5 ms·

I don't get why countries always under-invest in tax collection... as long as it's ROI positive, shouldn't budgets be getting increased?

corybrown 7y ago
There's a faction of US politicians that are philosophically against (most) government and taxes. It's not about ROI, it's about their goals.
- RyanAF7 7y ago
  Interesting. A faction you say? You mean like the faction that drafted the Articles of Confederation?
  - SimbaOnSteroids 7y ago
    No, the contemporary one that learned nothing from that folly.
    - RyanAF7 7y ago
      Oh! The one that found success with the Laffer Curve. Right. Freedom isn't an idea. It's an actual place. In terms of kingdoms a free peoples kingdom is a Freedom; and you don't have to pay someone for the right to exist. Oddly enough we agree, there is a faction in the US pursuing its own agenda.
      - corybrown 7y ago
        > The one that found success with the Laffer Curve Care to explain? The most recent tax cuts that were supposed to pay for themselves haven't. So where are we on the Laffer Curve right now?
        microcolonel 7y ago
        Hard to measure both over long and short timescales, since so many factors affect the willingness of people to invest personal effort and risk toward earning. You might have more success looking at the amounts while attempting to control for more factors; but of course, you could make it worse, because statistics is hard!
  - deleted 7y ago
    [deleted]
  - nerdponx 7y ago
    Ah, yes. The failed constitution.
- conanbatt 7y ago
  This faction of the US is unique, which is why the US has some of the lowest tax rates in the world and in consequences has one of the most positive balances in net immigration, specially considering it has one of the harshest immigration policies in the world.
  - SketchySeaBeast 7y ago
    "Give me your tired, your poor, Your huddled masses yearning to breathe free, Those sick of a 35% income tax on earnings over $45,000".
    - conanbatt 7y ago
      I'm literally upset at the US for being so closed for immigration. If it were just a little more lax it would have a lot more than what it has now.
  - microcolonel 7y ago
    The U.S. is by any good measure somewhere between #1 and #3 in median individual income net of taxes and other mandatory transfers; and always #1 in the mean. I think a lot of people look at the gap between the mean and median, and think that something must be going wrong; but to me, the inequality of outcome this measures is more a sign that America is a welcome home of extremely productive people and the smarter of their direct offspring, who inevitably earn ridiculous sums of money when and where doing so is not itself reviled.
  - koyote 7y ago
    The US has some of the lowest tax rates in the world, IFF you are making a large amount of money. If you are earning a median wage a lot of other countries have comparable tax rates. If you are earning minimum wage a lot of other countries have lower tax rates.
    - conanbatt 7y ago
      Yup, not a great country to be poor. Also tax-pressure is still considerable (33% of GDP). This implies the US has lots of regressive expenditures and taxes. On the whole, I think the tax rate is the main difference between the US and most of industrialized countries, and net immigration is hugely positive for the US.
DerpyBaby123 7y ago
Governments aren't 'rational actors' trying to maximize revenue. In US, 'starve the beast' [1] comes highly into play https://en.m.wikipedia.org/wiki/Starve_the_beast https://en.m.wikipedia.org/wiki/Starve_the_beast
rietta 7y ago
When the executive branch doesn't agree with the law, one tool they have as a separate branch of government is to not enforce the law. In U.S. political history, President Andrew Jackson reportedly responded: "John Marshall has made his decision; now let him enforce it!" referring to the Supreme Court ruling in https://en.wikipedia.org/wiki/Worcester_v._Georgia https://en.wikipedia.org/wiki/Worcester_v._Georgia.
aantix 7y ago
George: Still don't know how you can call lunch with me a business expense? Elaine: What do you think of the catalog? George: I think it stinks. Elaine: There, we just talked business. * Imagine the IRS debating grey area scenarios like this against financial teams trained to argue deductions. The ROI quickly becomes a sewer drain.
jonathankoren 7y ago
I think it’s because it’s a stealth tax cut. It might be able to win the political argument for lowering taxes, but by cutting funding for enforcement, you’re encouraging scofflaws and thus get the unpopular outcome you desired without having to go on television and defend it. A similar thing plays out when politicians want to cut popular social programs. They manufacture a budget crisis (typically through instituting a popular tax cut) and then solve the crisis by cutting the funding to the thing they already decided they didn’t like.
conanbatt 7y ago
If 99.9% of the national income were used to gather 100% of the national income, you would have positive ROI.
- trophycase 7y ago
  Where does the remaining 0.1% go then 0.o?
- nybble41 7y ago
  Exactly, which should illustrate just how pointless this calculation is. Obviously spending 99.9% of national resources on tax collection would be a colossal waste from the public's point of view despite the "positive ROI". The IRS supposedly exists to benefit the public; maximizing the amount transferred from private citizens to the government is not the end goal here. The benefit to the public from having that money spent by the government rather than by those individual members of the public who earned it is at best a small fraction of the total amount of tax collected, and may even be negative.
deleted 7y ago
[deleted]

corybrown 7y ago

There's a faction of US politicians that are philosophically against (most) government and taxes. It's not about ROI, it's about their goals.

