TAXES: How Much Do We Spend.

[Danosaur]

In an earlier post I stated that we spend nearly half the GDP on taxes according to the Libertarian smut I love to read. I will step away from my Libertarian backed study and give you:

Total Government Receipts in Absolute Amounts and as Percentages of GDP: 1947-2001, from the office of Management and Budget.

www.whitehouse.gov/omb/budget/fy2003/sheets/hist15z1.xls[/URL]

According to the office of management and budget we spend about 30% of our GDP on government.

How much money does the government need? Is government worth that much? Do you feel we are getting our moneys worth? And when we go beyond protecting basic human rights and defending our borders, shouldn't we have a say about where our money goes. Fine, take 30%, but I want to choose where my share goes.

[solomon]

Is government worth that much?

No.

Do you feel we are getting our moneys worth?

Absolutely not.

Fine, take 30%, but I want to choose where my share goes.

If you get to decide, then what do you need the middleman for? You don't. That's the entire point. They take it so that THEY can decide how to use it.

Solomon

[RichmondVA]

Originally posted by Danosaur
And when we go beyond protecting basic human rights and defending our borders, shouldn't we have a say about where our money goes. Fine, take 30%, but I want to choose where my share goes.

You do get to choose where your share goes. You elect your officials. You can tell the government what you think they should be spending your cash on, and you can even tell the government you think 30% is way too much.

Sure, you might have to pay for something you don't believe in, like public education. But then again, I'd love to listen to something other than Clear Channel. So in the free market, I'm "forced" to do things I don't want to do either. Why is it that when I listen to a Clear Channel station, that's my bad for making a faulty "choice" but when you pay taxes and don't want to it's theft?

I'm not saying that government is the same as private industry, but the dichotomy that you guys present of government as thief of your $$ vs. private industry representing cooperative shared interests doesn't ring true to me.

If governments are driven by power and budget dollars, corporations are similarly driven by power and profit. And ultimately, people control both those things. If taxes are too high, it's not because of some inherent theoretical flaw of governments. To a large extent, the government is inefficient and bloated because people choose it that way. So blame the people.

Everyone wants their taxes cut. But everyone also demands their government services as well. We haven't really seen a tax cut without a corresponding rise in borrowing in the last 25 years.

[slow-dog]

Originally posted by RichmondVA

Sure, you might have to pay for something you don't believe in, like public education. But then again, I'd love to listen to something other than Clear Channel. So in the free market, I'm "forced" to do things I don't want to do either. Why is it that when I listen to a Clear Channel station, that's my bad for making a faulty "choice" but when you pay taxes and don't want to it's theft?


It's the power of enforcement, RVA--and the fact that you don't actually have to pay CC money. You're argument would be stronger if CC could:

a) send you a bill every year
b) take action to obtain the money or throw you in prison if you failed to pay.

Your point about voting is a good one though--the difference between the Republican and Democrat positions on how much money to spend is probably not more than a couple of percentage points.

[slow-dog]

Originally posted by RichmondVA

If taxes are too high, it's not because of some inherent theoretical flaw of governments. To a large extent, the government is inefficient and bloated because people choose it that way. So blame the people.

I think that a flaw that contributes to growth in government spending is the failure to obey or acknowledge limits of government control. The federal government should kept it's nose out of areas which it has no business being. Of course, defining what areas those are is a challenge.

But that leads me to a point which I think someone who believes in all kinds of government spending could buy into: government spending should be done at the lowest level of government possible. If I send 30% of my income to the government every year, I'd much rather that 10% of it went to the federal government and the rest to the state and county than sending most of it to the feds? Why? My influence in the state is bigger than my influence in the government, and the same for my influence in the county compared to my influence in the state. By doing things at the lowest level, you increase the likelihood that the program responds more directly to the people that are affected by it. I guess I'm not clear on why there's a tremendous benefit to federal spending on primary and secondary school education, or why federal funding of the arts is better than city or state funding of the arts. Just a thought.......

