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Perhaps I'm just naive with regards to tax policy, but the idea of raising or lowering taxes in order to drive growth always seemed strange to me. I've always t
by nkrisc 8y ago
Perhaps I'm just naive with regards to tax policy, but the idea of raising or lowering taxes in order to drive growth always seemed strange to me. I've always taxes were a way to fund a functioning government and pay for all the common infrastructure and services that make life pleasant. If you have excellent public schools, and well-maintained roads, and an efficient governing body, wouldn't that be a place ripe for growth, regardless of tax rate?
- Spooky23 8y agoIt is. Most of the places where people live and work are higher tax places. The lowest tax places are usually places dominated the lowest value-add businesses -- like resource extraction. They don't really care about people because they don't need them.
- nybble41 8y agoMore money spent on government projects does not guarantee a proportionally greater benefit, and comes at the expense of other factors which are necessary for growth, such as private investment. Most of the things a healthy economy needs do not come from government and are not paid for via taxes. As a simple counter-example, let's say 100% of income were taxed and spent on the best educational and transportation systems money can buy. You'd have excellent schools and the best roads, but zero incentive for anyone to work, much less start a business. The capital needed to produce the goods people want would be consumed without replacement. That's a recipe for economic collapse, not growth.
- dv_dt 8y agoThe response to both dramatically increased taxes (as in South Korea), and dramatically decreased taxes (as in Kansas and the US), would seem to point to the fact that taxes as they affect growth mostly don't matter.