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It's not like money paid as taxes just evaporates. It's spent, i.e. put right back into the economy.

dunpeal 8y ago
Except much of it is spent hiring more bureaucrats whose function is often to hinder economic activity and growth by numerous rules and regulations. These very same people would be contributing to growth if they worked in the private sector and produced goods and service. Instead, they create either zero or negative growth.
- jonhinson 8y ago
  What do those bureaucrats do with the money that is paid with taxes? Spend it on economic activity.
  - dunpeal 8y ago
    You take a person that could be producing goods and services in the private sector, and pay him to work in the public sector, where he produces no such goods or services, and often is tasked with creating and enforcing regulations that limit economic freedom. Clearly you're going to end up with lower economic growth. The fact he would spend his salary on purchases is small comfort, especially when he'd likely earn a larger salary to spend in the private sector.
    - jonhinson 8y ago
      It's a false premise that taxation does not produce a good or service. E.g. USPS, defense contracts, farm subsidies, etc. It's not clear that you're going to end up with lower economic growth. For example, taxing some level of income that would otherwise not be spent on economic activity (e.g. savings or equity investments) and spending it on things that do result in economic active results in higher economic growth.
    - djrobstep 8y ago
      Spoken like an 18 year old that has completed Econ 101 but never worked in either the public or private sector. Please, tell us more about how doctors, nurses, firefighters, train drivers, and park rangers produce nothing of value. Or how socially beneficial the advertising and marketing industries are.
  - xupybd 8y ago
    Not always, sometimes they try to engineer the economy and kill growth.
chrisco255 8y ago
The government is generally bad at spending money efficiently, since they are a local monopoly and have few incentives to do so...which is why markets work better at this.
- mywittyname 8y ago
  This is a BS statement that doesn't actually say anything beyond expressing this trite idea that government is always bad. "The government" is not a singular entity, it's a collection of tens of thousands of smaller entities, all of which operate mostly independent of one another and whose relative "efficiency" is based almost entirely on the people working there. One town may have a school or fire department which operates extremely well under a very tight budget, while the town over might poor money into a corrupt and expensive institution which fails to provide more than basic services. In this respect, it's no different than any other business. Some Walmarts are clean, tidy, and well run, others are a mess. But you wouldn't go around claiming that "The retail" is inefficient because of this fact. Also, not every government department should be efficient. The military is often held up as the hallmark of an inefficient bureaucracy, but the fact is, we don't want a military that's cost-effective, we want a military that's combat-effective, no matter the cost. But we also have a post office that can mail a letter to the middle of Alaska for less than a dollar. Your comment about the market working better at "this" (whatever this is, anyway) is equally as lazy.
  - chrisco255 8y ago
    The difference (and it makes all the difference in the world) is that as a consumer of Walmart, you can simply choose to shop elsewhere (Amazon, Target, CVS, mom and pop, etc). Wal-Mart cannot survive if it performs under consumer expectations for too long (see Sears, KMart, etc). Governments are monopolies. The only incentive they have to be efficient is the leadership changes that possibly occur with each election cycle. Given the wide range of services and issues that governments must tackle, it's likely that voters have only a few key issues in mind when they go to the ballot box. With each change in leadership, a different set of priorities takes precedence. Sometimes long standing, mediocre services, continue unabated and unimproved for decades at a time with little to no innovation.
pessimizer 8y ago
> It's not like money paid as taxes just evaporates. It's spent, i.e. put right back into the economy. That's not how taxes work. It actually does evaporate. Money is an IOU from the government that it guarantees it will accept as payment. The government doesn't actually need to give itself an IOU (it doesn't make sense except as a way to keep track of internal accounting obligations); it burns the IOUs it gets back in order to preserve the value of its still circulating IOUs. It's always important to remember that governments print money, they don't discover it. The government doesn't need it from you, it needs you not to have it in order to keep it somewhat scarce.
- mywittyname 8y ago
  Ultimately the purpose of taxes is to force citizens to use the currency the government produces, which in turn, makes their currency valuable to citizens.

