It's akin to claiming that allowing scabs to steal the work of strikers is distributionally progressive: The scabs are, ceteris paribus, worse off than the unionised workers, therefore converting a union shop into a scab shop redistributes from rich to poor. I should hope that it is unnecessary to elaborate on why this is utter horseshit.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
Any policy that redistributes from the middle class to both the wealthy and the poor is regressive - if you generalize it to the whole of society, you achieve a society where the middle class has become poor, the poor have become slightly less poor, and the wealthy make out like bandits.
It matters really what the data says about the true distribution and upon whom the burden is really falling and the benefits accruing. (A Gini curve can still get flatter by taking from the upper part of the middle, depending on the original shape of the curve, for example.) Spain has notoriously high unemployment, which means that it is entirely possible that transferring wealth from employed upper-middle class government workers to unemployed people is still progressive, even if the rich (high skilled non-government workers and owners) aren't asked to help in that transfer. It all depends on the numbers and levels of rich, upper middle, lower middle, and unemployed are.
Put simply, you don't create a reasonable middle class income for the poor by impoverishing the middle classes - you do it by taxing and regulating the rich, because they own the bulk of the wealth.
While I'm sure some rich conservatives enjoy the divide-and-rule prospect of trying to set the poor, the unemployed and the middle classes fighting each other for scraps like crabs in a bucket, the point of progressive policy is to ensure that social investment is substantial and significant.
Scraps from the table aren't an acceptable substitute for that.
http://dialnet.unirioja.es/servlet/fichero_articulo?codigo=3136587&orden=0
suggests that Spain's top 1% have a similar order of the national wealth (20%) to those in Anglo countries.
Better general ways would be:
(a) location benefit levy - a tax on land rental values which is essentially a tax on the privileged use of the land commons;
(b) a levy on gross revenues from intellectual property rights - ie a tax on privileged use of the 'creative commons' of knowledge;
(c) a limited liability levy on gross corporate revenues - limited liability is another untaxed privilege;
(d) levies on use of non-renewables - another commons - and so on.
Then I would get rid of all other taxes except levies on earned income aimed at funding education and healthcare.
There is no chance of doing this via the State, since it the privileged turkeys who manage and own the country would not enact Christmas.
But I think in the emerging networked society and economy such an architecture could well evolve. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Spain has notoriously high unemployment, which means that it is entirely possible that transferring wealth from employed upper-middle class government workers to unemployed people is still progressive, even if the rich (high skilled non-government workers and owners) aren't asked to help in that transfer.
You are postulating that it can help the poor and lower middle class for the poor and lower middle class to gang up with the wealthy and soak the upper middle class, as opposed to the poor and middle class ganging up to soak the rich (and yes, the two are mutually exclusive - coalitions don't form and disband overnight).
I'd like to see a historical example or two of the former ever actually working to improve income and income security for the poor.
So splitting hairs over income taxes is, indeed, regressive. Income is not where the real inequality in economic power lies. By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
Actually, most of European politics can be summarized as a political arrangement between the owner class and the working class and poor to tax the upper middle class bourgeoisie in order to fund large welfare states. (See Jonas Pontusson, Equality and Prosperity: Social Europe vs. Liberal America)
Duplicate comment deleted. By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