[RichmondVA]

Originally posted by slow-dog

It's the power of enforcement, RVA--and the fact that you don't actually have to pay CC money. You're argument would be stronger if CC could:

a) send you a bill every year
b) take action to obtain the money or throw you in prison if you failed to pay.


a) CC maybe isn't the cleanest example, because they don't charge directly. Still, when I listen to CC their audience goes up, leading to revenue dollars. Thus, I'm supporting them and keeping them viable though I don't really want to.

b) But they've made me a prisoner to crappy music! Isn't that bad enough? Point taken though. I definitely wouldn't extend the analogy between gov't. and private industry too far. I only wanted to point out that people do have some (admittedly limited) control over how their taxes are spent.

As for state and local spending, I agree with you. Things like rivers and oceans, national defense, security, and health don't really recognize borders. Other things like research may require more $$ than any individual state could pay. There are areas where the federal gov. can take advantage of economies of scale.

But for most social spending small programs are more efficeint than large ones. Higher education, art funding, and programs for the poor are better served by people in the community who understand the needs and are more involved. And of course, you have more control over state policies as you pointed out.

K-12 education I'm not sure about. I'd like to see more state involvement, but if everyone in West Virginia is uneducated it costs the country as a whole, not just the state. I feel like there's some minimal level of education everyone should have, or at least have the opportunity to get, both morally and for the strength and stability of the country as a whole.

I'm not advocating federal education standards (ugh!), but certainly there are some poor states that simply don't have the money to fund schools properly. I think there needs to be some level of federal government involved there, but something like state block grants would be an easy solution that would probably satisfy most everyone.

[Danosaur]

Money in most instances is not the problem but the excuse. It actually cost very little to educate someone well. What cost a lot of money are extra curricular activities, security, and school bureaucracy. Some of the best schools run without sports programs, bureaucracy, or fancy facilities. Besides, who wants to go to school in today’s modern schools with their prison look and feel anyway? Smart companies are moving away from bureaucracy and so should the schools. We are not allowed adequate time to develop meaningful relationships with our students and therefore have to deal with high levels of delinquency. We also lie and present false representations of the truth to our students, and teachers must hide personal flaws (i.e. drugs and alcohol). To truly succeed a student needs the basics plus some computer savvy, and a good relationship with a least a couple staff members. Students go through the system right now getting a whole bunch of shit except a good understanding of the important cores of Reading, Writing, Math, Science, and Social Studies. If you’ve got the really important stuff down, great, there is much more to be done, but how many high school seniors can really write, review a book, utilize math and science, or understand how their government works and what their rights are? We also leave our students locked up indoors for unnecessary periods of time, which doesn't help them pay attention or stay out of trouble. None of these changes cost a dime. Money is the least of our education troubles.

[slow-dog]

Originally posted by RichmondVA


a) CC maybe isn't the cleanest example, because they don't charge directly. Still, when I listen to CC their audience goes up, leading to revenue dollars. Thus, I'm supporting them and keeping them viable though I don't really want to.

Why yes you are supporting CC if you listen to them. But you could not listen. But you know that.

[Bronzetree]

Originally posted by RichmondVA
Sure, you might have to pay for something you don't believe in, like public education.

Or a brand new football stadium for the worst team in the country.

[DudeMan]

Yeah, of course taxes are too high.

No, it's not as bad as most other places. I've lived in some other countries and it's really quite shocking what they charge you. I can't understand why those poor sops put up with it, but I dunno, maybe they just don't know any better.

But that said, yeah, our taxes are way, way too high. In theory, I think that the budget should balance over the economic cycle -- ie, deficit during downturns and surplusses in booms, which net out to zero. The main reason I believe this is the notion of 'taxation without representation'... ie, our children and grandchildren aren't getting a chance to vote on the future tax burden we're putting on them.

