Taxation and Redistribution

A reading from my class, “The Challenges of Global Poverty“, this economic paper discusses the elements and faults of progressive taxation, and suggests at a solution.

Taxation and Redistribution by Friedrich A. Hayek examines the current system of taxation that is referred to as ‘progressive taxation’. He outlines how the current system is largely unfair, penalizing primarily the wealthiest and poorest of any country by placing them at the highest taxation brackets. This is done, he postulates, as not only a means to redistribute the majority of income, but also to glean the approval of the voting majority.

The argument is made that the wealthiest are unfairly overtaxed and that an across-the-board tax should be introduced to replace progressive taxation. For this, all classes and tax brackets would be eliminated and everyone – including the government – would pay the same tax rate. The author admits to flaws in even this system, but suggests that the benefits would outweigh the flaws.

To read Taxation and Redistribution for yourself, click here. It is in 8 sections, so you can read it a little at a time. I’ll wait. I also welcome you to post your thoughts below so we can discuss this further!

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