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It’s like startups reporting burn rate as a percentage of investor wealth. Governments already operate mostly near maximum revenue. Raise taxes anymore and Ca

It’s like startups reporting burn rate as a percentage of investor wealth. Governments already operate mostly near maximum revenue. Raise taxes anymore and Capital and labor walk away.

skissane 6y ago
> Governments already operate mostly near maximum revenue. Raise taxes anymore and Capital and labor walk away. Look at OECD data on tax revenue as percent of GDP [1]. France is at the top at 46.1%. OECD average is 34.2%. US is near the bottom at 26.8%. Given the big differences in tax rates, it seems implausible every government is at maximum revenue - that might be true for the highest taxing countries like France and Denmark, but is unlikely to be true for a below-average tax country like the US. The “Laffer curve” determines maximum government revenue - the point at which raising taxes any further would cause overall government revenue to fall. Nobody knows exactly where that point is, but most experts believe the US is a fair way below it (see e.g. [2]) [1] https://data.oecd.org/chart/63TM https://data.oecd.org/chart/63TM [2] https://www.jstor.org/stable/23269968?seq=1 https://www.jstor.org/stable/23269968?seq=1
- naveen99 6y ago
  I wonder if the us numbers are misleadingly low because they may not include state and city taxes. https://www.taxpolicycenter.org/briefing-book/what-breakdown-revenues-among-federal-state-and-local-governments https://www.taxpolicycenter.org/briefing-book/what-breakdown...
  - skissane 6y ago
    The OECD website says [1]: > This indicator relates to government as a whole (all government levels) "all government levels" means state/provincial/territorial/regional/county/city/town/etc, the whole lot So I see no evidence it is “misleadingly low”, I think the OECD’s statistics are generally accurate. (More accurate than the UN’s, because the countries whose governments are most likely to commit statistical fraud are not OECD members.) [1] https://data.oecd.org/tax/tax-revenue.htm https://data.oecd.org/tax/tax-revenue.htm
    - naveen99 6y ago
      Thanks. Agreed.

It’s like startups reporting burn rate as a percentage of investor wealth. Governments already operate mostly near maximum revenue. Raise taxes anymore and Capital and labor walk away.

skissane 6y ago

> Governments already operate mostly near maximum revenue. Raise taxes anymore and Capital and labor walk away. Look at OECD data on tax revenue as percent of GDP [1]. France is at the top at 46.1%. OECD average is 34.2%. US is near the bottom at 26.8%. Given the big differences in tax rates, it seems implausible every government is at maximum revenue - that might be true for the highest taxing countries like France and Denmark, but is unlikely to be true for a below-average tax country like the US. The “Laffer curve” determines maximum government revenue - the point at which raising taxes any further would cause overall government revenue to fall. Nobody knows exactly where that point is, but most experts believe the US is a fair way below it (see e.g. [2]) [1] https://data.oecd.org/chart/63TM https://data.oecd.org/chart/63TM [2] https://www.jstor.org/stable/23269968?seq=1 https://www.jstor.org/stable/23269968?seq=1

naveen99 6y ago
I wonder if the us numbers are misleadingly low because they may not include state and city taxes. https://www.taxpolicycenter.org/briefing-book/what-breakdown-revenues-among-federal-state-and-local-governments https://www.taxpolicycenter.org/briefing-book/what-breakdown...
- skissane 6y ago
  The OECD website says [1]: > This indicator relates to government as a whole (all government levels) "all government levels" means state/provincial/territorial/regional/county/city/town/etc, the whole lot So I see no evidence it is “misleadingly low”, I think the OECD’s statistics are generally accurate. (More accurate than the UN’s, because the countries whose governments are most likely to commit statistical fraud are not OECD members.) [1] https://data.oecd.org/tax/tax-revenue.htm https://data.oecd.org/tax/tax-revenue.htm
  - naveen99 6y ago
    Thanks. Agreed.