Dr. Karol Skorek: Why does progressive taxation make sense?
The phenomenon of competition can be considered part of the natural world. Eventually, predators devour herbivores and herbivores consume plants. We, too, as humans, are part of these eternal mechanisms. The marketplace economy system, our own creation, besides works on the basis of rights arising from nature. The wolf devouring sheep is an analogy to a large chain of supermarkets that destroys small, family-run vicinity stores.
In capitalism we see expansions, mergers, acquisitions, bankruptcys, acquisitions of uncommon resources, ups and downs. This economical strategy is why it has survived for so long, due to the fact that it fits into the nature and processes of reality – even though so many bodes for it to fall.
However, modern marketplace economies are global in nature, while animals do not have specified method opportunities for expansion. In another words, saltwater fish cannot replace freshwater fish for reasons of biological limitations. On the another hand, the world's dominance of man causes global capitalism to have more possible for proliferation than many animal groups.
Healthy economical and natural systems are based on a balance of power. It's bad erstwhile invasive species disrupt the trophic net. Similarly, in economical life, the dominance of an all-powerful state is as bad a solution as the dominance of powerful corporations. Calculation of the many advantages of biodiversity at the same time we can calculate the many advantages of strong competition on the marketplace – there are any analogies here. Therefore, favourable legal solutions are to build a strong mediate class, to support tiny players in their development.
On the another hand, larger organisations should be liable for maintaining the system, which are adequately fiscally charged. As in everyday life, we require more work from adults than from children, and neither can we impose the same standards on companies of different sizes. The immense disadvantage of Polish government is that the government puts all companies "in 1 bag", thus harming the SME sector, which cannot afford to employment a number of administrative staff to meet unreasonable legal requirements.
By imposing excessive taxation and legal restrictions on tiny economical entities we contribute to the phenomenon of Polish region death. The state of our country falls into a vicious ellipse associated with the deficiency of people and an ageing population. The mechanics is that since there are no people, there is no demand, and since there is no demand, there is no occupation due to the fact that these are non-attractive areas for entrepreneurs. In this situation, most youths make exodus abroad or to a larger city, thus further exodus the problems of a tiny urban or agrarian centre.
Rather, the bad direction of the evolution of Western taxation systems was to taxation income alternatively than turnover. As a consequence of the current solutions, we can consider the strategy of creating artificial costs, which in fact is simply a denial of classical capitalism, where the key was to reduce costs and maximize profits. Medial example of this phenomenon can be widely commented data on CIT contributions to InPost groups – in practice it turned out that this company paid 4 times the taxation in a given year than its full competition combined.
In another words, we have created solutions that push the fiscal screw of the generality, while business sharks employment good law firms to optimise their tax. What harm would it have been if it were precisely the opposite, i.e. young, tiny entrepreneurs would pay comparatively little, while larger economical entities would be taxed more proportionally?
An crucial argument justifying the concept of progressive taxation is the marginal utility explanation of money. A man needs small to last for his basic function: any water, food and clothing. That is why it is so crucial for each of us to make the first money we gain – our biological endurance depends on them. But the more mammons we get in maturity, the faster we start to see that money is vanity, which is not always the same as happiness.
Buying the tenth car is not as happy as buying the first car, which allows us to get to work and basic functioning in modern society. In another words, erstwhile the gross of an entity increases strongly, the marginal utility of money falls, hence the transfer of these funds towards the state seems justified. erstwhile we have large opportunities in terms of individual budget, then the greater the temptation to make unnecessary expenses.
Consumerism in our day frequently besides shows its gloomy face. An example is the problem of obesity and civilizational diseases. Excessive food consumption has negative effects on public health. We besides have a immense amount of garbage, deliberate product ageing, eternal chemicals. erstwhile we read about the tons of plastic that goes into the ocean all year, it adds to the empathic man a simple regret.
The old theories about the first accumulation of capital proved true. Furthermore, the current financial system, which is necessarily connected with the partial reserve and fiduciary money, only strengthens these mechanisms. rather faithfully these issues are described in Oxfam reports on economical inequality. More and more voices are being warned about the increasing billionaires who, in the close future, will be like the Faraon rulers.
Even in the practice of economical life, we see how frequently powerful oligopoles are formed (AMD Intel account, Allegro vs. Temu). And it is thanks to appropriate taxation stratification that we are trying to prevent excessive concentration of capital.
For a long time, the request for taxation of rich people was considered unfounded, as was justified by the alleged grasping theory, which is not part of pure economical theory, but a certain publicist slogan. According to her assumptions, the financial resources of wealthy people are redistributed towards poorer layers, even by means of purchases, when, for example, the cresus buys a product from a craftsman.
This concept does not work mainly due to the fact that the rich core of its resources invests in money that makes money alternatively than in material goods from tiny producers. Millions buy cryptocurrency, bonds, funds, shares – these are capital-intensive sectors, providing a modest number of fresh jobs.
Implementation of reasonable progression is 1 thing. The second subject concerns the apparent reflection that taxes cannot be raised indefinitely. 1 of the conclusions regarding the Laffer curve is that the overly restrictive fiscal strategy achieves counterproductive effects as budgetary revenues are beginning to decline. Many socialist governments have withdrawn from their solutions erstwhile the richest simply began to account for taxation in another countries, an example of which could be France, which had given up 75% of the income taxation rate any time ago.
It seems unreasonable to lead to a situation where the wealthier state that emigration is simply a more reasonable alternate than remaining in a country of fiscal oppression. In another words, the architecture of progressive taxation can function decently unless it is led to absurdity.
Conclusion
A financial strategy based on fiducial money causes a noticeable mediate class pauperization in various places of the world. The proportion between our earnings and property prices is increasingly dilapidated, which has a peculiarly negative impact on young people who are frequently forced to live with their parents. According to the author, the emphasis on taxation of rich people is simply a partial remedy to the above mentioned problems.
An equally crucial subject relating to the application of different fiscal rates in the practice of economical life is the dilemma as to how much these solutions are in line with the concept of justice – these divisions require, however, due to their complexity, separate considerations.
When a country successfully creates a progressive taxation system, the question of what to do with these funds must besides be answered. According to the writer, infrastructure investments, the improvement of education, the focus on investigation and improvement are key. The money spent in this way will yet be paid off and will come back with an surplus. In particular, actions promoting degglomerations are important, i.e. taking care to strengthen the state of the country, not just a fewer large cities.
Many housing problems for young people are due to this force on surviving in "Megalopolis". In addition, the improvement of social expenditure can be regarded as a major mistake. The welfare state yet leads to: moral depravity of the general population, rejection of a healthy ethos of work, and increasingly widespread social groups in inactivity and pathology.
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