Browsing the archives for the taxes tag.

Will I Still Help People If Government Doesn’t Force Me To?

government
social workers

It costs $1,000,000 / year to keep each social worker, like the ones pictured above, helping people in Iraq.

One objection to anarchy is that many people will not choose to help others unless the government forces them to through taxes and wealth redistribution.  My main objections to this point are that government does not help people and the free market turns selfish people into public servants.

Why doesn’t government help people?  Well, the presumption is that government steals a dollar from rich Peter and gives it to poor Paul, and this helps Paul more than it hurts Peter.  The first mistake is that the government does not give Paul a dollar.  First, twenty five cents is used to murder brown people, mostly foreign ones.  Then another 25 percent is paid to government employees and retirees.  After all the corporate welfare, bank bailouts, boondoggles and bridges to nowhere, after every friend of every politician gets a cut, 12 cents are left over for welfare.

So the question should be: if there were no government, would I still spend twice as much money trying to destroy other countries as I did trying to help the poor?  If the difference was to spend only 20 cents on blockades to starve “insolent” people into submission, that could be considered a net positive for anarchy.

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The Ridiculous Rahn Curve

economics, taxes

The Rahn Curve indicates two things.  The first is that there exists a single, optimal level of taxation for maximizing economic productivity.   The second is that this maximum is somewhere between 15-25% of GDP.

The first statement is true.  The second is not.

Here is the Rhan Curve:

Notice the pathetic nature of this graph. No grid, no units and no endpoints. It gives us little information but implies a lot.   It implies that GDP can only grow, not shrink.  It implies that what lies outside of the narrow (?) range covered by the graph is unimportant — nothing to see here citizen.  Let’s improve the graph a little:

Here we show that GDP could rise or fall, and some potential values for the curve near 0% and 100% taxation.

I’ve drawn three potential extensions of the Rhan curve.

If the red extension were correct, then without government (0% government spending), then the economy would collapse (presumably due to lack of police services).  On the other hand, giving government total control of the economy would lead to even more impressive GDP growth than the local maximum that was originally marked as optimal.

If the blue curve were correct, then there would not be much to complain about — just that whoever made the original graph was lazy.  One interesting thing about the blue curve is that the economy would remain the same size with either no government or total government.

Finally, if the green curve were correct, then totalitarianism would lead to economic collapse, and anarchy would lead to prosperity.

Of course, drawing lines on the graph does not tell us anything about what is true about the economy.  However, it does help indicate how poorly conceived the Rhan curve is.

In order to maximize economic productivity, there must be every incentive to produce, and little incentive not to produce.  Why do people work?  To get money.  What do taxes do?  Take away their money.  Taxes are clearly a reason to work less.  The higher tax burden is, the less productive people will be.  The lower taxes, the better.  This is not rocket science.  How low can taxes possibly go…?    Zero!

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What Social Security Means To Me

taxes, welfare

The Social Security Administration sent me a mailing today entitled, “What Social Security Means To You“.

First they explained that the SSA is not going to give me enough money for retirement, “…Social Security was never intended to by your only source of income when you retire.  You will also need other savings…”.  Next they said that, “Social Security is a compact between generations,” but, “the Social Security system is facing serious financial problems”.  Apparently, the Trust Fund will start losing money in 2016 and be empty in 2037.  They make it sound like I am throwing money into a hole.

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