Thursday, October 27, 2011
Adam Smith favored taxing the rich more heavily than the poor and middle class
In fact, The Wealth of Nations includes the following statement on the payment of taxes:
"The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state."
Moreover, in this passage Smith goes on to specify progressive, not flat, taxation:
"The rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion"
Smith even specifically named taxes that he thought should be required by the state among them luxury goods taxes and tax on rent. He believed that tax laws should be as transparent as possible and that each individual should pay a "certain amount, and not arbitrary," in addition to paying this tax at the time "most likely to be convenient for the contributor to pay it".
Smith goes on to state that:
"Every tax, however, is, to the person who pays it, a badge, not of slavery, but of liberty."