Leaving aside your assertion that foreign aid has no economic benefit to the US (an ounce of prevention is worth a pound of cure when it comes to national security) I agree that its not easy to account for opportunity cost, But to include compound growth of investment on one side of the equation and assume zero growth on the other side is highly disingenuous. Heck they didn’t even adjust for inflation.
I mean, they shouldn’t adjust for inflation, right? The gov’t wouldn’t magically grow the money due to inflation. Maybe they lend it out, but return interest would most definitely be less than what it was used for.
And foreign aid is also used to delay the inevitable (see Afghanistan) which one could argue is about as effective as setting the $10M on fire.
Well, if you’re taxed a buck do you really care if it goes to Uncle Sam or to one of the nephews?
The entire notion that taxes take money out of the economy is so incorrect it is difficult to know where to begin. The United States federal government is by far the direct largest employer in the country—employing more people than the next four employers combined notwithstanding the fact that the majority of federal jobs are full-time employment with benefits versus part time, mostly minimum wage, non-benefits employment of Wal-Mart, McDonalds, and Kroeger—even before you factor in all of the people employed through federal contracts and subcontracts, virtually all of which is funded either through tax revenues or deficit spending. (A handful of government agencies do have revenue streams from user fees, resource leases, et cetera but I’m not aware of any federal agency with positive net income, nor is the idea that the government should run like a business a sensible proposition.) The federal government also distributes large amounts of monies to state, county, and municipal governments through a large variety of programs that fund their employees and local businesses that serve government contractors, and in many cases in rural areas can be the dominant source of employment revenue.
Taking money out of the mouths of billionaires who might invest it more ‘sensibly’ in profit-generating activities might seem like it is reducing investment but even a cursory look at a lot of the wealth of the ultrarich shows that it is predominately based upon market valuations that are often farcical in nature even if they aren’t created by deliberate manipulation of market or investor perceptions. Tesla, Inc is a perfect example of this; a boutique carmaker that could not show revenues of its ridiculously inflated valuation over vastly larger and well-established automakers in decades of production even with the most optimistic growth rates. That many wealthy investors and large corporations inflate their apparent value through stock buy-backs using ‘spare’ cash instead of investing in actual growth or innovative research demonstrates how the profit motive by itself, while nominally good at product and service improvement by fostering competition between peers, can act perversely in completely unregulated markets where one player can dominate investment market and venture capitalist perceptions even while there is nominal competition in the end product market.
This is not to say that all or even most of what governments spend money on is the best possible value, and indeed there is much about government that is wasteful (moreso when corruption is rife and regulation is restricted in the interests of privatization for its own sake) but the idea that taxed money somehow disappears into a void is nonsensical upon the face, and in fact the government provides essential services and infrastructure that everyone but most of all large corporations and billionaire investors depend upon to ensure that they have both a pool of literate employees who have a means to get to work and a retail market to sell goods and services to. This is why China has been rapidly building infrastructure at a breakneck pace to foster an industrial workforce and India, despite its large population and resources, lags behind in industrialization and income equity to develop into a comparable economic powerhouse.
Of course, Elon Musk doesn’t think about any of this; he just thinks that it is really unfair anytime someone tells him he needs to pay taxes, follow SEC, FAA, or county health regulations, or has to allow employees to express their concerns about safety and fraud or to discuss organizing. Because Elon Musk is a thirteen year old boy in the body of an adult man, except he’s not being played by Tom Hanks.
Stranger
I absolutely do. It’s a LOT more visible what tax receipts are spent on as you go down the ladder. I mean, I see where my city taxes go and where my school district taxes go. At the state and Federal levels, it’s a lot more of a black hole, and more so because both entities basically pay the level(s) below to do stuff on their behalf. So I may see some road construction that says “City of Dallas”, but it may be partially funded by the state or the Federal government, or even I suppose both. Without looking that specific project up, I would never know.
As a result of this, the resistance to being taxed for many people goes up with the level of government, because as you go up the ladder, it becomes less obvious where your money is going, and what you do know isn’t always something you’re cool with. I mean, if given the option I’d probably not agree to pay my share of Federal police grants to buy armored cars and nonsense like that. Nor would I choose to pay a lot of state-level things as well.
I also have a pet theory that this visibility is part of why many people are on board with larger military expenditures- tanks, ships, and airplanes are all visible, where a bunch of WIC payments to states is not.
Please tell me what those loopholes are. When stock goes up, I don’t pay tax on gains until I sell the stock. If I don’t pay tax on unrealized gains, why should Musk?
The 16th amendment allows Congress to collect tax on Income. Until Musk sells some of his Tesla stock, where is the “income”? Where in the authority to tax assets?
Sure:
It’s the ‘tell me you’ve never been wealthy w/o telling me you’ve never been wealthy’ challenge!
I always wonder how the payments are structured on the loans. How does one borrow millions without paying anything back? Just borrow from someone else? Isn’t this also a huge risk that assumes stocks will always go up in value?
Borrowing money against an appreciated asset is available to everyone, rich, or poor. And the interest paid is usually NOT deductible. I’ve known middle-class folks take out an equity loan on their appreciated home to buy a boat or finance a trip to Disneyland. Unlike us, the super rich still pay a pretty steep estate tax when they die.
And while you’re at it, kindly explain how taxing assets (as opposed to income) doesn’t violate the U.S. Constitution (unless done proportionately to the population).
Why is this relevant?
Not that I’m totally onboard with it, but the people who are for taxing assets are for whatever changes (to current statutes or even Constitutional Amendment) are necessary to do so.
You forgot to include “majestic equality” in there.
Taxing assets is utterly uncontroversial and commonplace.
@Yelnick_McWawa It makes sense because those assets are effectively your income.
Yes, it’s available to everyone. But only the rich can make it work well enough to not have other income. For most people, it’s rather insignificant.
The whole thing we want to accomplish is not having things that rich people do result in them paying a lower percentage of taxes than the rest of us. Only the rich can afford to put such a high percentage of their wealth into stocks and stuff. I can’t—I need to be able to eat.
Rich people engineered the system to give themselves an advantage. We just want to negate that.