Thursday, June 1, 2023

The role of taxes

As I write this the American government has been battered by some wealthy people who with the debt ceiling had a tool to force changes in the law that suit them.  Not sure how this particular battle will run out, but feel it is likely there will be future battles.

 With the Americans the discussion had been focused on cutting expenses and making the poor work to earn their welfare.  Assistance to the poor is to be cut.  All sorts of regulations were burdensome.  It is true you should not spend more than you take in.  There are painful results if individuals attempt to do it, but there are also consequences for governments.  One consequence might be inflation.  High interest rates.  Bankruptcy may seem impossible, but governments have faced that, just not the exceptional United States (so far).  Corruptions has overtaken some governments when the government can't provide services.

One part largely missing from the conversations is taxes.  Politicians treat taxes as almost a dirty word, to be avoided for fear of losing votes and the support of wealthy donations. Cutting taxes and bragging about it are normal.  Obviously most voters react negatively to increased taxes.

The Republicans have proven themselves to be hypocrites and working for the benefit of the wealthy.  A major cause of the increase in deficit came from the Trump administration's major tax reduction.  One proposal they rejected was to increase the number of tax collecting experts.  The one department that actually pays for itself and coincidentally mitigates inequality.  The subject of taxes is easily dismissed.

Progressive taxes are an attempt to be fair, but are resented by the very wealthy who have managed to reduce their high rates but still not enough.  In theory everyone pays at the same rate. When you earn more you pay more, but at established rates.  The wealthy also resent restrictions on their income.

Some commentators suggested that the poor could vote to get their way.  In truth there are attempts to bribe them and most politicians are careful not to increase their taxes.  The wealthy know they can swing the poor to their side; by appealing to their prejudices.

One sensible philosophy was provided by John Maynard Keynes who proposed in times of prosperity to build up surpluses and in times of need to use the surplus.  The wealthy feel rather than building up surpluses it is better to reduce their taxes.  

In a smaller simpler civilization the people had more real control.  As civilization became more complex, power becomes unequal and exploitation is normal-- check

A more rational plan to solve the many problems of Americans would include taxes.  Taxes are the price for civilization.  The government is not the source of all problems and in fact has been and certainly can be an engine for progress. Uneducated voters are easily manipulated. 

Even the wealthy overlook that they get infrastructure, a legal system, military protection, an educated labor force, and sometimes protection from pandemics.etc.

An earlier blog:

Another blog:

Another perspective:  

Also following the Toronto Mayoral election where there seem to be all sorts spending programs proposed with any taxes ridiculed.  Olivia Chow is attacked for proposing increased taxes for one segment.  Rational people understand there is a cost to pretty much everything and fairness is the best way to win co-operation. 

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