One of the things that hinder a country’s economic growth is the idea of progressive tax rates.

Many people who support this idea believe this to be a way of taking the rich’s money to help the poor (they believe the rich have more than they need anyways).

This sounds kinda nice but let’s examine this in more detail.

Suppose I put a gun to your head and say, “You have more money than you’re ever going to need. So, you need to give me some of your money and I’ll use that money to help orphans.”

Would my behavior be acceptable? Of course not!

But that’s what the government’s doing via progressive tax rate!

If the rich don’t pay their taxes at the progressive rate, the government will fine them. And if the rich refuse to pay the fine, the government will send someone to the rich’s house. And if the rich refuse to let that person into their house, that someone’s going to force themselves into the rich’s house.

The idea of progressive tax rate might be well-intentioned but forcing someone to ‘do good’ or ‘help others’ is not a good idea.

Even if the rich can somehow be successfully coerced into ‘helping others’, do you think the rich will be happy to see their money being spent on other people?

They will not.

The rich, who was basically robbed, will be more likely to feel resentful.

They might even move to tax haven countries, like Singapore and Switzerland.

And when their companies move to another country, many employees will be laid off, causing unemployment to spike.

Furthermore, progressive tax rate significantly affects people’s desire to work.

Why would people want to work hard when they’re going to get taxed to death?

These are some of the reasons why, I believe, a flat tax rate is preferable to a progressive tax rate.

#economics #tax #government