But, the pragmatist in me has come around to sort of liking budget deficits. If there are surplusses, there won't be surplusses for long because democrats and republicans both will be lining up at the trough to spend it on something or another if it's there. Having deficits, otoh, puts handcuffs on pols to a certain extent and has a dampening effect upon some of their more profligate tendencies.

Lowering marginal tax rates dramatically, getting rid of 80% of the exemptions, and generally streamlining things would get my vote -- promote economic growth and quit attempting to play social engineer with the tax code.

That all said, even though my tax bill was ungodly high this year, I actually felt for the first time ever that I got my money's worth since we went in and took care of bidness in Iraq.

[solomon]

I think that the budget should balance over the economic cycle -- ie, deficit during downturns and surplusses in booms, which net out to zero.

Surplusses and deficits for what reason? There wouldn't even be an economic cycle if it wasn't for their monetary shenanigans.

Having deficits, otoh, puts handcuffs on pols to a certain extent and has a dampening effect upon some of their more profligate tendencies.

I see what you're saying, but they also have a tendency to just monetize debts away, and that's not a plus, and in fact contributes to the business cycle.

Solomon

[RichmondVA]

Originally posted by solomon
Surplusses and deficits for what reason? There wouldn't even be an economic cycle if it wasn't for their monetary shenanigans.


Of course there would be. I know it must make things easy to use the government as a scapegoat for everything that goes wrong, but it ain't that simple.

I'm actually of the opinion that the government should stay out of monkeying around with fiscal policy because they have little power to help or hurt the economy.

[solomon]

Of course there would be. I know it must make things easy to use the government as a scapegoat for everything that goes wrong, but it ain't that simple.

And why is that? How do YOU explain the business cycle? It can be shown to be caused by credit expansion of the banks (which ultimately goes to the CENTRAL bank) inflation of our fiat currency, and interest rate control by the Fed. Fractional-reserve banking plays a part too. They all send distorted signals about how much savings are available, and consumers' time-preference ratios, so businessmen react to these signals - making mistakes in a boom, that culminate and result in a bust.

Solomon

[RichmondVA]

Crops fail. Critical suppliers mess up. Investors are stupid. Advances in technology come in spurts not a constant rate. All these factors cause the market to stagnate at times and boom at others. When government was much smaller than it is now, the boom and bust cycles were much more pronounced.

[DudeMan]

Yeah I'm with Richmond on this one... I put about as much credence in the idea that the economic cylce wouldn't exist were it not for the gov-mint, as I put in those new-economy folks who were crowing back in 1999/2000 about how technology and the dot-coms had just defeated the economic cycle.

I'm not denying that governmnet can exacerbate, or maybe even be the straw in the back to cause, a recession, but I just don't see that happening that there would be no such thing in the first place absent government intervention.

[dcXhc]

Originally posted by solomon
Surplusses and deficits for what reason? There wouldn't even be an economic cycle if it wasn't for their monetary shenanigans.


I've heard those commercials on the radio but never thought anyone actually believed them.

The Fed isn't perfect, but to say that they are the sole source of the economic cycle is misguided. October 1987 and the Long-Term Capital debacle would have been horrific events if not for the Fed.

What's the alternative you propose? No credit? Credit expansion decisions made by private banks only? What about reserve requirements? Should there be any? Who would the lender of last resort be?

Look at all the countries with weak or no central banks -- they've all experienced devastating hyperinflation. Like I said, the Fed's not perfect, but I don't think you could make a reasonable argument that they are detrimental or that they cause the economic cycle.

[solomon]

Ok.

I'm going to explain it how I see it.

The boom/bust cycle obviously has to do with an accumulation of errors that are suddenly realized. The period of the errors, is the boom. What causes businessmen to be so misguided for a time, until there is a sudden realization that they were wrong?

The reason is a miscommunication of the amount of SAVINGS available to take on new projects, make improvements, and investments, because the critical signals are tampered with. This isn't the result of bad crops, or something like that, that cause an entire nation's economy to boom/bust. The price signal takes care of this. The corn crop is bad, corn prices go way up, it doesn't mean the entire economy goes down the tubes.

