![]() On the other hand, someone making $100k year can easily give up a few extra thousand.Īnd many do, through charities. Also, if I'm not paying any income tax and you are, it doesn't seem fair that I can vote to have you pay more income tax. Everyone should have some skin in the game, at the very least so that they realize that the money that they receive through transfer payments comes from the people around them. They can't put even a nominal amount, like $20 into the system? That's like two packs of cigarettes. Those people already make so low an income that every dollar they make already goes to food and shelter. So 10% for someone who makes $20,000 a year is a big deal, whereas 10% for someone who makes $100,000 a year is less of a big deal. The utility of money decreases as you get more of it. You're not swimming in the money like Scrooge McDuck or whatever, but if you lose 10% of that money, it just means you're going to have slightly less luxury it's not going to put you out on the streets or anything. You can eat out, take vacations, buy nice things. At this point (again, we're talking about the bump in pay from $40,000/year to $60,000/year), you can have some comforts. Losing 10% of that would still be pretty painful, but you'll survive. This is the money that might keep you well fed and with good transportation. The next $20,000 are very important, but not quite as much. ![]() Losing 10% of that money might literally make you homeless. ![]() That's because the first $20,000 are the ones that keep you off of the streets. Your first $20,000 are way, way, way more valuable than your next $20,000 dollars, which are in turn a lot more valuable than the next, and on and on. The basic concept is the marginal utility of money.
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