Roger wrote:Effective top personal rates have floated around 28% to 36% since 1980, regardless of the published rate 70% to 28%. When you look at effective tax rates, Ind, Estate, Cap Gains, I dont think any of the effective rates are any where near 10% except possibly the corporate effective rates.
China spends 9% on infrastructure we spend 2.4%, in a 15 trillion dollar economy thats (9%) about 1.35 trillion. If we taxed our ENTIRE national GDP at a flat rate with NO EXEMPTIONS or deductions, @ 10% that yields 1.5 trillion.
I dont see how 10% is viable.
Your point is interesting and is not easily answered. I would suggest the possibility that were more people allowed to keep and spend their own money (by keeping tax rates low) then our economy might be substantially larger, and therefore the total money yield would be greater even with a lower percentage of taxation.
As I'm fond of using China's experience as an example of what happens when highly addictive drugs are commonplace, I would like to use Hong Kong as an example of what happens when you have a 10% tax rate. Now I haven't researched this recently, but if I recall, Hong Kong (before capitalism took off in China) was responsible for something like 1/5th of the ENTIRE income of China, and furthermore, it's government had so much money that they could afford to DROP a huge chunk of the population off of the tax roles. Indeed, it became a matter of social status to be able to brag that one payed taxes.
Apart from that, there is another factor in this equation. The issue of fairness. (Hold on to your hat, here comes the anecdote.
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Years ago, I had a discussion with one of the Directors in the Local City Government ( He ran the Computer Services/911 dispatch dept.) and I mentioned that the City's water bill was completely unfair. $50.00/ month whether you use it or not. He explained that it was NOT a water bill, but a City Services bill which included Garbage collection and Sewage as well as water. I asked him why, if this were so, did they only shut off the water when you didn't pay it?
Anyway, I asked how they set the rate. He said it worked like this. "First you have to figure out how much money the City needs, then you divide it by the Number of accounts, and then you charge each account the amount necessary to reach your budget figure in a years time.
In other words, They decide how much they're gonna spend, then make everybody pay them the amount they decided on.
I asked him why couldn't you set the rate at fair market value, then make the City Government live within the amount of money this yields? He thought the idea was preposterous, and refused to discuss the issue with me further.
That, my friend, is the problem with the mindset of government employees. The thought of fiscal restraint is simply alien to most who work in Government. In the meantime, they spent half a million dollars planting trees and bushes in the middle of a major boulevard, all of which died because there was no way to water them during our drought like summers. I could go on an on about the idiocy of our local city government, (and the state) but I think you get the idea.
‘What all the wise men promised has not happened, and what all the damned fools said would happen has come to pass.’
— Lord Melbourne —