Tax fairness is an oxymoron

Definition: Oxymoron is something created by and for morons.

Taxes mean sharing. The grand idea behind taxes is that the government provides us with some services such as military and police protection, social programs, economy regulation, and so on. We can (and many people do) forever argue whether we actually need some of these services and whether the government is able to effectively provide them (there’s little argument about this one).

It’s not the point. The point is that all these programs need to be paid for. So, all Americans are expected to reach into their pockets and fund the government. This is called taxes.

My fair share is less than yours!

The trick is to decide how much each of us should contribute. This is about fairness. Unfortunately, no two people can agree on what exactly is fair. Some of the popular ideas are:

  1. Everybody contributes equal amounts, regardless of anything else. Sounds simple, but some people say it’s unfair. Their reasoning: the poor need to pay less, because they can’t afford more.
  2. The more money you have, the more taxes you pay. This solves the first problem, but can still be considered unfair. Explanation: the people who benefit the most will pay the least.
  3. The more government services you use, the more taxes you pay. And how do we measure the use of government services? I guess, the speeding driver “uses” more police services. But he already pays for that, right?
  4. The more money you spend, the more taxes you pay. Let’s define “spending” first. Isn’t it unfair to treat buying groceries, buying jewelry, and buying business machinery the same way?

And now, to implementation

Let’s leave the ultimate fairness solution to the philosophers, in-laws, and Judge Judy. While they’re busy working on it, we must face the sad truth: even if they can agree which one is the most fair approach, we will never agree on the implementation.

  • How do we count how much money each of us has?
  • How do we measure consumption?
  • How do we prevent fraud and abuse?
  • How do we account for children and retirees?
  • And how much taxes should be paid after all this is considered?

Finally, on the compliance issue. Even if there is the magic solution that is somehow fair to everybody, how do we make everybody pays his or her (now fair!) share? Because nobody ever cheats on taxes or otherwise. What about all these people who never “have money” to pay? Have you ever done dutch with somebody who forgot his wallet at home? It is only fair that you pay for both, right? And the next time he will pay for you – unless, of course, he “forgets” again.

Bottom line

No matter whether we talk about current US income tax or some future version – it is and will remain unfair.

And we still have to comply. Why? One silly reason would be that it’s a Federal law. Ironically, writing and enforcing that law is funded by taxes.

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