Friday, March 13, 2009

on socialism and the graduated income tax:

a brief and simplistic description of economic systems:

The Socialist/Communist (there are differences, but mostly not) way:
Imagine you are in a group of 10 working people. You have no money at the start of the day. The owner of a warehouse announces that he is paying $1 for every concrete block moved within the warehouse in an 8 hour period. At the end of 8 hours, you have moved 300 blocks, 4 others have moved 150 blocks each (600 total), 2 others moved 50 apiece (100 total) and the last 3 guys slept all day in the corner. So at the end of the day, 1000 blocks were moved, and the owner pays each of the 10 workers $100.

(rationalle: the effort put forth by the workers belongs to "society" not to the individual worker, therefore the product of that effort must be divided equally among all the workers)


The Free Market way:
The same initial conditions apply and the same work (or not) is performed by the workers. At the end of the day, each worker is given $1 for each block he moved. So you end the day with $300. Those who did not work, got nothing.

(rationalle: each worker owns his own effort, and is entitled to compensation relative to the effort he provided)


"Free Market" With a graduated wage tax:
The same initial conditions apply and the same work (or not) is performed by the workers. at the end of 8 hours, you are paid $300, then the "tax man" comes and takes $75 from you, $20 from each of the 4 who moved 150 blocks and $5 from each of the 2 who moved 50. He then takes $15 for "administrative costs" and gives the 3 who slept all day $50 each, because they "are poor, and are unable to support themselves". You wind up with $225 for moving 300 blocks.

(rationalle: i can't really think of one, but it must be similar to the socialist model)

which of these systems is fair?

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