Re: are we all paying too much in tax
What is your point, djohns?<br /><br />Taxes exist for one specific reasons:<br /><br /> To fund the needs of the government. Now those needs may be desirable, or wasteful, or whatever, but they are there nonetheless, and need to be funded, or politically eliminated.<br /><br />Tax policy, on the other hand, is designed specifically to generate the necessary funds while encouraging some behaviors while discouraging others in order to make the economy work as efficiently as possible.<br /><br />It is why, for example, we have tax incentives for corporate investment and the like.<br />It is how government tunes economic activity, and is used one way or another on a constant basis.<br /><br />For example, the government may make tax incentives for the very wealthy to cut their effective taxes so that they may invest that extra money in expanding businesses, hiring more people, and thereby expanding the economy.<br /><br />OTOH, we are currently in a situation where the economy has contracted, and we have something like 25 % unutilized capacity. Now in those circumstances, a person in the top brackets are not likely to invest that money, but rather sock it away, since they no doubt know that they could not sell the increased product that would result from that investment, had they made it.<br /><br />Giving a big tax break to the wealthy right now would more than likely result in less revenue to the government, with little in the way of economic benefit to the economy as a whole.<br /><br />Now, for example, if more consumer spending is required to get the economy moving again, and get that unutilized capacity up and going again, a tax cut to the middle class might just be the way to go, as they are likely to spend the extra money back into the economy, thereby requiring more goods and services to be produced, and some of that excess capacity used. Perhaps to the point of investment being made to increase capacity or productivity.<br /><br />Times change, problems change, and potential solutions change. You cannot properly go about looking at tax policy from a single viewpoint. Different policy has a different effect depending on different circumstances.<br /><br />It has absolutely nothing to do with what might be nebulously described as "fair".
