Re: Income inequality benefits the poor.

Peter B. P. wrote:

Are you kidding me? Last time I looked, "Nospam" advocated a heavily
progressive income tax.

Correct me if I'm wrong, I'd really love to be!

No. You are quite correct here.
The reason for a heavily progressive tax are very simple:

By many psychological studies it looks like both the satisfaction and social
utility generated by extra wealth follow a logarithmic curve.
That means that an extra 1000/yr bucks bring a lot of satisfaction to those
earning 10k/yr or less, bring less satisfaction to somebody earning 100k/yr
and almost unnoticeable satisfaction/extra utility to somebody earning
1M/re or more.

By analogy I expect it should be exactly the same with taxation.
The unhappiness generated by taxing the millionaire 1000 it is almost
insignificant compared with the unhappiness generated by taking 1000 from a
minimum wage.

It is possible to design a progressive taxation that emulate a logarithmic
growth. By doing that, you generate an equal unhappiness among the spected,
while generating a lot of happiness at the bottom by linear increase of
social programs.

So, in the end the progressive taxation should be the optimal taxation
solution: You generate a logarithmic unhappiness while generating a linear
happiness. At least from the mathematical optimization point of view, make
a lot of sense.

If also you look at the proven fact that an increased polarization in
society actually slows down the economy:

http://www.angelfire.com/planet/dragonomics/polarization1.pdf

There is absolutely no reason any logical person will ever oppose a
progressive taxation. The only reasons may be either greed either a clean,
fresh, nicely washed brain.


.

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