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And Mikemover says that there are no neo-liberal academics! Yikes! I know libertarians that find the idea of equal taxation pretty radical.
True, there is strong evidence to show that tax rates over 50% are a dissincentive and can reduce tax revenue from the highest tax brackets.
The idea of simply adding up the cost of doing business as a society and dividing it equally among each member of the population might sound neat on paper, but do you have any idea of how to make someone that works at Wal-Mart for $4.00 an hour pay it?
Do you really think this equal taxation policy could ever work without slashing government programs to barely existant?
Also, your example is much too simplistic. There is no multiplier effect from having the money circulating in the economy. Your example does not consider the cost benefit analysis of the "public good" of providing certain services, and how much impact these services have on different income groups.
Perhaps in a world where gov't spending was a "one good" and marginal utility was equal for the "one good" for all "consumers" this model would make perfect sense. Otherwise, it does not.
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