[quote=GH]I’m not so sure. If taxes were raised to 100% no one would “bother” to go to work and tax revenue would be $0.00
If taxes were reduced to 0% everyone would be pretty happy in the private sector for a while and taxes would be reduced to $0.00
Thus there MUST by definition be a place in between where taxes are maximized. There is some math one is supposed to have learned around age 13 or so called “linear programming” which describes the relationship between cost and profit.
At my last job I was paid hourly and did not bother working OT, since it was taxed at 56%, so at least in my case taxing me at say 33% on my OT might have encouraged me to work more and thus PAY more taxes. I suppose this would not make sense to a government worker, who is concerned only that they get their retirement check when they are done with the drudgery of their work life!
See a movie called “The Island” – substitute the word “Island” with the word “Retirement” and see what a bunch of suckers we all are!!![/quote]
It’s not necessarily true that if taxes went to 100% people would stop working. If the benefits they received from the taxing entity were worth it, they would work.
Likewise, if taxes went to 0%, it’s entirely possible that people would stop working because there would be no social order, no legal infrastructure, and a great wealth disparity where the elite live in well-protected enclaves while the poor riot in the streets.
How much would we have to pay for-profit companies to build roads so we could get to the grocery store or the for-profit hospital? Who would fund the initial research necessary to create the medicines we need to stay healthy? What would keep for-profit, unregulated food manufacturers from loading up our food with all kinds of toxins because it’s more profitable for them (greater yields, less waste, longer shelflife, etc.)? Who would protect us from the roving gangs of theives who would run our streets since there would be no law enforcement or laws of any kind? Perhaps we ought to pay “protection money” to our local gangs, and that would take care of it? How much would we have to pay for medical care, or food, or shelter, or safe and convenient transportation, or communication technology?
I think people are seriously misinformed about what happens to their tax money. We all benefit greatly from paying taxes. Even if it goes to “overpaid” government workers, that money is quickly recycled through the economy — it goes to all the private sector companies who sell goods and services to the government employees. The vast majority of Americans benefit either directly (employed as a public employee, or private-sector contractor, or private-sector company that provides goods/services to a govt entity, or derives tax credits, low-cost govt loans, or grants or other subsidies from the govt), or indirectly because we can live in a safe society, protected by a govt fire dept and police force and govt military…then there’s our physical infrastructure, medical R&D (most is/was funded directly or indirectly by the govt), or communications technology, food technology, etc. People grossly underestimate the benefits derived from government spending. They tend to only focus on the taxes paid, but fail to understand what happens to the money once it leaves their paychecks.
Still, there is absolutely some perfect place where taxes are minimized while benefits derived are maximized, and private sector jobs are maximized as well. I think we can look at countries with high taxes vs. low/non-existent taxes to get some clues as to how things work at the extremes, and then go from there. If someone can show us a country with low taxes and high quality of life, I’d like to see it. So far, nobody’s ever been able to come up with a single example.