This is an analogy. Imagine you are building a house. You are told that you have X amount of resources to build the house, and they are sufficient, but after you lay most of the foundation, you discover that you don't have near enough resources to complete it, and the work is realized as a waste. This is basically what happens.

Credit expansion is inflation caused by fractional reserve banking. Fractional reserve banking is FRAUDULENT, as evidenced by the fact that the contract to have your money there when you want it cannot be maintained if there is a run on the bank (and there's no big Papa Bank to bail you out.) It gives the illusion that more work/production/savings have been done than there has been in reality. Lets say I put $100 in the bank. I can still write checks and use the money how I want, but the bank has also loaned $80 of it out. There is now *$180* of functioning money on the market for my $100. This is basically a form of counterfeiting. As long as we don't all claim our money at one time, no one is the wiser. This, in turn, leads to changes in the interest rate.

Now, the interest rate. The interest rate is a signal about how much savings are available, and how valuable present goods are in relation to future goods, or consumption to investment. It regulates the time-order of choice of projects, in accordance with their urgency. A low interest rate says that there are a lot of savings available, so more projects can be undertaken profitably. A project appears to work at 4%, but not at 10%. Only products that can be profitable at 10% should be undertaken, but the interest rate, due to the FED and credit expansion/inflation, is artificially held at 4%. So MORE misallocation occurs. This adds to the fire. Mistakes are being made, but to cover them up, they have to keep making the same mistakes. Even more credit. Even lower rates, until it reaches the breaking point. The people in power (government and banks) are just making too much money off this scam to want to stop it. This is the problem with keeping the interest rate low during times like these. The boom we had before USED UP a lot of the resources. Now is NOT the time to be borrowing money for some fanciful business notion. You should only be borrowing scarce resources if you need them or want them badly enough to pay a higher rate, or if a project will still be profitable even at the higher rate.

To answer you dcXhc, credit should be issued by individuals or organizations for THIS purpose, so that when I put $100 in to lend, I can't ALSO use the $100, and when I put my $100 in a BANK, it stays there. Reserve requirements for banks should be 100%, and the currency shouldn't be government paper money, but gold or notes representing a specific weight of gold that ACTUALLY exists. As regards the "lender of last resort", what do you mean? You only need this in a run-on-bank situation, and that only happens in a fractional-reserve banking scenario, right? Countries without central banks experience hyperinflation because they are still using FIAT MONEY. You can't have hyper inflation when your money is a commodity, like gold, because you can't just print or make more of it.
I guess that's all I'll say for now. Attack! : )

Solomon

[RichmondVA]

If bank reserves should be 100% and backed up in gold, then aren't you really arguing for government to increase it's presence via regulations (and unfunded mandates at that)? There's no law preventing banks from holding gold or carrying enough reserves to meet 100% of deposits. It doesn't happen because consumers don't demand it. So you'd see the same result or worse in the free market.

There's no profit incentive for banks to hold 100% of reserve, and there's so no way they would do that. You are essentially blaming the government for the follies of individuals.
If reserve rates and interest rates are set incorrectly, a smart investor should understand that the risk is too great for market and see through it. But they don't. Investors WANT the big boom. And as a consequence they will pay for it with the big bust.

[slow-dog]

Man, RVA beat me to pointing out the extreme statist proposal Solomon was making. Solomon, what about private banking systems which allow depositors to choose the level of risk they are comfortable with?

[solomon]

Hello

If bank reserves should be 100% and backed up in gold, then aren't you really arguing for government to increase it's presence via regulations (and unfunded mandates at that)?

No. It's not that money "should be" gold. I just say gold because historically it has been the money chosen by the market. What I mean is money should be MARKET determined. It can be gold, silver, sea shells, or tobacco. Just not government paper-money. And you don't need the state to ensure a 100% reserve situation in a free banking scenario, but even if you DID, I wouldn't be against it because if the government has any purpose it all, it's to protect us from theft/fraud and violence, and fractional reserve banking is fraudulent.

