How high is 'too high' when we're talking taxes?

[oldjones]

Hard to make the question simpler. We hear it all the time: "My taxes are too high", "California's taxes are too high", "Yeah, but Swedish taxes are way too high".

We could end any discussion by saying all taxes are too high, just by definition, but that would make a mockery of all those who offer, "our taxes are already too high" as a well-meant debating point.

So what's the measure? Too high determined how? Compared to what? Other countries? Gross income? Net?

 

[Mrbig1949]

When someone says something like Swedish taxes are too high it can only be measured against the services provided for the taxes. USA much lower taxes overall but no Medicare for example.

 

[papasmerf]

if you are a member of the ruling class (politician) or on welfare taxes are never too high

 

[oldjones]

papa I'll give you your second group, the ones on welfare, but I've sure heard a lot of moaning from people I'd call 'ruling class'. Granted that's only when someone proposes to shut some loophole or open up a new tax line, but moan they do.

Or did you mean as long as they had a dollar left their taxes weren't too high yet?

 

[papasmerf]

papa I'll give you your second group, but I've sure heard a lot of moaning from people I'd call 'ruling class'. Granted that's only when someon proposes to shut some loophole or open up a new tax line, but moan they do.

Or did you mean as long as they had a dollar left their taxes aren't too high?

I corrected it to read politicians and welfare which means those who pay no taxes.

Myself I would impose a 3% flat tax on any and all gross incomes, no exceptions and no deductions. This would include all welfare and SSI incomes as well as State and Federal pensions.

 

[wet_suit_one]

Hey papa,

I was once told that 3% is the rate in South Korea. I wonder if we would have enough revenue?

Of course, as long as your spending plans are in line with your taxation plans, it's all good.

 

[papasmerf]

Hey papa,

I was once told that 3% is the rate in South Korea. I wonder if we would have enough revenue?

Of course, as long as your spending plans are in line with your taxation plans, it's all good.

3% is not out of line when you eliminate all deductions and the need for 70% of IRS employees

 

[fuji]

I agree with the concept, but I think you pulled the 3% number out of your ass.

 

[papasmerf]

I agree with the concept, but I think you pulled the 3% number out of your ass.

Not really I based it on what would work assuming economic growth.

When you consider 30% close to the average rate Americans are taxed and about 10% of that is not returned through programs giving non working Americans refunds or legitimate refunds to working people 3% is a good place to start working from.

 

[Mrbig1949]

The ruling class is the Bernie Madoffs of the world who almost madeoff with everybody's money. The ruling class has names like Gates, DuPont, Morgan etc.

Warren Buffet "There is a class war in America. My class started it and we are winning."

 

[papasmerf]

The ruling class is the Bernie Madoffs of the world who almost madeoff with everybody's money. The ruling class has names like Gates, DuPont, Morgan etc.

Warren Buffet "There is a class war in America. My class started it and we are winning."

try every elected official in the country. Their main concern is getting re-elected.

 

[Aardvark154]

The ruling class is the Bernie Madoffs of the world . . . The ruling class has names like Gates, DuPont, Morgan etc.

Do you actually know any DuPonts or Morgans? I believe you might be quite surprised.

 

[Aardvark154]

Myself I would impose a 3% flat tax on any and all gross incomes, no exceptions and no deductions. This would include all welfare and SSI incomes as well as State and Federal pensions.

The so called Fair Tax is an interesting idea.

Of course both Congress and Parliament have for decades used the tax codes to advance all sorts of political and economic goals having absolutely nothing to do with tax revenue.

When a political squawk arises over taxpayers actually taking advantage of the deductions Congress or Parliament enacted, this now becomes an excuse for political speeches decrying the horrible abuse of the tax code.

 

[kkelso]

So what's the measure? Too high determined how? Compared to what? Other countries? Gross income? Net?

I've always thought that an absolute, rather than a relative, measurement is the most interesting. Step back, forget everything you know about anybody else, and think of taxes as a fee you pay for services.

Given that, it seems to me that anything over a third is plainly absurd. Stack all my taxes up and I'm paying around 55% right now (U.S.)

 

[JohnLarue]

Taxes are always too high, no matter where you pay them.
Why ?
Because there is always wasteful spending and corruption in government
Less government >>>> less waste

 

[someone]

As far as OldJones is concerned, I am sure that whatever the NDP tells him is the right level is correct.

 

[WoodPeckr]

You have to be a Chico State grad.....

Less government >>>> less waste

ROTFLMAO!!!

Believe Dubya PROVED this an urban myth, to the nth degree, NO?....

 

[binderman]

Taxes are always too high, no matter where you pay them.
Why ?
Because there is always wasteful spending and corruption in government
Less government >>>> less waste

+1000000000

I don't mind paying taxes as long they are for negative freedoms, that is, things that are anti-bad (police, military, courts of law, fire services, prisons, 911, FBI, national defense, etc, etc)

Its positive freedom, that is, things that are pro-good that I have a problem with. Because if the gov. tries to do good it will fail or create grossly inefficient waste because it has got the reinforcement mechanism backwards. (eg. with welfare, the more you fail, the more you are rewarded for failing with more money)


Milton Friedman explains in just 2.5 minutes why you can't do good with other people's money:

http://www.youtube.com/watch?v=k2Kg2SvsI8Q

 

[fuji]

When you consider 30% close to the average rate Americans are taxed and about 10% of that is not returned through programs

So you are not just proposing to eliminate deductions, you are proposing to eliminate all spending programs? Well then yeah 3% is probably enough, but that's demented.

Providing a social safety net generates risk-taking behavior in society. Eliminate it and people become far more conservative and as a result less entrepreneurial. Yes too much welfare and you generate laziness--but the optimally efficient economy has a safety net that is somewhere in the middle, in moderation, not at either of the extremes. You want failure to be tolerable but unpleasant.

We want people to take risks, therefore, we have to provide for those who fail.

 

[fuji]

I don't mind paying taxes as long they are for negative freedoms, that is, things that are anti-bad (police, military, courts of law, fire services, prisons, 911, FBI, national defense, etc, etc)

Your positive/negatie freedom concept is a false dichotemy. There is no "positive/negtaive" difference between quenching a fire or quenching thirst; nor between quelling a rebellion and quelling a disease outbreak.

Thinking that way will cause you to miss the economically optimal solution if, for example, it can be shown that it's cheaper to prevent crime than to punish it. If subsidizing jobs for would-be criminals is cheaper than building another prison, why wouldn't you?

You will likely choose to answer this in ideological rather than empirical terms, and that is my problem with both the left and the right: I prefer solutions that work, that are economically optimal, over ideologically "correct" ones from either the left or the right.

[buote]because it has got the reinforcement mechanism backwards[/quote]

We aren't Pavolovian dogs, we're thinking, savvy people. As I mentioned in my reply above to someone else when you create a social safety net you also encourage risk-taking entrepreneurial behavior, which leads to faster economic growth.

A society with a moderate social safety net will outperform one with no social safety net, or with an oversized social safety net. The advantage of a guaranteed old age security pension or a subsistence level welfare roll is that it frees individuals to try crazy but maybe revolutionary new ideas knowing full well that failure won't be that bad.

We want that.

Obviously there is a tradeoff with some people being lazy, but it is indeed a tradeoff and the efficient solution is not at either extreme, but in the middle somewhere.