Every now and then we can hear about the necessity for the introduction of this taxation policy as the one that is used in the majority of developed countries in Europe and which ensures the just redistribution of wealth between the citizens. Progressive taxation scale means that every person is supposed to pay taxes according to his income – the more the income is, the larger the percentage of it to be taken by the state becomes.
Why this method supposed is to be beneficial is beyond the thinking ability of any sane human being. Isn’t it natural and obvious that the first and foremost reason for a person to work is his own profit? The only reason for a person to expand one’s business, to increase one’s qualification, to go to more well-paid job is to earn more and progress in one’s field of activity. The more people expand their businesses, the more the economy of the country develops, the more is produced, sold and bought.
But when people are subjected to the progressive taxation scale, it means that a businessman will think ten times before entering a new market or simply starting to sell new merchandise or providing a new service, for it may increase one’s profits. In some countries the difference between the taxes at different levels is so significant that people who double their income receive only slightly bigger factual revenues than they received before. So, what is the motivation for them to develop themselves, their businesses and, through their medium, the economics in general? When the state introduces progressive taxation scale, it is taking ground from under its feet.