One of the primary arguments against a progressive tax is that of wealth-transfer and the elements of communism/socialism that it brings up.

I still think a progressive earnings tax is the way to go. Bear with me for a minute and envision capitalism as a high stakes poker tournament. In the beginning all the players have the same buy-in, but as the games progress on various tables, there are winners and losers. The winners move up to the next table and the losers are now spectators. As the tournament continues, there are substantially larger winners as well as a steadily increasing group of those that are out of the game.  Eventually we are left with a small core of excessively rich players battling it out for supremacy.

This is the natural progression of capitalism. It favors innovation, entrepreneurship, and pays exceedingly greater rewards. The problem is that the game must eventually end. At some point only a few people have the vast majority of the wealth and everyone else is on the outside looking in.

In order for this system to perpetuate, the players that have gotten knocked out need to be able to buy back in.  We can either print more money and give it to those to get back in (fiat currency), The rich players at the top can loan it with interest to those at the bottom (inflation), or we can take a percentage from those at the top to give back to those at the bottom (wealth-transfer) so they can continue playing the poker game of capitalism. Our system currently does a combination of all three methods and I believe it takes a combination of all three to insure our system continues to function.  We can bicker about the levels and percentages but that’s why I feel a progressive tax should be a part of our tax plan.

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