Why an Income Tax When I Change My Labour Into Money?

Friday, May 08, 2009

It is not my original idea and I cannot remember the source, but it is a fundamental question and cannot be repeated often enough: Why do we have to pay income tax when our incomes are no earnings but a compensation for our labour? As I am only exchanging my labour against money I am confronted with a fundamental systemic flaw. Corporations are only taxed when they turn a profit by adding a margin to their original product/service.
Homo sapiens is treated differently. As soon as one lifts her/his hand for somebody else the finance minister (treasury secretary) reaches into one's wallet and takes a good portion while wrongly claiming that one has an income. This is simply not true because the only action taking place is an exchange of labour against money.
To say it again: All one does is exchanging one's skills against a monetary compensation. So why am I taxed for "income?"
I see a theoretical compromise though. When I manage to charge more than my labour is worth I am willing to pay taxes on this personal profit margin. Unfortunately this ain't gonna work in practice as it will be difficult to determine the size of the profit in my total compensation.
Any bright minds out there to fuel this discussion?


Wikinvest Wire