Where have all the Taxes gone? (a question for FL)

[dagrom]

It seems like every coffee lounge eventually ends up talking about politics and unfortunately i'm still trying to find my way... (i voted for obama but probably won't again)

One thing that always baffles me is the discussion of Taxes.

Conservatives say cut taxes and the Government will have more money than ever!

Liberals say raise taxes on rich people because we can pay down debt faster increasing revenue etc.

So if cutting taxes increases revenue then cut them again, and again! Keep cutting them. Think how rich we will be when we get to 0%?

If raising taxes is the right approach then why not tax at 100%?

Anyway, I think it's pretty clear that in order to have roads to drive to work on and a military to protect my one dollar and google's trillion dollars we all need to pay something.

Over the years economies all over the world have been taxing and spending different amounts so why don't we have enough data to determine the correct tax percentage?

i'm confident that 0% and 100% are the wrong amounts so instead of saying cut taxes or raise taxes how about we look at history and determine the sweet spot?

[jAQUAN]

FL is not some wack-job who can be easily bated into a political thread. He's actually a really nice guy so he may still answer.
Keep in mind FK is over ten years old so we've had enough political threads to give a forum focused on them a run for their money. They started to dominate the CL for a while and we tried to get away from them but it just doesn't seem as lively around here without them what with twitter distracting a lot of our regulars and all.

Taxation is really a moot secondary discussion behind irresponsible or near-sighted spending. I think we've been hovering around the appropriate amount for a while now. The trick is not blowing and misplacing countless trillions on crap no one needs and creating more tax payers (not necessarily more people). The jobs are there, just ask Mike Rowe.
After living abroad for a few months, I have a different perspective on military spending. It may seem frivolous to build an entire shopping mall on a foreign military base but let me tell you, there are thousands of spouses and children over here who's happiness depend on those elements of home. It's not all just bullets. Its schools, sports equipment, movie theaters, affordable gas and a bunch of other things most americans take for granted.

[dagrom]

FL seems very sharp to me so my intention wasn't to bate a "wack-job" into a political debate, rather, I value his opinion.

Military spending is one thing we don't want to off load on the states or individual households. The US has a great military and the special forces who executed bin laden make a teachers salary on average $54,000 certainly worth the money.

I think governments will always be accused of wasteful spending. I see no way around it because at least one person will always value a cut government service over another person.

It would be cool if everyone could go to TAX.gov or something and see a big red 42% or something that represents the amount of GDP needed to be debt free. Americans working harder and/or government spending less would make that % go down while job loss and spending would make the % go higher.

With the technology we have now there shouldn't ever be a deficit or surplus.

I know that scenario would never happen but it makes me wonder if something like that would really make people more involved in getting the % to go down because subsidies or other wasteful spending would now instantly change their pay check.

[gerbick]

I'd personally be interested in why has the government grown so large and how do we cut that back. It's time for government to downsize while being as efficient, if not more.

[Loyal Rogue]

I'd personally be interested in why has the government grown so large and how do we cut that back. It's time for government to downsize while being as efficient, if not more.

I think that is an idea that both sides can get behind.
The only ones not interested are career politicians handing out no-bid government contracts and kickbacks/welfare to their corporate masters/donors/friends.

The problem is how to go about making it happen without making the system worse than it currently is.
As someone mentioned, just cutting the budget inevitably leads to the waste being protected while the primary purpose of a program gets slashed.

The first thing that needs to get done is scrapping the lobbyist system... like that will ever happen...
Just look at what's going on now with the oil companies and congress.
Yesterday the CEOs from the top 5 oil companies were in Washington to protect the $4 billion in corporate welfare we give them each year.
...That's $185 for every licensed driver in the US... taken from our tax dollars and handed over to companies that are making record-breaking, obscene profits every quarter.

Why are multi-billionaires getting $4 billion of our tax dollars in welfare checks?
Because they spent more than $145 million last year on nearly 800 lobbyists to buy off the politicians.
$145 million in bribes turns into $4 billion in welfare = 2700% ROI
Not a bad return on investment for the year, eh?

How are you going to fix a system like that?

[jAQUAN]

Easy, plural government. Let the law makers drink their own koolaid (I think its grape) and experience the market system themselves. Competition is the only thing that makes a company get bettter.

[gerbick]

How are you going to fix a system like that?

Legalize crack, meth, marijuana and looting any oil execs?

I'd support two out of the four aforementioned.

[silverx2]

Easy, plural government. Let the law makers drink their own koolaid (I think its grape) and experience the market system themselves. Competition is the only thing that makes a company get bettter.

I have played enough games to know that if you have multiple governments trying to govern the same place, its going to result in people with weapons fighting other people with weapons.

Often times wearing clown makeup

[FlashLackey]

Over the years economies all over the world have been taxing and spending different amounts so why don't we have enough data to determine the correct tax percentage?

i'm confident that 0% and 100% are the wrong amounts so instead of saying cut taxes or raise taxes how about we look at history and determine the sweet spot?

The article has been a bit abused due its political implications. But, there is information about this concept here: http://en.wikipedia.org/wiki/Laffer_curve

Obviously, there has to be a limit to how low the rate can go without beginning to lose revenue. However, there are many examples of countries lowering rates substantially and then collecting a lot more in revenue. It happened after the Bush tax cuts. It happened in Ireland. It's happening now in [Russia and Baltic States] with flat taxes.

One significant outside factor is what rates are relative to other countries. If the rates are higher than in foreign countries, it creates incentive to take investment and work out of the country. As you can see, the US has one of the highest corporate tax rates in the world:



And people wonder why we are losing jobs and business overseas.

FL seems very sharp to me so my intention wasn't to bate a "wack-job" into a political debate, rather, I value his opinion.

Thank you (and jAQUAN) for the kind words. The truth is, I've been having these same types of internet debates for so long that I have a large arsenal of citations ready to go in my bookmarks list at any moment. You should see the list on football related debates!

Whether or not someone who has spent this much time on this is a "whack job" is a question I'm still working on answering...

I think governments will always be accused of wasteful spending. I see no way around it because at least one person will always value a cut government service over another person.

I think there are two different issues.

A) Whether or not something is a good investment.
B) Whether or not a program is being carried out efficiently.

I believe that most Americans accept that via our type of government, there will almost certainly be investments made that they disagree with.

However, what seems to be difficult is that whether or not something would be good to invest in is beside the point that government has clearly proven unable to carry out many (if not most or all) programs as efficiently as those in a competitive market.

The first thing that needs to get done is scrapping the lobbyist system... like that will ever happen...

There's an excellent debate about all of this in the first episode of Milton Friedman's classic series "Free to Choose" (highly recommended): http://www.youtube.com/watch?v=D3N2sNnGwa4

It's worth watching the entire thing. But, skipping to 34:58, there is an exchange where Friedman says it best, imo. One of the driving reasons why conservatives want smaller government is that it gives corporations and other relatively powerful groups less ability to manipulate policy to their advantage.

[hanratty21]

Legalize crack, meth, marijuana and looting any oil execs?

I'd support two out of the four aforementioned.

Clearly crack and meth being the two...