Because if someone is contributing more than me in an absolute sense, and that money is getting spent on things that benefit me, why should I care what percentage of his or her income that is? It's just envy.
If you have an income of Euro 20,000 per year, paying 40% taxes will have a significant impact on your standard of living. If you have an income of Euro 20,000,000 per year, paying 40% taxes will have no significant impact on your standard of living.
Well if you have an income of GBP 10,000/year then you pay no income tax whatsoever, and get exactly the same government services as a millionaire. In fact you get more since you get free dental and the millionaire doesn't! And probably housing benefit, child benefits, etc etc. Why should you care what percentage that millionaire pays?
Why should I care what percentage the millionaire pays? Because if they pay a lower percentage, then I have to pay a higher percentage (or receive less well-funded public services). Unlike those millionaires who have reached the stage of simply keeping score, it also significantly affects my ability to buy things I want.
I also fundamentally disagree that I get more in absolute terms from the government than the millionaire, even if the millionaire has never asked for a handout or used a publicly funded service in his life. The millionaire couldn't buy stabilisation of the banking system[1], free access to markets, protection of his physical and intellectual property, effective enforcement of contracts and all the other benefits which have enabled him to maximise the returns of his ability and efforts - their removal would cost most millionaires far more than 17% of their annual income.
They are beneficial to me too, but not to the tune of several million pounds a year (or not yet anyway :-)
[1]Stability is relative. Unless he happened to be a gold miner, he would be earning less from a smaller economy if every transaction were backed by gold.
Most millionaires didn't get there without hiring anyone. They also pay for many other things that most likely require paying people (assistants, etc). So, those millionaires are providing jobs to the economy which in turn adds more tax revenue to the government.
"Why should I care what percentage the millionaire pays? Because if they pay a lower percentage, then I have to pay a higher percentage (or receive less well-funded public services)"
This is the problem with government entitlements. People get used to certain cervices and when you try to take them away (less tax revenue, no funding, etc), you get riots in the streets.
There are already problems with this line of thought in Sweden and France. The government has started cutting back because they can't afford these services anymore. I'm not surprised by this because the system just doesn't scale (I think of it like running a business).
The problem I see is that when you dump 60-70% of your money in taxes to the government, you don't have that much left over to save. In 10 or 15 years, if the government collapses, are you going to have enough to get by without it? Nobody thinks long-term, they only think about the now.
By less well-funded public services let's be clear here that this means people who are already getting services for free simply feel that they would just like more free stuff, thankyouverymuch. Well, we would all like more, whether that's stuff or people doing things for us. But the world doesn't owe you a living.
The beneficiaries of a stable banking system are just as much the man in the street paying his mortgage or working in a factory as anyone.
By less well-funded public services, I mean if you give tax breaks to (or leave tax loopholes for) multimillionaires then (unless you're on the too-high-taxes side of the Laffer curve) the government faces a choice of cutting their budget, or increasing the share of the tax burden paid by those on moderate or low incomes (or unsustainable deficit spending). Recent history suggests that governments offering high-end tax breaks generally prefer the latter two options, which it manifestly is in my interests to oppose. I'm really not sure where I asked the world to owe me a living.
I've already acknowledged that I benefit from services provided to me by government such as a stable banking system. However, as I stated in the original post, in absolute terms rich people benefit significantly more from these services, just as their larger enterprises tend to pay more for software licences, not because the marginal cost to the vendor is higher but because the value to their enterprise is much greater. A government that withdrew funding from (for example) enforcing law might cost me my livelihood in the ensuing chaos, but the millionaire stands to lose more than I have ever earned.
I'm mostly familiar with the US, but whether more government services are available to lower- or higher-income people is an interesting question that I don't think could be answered without running some numbers. There are things like food stamps only available to the poor, but there are large swaths of subsidies, research programs, business grants, etc. that would be difficult to qualify for if you were dirt-poor.
All incomes combined may not be a zero-sum game, such that income inequality must necessarily indicate the wealthy confiscating money from the middle class. But it seems to me that government spending definitely is: if we need to buy a tank, the money from it is coming from taxpayers. Every dollar for that tank that doesn't come from the wealthy must instead come from someone less wealthy.
Do we need to argue about why this is something we want to avoid as much as possible, or is it self-evident?
So are you arguing in favor of an annual tax charge that's a fixed number of dollars, in lieu of percentage-based taxes? That's possible to argue for, but seems like an unusual proposal. As far as I can tell, there's broad consensus from libertarians to liberals that taxes should in some way be proportional, whether it's proportional to income or consumption or property owned. A Forbes-style flat tax, for example, still starts from the assumption that everyone should pay a certain percentage of their income in taxes. The FairTax proposals start from a consumption-based flat tax, and progressify it a little with a fixed dollar rebate.
I personally (tho' I don't think this idea will ever catch on) would like to see tax fixed, but optional. Let's say for sake of argument $10,000/year. Those who pay get a vote in how it's spent but there is no penalty for not paying.
