This is an interesting take. At first glance, it sounds like a pretty good proposal. Get rid of the billions of dollars in fraud and waste that we keep hearing about, and cut or drastically lower income taxes for many seems like a good way to spur more economic growth. I disagree with eliminating income taxes on the "poor and middle class" entirely. I am convinced that people need to have some skin in the game when it comes to taxes and "benefits". Personally, I would say that dropping the "middle class" tax rate to (say) a flat 10% and the "lower class" tax rate to (say) 5% would accomplish much of what this proposal claims without removing the skin in the game for people.
https://x.com/andercot/status/2012620443577102583?s=51&t=cLq01Oy84YkmYPZ-URIMYw
" We could suspend all income taxes for people earning less than $100k and the economy would absolutely rip in terms of growth. We would only need to eliminate ~half of the fraud and waste of government spending to balance the resulting budget. But this would shatter the illusion that it's "middle class Americans tax dollars" that fund the state - its not. The middle class funds ~20% of income tax revenues. The vast majority of government services are paid for by the very wealthy, but this is hard to square with a political narrative that wants to seize the wealthy's assets to 'redistribute' it to the poor. But why not just stop taxing the poor and middle class altogether? The state would have us believe it is a better allocator of people's money than themselves, yet this has always been false. The state is a terrible allocator of capital, doesn't get bargains on any of its purchases. A middle class family giving 30-40% of its income to the government when this doesn't move the needle at all in terms of total government budget, but massively influences the quality of living for that family, is a crime by the state against its citizens.
Every additional dollar in the hands of that family would directly go to spending and saving, and like I said the economy would rip as a result. More than that, because that family is the best discriminator of value and prices for its own needs, the economy would grow in value *more* than just that dollar amount. The money multiplier effect. Instead, that 30-40% of a middle class family's income goes into government purchasing, where it is siphoned by fraud, waste, abuse, and even when spent, spent extremely poorly. California's budget has doubled in the last ten years while essentially all metrics of public services have declined. Dollars spent wastefully or fraudulently obtained without increasing the value of the economy drive inflation, fundamentally, and erode the net worth of those who have more cash than hard assets - i.e. the working poor and middle classes. If you want to help the working poor and middle class, just abolish all income taxes below $100k, target fraud and waste and financial abuse. This would grow the wealth of the nation far faster than any other means."
6 comments:
It seems to me that eliminating income taxes for anyone instead of for everyone is an example of unequal application of the law. I feel the same about the progressive income tax system we now have. Flatten the tax rates and the economy would thrive.
Eliminating all the fraud and waste is tougher than it ought to be. I'd like to see more of it.
You may be missing the author’s point, but whatever.
Eliminating entrenched waste and fraud is difficult, yet as the author notes, significant elimination of fraud plus the economic growth of unshackling a significant portion of taxpayers would create significant economic growth that would benefit everyone.
Oh, I get the point quite well. But like you, I believe all must have skin in the game and as long as we have an income tax system at all, everyone should have their income taxed. To get what he's looking for can be had to one degree or another by reducing the tax rates on everyone. We've already seen that work every time it's been tried. What hasn't been tried to any significant extent at all...if we assume it's even been tried period...is the widespread reduction in spending. Simply spending no more than what is taken in by itself can turn things around. Spending less than what is taken in even more so. ANY tax reduction will push us in the right direction economically. So why not reduce everyone's burden?
Obviously controlling spending is the key and is completely foreign to the congress. Partly because they don’t understand that it’s not an inexhaustible supply of free money.
That is the problem. Also the fact that not enough of them realize the impact of either raising or lowering taxes as regards economic expansion/contraction.
That is True. I can say that from personal experience. They don’t give a rat’s ass about those who provide the money and even less of one about the billions that have been stolen.
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