Some time ago I recall reading of how some countries base their traffic fines upon a percentage of the annual income of the offender. I believe this to be a great practice, as it assigns a penalty relative to the means of the person in violation, and in principal at least, making it “hurt” equally between low and high income earners.
Then the other day I wondered: What if the cost of all products and services were based on a percentage of one’s income?
For example, say the current U.S. median income is $50k/year. A typical consumer television might cost around 500 USD, or 1% of that median earner’s income. So if we then extend that formula across the board, someone earning 22k/year would pay 220 USD and someone earning 120K/year would pay 1,200 USD for the same product!
Such figuring would extend to all aspects of the economy, and would undoubtedly be exceedingly complicated when factoring in entire companies, shipping, wages, etc., but in reality, how much more so than it is already? It would, in effect, flatten the distribution of wealth without overtly re-distributing it.I’m certain someone somewhere must have already experimented with or designed such an economy, and if so, I’d like to hear more about it.
Of course the usual reaction to this thinking will be something along the lines of “Then what incentive is there to make more money if we all pay the same amount?”