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Nolan Finley | Tax code milking cash cow dry

Progressive tax rates  have always puzzled me because they assume that government has different value  for citizens based on their incomes.

Break government down to the basics and it is essentially a provider of  services — defense, transportation, the legal system, schools,  etc. — that customers want or need and are willing to pay a price to obtain.

In that way, it’s little different than a private sector business.

Except in the private sector, goods and services have a set value; all  customers pay the same. You don’t have to scan your 1040 at the gasoline pump to  set the price per gallon.

Only in government does every customer pay a different price for the same  thing.

Reader Jon Taub sent me a note last week putting the difference between  government and private sector pricing in perspective.

Taub, a corporate lawyer for a Detroit business, notes that the top 1 percent  of earners pay for 38 percent of the general fund  services delivered by the federal government.

Forty-seven percent of earners pay nothing for these services. And the bottom  40 percent actually get a reverse payment from the federal government in the  form of a refund on taxes they don’t pay.


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