Except much of it is spent hiring more bureaucrats whose function is often to hinder economic activity and growth by numerous rules and regulations. These very same people would be contributing to growth if they worked in the private sector and produced goods and service. Instead, they create either zero or negative growth.

jonhinson 8y ago
What do those bureaucrats do with the money that is paid with taxes? Spend it on economic activity.
- dunpeal 8y ago
  You take a person that could be producing goods and services in the private sector, and pay him to work in the public sector, where he produces no such goods or services, and often is tasked with creating and enforcing regulations that limit economic freedom. Clearly you're going to end up with lower economic growth. The fact he would spend his salary on purchases is small comfort, especially when he'd likely earn a larger salary to spend in the private sector.
  - jonhinson 8y ago
    It's a false premise that taxation does not produce a good or service. E.g. USPS, defense contracts, farm subsidies, etc. It's not clear that you're going to end up with lower economic growth. For example, taxing some level of income that would otherwise not be spent on economic activity (e.g. savings or equity investments) and spending it on things that do result in economic active results in higher economic growth.
  - djrobstep 8y ago
    Spoken like an 18 year old that has completed Econ 101 but never worked in either the public or private sector. Please, tell us more about how doctors, nurses, firefighters, train drivers, and park rangers produce nothing of value. Or how socially beneficial the advertising and marketing industries are.
- xupybd 8y ago
  Not always, sometimes they try to engineer the economy and kill growth.

chrisco255 8y ago

The government is generally bad at spending money efficiently, since they are a local monopoly and have few incentives to do so...which is why markets work better at this.

mywittyname 8y ago
This is a BS statement that doesn't actually say anything beyond expressing this trite idea that government is always bad. "The government" is not a singular entity, it's a collection of tens of thousands of smaller entities, all of which operate mostly independent of one another and whose relative "efficiency" is based almost entirely on the people working there. One town may have a school or fire department which operates extremely well under a very tight budget, while the town over might poor money into a corrupt and expensive institution which fails to provide more than basic services. In this respect, it's no different than any other business. Some Walmarts are clean, tidy, and well run, others are a mess. But you wouldn't go around claiming that "The retail" is inefficient because of this fact. Also, not every government department should be efficient. The military is often held up as the hallmark of an inefficient bureaucracy, but the fact is, we don't want a military that's cost-effective, we want a military that's combat-effective, no matter the cost. But we also have a post office that can mail a letter to the middle of Alaska for less than a dollar. Your comment about the market working better at "this" (whatever this is, anyway) is equally as lazy.
- chrisco255 8y ago
  The difference (and it makes all the difference in the world) is that as a consumer of Walmart, you can simply choose to shop elsewhere (Amazon, Target, CVS, mom and pop, etc). Wal-Mart cannot survive if it performs under consumer expectations for too long (see Sears, KMart, etc). Governments are monopolies. The only incentive they have to be efficient is the leadership changes that possibly occur with each election cycle. Given the wide range of services and issues that governments must tackle, it's likely that voters have only a few key issues in mind when they go to the ballot box. With each change in leadership, a different set of priorities takes precedence. Sometimes long standing, mediocre services, continue unabated and unimproved for decades at a time with little to no innovation.

pessimizer 8y ago

> It's not like money paid as taxes just evaporates. It's spent, i.e. put right back into the economy. That's not how taxes work. It actually does evaporate. Money is an IOU from the government that it guarantees it will accept as payment. The government doesn't actually need to give itself an IOU (it doesn't make sense except as a way to keep track of internal accounting obligations); it burns the IOUs it gets back in order to preserve the value of its still circulating IOUs. It's always important to remember that governments print money, they don't discover it. The government doesn't need it from you, it needs you not to have it in order to keep it somewhat scarce.

mywittyname 8y ago
Ultimately the purpose of taxes is to force citizens to use the currency the government produces, which in turn, makes their currency valuable to citizens.