Yes, this is an absolutely backwards way to pay people. When times are tough we end up tightening our belts on a whole host of services, but cannot adjust pensions because we have promised them. We should just pay people market rates and avoid saddling ourselves with a bunch of debt when times are good.
When is the government ever not tightening its belt? It's ridiculous that we can pay for bombs but not pensions. Just tax the rich some more. The debt never matters when it comes to killing but always matters when it comes to salving.
I quite agree with the comments about not spending so much on the military, but as a fraction of GDP, federal taxes have been pretty stable over the last 60 years https://fivethirtyeight.com/features/u-s-tax-rates-the-big-p... with increases and decreases in a constrained range.
This whole it or the defecit thing seems like a common talking point for progressives now that Republicans have shown their true colors, but if your goal is to actually govern a country, it does matter.
At the very least you should be able to see how increasing our debt increases the payments we need to make to service that debt. 7.4% of our latest budget was just paying for the debt we've already racked up. That's tens of billions of dollars that could have been spent on something worthwhile, but instead we're just paying for the past.
With the median household income being $65000, when the average voter talks about "taxing the rich", they won't have any problem going after tech workers making in the low six figures. You may come to find that you may be one of the "rich".
Think about the implications of that statement. We're headed towards (actually already in) a world in which the very few are fabulously wealthy and the rest suffer needlessly.
You can't raise taxes, the rich leave. You lower taxes, the rich suck money out of the local population until they get a better deal. All states are in competition to lower taxes. A much more comprehensive solution is necessary.
Are you suggesting we create a world government to ensure there's nowhere on Earth people can flee to to escape high taxes?
So what do you do when the rich leave for Mars? Chase them there to make sure you get your pound of flesh?
Is this really the kind of world we should strive to create?
>>You lower taxes, the rich suck money out of the local population until they get a better deal.
Maybe you're looking at it wrong. The rich aren't cows to be milked. The relationship between an individual and a jurisdiction should be mutually beneficial.
If the jurisdiction has something the wealthy individual wants, they will invest there.
If the jurisdiction is losing wealth as a result of the activity of the wealthy individual, then clearly there are negative externalities that it is not punishing with penalties, or subsidies that it is providing without a proportionate benefit, that wealthy people are taking advantage of.
The solution there is to change the way government programs are structured to make business models that suck wealth out unviable.
If the programs that the taxes the rich pay for provide a greater benefit to the rich than the cost of the taxes, the rich will move/invest in that jurisdiction. The stable equilibrium is not zero taxes with no government.
As for growing income inequality, the solution is not forcibly redistributing income with a totalitarian world government that destroys/sanctions independent jurisdictions until they fall in line.
The solution is to find out what structural forces allow those with greater capital to accumulate wealth at a faster rate than those with less capital.
Perhaps the government is introducing structural barriers to full economic participation.
One example would be transaction taxes, like the sales tax. These advantage larger organizations that can avoid financial transactions by keeping their activity in-house, something smaller businesses can't do by virtue of being more specialized.
Another example would be securities laws, which necessitate use of highly paid professionals to get approval from the centralized regulatory gatekeeper to offer stock to the public.
It now costs $6 million to do an IPO, and many elite in the government and securities sector are looking to shut down unregulated cryptocurrency token sales that offer people who can't afford those sums a more affordable means of raising capital.
Maybe those concerned with wealth inequality are not concerned enough about these things, and are inadvertently contributing to the very centralization that is behind these problems by calling for more power to be given to centralized governing institutions in their pursuit of tax collection.
Something like 12 out of 20 of the wealthiest counties in the US are suburbs of Washington D.C. Maybe you're not looking in the right place for the source of the problem.
> Are you suggesting we create a world government to ensure there's nowhere on Earth people can flee to to escape high taxes?
This doesn't require a world government.
The US already has tax laws on the books for when people renounce their citizenship for tax purposes. Some states like CA are pretty aggressive in suing people who attempt to leave their jurisdiction before realizing capital gains to avoid taxation.
The ability to hide wealth/earnings in general is a bigger deal, and that can be dealt with through treaties without requiring world government.
I think people at once need to be realists and understand that capital flight and over-reliance on a few individuals is a real thing, but also not go too far and assume government institutions are powerless and can only exert their power by bending over backwards.
>Some states like CA are pretty aggressive in suing people who attempt to leave their jurisdiction before realizing capital gains to avoid taxation.
And that just lengthens the timeline on when the state starts suffering from its high tax policy. Now on top of high taxes, enterprising individuals also have to worry about financial penalties for leaving the state. The wealthy already in the state will be less inclined to leave, while the wealthy outside the state will be less inclined to come.
The delayed effect of hikes to national taxes on the residency of the wealthy is actually a disadvantage, because it results in people not taking it into account when voting on policies.
On the other hand, when the effect of something is immediate, voters take it into consideration.
So I view the high mobility between states as an advantage, because it results in state policies being better structured to avoid economic harm.
>The ability to hide wealth/earnings in general is a bigger deal, and that can be dealt with through treaties without requiring world government.
There's no solution to the wealthy simply getting up and leaving the high tax jurisdiction for good, in order to avoid incurring future tax debts. What's collected on an exit tax is nothing compared to what that individual would have contributed had they stayed.
Tax treaties and the like will not prevent this, because when you live in a country with a lower income tax rate, your tax obligations are lower. This makes it financially advantageous for any highly productive individual to leave a high tax jurisdiction.
