Comment by ChuckMcM | Hacker News Reader

Comment by ChuckMcM | Hacker News Reader

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Many western economies have a graduated tax system, that is the more money you earn, each additional dollar is taxed at a slightly higher rate than the previous dollars (or euros). You will experience this as the harder you work the more money you are obligated to give to the government.

But here is the rub, what if the Government spends the money you gave them on an all expense paid trip for themselves to Las Vegas where they ran up big bills at strip clubs and on luxury suites? How do you feel about that?

How about the Greek people, their economy in flames, their country ruined, where "not paying taxes is a national pastime" according to The Economist.

The insight you are missing is that when "your" opinion of the government's fiscal policy is destroyed by abuse, "you" feel completely justified in exploiting all the legal ways to not give them any more money than you have to.

It is hard for an individual to fix government it is easy for an individual to minimize their tax burden. So people take the easy way out.

> You will experience this as the harder you work the more money you are obligated to give to the government.

This is not really true. There are many ways to make money without expending much effort. Example: capital gains. By simply having a lot of money, I can invest this and make a solid profit...and be taxed in a lower bracket.

It has no bearing on effort expended. In fact, you can easily argue that "More Effort = More Money" has a very definite ceiling which you can't cross. At some point, you have to start leveraging other assets (money, employees, etc).

Taxing based on the amount of income earned is really the only sensible way to tax. You can't tax "effort"

I don't disagree with your thesis that earned income is a reasonable basis for taxation, it is certainly better than 'value added.'

But wonder if you are arguing that earning money through non-manual labor is 'effortless' ?

This could use some clarification:

" By simply having a lot of money, I can invest this and make a solid profit...and be taxed in a lower bracket."

Is there some magic money pool somewhere that I can put a million dollars into and count on it to make a "solid profit" ? What is a 'solid profit' ? Is it inflation + 4%? 5%? 10%?

People have told me that programming takes no effort, they say "Oh yeah, you just go in there and type in some stuff and make a word processor or something and then sell that again and again for $100, its like printing your own money!" I realize that they don't understand what programming involves in terms of making a living at it.

For the last 15 years or so I've had the opportunity to manage the funds that I rolled over from a 401K as a 'self managed IRA'. I haven't found making that money 'grow' either easy or effortless. Rather it has been very much a challenge.

During the dot-com frenzy I knew people who mortgaged their houses to raise capital that they were going to 'make money hand over fist' with. But I don't know any of them where that turned out to be the best use of that capital. Not definitive I know but it made me cautious.

It takes effort to make a solid profit from investing, but more than that, it takes effort to avoid losses.

That's one of the reasons wages and investment are treated differently: your effort can be wasted in either case, but with investment you can also lose your capital.

Largely true, with the exception of the banks lucky enough to be a Primary dealer for the Federal Reserve, for whom the Fed is indeed your magic money pool.

In regards to investing, nearly everyone is best off just investing in an index fund of the entire market.

The progressive income tax exists because there's a diminishing marginal utility of income.

In regards to government expenditures, I'd say generally, it makes sense morally to reduce your tax as low as possible, and than donate that amount to charity, research, or whatnot, not just because government wastes money, but because they use money to engage in horrific activities such as the Iraq War.

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