There's no law preventing banks from holding gold

No there isn't, but did you know there was at one time? In 1933 gold was demonetized and americans were forced to turn over their gold coins to the government. It was like this until the 70s when americans were allowed to own and trade gold again. (This also spurred a black market coin trade where you had government agents "raiding" coin traders like they had drugs or something.)

There are still legal tender laws though, which prevent people from freely choosing to do business with gold. It's making a small comeback though, especially with the internet with sites like www.e-gold.com and similar.

It doesn't happen because consumers don't demand it. So you'd see the same result or worse in the free market. There's no profit incentive for banks to hold 100% of reserve, and there's so no way they would do that. You are essentially blaming the government for the follies of individuals.


The average Joe on the street has no idea what exactly is even going on. It wouldn't be worse on the free market. In a free market there would be runs on banks all the time, which would prevent fractional reserve banking. In fact, this was the reason the banking industry was cartelized, so they could all run the same scheme together without worrying about competition. The Fed is always there in case of a run.
In a free scenario, the banks are competing with each other, and when they receive checks from competing banks, they go to withdraw the cash (to add to their own reserves to pyramind on), which isn't there. Boom. Bankrupt.

If reserve rates and interest rates are set incorrectly, a smart investor should understand that the risk is too great for market and see through it.

How many investors are smart? What can a smart investor do about an incorrectly set rate? The smart thing to do is go out and borrow more, but this will only contribute to a failing or ready to fail economy. Thats the problem. The incentives are out of whack. A smart investor would stay out of a boom, but who wants to miss a chance to take a chunk of all that money?

Investors WANT the big boom. And as a consequence they will pay for it with the big bust.

But the problem is that most investors do not know the boom will be followed by the bust. Look at what Dudeman said before, don't you remember all the hype? The "New Economy"? Tech had allowed the boom to happen with no threat of bust. Don't you remember all that blather. Investors really did not believe there were going to be consequences. They want the boom, they don't want the bust, but they need to realize the two come together.

Sol

[solomon]

what about private banking systems which allow depositors to choose the level of risk they are comfortable with?

You mean bank-run risk?You still can't create money out of thin air, which is what they are doing. This is a form of counterfeiting. It's not on the up and up. Like i said, there's no problem with credit, but when you lend money it has to leave YOUR pocketbook and go to someone else's. And I forgot to mention this before. I think reserve requirement is 10%. Look at that leverage. They can leverage 10 dollars into 100 new dollars. Can you believe that? This on top of the straight up money-printing counterfeiting the Fed is engaged in.

Solomon

[slow-dog]

Originally posted by solomon


You mean bank-run risk?You still can't create money out of thin air, which is what they are doing. This is a form of counterfeiting. It's not on the up and up. Like i said, there's no problem with credit, but when you lend money it has to leave YOUR pocketbook and go to someone else's. And I forgot to mention this before. I think reserve requirement is 10%. Look at that leverage. They can leverage 10 dollars into 100 new dollars. Can you believe that? This on top of the straight up money-printing counterfeiting the Fed is engaged in.

Yeah, I mean bank-run risk. My point was, assumiing that one concedes the points that the Fed is evil, and fiat money, is evil, and that money should be backed by something with inherent value as opposed to the "full faith and credit" of the government, it sounded like you were saying that someone (the government?) should be enforcing the 100% reserve requirement.

You can still do fractional reserve banking, even with commodity money. The value you place on the risk of a bank run would figure in to the choice of the bank you made. 100% reserves= no risk of bank run, 90% reserves = minimal risk. The interest rate the banks offered could be higher, which would essentially be the risk premium.

[solomon]

it sounded like you were saying that someone (the government?) should be enforcing the 100% reserve requirement.

Well, despite the fact that I think there would be 100% reserves in a free market, I do think whoever is enforcing laws in the society SHOULD enforce 100%, because as I said, fractionalreserve is a form of counterfeiting and is fraudulent.

