“Fair is fair.” “Give your fair share.” “Play fair.” These imperatives were a staple for most children growing up in the US. We were all taught as children, that we couldn’t play with the toy for the entire time; we had to be “fair” and share it with others. My children go to great lengths to make sure that TV time is evenly apportioned. When it comes to financially supporting the efforts of our government, what is my fair share?
Let’s do the math. Assume that there are 5 people (only five) in the United States. Here’s what they earned last year.
- $1 million
- $0 (he’s out of work)
We’ll talk about how we spend later. For now, let’s think about how we tax these people? Here are a few options:
I. Tax evenly – let’s say 10%.
- $1M * 10% = $100K
- $500K * 10% = $50K
- $100K * 10% = $10K
- $50K * 10% = $5K
- $0 * 10% = $0
total revenue = $165,000.
II. Tax at a progressive rate.
- $1M * 12% = $120K
- $500K * 9% = $45K
- $100K * 6* = $6K
- $50K * 3% = $1500
- $0 * 3% = $0
total tax revenue $172,500.
III. Tax at a progressive or even rate, but exonerate certain groups because of their low-income. The numbers might look a lot like example II. This is how our system works today.
The question of fairness boils down to how you look at it. There are initially two perspectives. How much are you paying or how much are you keeping. If you are wealthy you probably see the former, “I paid $120,000 while the bottom guy paid nothing, even though he was working.” And if you are poor or middle class you probably focus on the latter. “I only made $50K, sure I didn’t pay anything but that rich guy kept $820,000 to play with, he can afford it, I can’t.” Both views make perfect sense. I have been on both sides of the fence and completely get it.
Our society should continue to promote the importance of market determined value of what we do, so I propose a third view on how to tax. Let us consider value, not the value of the money but the value of our time. I believe that most Americans work very hard at their job. The construction worker and the plumber crank it out all day sometimes six days a week. The corporate executive does the same, and while less physical, the demands are just as onerous, time consuming and stressful. The business owner has to wake up every day and succeed or fail by her decisions. Most of us are working hard.
I propose that we all agree that we will give to the government an equal percentage of our time out of the year. This is a flat tax position, but a fair share of our working time in a year is a clear value set.
I say we all give 6 weeks of pay from work to the government. That’s it. No more no less.