Reply to post: Re: Pretty meaningless metric

Non-doms pay 10 times more in income tax than average taxpayer group

Dr. Mouse

Re: Pretty meaningless metric

I've not seen that before, it's an interesting explanation both of how our tax system works and how "let's tax the rich, they can afford it" can affect things.

Let's just say for a minute that, before the bar bill reduction, the eighth person looses his job. He joins the lower 4 and pays nothing. Now there is a $12 deficit. As the 10th person "can afford it", the 9 decide that he should make up the shortfall.

The tenth man thinks this is unfair: He is already paying 59% of the bar bill, why should he pay the extra? So he decides to stop drinking with this group, who are treating him unfairly. Instead, he joins a bunch of better off friends who split the bill equally at a swanky bar. He still pays $59, but in a nicer place, with people who aren't trying to treat him unfairly.

The 9 remaining friends try to recalculate, leaving the 9th person paying the most. He decides this is unfair, too, and leaves. Eventually, the remaining parties can't afford to pay anymore, and rail at the others for leaving.

Most people agree that progressive taxation is the best way. However, push the top too far, and they will leave (or try to find loopholes). These are the people who are most mobile and have the most options about where to live and work.

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