Roger Odisio wrote,
> The clearest way to see the effect . . .
The key word here is "effect". The illustration you gave, Roger, is not of
a flat-rate reduction but of a lump-sum rebate. Under the circumstances, a
lump-sum rebate _would_ be progressive in the strict sense that I
use. Unfortunately, it doesn't illustrate the case we've been talking
about.
> In a tax system with two tiers, which do you think is more
> progressive--when the poor pay 1% of their income and the rich pay 40%,
> or when the poor pay 2% and the rich pay 80%. Or are these the same
> because the ratio of rates stays the same?
This two tier tax system is too abstract for me to touch. Say the "poor"
earn $10,000 a year and the "rich" earn $15,000. Neither tax system could
be considered progressive because neither respects the principle of
ability to pay. Your underlying point here is a valid one: that
judging progressivity simply by the ratio of rates is an over
simplification. But I don't think one corrects for the over simplification
by adding false analogies and even more over simplifications.
Tom Walker
