Tuesday, September 8, 2015
On the Fact that William Jennings Bryan (a Man Who I Admire in Many Ways but Who Disappointed Me Here) Actually Tried to Convince the American Citizens that Adam Smith Was a Supporter of the Income Tax
This, straight from Smith's "Wealth of Nations"; "Capitation taxes, if it is attempted to proportion them to the fortune or revenue of each contributor, become altogether arbitrary. The state of a man's fortune varies from day to day, and without an inquisition more intolerable than any tax, and renewed at least once every year, can only be guessed at. His assessment , therefore, must in most cases depend upon the good or bad humour of his assessors, and must, therefore, be altogether arbitrary and uncertain.............An inquisition into every man's private circumstances, and an inquisition which, in order to accommodate the tax to them, watched over all the fluctuations of his fortune, would be a source of such continual and endless vexation as no people could support."......Well said, Adam. Well said (and, yes, he was clearly wrong about that last part in that the average Joe of today has no problem whatsoever in taxation as long as it doesn't pertain to him).
Subscribe to:
Post Comments (Atom)
5 comments:
Perhaps Bryan referred to the first of Smith's maxims, Equity:
"The first of Smith’s tax maxims, equity, reflects his belief that the wealthiest benefit most from government and can most afford to pay. “The rich should contribute to the public expense not only in proportion to their revenue,” Smith believed, “but something more than in that proportion.” Equity, according to Smith, requires progressive taxation. That principle is firmly embedded in the U.S. tax code today." -from an article by the Heartland Institute
I believe that progressivity can be achieved in a manner other than the income tax; a national property tax, a higher sales tax for more expensive items, etc.. And the the fact that the rich benefit more from government I believe means the local government.
Also from that article - "Smith was most critical of taxes on wages and profits. Both diverted resources from wealth-creating activities, he pointed out, and raised the prices of manufactured goods by more than the amount of the tax. Taxes on the profits of “stock” were destructive of wealth creation because “stock cultivates land; stock cultivates labor,” and a tax on profits diminishes both “the rent of land and the wages of labor.” These considerations remain relevant today as politicians debate the taxation of dividends and capital gains."
Whatever our take on Adam Smith, he was no doubt brilliant, but his experience was
confined to the economics of a couple centuries past. He had no concept of derivatives, for example. Nor was he the first to recognize that skewed wealth
distribution presented societal problems.
What presents far more societal problems is poverty and it it has been capitalism and free trade that have gotten more people out of poverty than anything else on the planet (the fact that the standard of living was essentially a straight line for 18 centuries and it was when the West instituted economic liberalization that it started going up rapidly).......And, yes, a poor person in the U.S. today lives better than a king did just 300 years ago.
Post a Comment