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The Boots theory of socio-economic unfairness

A decent pair of boots costs £100. An inferior pair costs £50.

The man who can afford the £100 pair has less need of them than the man who can only afford the £50 pair (he has a white collar job and his own private transport). They last the wealthier man a lifetime. The poorer man has to replace his inferior boots three times in his lifetime, meaning that an economically disadvantaged person has paid twice as much for the same level of utility.

This is an inefficient distribution of goods by the market, which impacts negatively on a society's economic productivity. How to overcome this? Price control of essential goods? Redistribution of wealth through tax credits or similar? State control of boot production?

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MethDozer · M

Honestly I think part of the solution is allowing more freedom in tax write offs for the poor and middle class. You should be allowed your standard deduction if you make below a certain amount for any and all necessities.

To be honest I think we should tax the rich more and eliminate taxes for anyone making below $60,000 Dollars.

SunshineGirl · 36-40, F

@MethDozer My preference would be to make essential items tax deductible for lower income people. But there is the danger that producers of these goods will hike prices in respinse and the taxpayer will be on the hook for an even less efficient market.

I agree that it seems futile trying to extract tax from those who struggle to sustain themselves. But in the UK at least there is a concept of social equity that taxes should be universal (even if significant adjustments and reimbursements have to be made later).

MethDozer · M

@SunshineGirl Word. I don't have all the answers and it annoys me when people expect us to have them. Like just because we don't have the perfect answers doesn't negate any of us from noticing current systems are failures and completely broken.

SunshineGirl · 36-40, F

@MethDozer That's why I love questions like this. Really forces people to think and re-examine their beliefs. I've seen Thatcherites and Marxists alike almost reduced to tears when they try to reason their way out of the connundrum!

Elessar · 26-30, M

@MethDozer

tax the rich more and eliminate taxes for anyone making below $60,000 Dollars.

They'll just declare $59,999 even if the actually make 1000x as much

MethDozer · M

@Elessar they'd certainly try but it's kind of impossible to cover that much money for very long.

Elessar · 26-30, M

@MethDozer Trust me, it's all but impossible. It's an arms race between the state and creative new ways to elude it.

MethDozer · M

@Elessar Yeah but hiding millions or more a year to claim $60 grand is extremely difficult plus you'd have to basically live like you're not multiple millionaire.

I'm not saying it couldn't be done but it would extremely difficult to keep getting away with.

I mean if you made $100,000 you could maybe buy employers report your earnings. Same with investment firms.

Elessar · 26-30, M

@MethDozer You can do it with a more or less complicate scheming of essentially shell businesses, fake transactions, uninvoiced/unregistered transactions/sales; I don't know all the tricks that are employed but it's hella common where I live, and detaxation programs for businesses (and individuals) that make less than x yearly are controversial precisely because of this reason.

SunshineGirl · 36-40, F

@Elessar I spent five years trying to advise the UK Treasury on tax compliance. It is like trying to herd cats. The common perception is that tax evasion is a perfectly reasonable business strategy. The only (practically) foolproof tax regimes are sales tax (which has the unfortunate disadvantage of being very regressive - it weighs heavily upon the poorest) and property tax (because it is impossible to spirit your factory building away to the Bahamas).

Elessar · 26-30, M

@SunshineGirl Yeah I'm absolutely a layman on the matter and I've just translated word by word how some of the elusive practices get called here, but indeed.

The common perception is that tax evasion is a perfectly reasonable business strategy

Eh. If I got a single Euro, every time I've heard even people who make as much as myself, and who see like half his own salary going into taxes (that you can't really elude if you're an employee), coming out with some shìt like «Ehhh, but if they don't evade at least a bit they'd be forced to close and we'd lose our jobs too» I would have.. €59,999, and a few boats in the Cayman 🥴

SunshineGirl · 36-40, F

@Elessar And perhaps another manifestation of the Boot theory . . only those with a certain level of income can afford to take the professional advice to avail themselves of these tax mitigation strategies. The rest of us pay up and shut up 😐

Elessar · 26-30, M

@SunshineGirl More than that, it's an existential matter. This country (and not only this one, but it's quite extremized here) can only squeeze some money out of the lower classes, and only those. It's a little amount comparatively but we're many.. If even employees were allowed to do their own claims, you could bet that at least half would declare half of what they actually make, and later on the other half would follow because "why do I have to declare it all when they're declaring half? Am I stupid?" and the system would've imploded by now.

MethDozer · M

@Elessar Oh I know but this would be a massive evasion. Evasion here is a huge problem and it already happens, but we have also been getting better at wrangling it in than we were here even 15 years ago.

Either way, I don't think tax evasion scams is justification to remove the tax burden on those the system doesn't really benefit and are barely scraping by. We can do better than that

MethDozer · M

@SunshineGirl @Elessar I mean it is a reasonable and smart business strategy form their perspective when it is allowed or even encouraged by the system. But it isn't something any of us looking up from down here should excuse or try to eliminate.

SunshineGirl · 36-40, F

@Elessar Yes, which is why tax systems need to retain the appearance of being fair and impartial . . or there will soon be a race to the bottom of the barrel.

SunshineGirl · 36-40, F

@MethDozer For me, paying taxes is the most basic civic duty. In a free society they are raised by democratically elected governments with a mandate to tax and spend. If you don't buy into that it raises quite serious questions.

MethDozer · M

@SunshineGirl It depends on how the taxes are used and I really don't think the bottom rung should have to pay into them. I don't think that's fair.

SunshineGirl · 36-40, F

@MethDozer It can seem pointless, particularly if they are just returned again through tax credits and welfare. But sometimes taxes have to be applied universally to be seen as fair.

MethDozer · M

@SunshineGirl No they don't. What is fair is paramount to what just seems fair.
A flat tax seems fair, yet isn't fair at all.

Besides it gives people more money to put back into the economy. A class of people who do out their money back into the economy. So it actually benefits everyone and promotes growth

SunshineGirl · 36-40, F

@MethDozer Yep, a pound in the pocket of the poorest 10% does far more to boost the economy than a pound in the pocket of the richest 10%.

MethDozer · M

@SunshineGirl a pound in the pocket can get you arrested here if you're in public