how to properly smash the 'high taxes = prosperity" argument

Economics Economics Questions
1

i’ve encountered this line of thought a few times in the last couple months:

" Increase in unions, increase of government regulations on businesses, a higher corporate tax rate, higher taxes on the rich, a GI Bill, an increased emphasis on educating youth (to complete in the Cold War). These changes, and many other, took power away from business elites and empowered the people."

…and the basic argument is to look at the tax rates in the 1950’s and the increases and regulation and this = prosperity for all.

do tom woods, walter block or anyone of equal wit smash this argument in any lectures/articles/podcasts?

anyone have a good rebuttal against this? i’d like to add it to my arsenal should this topic arise again

2

Other than to direct them to Man, Economy and State or something similar, give them some historical examples. East Germany/West Germany, North Korea/South Korea are as good a large scale lab experiment as we are going to see in economics. The results are not ambiguous. Take a looka t Hong Kong before 1950 and then after. That’s a quicker route than teaching them sound economic methodology.

Here’s a good metaphor: a sickly deer attracts few ticks, a healthy deer attracts many and they feed better. Is it the ticks that make the deer healthy? Is it the higher confiscation rates that made an economy strong, or did capital accumulation eventually allow for higher confiscation rates. If they want to make an assertion, demand that they back it up, and correlation will not be accepted as causation. You have Korea and Germany and frankly plent of others to back up your assertion, don’t be the only one doing back up work. Demand evidence from them as well.

3

The argument is nonsense to start with. There’s no point in looking at the statistics for other than historical reasons. If you take money away from people you necessarily spend it on things they want less than what they would have bought, and you also direct resources into an agency which produces nothing and is incapable of economic calculation.

It’s just like the war-prosperity myth. Anyone who advocates that is basically an idiot.

4

Greater prosperity causes higher taxes because there is more to loot.

5

I agree with a previous post that citing empirical evidence is convincing by using the contrast between north korea/ south korea, east germany/west germany, maoist china/hong kong, et al

a simple logical way to highlight the folly of high taxes is that they redistribute wealth and capital from demonstratably productive, efficient, and tax generating individuals and enterprises to wasteful, corrupt, and inefficient politically connected tax consuming individuals and enterprises.

otherwise, why do these politically connected recipients of the government largesse need the money in the first place ?

since these leftists love government revenue – inform them that redistributing money from sustainable private sector tax engines — to politically connected cronies in both the public and private sector who are tax consumers will result in a significant decline in government revenue in the long run.

Moreover, the primary reason why washington is corrupted with legions of lobbyists is that they are vying for the hundreds of billions of dollars in government largesse. Hence, society further suffers from the opportunity costs of myriad private firms spending money on lobbying instead of improving the quality and value of their product and service.

In sum, AMerican companies engaged in a desperate attempt to gain government funding and regulatory advantages lose their edge in the global marketplace.

good luck, but the motivation of these leftists is not economic – they are guided by egalitarianism. NO matter how convincing an argument, they pray on the altar of equality of outcome.

Merit is not in their dictionary.

6

Tax rates are bogus. Nobody pays those. Reality: http://www.usgovernmentrevenue.com/downchart_gr.php?year=1950_2008&view=1&expand=&units=p&fy=fy12&chart=F0-total&bar=0&stack=1&size=m&title=&state=US&color=c&local=s

7

…and the basic argument is to look at the tax rates in the 1950’s and the increases and regulation and this = prosperity for all. – afederalrepubican1776

the lefties have again mistaken correlation with causation for the 1950s period of relative prosperity. besides the USA was the only industrial power that escaped WWII unscathed. This period represented the biggest reduction of government spending and regulation in our history that occurred after FDR died and world war II ended. Indeed, this is an affrimation of the benefits of reducing government spending and regulation.

while the tax rates may have remained the same as during the war. I am not an economist but I would guess that there was a dramatic 180 degree shift in expenditures from the public sector to the private sector in the 1950s. For example, capital began to flow into private coffers and consumers pockets instead of government programs and defense.

one last point that I discovered was that europe and japan were growing faster than the USA from 1946 until 1980 – primarly due to America’s high tax rates. once we reduced capital gains tax rate in the 1980s and europe raised their rates – the USA begin to outpace Europe and Japan in growth by upwards of 50% per year.

essentially, high tax rates are unsustainable in the long run — especially in a global economy where capital and labor are mobile.

8

NOW Wait wait wait wait just a durn minute here! How does a liberal democracy sustain itself if not via taxation? How will we pay for the police state?

199×176 1.72 KB

And if your now going to proceed by defending taxation in a liberal democracy than you’ll kindly walk away from this anti-tax thread as this is clearly no place for you! :slight_smile:

9

thanks everyone… good arguments

10

Well, it’s not even true. For instance Scandinavian countries don’t have high corporate taxes. They have rather low corporate taxes and high personal income taxes. So if the argument is, “it works in Sweden”, that’s just not what Sweden does.

And where is the connection between empowering “the people” and economic productivity? Other than both being desirable? If anything, economic prosperity results from making a countries economy more accommodating for business elites. Empowering the workers discourages production, it’s like raising the price of iron.

As an aside, “an emphasis on educating youth” is a pretty far stretch in terms of an euphemism for a state monopoly on schooling. As if those who oppose state schooling are opposed to educating our youth.

