Re: And this is where the complexity comes in..
* VAT is regressive. It isn't so much of a problem as is usually presented.
And yet it is. It's very simple: whenever a poor person and a rich person buy the same item, the poor person pays a greater proportion of his or her income in VAT. That's the definition of regressive.
People who buy more expensive items, even of the same type, pay more tax. Are you saying that's a bad thing?
They pay proportionately less even though they can afford more; that is what I'm saying is a bad thing.
Maybe, despite what you might want to be true, greater inequality is a by-product of generally increasing wealth overall.
Try this thought experiment to test your real attitude to income inequality: where would you choose to live if you were born into a random family, Denmark or Brazil?
If you answered Brazil, then you'll have lovely beaches upon which to sell snacks, but opportunities for fulfilling your potential have historically been few. Thankfully though, the situation is getting better, thanks in part to the redistributive policies of Lula and Rousseff.
If taxes are too redistributive, they may reduce or remove the incentive to invest and create jobs. Which in turn lift people out of poverty.
The point at which higher income tax rates become counter-productive (i.e. the down side of the 'Laffer Curve') is approximately 70%. A rate that high would sting, but people would indeed still work, so it's not fanciful to suggest it.
Estate taxes, on the other hand, what's the argument against them? That it would remove the incentive to be born into a rich family?