Is equal always fair? Such an interesting question.
I have two siblings. They’re 4 & 5 years younger than I am. At dinner time, when we were little, our mother would occasionally spoon feed us. She would have me sit in the middle, with my siblings on each side. She would start feeding from my left and had a rhythm going – left-middle-right-middle-left-middle-right-middle-, etc. This would continue till dinner was complete. Me sitting in the middle got twice as much as my siblings did.
The distribution was unequal. Was that fair?
What would you have done? Is equal always fair?
A father and his two sons, a 10-year-old and a 5-year-old, lived next to a baseball field. There was a wall at the end of their backyard, and if you were tall enough to peer on the other side, you could see the games. One day the mother found three wooden boxes next to a hardware store. The store did not need them, so she brought them home. Father and the children were excited. They each took a box and stood on them.
The father who could already see the games without the box, now was able to rest his elbows on the wall. The 10-year-old could now see the games standing on the box and was happy. The 5-year-old still could not see the game despite standing on the box.
They each had a box. The distribution was equal. Was it fair?
What would you have done? Is equal always fair?
Is equal always fair?
An ongoing political debate is who should be taxed how much. Should taxes be equal? Would equal be fair? Should taxes be unequal? Would that be fair? Let’s see.
In the spirit of fairness, let’s say everyone ought to pay 15% of what they earn. Sound fair? Let’s see how this plays out.
If my wife and I, or you and your spouse make $85,000 in combined income, that means we’d pay $12,750 in taxes leaving us with $6,020 a month to live on. That’s enough to live on, yes. With the rising costs of everything, we’d have nothing to put towards savings though.
Another couple about 100 miles from us makes $350,000 annually. At 15%, they’d pay $52,500 in taxes leaving them with $297,500 to live on, which equates to about $24,791 per month after taxes. That’s being able to save enough money to buy a brand new car every quarter, in cash.
In this scenario where taxes were 15% across, the board the Government would have received a total of $65,250 in taxes.
Here’s another scenario.
Let’s say because my wife and I, or you and your spouse make less money, we pay 10% in taxes rather than 15%. And the wealthy couple living 100 miles away pays 20%. Let’s see how the numbers play out.
10% of $85,000 is $8,500 in taxes. Leaving us with $76,500 or $6,375 per month. We may be able to put a couple hundred dollars in savings a month.
For the wealthy couple, 20% of $350,000 is $70,000 in taxes leaving them with $280,000 or $23,333 per month after taxes. How much of a dent would do you think it would make in their lifestyle. Now rather than be able to buy a new car in cash every three months, they can buy one every four months.
In the second scenario with unequal taxes, the Government would receive a total of $78,500 in taxes. That’s $13,250 more for the government, some relief for you and I, and rather than buy a new car every three months, the rich can still buy one every four months.
What would you do? Would you have equal taxes or unequal taxes?
Is equal always fair?