Saez & Piketty--Why the 1% should pay tax at 80%

[ieoeja]

21. I assume you meant the "royal you" as referencing DU rather than me since I have already agreed ...

... with the point you were making.

Possibly the single worst result of the Reagan administration was shifting the burden of paying for things down to the state and local governments. Aside from the fact that Reagan's policy devastated rural communities, it also created an unlevel playing field harmful to small and medium sized businesses.

Indiana gave United Airlines a tax break to move from Illinois to Indiana. Illinois gave Boejing a tax break to move from Washington state to Illinois. Nobody is going to offer you those tax breaks. The bigger guys have inherent cost savings advantages over their smaller rivals without the governments turning around and giving them tax advantages vs their smaller rivals as well.

Then the governments need to make up for the lost taxes granted to the big guys. So they increase taxes on indviduals and small/medium sized businesses compounding the problem they've already created for us.

Pre-Reagan this was not an issue. State and local taxes were too small to cover the cost of moving to avoid them. By shifting the burden for taxation to the state and local goverments, it created competition between them with the aforementioned results.