As I was catching up on it today, I read this post on tax reform, which got me to thinking about the different types of taxes when he brought up the term "progressive" as cited by Mort Kondracke, of the Joplin Globe. There are "progressive" taxes, and there are "regressive" taxes. There are also two different "progressive's", one in economics as applied to taxes, the other in politics (more on that below). The one paragraph in Mr. Kondracke's article that gave me pause was this:
On Jan. 7, Bush charged his nine-member commission, headed by retired Sens. Connie Mack, R-Fla., and John Breaux, D-La., to recommend ways to simplify the tax code and "share the burdens and benefits of the federal tax structure in an appropriately progressive manner." [Emphasis mine]
While I don't know Mr. Kondracke, and I must admit I haven't seen the bit in quotation marks in the news, I'm hoping that his use of the term "progressive" was in relation to economics, and not politics. (In politics, "progressive" equates to the Democrat Party; "progressive" as used in this context, being a euphemism for Liberal. I do not believe that if the bit in quotation marks was a quote attributable to President Bush, that he was speaking in the context of politics! And, no, I didn't forget the "ic". As far as I'm concerned, there's nothing democratic about the Democrat Party.)
In economics as applied to taxes, however, "progressive" has an entirely different, positive, meaning. The other term used in economics as applied to taxes is "regressive", which carries a negative conotation. Any tax that is considered "progressive" places the same burden of taxation on everyone by income level, so that all pay their fair share, whereas a "regressive" tax places the same percentage amount of tax on everyone, which places an undue tax burden on those of lower incomes. An example of a "regressive" tax is a states' sales tax. With a state sales tax, everyone is taxed at the same percentage amount based on the cost of the goods or services they are purchasing, but as a percentage of total income, those making lower wages pay a higher tax rate than those earning more. A "progressive" tax places a different tax burden on people according to their income level, rather than on the costs of goods or services.
I'm definitely no economist by any stretch of the imagination, but take my word for it, I know what the difference between progressive and regressive taxes are. I happen to live in Washington State, which possibly has the most regressive system of taxation in the nation. As far as I'm concerned, don't tax me at all, but if you must, give me "progressive" taxes (but not anything that stifles growth in the US economy) please!
UPDATE: I wrote David an e-mail to let him know I had posted on his post (too bad Blogger doesn't support Trackback), and asked him to read it. Imagine my surprise when I got a reply from him - busy man that he is - and also my chagrin when he - politely - pointed out that I had made a mistake in my post, when I said that he had made a mistake of misinterpretting what Mr. Kondrake had written in his article. So, I went back and reread both Mr. Kondrake's article, and David's post, and then did some editing (actually, I pretty much re-wrote the first half) of my post. Why? Because I was wrong.
Thank you, David, for taking the time to give my humble little blog a read, and to write back - even if it was to say I messed up (although it was done politely). I'll try to not do that again ... that shows I didn't read that properly, which is too embarassing!
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