My Individual Tax Policy is based on forest management principles. The first thing a forester does in managing a forest is to model what they want the forest to look like in the long run, then prescribe management activities to slowly bring that forest into the shape of the model they created. The model is based on scientific data collected about the environment and the tree species, specific information about how the trees grow and reproduce. The management activities include harvesting, prescribed fire, and planting.
Graph A is a basic model of a stand of trees a forester might be trying to achieve; it is population on the Y axis, versus age/diameter on the x-axis (giving that in a healthy forest the trees will get bigger with age). The graph shows a high number of seedlings and saplings, and decreasing in population as the size and age of the trees increase. In an ideal world, where everything is perfect and there are no disturbances and nothing costs any money, Graph B shows how a forester would choose to do things; let the forest grow for a period of time, and then cut it back to the original curve.
Graph C shows the reality. There are forest fires, hurricanes, tornadoes, bug and disease infestations, and a whole bunch of people doing dumb things that cause a forest to be less than perfect in management terms. Thus, a forester needs to make decisions about how long to grow the trees that are present, which trees to cut back to the curve, what kind of activities to initiate new growth to bring the number of trees up to the curve, all depending on what the budget will allow. So, the simple idea is to cut above the curve, and plant when the seedlings are below the curve, and allow the trees to grow through the cycle. By my perspective, taxing is the same as harvesting and investing is the same as planting.
In our world, we have no scientific model of what we want our society to look like, measured in terms of population vs wealth. It is true that most people will say that we do, and that it is a bell-shaped curve (Graph D).
However, this is not a scientific model, it is just an idea; there is no hard data or science going into that graph; nothing more than what people think would be good. If that graph were a forest, the problems would be; A, there are no seedlings to grow into older trees as they die and/or are removed (in our society it is that we have no one to do the jobs on the low end of the economy, so we have to import them illegally), B, an overcrowded and stagnant middle class where individual growth and development is near impossible, and C, old and decadent trees that are not challenged for space and will not be replaced when they fall because of the stagnation issues of B.
As a result of this blind pursuit of an idea and not an actual model, we are now in the midst of dealing with Graph E. The middle class is being pushed down (A), while a gap grows between the middle and upper class (B), as the upper class (C) grows more aloof and decadent.
Graph F is my model for a healthy society. The green line is the base liveable income (because everyone deserve a base liveable income), Point n is a scientifically derived position… (we have the capability to do such a thing these days… even though I might not be able to do it here… at my desk… sniffing Sharpies). Since we are able to figure what n is, we would be also able to build the rest of the model all the way up to p. Then, the idea would be to have a flat tax, something like 10%, for every income class where the population matched the curve. However, As seen in Graph G, if the population of a particular income class deviated from the curve, taxes would increase for where the population was greater than the curve and decrease where the population was lesser… generally speaking. Furthermore, the tax would increase the further an individual’s income was above the line.
This is simple enough for the scenario shown in Graph G, but the scenario in Graph H might require a little more thought… depending on what the stated goals of the society are.
Taxing the rich and reducing the tax on the middle class, while leaving the poor alone, would be one way to go. Or, reducing the taxes of the middle class alone, by a much larger amount, in order to raise the curve altogether. It is through such management that we can see healthy and equitable ways to pursue economic growth.
Graph I shows an economy that is growing in a healthy way – where the population increases and the curve remains the same.
In Graph J, the population stays the same, but since the lowest wage is increased everyone moves up together.
But Graph K, is what keep doing in our society. It should be guarded against vigorously. Where we try to separate ourselves from things that we cannot separate ourselves from. The rich cannot separate themselves from the poor, the successful from the unsuccessful, we are stuck together whether we like it or not.
In the end, the most important aspect of my view on taxes is that we manage the issue through reason, by building a view of what we are trying to achieve so that we can make sound decisions in our effort to get us there. Currently, there is no vision of where we are going, we live by the practice of “Shiny Object Management” and the people in charge are only making choices to satisfy their own short-term goals. Ultimately, this vision of what we are trying to achieve cannot be based on money, it has to be about the very structure of our communities and nation as a whole.