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Your argument fails to the same issue as the one you're responding to. There are countless countries with both extremely high and extremely low tax rates, but h

Your argument fails to the same issue as the one you're responding to. There are countless countries with both extremely high and extremely low tax rates, but here seems to be little connection in general to economic/social development based on tax levels. I think it all has to do with something very simple: opportunity + nationalism. Post WW2 US was basically a land of endless opportunity spurred on by great nationalism. The reason nationalism is important is because it helps align motivations beyond just profit. Now a days most large corporations wouldn't think twice about firing all their domestic workers if they could profitably replace them with cheaper workers in another country. This is ostensibly good for the corporation, but not so great for the country, and worst of all for the workers left behind. Aside from that social bond there is also a practical commercial one. When individuals in a nation strongly bias towards domestic products, this incentivizes domestic production. E.g. - 'Made in the USA' was a major selling point. But most importantly, I think you'll find this pattern of opportunity + nationalism is something that maps pretty well to national success in general. The US in its boom times, China today, the rebuilding of South Korea, Japan, etc.. What triggers the eventual decline there though is something far more difficult to answer. E.g. the US and South Korea continue to grow, while Japan ended up facing (and continuing to face) decades of stagnation.

sonnyblarney 8y ago
"There are countless countries with both extremely high and extremely low tax rates, but here seems to be little connection in general to economic/social development based on tax levels." This is not true. If you draw a map of low-tax v high-tax countries there's a strong correlation between high taxes and higher GDP. A few countries have high taxes and low prosperity. But the one's with low taxes and high prosperity are universally 'oil rich' or 'gambling rich'. There are no countries with almost zero taxes that are very prosperous at all. Switzerland has lower taxes, but not that low. Same with Monaco, they have very high taxes outside of income. As far as 'nationalism' - it was more the fact that American industry was intact, and everywhere else was burned to the ground. And yes - 'the spirit' of workers and managers was very important, I would say Nationalism was part of it, but it was not the foundation. Yes, everyone was a 'leave it to Beaver' believer until rock and roll and cynicism came along. South Korea and Japan 'boomed' just like Europe did because they were recovering from a war where investment opportunities abound, and are obvious. China in much the same way. If there are still zillions without homes, you can easily build more homes to create value. No highways? Build them. Easy, no brainer investments.

sonnyblarney 8y ago

"There are countless countries with both extremely high and extremely low tax rates, but here seems to be little connection in general to economic/social development based on tax levels." This is not true. If you draw a map of low-tax v high-tax countries there's a strong correlation between high taxes and higher GDP. A few countries have high taxes and low prosperity. But the one's with low taxes and high prosperity are universally 'oil rich' or 'gambling rich'. There are no countries with almost zero taxes that are very prosperous at all. Switzerland has lower taxes, but not that low. Same with Monaco, they have very high taxes outside of income. As far as 'nationalism' - it was more the fact that American industry was intact, and everywhere else was burned to the ground. And yes - 'the spirit' of workers and managers was very important, I would say Nationalism was part of it, but it was not the foundation. Yes, everyone was a 'leave it to Beaver' believer until rock and roll and cynicism came along. South Korea and Japan 'boomed' just like Europe did because they were recovering from a war where investment opportunities abound, and are obvious. China in much the same way. If there are still zillions without homes, you can easily build more homes to create value. No highways? Build them. Easy, no brainer investments.