Gustaf
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Political Matrix
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« on: April 18, 2010, 12:37:02 PM » |
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The marginal utility of money falls with higher incomes and that is the basic case for progressive taxation.
Taxing people with the lowest incomes the same as everyone else would force the tax-rate to be extremely low, which would mean a lot of problems.
Besides, from what I've seen, the distorsion effects of progressive income tax aren't really that high. IIRC, the US system is probably too complicated though. The Swedish system only has two brackets (well, formally 3 but the third is so high up it doesn't really matter) and that's fine.
There are other issues to deal with, basically.
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