Vox argues that progressive income taxes actually hurts America's tax income

[Citizen (The) Doctor]

http://www.vox.com/2014/10/8/6946565/progressive-taxes-are-not-the-solution-to-inequality

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Thoughts?

[DC Al Fine]

The idea that you can't finance an excellent welfare state by soaking the 1% is correct. You need to have the middle class kicking in as well for it to work.

[bedstuy]

It's not that simple.  Here's my basic counter:

The middle and lower classes might pay higher taxes in Western Europe, sure.  But, they also get higher public benefits in terms of things like transportation, education and healthcare.  Would you rather pay your insurance company $1 or pay $1 in taxes?  Would you rather pay $1 in tuition or $1 in taxes?  People would willingly pay more in taxes if they got single-payer healthcare and free university education.  Or, put another way, if you're getting the same services, you should be indifferent whether those services are purchased through the market or through taxation.  Ultimately, it's just money out of your pocket whether it goes to Aetna or Uncle Sam. 

Rather, you should look at taxes and spending together.  If you're being taxed less, but you don't get any of the benefits of that taxation, that's not really such a great deal.  On the other hand, if you're taxed at a higher rate, but you have free health and higher education, maybe you actually have more wealth. 

[AggregateDemand]

They are making a dangerous argument in the name of flatter average/effective tax rates and broader tax bases. Loss of consumer choice and economic independence might be tenable if you live in an small country run by intelligent forward-thinking people, but as the population and demography grow, the effectiveness of the state plummets. The northern European civil law states are clustered at the top of the Vox graph. The smaller states are towards the top. The larger states towards the bottom. Same trend exists on the common law English-speaking nations at the bottom of the chart.

The US government is demonstrably incompetent, and based upon the numbers in the graph, I'm sure our real incompetence (FICA income redistribution) has been excluded from this graph. Excluding FICA might be for the best, though. When the social justice mob go looking for the money we're supposed to use for middle-class programs, they'll soon realize its funneling into SS and MED. Maybe that's why Obama wanted to cut $500B from Medicare? 

The progressive average rates are not the real danger in the US tax system, anyway. The marginal rates in the graduated system are what create this mess. The higher your marginal rate the more incentives taxpayers have to avoid taxes by abusing the deduction/credit system.