I see what you are trying to say, that the people will determine ultimately how much fractional reserve goes on, but why should banks be the only ones that can benefit from a counterfeiting operation? If they can do it, why not let any other company just print money? Either form is increasing the amount of money-representations relative to the amount of money available, and this only has bad effects and is abusive. It's a theft of currency value basically.

Sol

[RichmondVA]

I'm confused. Why even have banks then?

The only reason why banks pay you interest on your savings is because they can lend your money. They pay you 5% interest, take your money and loan it out at 8%, and that's their profit margin. If they have to hold your savings, then they can't lend anything. There's no profit there and banks wouldn't serve any purpose at all. Is there another way banks make money?

You want to keep your money, or wampum or whatever safe, just keep it under your bed. You don't need a bank. Money leveraging exists because consumers want it, so it would certainly be around in a free market. Aren't you taking the government-loving liberal view by saying that consumers make bad choices?

[solomon]

Hi

I'm confused. Why even have banks then?
...........
You want to keep your money, or wampum or whatever safe, just keep it under your bed. You don't need a bank.

You really would feel safe having $50,000 just under your bed? Banks provide much more security. PLUS...the original purpose of banks was to store gold, for which they would give a warehouse receipt. The warehouse receipts were traded in place of gold (this was not counterfeiting or inflationary as the gold at the bank was out of the market.) It was easier to trade the proof of ownership slips than the actual gold, and it's the same now. You can't write a check with the money under your bed. But you can with a bank account. The money stays in the bank, but ownership slips for various amounts are traded, or the funds become available for electronic trading.

They pay you 5% interest, take your money and loan it out at 8%, and that's their profit margin. If they have to hold your savings, then they can't lend anything. There's no profit there and banks wouldn't serve any purpose at all. Is there another way banks make money?

The banking industry would be different. No question. Look, if you want to make interest, then do it but give it to someone for this purpose. Buy some bonds. Give it to an organization that does this specifically, some credit institution. A bank would cease making money on fraudulent deposit accounts. You wouldn't make interest from the bank. They would charge a small fee to hold your money, and there would be transaction costs.

Money leveraging exists because consumers want it, so it would certainly be around in a free market. Aren't you taking the government-loving liberal view by saying that consumers make bad choices?

Most consumers do not understand what is going on. In a free situation, once they realize that there are going to be bank runs, it would become an important issue to them. The wouldn't want the leverage if they knew there was a chance they would lose their whole account in a bank run. Maybe there would be some fractional reserve banking. But the consumers would have to know that if they participate in these schemes, there's a chance all their money will be gone. It should be ILLEGAL though for the reasons I've said multiple times.

Aren't you taking the government-loving liberal view by saying that consumers make bad choices?

If the consumers want to commit fraud or counterfeit I am against that. It's implicit theft. A consumer who counterfeits money is making a bad choice, and he should be punished. This isn't 'government loving', it's asking them to do the ONE thing they are designed to do: protect us from violence and theft/fraud.

Sol

[blue_kitten]

I don't know. I'm just pissed that I f*cked up my own income tax because my company, a famous cincinnati chili company, doesn't allow us to report our tips, so they do it for us... It's a travesty. I WAY overpayed. I am going to puke over this... If I wasn't a full-time student/mother of two/ and p/t worker, I'd take them to court over this. Two more quarters of school and I can quit this horrible company. Think twice when you go to the original cincinnati chili chain....Or at least, tip me accordingly.

[RichmondVA]

Okay Solomon,

I see where you are coming from. I agree that money leveraging causes booms and busts and creates the risk of a horrible economic collapse. Where I disagree is that I do not think that consumers would ever demand that banks hold 100% of money on their own. I pretty much feel like government intervention will be needed to make that happen.

A government rule mandating bank holdings would be pretty cheap. It's a rule, not a program. But once you agree the government serves at least one purpose, doesn't it have to have at least some minimal funding to enforce the rule?

