This is so obvious, and yet is something I hadn’t before considered. Thanks for C. Peterson who has recently been dropping by:
The issue that first drew my attention to this matter of the actual value of money was when I realized that our punitive fine system is based on fixed amounts. Go too fast in a school zone and you’ll get a $500 ticket. It doesn’t matter if you’re living in poverty or if you’re Bill Gates. That makes no sense- the intent is to be punitive. A $10 fine to the poor guy is equivalent, perhaps, to a $1 million fine for Gates. (FWIW, traffic fines in Switzerland actually are based on your income.)
It seems clear that a 10% tax on a person who makes $20,000 per year “hurts” more than a 50% tax on a person who makes $10,000,000 per year. As you put it, it’s just afternoon changing for the latter guy (if that).
Unfortunately, the entire thing tends to get framed in extremes. The economic conservative imagines that the economic liberal wants to eliminate capitalism and equally redistribute wealth. The economic liberal imagines that all economic conservatives favor letting them eat cake. Realistically, capitalism is the best economic system that’s ever been devised for complex societies. It appeals to self-interest, and that’s surely critical to the success of any system. Also realistically, capitalism has positive feedbacks built into it which require that it be regulated. Objectively, the ability to become “rich” has driven our economic and technological advancement. It’s a good thing. Objectively, when too much of the wealth is held by too few, or when there is too large a disparity between the rich and the poor, societies suffer. Sometimes fatally. These are discussions that need to be held by those who understand there is a middle ground. Unfortunately, we don’t find too many such policy makers out there today (particularly in the U.S.)