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I would imagine that taxes, like almost all dials you can tweak for optimization, have a point that is optimal for growth, above or below which, they are bad fo

I would imagine that taxes, like almost all dials you can tweak for optimization, have a point that is optimal for growth, above or below which, they are bad for growth. As taxes approach zero, for instance, you live in a mad max society and nothing can grow because there is no stability.

bluGill 5y ago
The first is correct (though in practice the system is chaotic enough that we can only get close to that point). However is that really what we want? Maximum growth is good for some things, but some of us will trade less growth for something else - either "more for me" (less taxes), or a "more services from everyone" (more taxes). I put both of the above in quotes because there is no way to capture all the subtitles of the complex trade offs involved here, and I hope you don't try to fight the strawmen I setup in my attempts. There is no agreement on what is good. Which is why politics is so complex.
stale2002 5y ago
> have a point that is optimal for growth, above or below which, they are bad for growth. As taxes approach zero, for instance, you live in a mad max society and nothing can grow because there is no stability. You are mis-equating a cost for a benefit, when it is instead that a cost is required to achieve a separate benefit. The point is that taxes are a cost. They are a cost that needs to be paid, in order to pay for certain things, such as government services. Setting taxes to 0 would not be bad for growth, because of taxes being 0. Instead, it is that having taxes be zero, means that we are unable to pay for government services. And the reduction in government services is what causes growth to go down. It is a subtle, but important distinction. And if you do not take into account this distinction, then you would come to the incorrect conclusion, that the government taxing people, and then wasting those resources entirely, could actually be good for growth, which is nonsense, outside of some extreme edge case situations, regarding extra-oridinary macro-economic scenarios.
- treeman79 5y ago
  What is a sufficient tax level to maintain security, external / internal threats, and basic dispute resolution. Basically a military so that you don’t immediately get taken over by another country. A solid alliance may be a substitute for this. A police force so everything doesn’t get burned to the ground each night. Some sort of court / judge/magistrate to decide on disputes. If you have those you have a stable county. Maybe brutal, maybe not. But a country. Everything else is a nice to have (hopefully) Tax rate can be 1-100% percent. At 100% everyone is essentially a slave. Revolution / collapse will happen quickly. America is around 50% or so. So the question is, what rate is “enough” to cover needs + reasonable wants.
  - stale2002 5y ago
    > What is a sufficient tax level to maintain security, external / internal threats I don't think you read my post. I was saying that taxes are a cost, that are used to pay for things. They are not a benefit in and of themselves. The services are the benefit. And the taxes are the costs needed to pay for that benefit. But they are still a cost.

bluGill 5y ago

The first is correct (though in practice the system is chaotic enough that we can only get close to that point). However is that really what we want? Maximum growth is good for some things, but some of us will trade less growth for something else - either "more for me" (less taxes), or a "more services from everyone" (more taxes). I put both of the above in quotes because there is no way to capture all the subtitles of the complex trade offs involved here, and I hope you don't try to fight the strawmen I setup in my attempts. There is no agreement on what is good. Which is why politics is so complex.

stale2002 5y ago

> have a point that is optimal for growth, above or below which, they are bad for growth. As taxes approach zero, for instance, you live in a mad max society and nothing can grow because there is no stability. You are mis-equating a cost for a benefit, when it is instead that a cost is required to achieve a separate benefit. The point is that taxes are a cost. They are a cost that needs to be paid, in order to pay for certain things, such as government services. Setting taxes to 0 would not be bad for growth, because of taxes being 0. Instead, it is that having taxes be zero, means that we are unable to pay for government services. And the reduction in government services is what causes growth to go down. It is a subtle, but important distinction. And if you do not take into account this distinction, then you would come to the incorrect conclusion, that the government taxing people, and then wasting those resources entirely, could actually be good for growth, which is nonsense, outside of some extreme edge case situations, regarding extra-oridinary macro-economic scenarios.

treeman79 5y ago
What is a sufficient tax level to maintain security, external / internal threats, and basic dispute resolution. Basically a military so that you don’t immediately get taken over by another country. A solid alliance may be a substitute for this. A police force so everything doesn’t get burned to the ground each night. Some sort of court / judge/magistrate to decide on disputes. If you have those you have a stable county. Maybe brutal, maybe not. But a country. Everything else is a nice to have (hopefully) Tax rate can be 1-100% percent. At 100% everyone is essentially a slave. Revolution / collapse will happen quickly. America is around 50% or so. So the question is, what rate is “enough” to cover needs + reasonable wants.
- stale2002 5y ago
  > What is a sufficient tax level to maintain security, external / internal threats I don't think you read my post. I was saying that taxes are a cost, that are used to pay for things. They are not a benefit in and of themselves. The services are the benefit. And the taxes are the costs needed to pay for that benefit. But they are still a cost.