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0 pointstunesmith8y ago0 comments

It's generally accepted that the value of money is roughly logarithmic as it increases. A logarithmic flat tax could look something like this:

1) Figure how many times poverty rate you make in revenue (2x, 3x, whatever)

2) Take the log base 10

3) Multiply by some flat constant that is the same for everyone, so that the total national amount taxed is how much the US needs. Last I checked, that flat constant would be around 9.

4) The result is what percentage of your revenue you should pay in taxes.

Currently, we are far from logarithmic. Under this scheme, pretty much everyone reading this board would pay less taxes. Bill Gates pays about the right amount. Exxon would pay more.

Useful as a thought experiment to explore how far away we are from a fair level of progressive taxation.

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hackuser8y ago

Thanks.

> It's generally accepted that the value of money is roughly logarithmic as it increases

I assume that is economic theory; do you remember whose or have any pointers to where I can read more?

tunesmithOP8y ago

I think it was Bernoulli that first talked about the logarithmic relationship of utility and value. That was back in the 1700's. I believe there have also been empirical studies that suggest that it holds up in experiments, etc.

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