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Progressive Taxation

Prager "University" is a website created in 2012 by radio talk show host and columnist Dennis Prager. The website offers a series of five-minute videos on a wide range of social, political, and economic topics, and is intended to provide an alternative to a "liberal bias" which Prager believes is common in university settings.

A typical video is the following attack on the progressive income tax.

It's hard to know where to begin in responding to the video's mischaracterizations and false assumptions.

The video's most glaring weakness is its assumptions that the only difference between high earners and low earners is the amount of work they do and that the difference in hours is a matter of choice. In the real world, many people are stuck in low-skill, low wage jobs simply because there are not enough jobs available for people of their skill sets. A large number of people, too, are not able to work as many hours as they'd like. In the real world, having a lower income is usually not a matter of choice.

And though the video also dismisses Tom's wife staying home with the kids as a selfish choice, research indicates that having a parent at home boosts children's health and their intelligence--and can bring financial benefits to the family. Additionally, in the real world many households have only a single parent, so they have extra child care expenses that a family with a stay-at-home parent doesn't have. Such families don't exist in the world of the video.

Furthermore, differences in income don't equate to differences in living expenses. There's a very good reason a set amount of income ($6300 per person in 2015) is exempt from taxation: We all need food, clothing, transportation, and shelter. If you want to offer equality of opportunity, you can't start with one family having to choose between buying groceries or buying gas. Once basic needs are covered, some families have nothing left to give. Others have an abundance. If you want citizens to pool their money for shared resources, you'll need to get the money from people who have it.

Another false assumption from the video is that we all benefit equally from shared resources. In the video, all three brothers bought homes on the same cul de sac, despite their difference in income. In the real world, only Harry would be able to afford a home in that neighborhood. Dick would have to settle for a smaller home, and Tom might spend his entire life as a renter. In a realistic scenario, Harry is the only one who benefits from the gate. Asking him to pay 80% of the cost is more than fair to Harry; in fact, it's unfair to his brothers, who only receive its benefits when they visit him.

What's more, the disparity in family income gives an advantage to the children of the wealthier familes. Unlike the video, where everyone starts out with a level playing field, the real world gives some kids a boost--and holds others back--from the moment of conception. Wealthy children are likely to receive better prenatal care, more childhood immunizations, better education (both at home and in school), more opportunities for post-secondary education, and better connections and leads to get better jobs. Now, there's nothing wrong with wealthy people doing what they can to give their children as many advantages as possible. But the video completely ignores the reality that disparity of income is often a result of disparity of opportunity.

And then there's an entire layer the video ignores: the increasing gap between the incomes of workers and management. Maybe Tom, Dick, and Harry's income disparity can be explained by how many hours they work, but the video doesn't account for the fact that the CEO of the construction firm is taking home $1.4 million per year, and he isn't working nearly enough hours to justify that kind of salary. In the world of the video, we're supposed to pretend he doesn't exist.

The short video tries to make the point that, all else being equal, it's not fair to ask the wealthy to pay higher tax rates. In the cartoon world of the video, it's a valid point. In the real world, all else is seldom equal.

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