The same logic applies to business; tossing tax cuts at them in the vain hope they can turn increased capital in to jobs is likewise improbable. Businesses expand in response to increased demand, not increased capital. Why spend capital to add capacity if you are running at only 70% now?
My point in using the bridge to nowhere as an example was to show that even infrastructure, which you are more supportive of, is sometimes not so useful. Business leaders work to maximize their salaries, which sometimes involves improving shareholder value. Unless you have a monopoly ore an effective monopoly, you can’t afford to do anything for the public good. Yes, long term capitalism beats the hell out of a state run economy, but to improve the lot of the people you need to have people voting for the people’s interests. Legislators may suck on the lobbyist’s teats to get money, but eventually they’ve got to face the public. I’ll trust them more than a CEO any day - not because a CEO is evil, but because maximizing the public good isn’t in his job description.
Following the dictum that all politics is local, I’d bet that plenty of people who advocate tax cuts would lose their passionate interest in the subject if their individual taxes were cut to zero. If their actual taxes were zero, they’d have a minimal theoretical concern for what tax rate other people were paying.
Using tax cuts as a means of economic growth does make some sense. Reducing taxes does lead to economic growth. The problem that tax cut advocates avoid is that there are other things that also cause economic growth. And many of them are government run programs that require tax revenue to operate. It’s a poor investment to enact a tax cut that increases your economy by two percent if the cost of that tax cut was closing down your public school system with a resultant fifty percent reduction in your economy.
It’s like every thing else; you have to weigh the costs and the benefits and look for a moderate balance. You have to ask which is going to benefit society more in the long run - people keeping their money or people having the government program that that money could pay for? Anyone who says the same answer is always correct is a fool.
Federal income tax…
State income tax…
City income tax…when I worked in Detroit I had to this.
Property taxes…
Lump-Sum tax…
Capital gains tax…
Excise taxes on…whatever.
I would love more tax cuts.
:mad:
But when is enough enough?
According to R.J. Rushdoony, the divine law only asked 10%, & it’s terrible that earthly governments ask more.
According to Harold Canvera, “When you hear someone like William F. Buckley calling for lower taxes, that’s someone who’s squishy-soft on left-liberalism! All taxes are robbery!” (Of course, HC is not a real person, & man, I read that book half my life ago!)
The more pragmatic view that I’ve heard is that politicians say they’ll cut taxes as a sort of bribery, appeasement, or bargaining; it’s not a serious theory of government, just a way to get elected. Unfortunately, it’s become politically impossible for the GOP to run without it, which shows how little the rest of their platform is worth. Some GOP officeholders accept that the Dems have to win sometimes, just because they can raise taxes & keep a given government running (I’m talking state/local here).
Virtually any tax cut? Even as the tax rate becomes infinitesimally close to 0?
Given a sufficient span of time and any possible investment, yes. In practice, the difference at a certin point would be trivial as random fluctuations would make it impossible to guess at. However, the point is that any productive asset which can be improved, in any way, will eventually produce more value given enough time than any amount of government spending could ever produce.
With no taxes, there is no revenue, and there are no government services. So is your assertion that a civilization without any govt services has greater prosperity than one that does? Can you provide an (non-hypothetical) example?
The biggest problem I have with the Laffer Curve and supply-side arguments in general is that they concede the notion that government should have more revenue with which to do more things.
To me, asking ‘what’s the correct tax rate’ is the wrong question. The correct question is, “What is the correct size of government?”. Answer that, and the answer to the tax rate question is, “whatever the optimum rate is to raise the revenue required to fund the services proper to government”.
You simply cannot answer the tax rate question without first establishing the correct size of government.
In my opinion, our current western governments are all far, far too large. Entitlements are out of control. In fact, the government has no business mandating my retirement savings or my health care choices. There should be no federal Department of Education. I would take every entitlement program and means-test it. Essentially, I would eliminate Social Security, Medicare, and other entitlements and roll them all into one welfare system which only helps those who are in desperate conditions. I’d get rid of the wasteful system in which dollars flow into the federal government, and then representatives ‘earmark’ it back to their home districts as pork to help them get re-elected. I’d rather not tax the money at all, and let the states keep it and do what the want with it. I’d end the war on drugs, and I’d turn responsibility for things like food and drug safety over to the states, so that people have more freedom to go where there are laws they prefer, and so that innovation in medical research could take place in those states willing to do so.