RyanAF7 7y ago
Interesting. A faction you say? You mean like the faction that drafted the Articles of Confederation?
- SimbaOnSteroids 7y ago
  No, the contemporary one that learned nothing from that folly.
  - RyanAF7 7y ago
    Oh! The one that found success with the Laffer Curve. Right. Freedom isn't an idea. It's an actual place. In terms of kingdoms a free peoples kingdom is a Freedom; and you don't have to pay someone for the right to exist. Oddly enough we agree, there is a faction in the US pursuing its own agenda.
    - corybrown 7y ago
      > The one that found success with the Laffer Curve Care to explain? The most recent tax cuts that were supposed to pay for themselves haven't. So where are we on the Laffer Curve right now?
      - microcolonel 7y ago
        Hard to measure both over long and short timescales, since so many factors affect the willingness of people to invest personal effort and risk toward earning. You might have more success looking at the amounts while attempting to control for more factors; but of course, you could make it worse, because statistics is hard!
- deleted 7y ago
  [deleted]
- nerdponx 7y ago
  Ah, yes. The failed constitution.
conanbatt 7y ago
This faction of the US is unique, which is why the US has some of the lowest tax rates in the world and in consequences has one of the most positive balances in net immigration, specially considering it has one of the harshest immigration policies in the world.
- SketchySeaBeast 7y ago
  "Give me your tired, your poor, Your huddled masses yearning to breathe free, Those sick of a 35% income tax on earnings over $45,000".
  - conanbatt 7y ago
    I'm literally upset at the US for being so closed for immigration. If it were just a little more lax it would have a lot more than what it has now.
- microcolonel 7y ago
  The U.S. is by any good measure somewhere between #1 and #3 in median individual income net of taxes and other mandatory transfers; and always #1 in the mean. I think a lot of people look at the gap between the mean and median, and think that something must be going wrong; but to me, the inequality of outcome this measures is more a sign that America is a welcome home of extremely productive people and the smarter of their direct offspring, who inevitably earn ridiculous sums of money when and where doing so is not itself reviled.
- koyote 7y ago
  The US has some of the lowest tax rates in the world, IFF you are making a large amount of money. If you are earning a median wage a lot of other countries have comparable tax rates. If you are earning minimum wage a lot of other countries have lower tax rates.
  - conanbatt 7y ago
    Yup, not a great country to be poor. Also tax-pressure is still considerable (33% of GDP). This implies the US has lots of regressive expenditures and taxes. On the whole, I think the tax rate is the main difference between the US and most of industrialized countries, and net immigration is hugely positive for the US.

DerpyBaby123 7y ago

Governments aren't 'rational actors' trying to maximize revenue. In US, 'starve the beast' [1] comes highly into play https://en.m.wikipedia.org/wiki/Starve_the_beast https://en.m.wikipedia.org/wiki/Starve_the_beast

rietta 7y ago

When the executive branch doesn't agree with the law, one tool they have as a separate branch of government is to not enforce the law. In U.S. political history, President Andrew Jackson reportedly responded: "John Marshall has made his decision; now let him enforce it!" referring to the Supreme Court ruling in https://en.wikipedia.org/wiki/Worcester_v._Georgia https://en.wikipedia.org/wiki/Worcester_v._Georgia.

aantix 7y ago

George: Still don't know how you can call lunch with me a business expense? Elaine: What do you think of the catalog? George: I think it stinks. Elaine: There, we just talked business. * Imagine the IRS debating grey area scenarios like this against financial teams trained to argue deductions. The ROI quickly becomes a sewer drain.

jonathankoren 7y ago

I think it’s because it’s a stealth tax cut. It might be able to win the political argument for lowering taxes, but by cutting funding for enforcement, you’re encouraging scofflaws and thus get the unpopular outcome you desired without having to go on television and defend it. A similar thing plays out when politicians want to cut popular social programs. They manufacture a budget crisis (typically through instituting a popular tax cut) and then solve the crisis by cutting the funding to the thing they already decided they didn’t like.

conanbatt 7y ago

If 99.9% of the national income were used to gather 100% of the national income, you would have positive ROI.

trophycase 7y ago
Where does the remaining 0.1% go then 0.o?
nybble41 7y ago
Exactly, which should illustrate just how pointless this calculation is. Obviously spending 99.9% of national resources on tax collection would be a colossal waste from the public's point of view despite the "positive ROI". The IRS supposedly exists to benefit the public; maximizing the amount transferred from private citizens to the government is not the end goal here. The benefit to the public from having that money spent by the government rather than by those individual members of the public who earned it is at best a small fraction of the total amount of tax collected, and may even be negative.

deleted 7y ago

[deleted]