Why the Rich MUST Pay Higher Taxes

This article is a must read for all those people who go and question, Why must we go
and pay a higher tax? Is it just because we earn a higher amount of income? Along
with that, its also aimed to inform people about a deeper realization of the taxation
scheme and its needs because people, who are the essential cog-wheels of any system,
must understand the system they are all part of.
So what exactly are we going to understand through this article? The course of my
explanation will take the following course: an introduction about materialization and
money and labour power, followed by in depth understanding of the role of the current
system and a state, an elaborate comparison between two people, and finally the
implications of a tax scheme.
Materialism
When Karl Marx in his book, Das Kapital talked about the intrinsic value of any
human being, being essentially linked to the idea of materialization, we need to
understand that this is the core of our existence. We do any and everything with the
purpose of fulfilling our wants because all of us are aiming towards a higher
satisfaction of wants and better living, whether it is our benefit, or altruism with the
objective of our inner satisfaction. Adam Smith in his book, The Wealth of Nations
mentioned an important sentence describing human nature, Consumption is the sole
end and purpose of all Production. If we think deep, we do all productive activity to
achieve or buy something in the end, be it a short lived thing like food, a long term
asset like a house or gold, or maybe to buy things to show other people what we own,
wealth being the indicator here. So when Marx talked about human beings being
materialistic, that is something we definitely the driving force of our existence. A good
and comfortable life is associated with materialism. This insight is sufficient for
establishing the base of what follows.
An Organised State
Way back in the 18th century, a man named Thomas Hobbes in his book, Leviathan,
talked about something called a Social Contract. Just to give a simple understanding,
when a person is born in a particular region, he enters into a contract with the state,
where the state takes the responsibility of his welfare. In return, the person has to
abide by some laws established by the state essential for its functioning. This included
law and order, protection and transactions between both, something called a tax. The
political structures of a state varied and evolved over time. From a slave society where
there was no one to protect you to a democracy, where the state is there to protect
you, we will talk about the framework of a democratic system in the subsequent part
of my writing.
Money is Cheap
This must be sounding very vague. How can something like money be cheap? Well, the
truth is, money is. Adam Smith talked about how the only way to determine the true
value of anything that is exchanged is value of labour. Lets take a simple example
called a mobile phone. I will take a midrange model and assume it costs Rs. 20000. Is
20000 worth it? Well, lets see the simple raw materials that go in it. Glass,
Aluminium, Plastic, Softwares and other circuits and chips. Not to forget, a software
too.
So lets pick up glass. Someone so many years ago spent a lot of labour in conceiving
the idea of glass, in its preparations. As time went by, more people spent so many
labour hours in determining how to improve it, reshape it, strengthen it. Today we buy
a glass from a shop. We dont realize how many labor hours have gone directly and
indirectly in it to prepare that thing for us. If we had to bring glass to its current form,
we individually would have spent centuries. We didnt spend centuries. We spent
something called money to get that in a fraction of moments. We didnt give up time,
effort, anxiety, frustration or stress. We just made a payment of some money. And in
our hand we now hold so many years of progress that we rightfully own without even
putting an effort in its creation. This illustration might be countered by development
and modernity and technology, but the fact is this, labour value in terms of time is
undervalued when it has to be in terms of something called money. This was only
about glass, think how much has gone about the other raw materials I mentioned.
Think for moment. Think about other things like a plane, a car, roads, railways,
everything. You will realize money is cheap because money cant evaluate a history of
human labour.
The Comparison
The previous parts were to make you think. Now starts the deep economics of a
taxation system mixed with what I have mentioned before. All individuals buy two
things, private and public goods. Private goods are used by those who pay. Public
goods are used by everyone. Both are bought by us directly or indirectly. Taxation
facilitates the purchase of the public goods. In economics, we have a law as follows for
public goods,
MB = MC
This means, that the total a