After all that was done, and the Federal government shrunk to a size that I’d think appropriate, THEN I’d look at how much money they need and what kind of tax rates are necessary to provide it.
Can you give an example of, say, some non-Western government where (1) government is smaller and (2) this produces a better state of affairs than we’ve got here?
I didn’t mean ‘western government’ to be exclusionary of others. I meant it to be inclusionary - more governments than the United States. Being from Canada, I sometimes use that term to indicate I’m not speaking specifically of the United States.
As for other countries with less government, I’d include Hong Kong (at least before being handed over to China) in that list. But you can’t name many others, simply because the United States is near the top of the list for economic and political freedom. Countries which have more economic freedom (Singapore) have less political freedom. My belief is that the two need to travel together.
So there aren’t any countries that are more free to compare to (and comparing countries is always dicey because they are different in many other ways). But you could certainly look at the same country before and after it gained more economic and political freedom. For example, there was a round of liberalization of trade and reduction in government regulations throughout much of the world in the 1990’s - and I think it was phenomenally beneficial. New Zealand deregulated its agriculture, and agriculture boomed. The United States deregulated the airlines and safety went up and fares went down. In Canada, we privatized numerous former state organizations, all for the better. There was significant movement to market economies in South America and Eastern Europe. Britain went through a smaller government/less regulation phase, and its economy was revived. China and the ‘Asian Tigers’ eliminated state control of many industries, deregulated their businesses, and lowered taxes, and their economies boomed.
I rather think the burden of proof is on you. Do you have examples of countries where the state increased regulations, nationalized businesses, and raised taxes - and improved the economy and the general welfare of the citizens? Perhaps an example outside the small Scandinavian countries?
Sam Stone did a better job at this than I would.
I would also start with an analysis of what we should spend money on, and WHERE. It is a waste of money to have me send taxes to DC, just to have around 80% come straight back to California. Better to reduce my Federal 80%, and instead tax me the same amount at the state level.
Then, I would see how much comes back to my community, and reduce my state tax level by that amount and instead collect it at the community level.
I have found that as I age (and raise children) I am more of a pure libertarian / minimalist at the Federal level, and more of a socialist at the local level. That is, I don’t mind taxes when I can call up the Mayor or a member of the School Board and get a meeting within two days. I have no such ability at the Federal level, hence my lack of desire to send them my cash.
Nationalizing business is a red herring. Larger governments and more regulaltions are not synonomous with nationalized businesses. I also think it is disingenuous to put the burden of proof for your assertion on someone else. That said, one can point to the US as a country that benefited from a stronger national government and higher taxes.
Look at the US before and after the Civil War. The national govt was strengthened with a net increase in freedom. taxes were increased, the govt put a large number of regulations in place for clothing and food, and the rail system was built with the govt helping secure the right-of-ways.
Yes, you can make a case for the benefits of stronger government when that government is already very weak. Iraq needs a stronger government. Afghanistan needs a stronger government.
We’re really talking about the modern welfare state here. There are some countries who tax relatively less and have relatively fewer regulations than others. Those countries tend to be the economic achievers. The countries with the highest taxes and biggest social programs and most regulations have low growth, high unemployment, and large debts. With some exceptions generally having to do with natural advantages such as oil resources. In such countries, a lowering of regulations and taxes has almost always benefited the economy. Welfare reform in the U.S. benefited the economy. So did deregulation.
But the reason the burden of proof is on you is because you are the one who wants to impose your will on me. Your the one who wants to take more of my money by force, or exert more control over my life. The default assumption should not be that this is a good thing, and I have to prove it bad or lose my freedom. You need to convince me that in exchange for ceding more freedom I will get compensatory benefits. If you can’t do that, I’m not interested.
The U.S. was better off for the New Deal, regardless of whether it helped us out of the Depression or not; at any rate, it gave us a lot of government programs and agencies no sane person would want to give up, such as Social Security. When I said, “this produces a better state of affairs than we’ve got here,” I was not limiting that to economic growth rates alone. There are other important factors, you know. It’s better to live in a moderately wealthy economy with a social safety net than a booming economy with none.