A tax reform you probably haven’t heard of

All tax systems are inherently unfair. Only if everyone paid the state for the value of the services provided (or if no one paid any taxes because the state did not exist) would it be possible to justify a particular tax schedule as morally superior to all alternatives. But neither of those regimes are realistic. After all, most government spending is meant to prevent or ameliorate severe poverty. If the beneficiaries of that government spending could afford to pay the amount of taxes that is “fair,” they would not need to receive state aid in the first place.

Suppose the government confined itself to providing basic physical security to its citizens. It is still not clear what would constitute a “fair” system. Would the salaries of the police and the cost of their equipment be split equally among all members of the population? Or do those with more property derive greater value from the security that the state provides?

So every tax system has to be somewhat arbitrary. This does not mean, however, that there are no better systems than the one we have. Today, I will present a practical alternative that is never discussed: the progressive continuous income tax. Read more of this post