Through things like taxation and inflation, how much productivity does the US Government steal, on the average?
Unfathomable.
I think one sector this is easily visualized is roads and transportation. Cars have evolved so vastly in the last hundred years, and roads have changed as well (with new construction techniques etc) but to a much much smaller degree. Just imagine if we had a completely privatized roads system!
I would say about half. One third is income taxes alone, 10% inflation, and the rest is gas tax and other stuff. If you count eminent domain, and property value as productivity, I’d say 90%
The amount of productivity it coercers us into wasting and the amount of potential productivity it prevents is astronomical!
That adds up to 40%. And then they spend it - wasting the same again. And you’ve left out a lot…
FSK has put down some thoughts on that on his blog.
The key is to add up both direct taxes and indirect hidden taxes.
Consider medical care. There are extensive State licensing requirements for doctors and insurance companies, driving up prices. The typical American pays $400/month for medical insurance. Even if your employer pays for it, the cost is borne by the employee. Money spent on health insurance would otherwise be available for salaries.
Suppose that without State licensing requirements, medical care would only cost $50/month. In that case, you’re paying a taxation rate over 85%, in addition to the taxes the doctor pays on his own profits. Further, State restriction of the market limits the quality of your care. You are paying a lot for medical care, but you typically only get to see the doctor for a few minutes, due to the shortage of doctors.
The State causes you to pay a higher price AND receive a lower quality product.
That is only one example. Indirect hidden taxes cost as much or more than direct explicit taxes.
It’s nice to see that people are still quoting me, even though I’ve been busy with other things.
Why would an employer pay more than the market rate for his employees? If people are willing to work for $x now, why would they suddenly be less willing to work for $x if health insurance cost their employers less? See Man, Economy, and State, ch 12.8D - same argument applies here.
Suppose your employer did not have to pay 7.5% Social Secuirty plus Medicare taxes. This would cause wages to rise by approximately 7.5%. Employers would have surplus money available to pay employees, and salaries would be bid higher.
Similarly, the cost of employer-paid health insurance is actually paid by the employee. If the employer did not have this expense, then salaries would be higher.
That illustrates the importance of hidden taxes. Even if you aren’t personally paying a tax, the money might still be coming out of your pocket.
Health insurance is part of the market rate for wages and salaries. The reasons employers usually provide health insurance is due to tax credits for employers who do so.
So you can roughly make a simplified equation like this:
w = c + m + p
Where w is wage, c is cash, m is medical costs, and p is payroll tax. So if w doesn’t change, but c increases, then either (or both) m and p have to be lower. Of course, m and p usually increase at the behest of c.
I do not like the question mainly because “productivity” is not much of a measurable concept. Once you start measuring productivity the way that government bureaucrats do, I think you have already made too much of a concession to the argument in favor of the state.
I would rather just say to the government: “Get out of the market place!”
Non sequitur. Salaries would only be bid higher if employees were less willing to work for the same money - and why would that happen?
You’re assuming costs are “pushed forward”; Rothbard explains that they can only ever be pushed “backwards”. Yes, most people probably would earn more, but not for the reason you suggest - just like when governments increase a general sales tax, most prices do go up, but the mechanism is not simply the passing-on of the tax.