a bus pass. To be able to shop around for a better employer, you’ll need decent, reliable transportation. To get a better job, you might need better clothes, a cell phone, a computer with an internet connection… and moving up the scale, you need a college education… and for that, you’re looking at tuition, books, and the costs associated with spending the amount of time it takes to get through college without a well-paying job.

If you can barely afford the clothes on your back, you’ll be lucky to be earning minimum wage… and maybe after a few years of scrimping and saving, you’ll be able to get a car, and have some slightly better options. If you have a decent income, you have a much better opportunity to get a college degree in a high-paying field, or work your way up the corporate ladder.

That’s not even getting into the facets of your life that indirectly affect your job opportunities. If you’re wealthier, you have better legal options, which means that you’re less likely to be convicted or spend time in prison, even for committing the exact same crime as a poor person. You have better medical coverage, which means less time spent having to call in sick to work, and being more fit also makes you a more appealing job candidate. There are even some ties between level of income and access to a nutritional diet – low-income folks generally eat shittier food because they can’t afford to buy healthier food.

This isn’t a fluke. It’s how money works – the more of it there is, the more powerful a force it is, even proportionally, and the easier it is to get more of it.

However, there’s another side to this too. The more money you have, the more expendable any portion of it becomes, even proportionally-speaking. Let’s look at three guys, Allen, Billy, and Charlie. Allen makes $20K a year, Bill makes $200K a year, and Charlie makes $2 Million a year. Each is taxed at 10% of their income… but as need to happen sometimes, the taxes need to go up. Let’s say they double, so it’s 20% now – the same for all three, right? Hell, it’s harder on the richer, because they’re paying more money than the poor guy! But in actuality, it’s the poor guy who’s sacrificing the most because of this, because so little of his income is expendable. Now Allen needs to decide between paying the rent and paying for food. Bill needs to hold off on that family vacation to Europe he’s been planning. And Charlie… well, Charlie will gripe about the number in his bank account being less than he’d like, and then he’ll go and buy his twelfth Ferrari anyway.

That money you supposedly “own” isn’t even really property, it’s an idea used to facilitate the operation of a healthy society, and it does so by making an easy, simple conversion of property into a common exchange value. But since its very nature is uneven and broken, it needs to be addressed as such. And since a 10% tax hike on someone earning $20K is not the same as a 10% tax hike on someone earning $2 Million, for the many reasons I’ve just stated, we have progressive taxation, where the wealthier you are, the greater a portion of your income you contribute in taxes.

To take this to an extreme, if there was an across-the-board tax of 50%, with wages in America what they are now, the wealthy would still be living comfortably, the middle class would be scraping by… and the poor would starve to death. Treating everyone the same is not fair.

Republicans and those aligned with them like to paint this in a way that’s essentially “ganging up on the rich people”, “punishing” them for “success”. However, if you treat everyone the same, make everyone pay a flat tax rate, then you are punishing the poor, who are less able to afford it. And it’s easy to point at the numbers and turn them into a picture that shows the terrible burden the wealthy have to pay thanks to progressive taxation… but the truth of it is, the reality those numbers translate into is one where the wealthy can afford to contribute more, without any noticeable change to their lifestyle, and it’s not just because they have more to give, it’s because the fact that they have more makes them less dependent on it, better-able to acquire more of it, and less affected by its loss (again, even by proportion).

That is why any reasonable capitalist society taxes the rich progressively more than the poor. It’s not to “punish” anyone for success, it’s because the nature of money makes it far more invaluable by proportion to the poor than it is to the rich.

A simpler explanation for the benefit of the religious right: “As Jesus looked up, he saw the rich putting their gifts into the temple treasury. He also saw a poor widow put in two very small copper coins. ‘Truly I tell you,’ he said, ‘this poor widow has put in more than all the others. All these people gave their gifts out of their wealth; but she out of her poverty put in all she had to live on.'” Mark 12:1-4

There is another discussion here. Namely the more you make the more you spend, but there is a threshold at some point where this stops being true. Cut taxes all you want and by extension leave more money in people’s pockets for consumption but that threshold still remains constant. Why? Because you could only consume so much. Even with all the money in the world. Just because you make 300x more than the next guy doesn’t mean you are going to go out and buy 300 pairs of pants or 300 cars. Hence cutting the rich guys taxes by moving from a proportional to a flax tax scheme will do nothing for consumption – the real engine of economic growth – making up 11 out of our near 15 trillion GDP. I mean, what would be the purpose of any tax change if its not meant to “grow the pie” and by doing so expand and improve upon the social goods which could be offered to society?

By extension we could also say that while the guy that earns more spends more, this is only true absolutely, not relatively. Eventually the more he makes he actually spends a smaller and smaller percentage of his total income. The truth is the poorer someone is, the greater proportion of their total income MUST be spent. Regressively increase their tax burden by any measure and they will either be forced to spend less of their already bare bones budget or carry greater debt. So in the end. So yeah, we could bring up Consumption-to-Income schedules, MPS’s, MPC’s, laffer curves… but nah.

There is so much to say on this topic from who should pay more to who deserves the greater share of society’s wealth. I won’t get into how the accumulated wealth of the higher incomes is actually the result of a mass expropriation of the surplus value of all of societies aggregate labor and thus the wealth created by this labor but only partially paid for with less than true value wages and salaries. Let’s however look at the question “Why should the rich pay a greater proportion of taxes”? The answer is… because they use and benefit to a much greater degree from government provided good and services. Think of commerce. My taxes go to pay for transportation infrastructure such as highways, trains, bridges and such. Such I benefit at a very micro-individual level from these things but compare that to the benefit bushinesses reap from having the things in place. Or how my taxes pay for schools which to a greater extent benefit the private sector with a literate ready to work labor force they don’t have to train out of their own pocket. How about “defense”? How have any of us individuals benefited from this country’s adventures in Iraq and Afghanistan? Please, someone enlighten me on this one. I go to the airport, I go to the courthouse, I go to the post-office and sorry I see quite the opposite. But I digress. Now, how many corporations benefited from Iraq and Afghanistan? So here is the seed of the argument. You benefit more? You pay more.