I guess funding doesn't necessarily have to come from taxes, though. hmmmm. . . in the absence of taxes, would the government fine violators of your rule and use the fines to fund itself?

[RichmondVA]

Originally posted by blue_kitten
I don't know. I'm just pissed that I f*cked up my own income tax because my company, a famous cincinnati chili company, doesn't allow us to report our tips, so they do it for us... It's a travesty.

That sucks. Can they do that? I thought that you were required to report any tips over $20 to the restaurant so they could pay taxes. I could see how the restaurant might choose to track this on their own so they don't get punished for employees underreporting tips.

But if that's the case, wouldn't the restaurant keep some sort of documentation regarding the actual amount of tips in case of an IRS audit? Maybe there's a way you can get your hands on that document. Just a thought.

[solomon]

Where I disagree is that I do not think that consumers would ever demand that banks hold 100% of money on their own. I pretty much feel like government intervention will be needed to make that happen.

You may be right, but I do think that fear of bank runs would bring the reserve way up. maybe reserves of 90%, which while not perfect, would be much better than 10%. There would be a law against it though too I imagine.

But once you agree the government serves at least one purpose, doesn't it have to have at least some minimal funding to enforce the rule?

Well, the government does serve a purpose: defense. But as I've said, when I say government/state I mean a territorial monopoly on law/justice. The main question in my mind these days, is can a society exist with competing law codes, judicial systems, and defense agencies? Where instead of state monopoly, there is free entry and a market process in law and defense. It's the territorial monopoly part that is the problem. The love it or leave it. For instance, what would society be like if I could tomorrow declare myself a German citizen, who will abide by german rules? Since this is the government I am CHOOSING, why must I be railroaded into a system I don't want just because of where I live? These are the things I've been reading about and chewing on the last few weeks..but probably better suited for a different thread.

I guess funding doesn't necessarily have to come from taxes, though. hmmmm. . . in the absence of taxes, would the government fine violators of your rule and use the fines to fund itself?

Maybe, but if they realize their funding comes from fines, I think they would quicly pass law after law, where the punishment is a fine, just to increase their funding. That would seem to be the incentive at least.

Solomon

[RichmondVA]

So I guess we come back full circle. I think we both recognize some practical difficulties with the anarchist-capitalistic society you prefer. Immoral though it may be, in the real-world (at least at this time and place), some limited government role is probably necessary.

So how much tax is right?

I'm completely winging these numbers. It would take many hours of research to come up with anything near exact figures. But here's my take:

If taxes are 30% of GDP, I'd say we can easily cut out the pork barrel crap and cut it down to 25%. That would eliminate those programs that where I find it hard to believe that any objective person could make a logical argument in their favor.

In order to fund the stuff that even a libertarian can get behind ( police protection, national security and the judicial system), you'd probably want maybe 5% of GDP.

That leaves somewhere between 5 and 25 percent of GDP as the magic figure. Trying to get any more accurate than that is tricky. There are programs that I personally do not believe in due to my particular set of preferences and economic beliefs, but where I could also see how someone could reasonably make an argument in their favor.

Without doing hours of research, I'm going to guess that you could probably fund all the programs that I like at 15-20%, which most likely far greater than what you would prefer. Still I'm guessing that for most Americans, somewhere between 15-20 is acceptable, if not optimal. Of course where we put that 15-20 would still be the source of heated debate.

[solomon]

I think we both recognize some practical difficulties with the anarchist-capitalistic society you prefer.

It's true, there are still some difficulties. But probably fewer than you think. I think you'd be surprised by how much good work has been done outlining how a totally free society would work. And to me, it seems worth a try when compared to the dismal record of statism. Just look at the entire 20th century.

In order to fund the stuff that even a libertarian can get behind ( police protection, national security and the judicial system), you'd probably want maybe 5% of GDP.

I could easily live with 5-10%. If it stayed that way, which it wouldn't. If they restricted themselves to protection from aggression, which they wouldn't. It's a pipe dream I think, unfortunately.

Sol