Wednesday, November 23, 2011

High

I'm tired of hearing Republicans complain about taxes being too high. What exactly is the magical percentage at which it isn't too high? Rick Perry wants 20%, Herman Cain is infatuated with 9%, but why not 8% or 2% or none at all?

I get the feeling that the Republican voter pictures the government as a Scrooge McDuck of sorts, hoarding all that tax money into a giant safe. In reality, every dollar collected is spent, in fact on top of taxes we borrow some more dollars to spend. Thus, taxes are not too high, they are by definition too low because we are incurring more debt every year. They might be spent on things you don't like, which is what we should be talking about instead.

Now, in many ways, government spending actually saves you money. If we each have to buy guns to defend our homes, it'll probably cost more than setting up a good police department, and probably won't even work that well (remember the wild west? really want to live like that?). Ditto for fire protection and various public works like roads, pipes, and bridges. Just imagine if your only way to get to work involves driving on a private road: how much do you suppose the owner's going to charge?

Other kinds of expenditures have a more indirect effect. The strong (and very costly) US military ensures the free flow of petroleum to fuel our economy. They deter foreign invasion, which provides a predictably safe environment for businesses to invest. All of that is worth money, but how much, exactly? If we cut the defense budget by a billion, what would it cost us indirectly? What about ten billion or a hundred billion? The same analysis can and should be done against each of the big expenditures.

In other words, there is no magic percentage to taxes or spending, and "too high" can only be true if you calculate it relative to what you're getting back. So let's talk about what government programs aren't worth the money instead.

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