11

NOW Wait wait wait wait just a durn minute here! How does a liberal democracy sustain itself if not via taxation? How will we pay for the police state?–filc

by any objective, rational, and independent thinking measure – liberal democracies are not police states. Indeed, political and civil liberties have appreciated considerably since 1776. IN contrast, anarchist systems are unsustainable and always have degenerated into statism.

in sum, there is no utopian human system. However, within liberal democracies there are checks and balances on the levers of coercion that forestall the emergence of absolutism to a far greater degree then anarchist systems.

Note the differences:

in the anarchist system – those that fund, command, control, oversee, benefit, et al from coercion are the same. Hence, there are no substance checks and balances on the emergence of absolutism within this highly centralized coercive machine. This tenet is one of the primary reasons why anarchism devolves into statism in all cases.

In contrast, within liberal democracies — those that fund defense (civilian tax payer), distribute funding (civilian legislature), strategic command (civilian executive), oversee (civilian legislature), weapon platforms (military-industrial complex), technology (free market --academia), execute (military), tactical command (military), air assets (air force), naval assets (navy) amphibious assets (USMC), ground assets (army), monitor (civilian media), et al.

as can be easily seen, the extreme checks and balances within liberal democracies make it difficult (albeit not impossible) for the emergence of a absolutist government.

12

Well, it’s not even true. For instance Scandinavian countries don’t have high corporate taxes. They have rather low corporate taxes and high personal income taxes. So if the argument is, “it works in Sweden”, that’s just not what Sweden does. – emperor nero

true,

in addition, sweden has significantly reduced the size and scope of government since their 1990s meltdown.

Moreover, the commonwealth of Virginia with 12% fewer residents than sweden has a larger GDP.

, the average swede living in his ‘socialist paradise’ has less living space/capita, less autos/capita, less dryers/capita, consumes less calories/capita, consumes less energy/capita, less microwaves/capita, less tv’s/capita, et al ---- then the average American living in poverty !!!

Lastly, the suicide rate in sweden is higher than the USA and this socialist paradise does not have the wherewithal to defend itself from statist threats without the deterrence of a US response.

in sum, sweden sucks when compared to the USA despite the advantages offered by a much smaller, peaceful, homogenous society

13

And if your now going to proceed by defending taxation in a liberal democracy than you’ll kindly walk away from this anti-tax thread as this is clearly no place for you! :slight_smile: – filc

The USA is stronger when it is united, meaning that a balkanization of the current union represents a survival level threat to the security of all states from statist threats abroad – China, Russia, Mexico, et al.

defense expenditures as a percentage of GDP is less than 5% – moreover, this level has been relatively constant since the end of WWII. In contrast, health care costs, entitlements, and interest on debt represent over 30% of GDP and are growing unchecked.

in sum, tax rates would decline considerably with the elimination of social redistributive programs.

nonetheless, security is essential and the best entity to provide security without risking the emergence of absolutism is liberal democracy.

of course, you are more then welcome to put your faith in private security and the threat of absolutism that will eventually end your utopian system.

btw, how is that private security and ancap society working for you ?

14

9 US states had a higher per capita GDP than Sweden in 2006. And even that’s misleadng because government spending makes GDP look big for the same standard of living. Other Skandinavian countries have higher GDP than most US states, but they got oil.

Are those statistics true, or do you just think so? Sweden has fewer cars and smaller houses per capita than the American “poor”? That would be quite a great argument if verified.

15

I’ve been to Norway and I was shocked how expensive fuel was there. Much more expensive than it is here in Brazil, and what we have here is already more expensive than the american prices.

16

A thief employs checks and balances to ensure he doens’t steal?

Aside from that point, you are pro-taxation. So what are you doing here on an anti-tax thread?

17

They’re trolling you. Troll them back.
Topic
Debate

18

Oh I am trolling him! :slight_smile:

19

No I mean the socialists who argue like that.

20

A thief employs checks and balances to ensure he doens’t steal?

Aside from that point, you are pro-taxation. So what are you doing here on an anti-tax thread?-- filc

our founding fathers had it right. In contrast, to anarchists who allow the elements of coercion (private defense agencies) to fund themselves – civilian taxpayers and elected legislatures within liberal democracies fund and dispense monies to the elements of coercion, thereby significantly reducing the threat of absolutism.

the checks and balances present in a liberal democracy are in place to forestall the emergence of absolutism.

constitutional federal republicanism is a form of societal vaccine injected in small quanties that acts to kill the greater virus. In the same manner, most of the elements of coercion and absolutism are decentralized and competing in an open forum for all citizens to monitor and attenuate as needed.

by any objective, rational, and independent thinking measure civil and political liberties have increased significantly since 1776. We simply need to correct the statist schemes that have resulted in economic coercion.

our founding fathers (at least mine, not yours) understood the tendency of statism to emerge among stateless anarchic systems. Moreover, they identified the weakness of balkanized anarchic enclaves to external statist threats.

In sum, if you would like to have a moderator set-up a thread where we can debate one-on-one my assertion that coercion will be a present and beneficial within ancap society — then I am challenging you.

moreover, I will challenge you in a debate that liberal democracies are inherently more peaceful to each other then anarchic societies are to each other or that liberal democracies have mechanisms in place that forestall the emergence of absolutism.

take your pick on any of the three – lets do this.

find a moderator that can set-up the thread and lets have at it.

I am looking forward to the debate