Equal Rights Libertarian

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20230312 – Taxes Have Consequences



This book is a pretty much detailed history of taxation in the USA in the XXth and the first 20 years of the XXIst centuries. It provides a thorough examination of taxes and their effectiveness or lack thereof. The author’s name is well known because it relates to the famous “Laffer curve.” He convincingly demonstrates that the tax rates, more often than not, are just political games that have little impact on what people at the top pay because these people have access to a great many loopholes and a massive industry of legal tax evasion. In addition to a laundry list of tax evasion methods, the author demonstrates how high taxes produce a negative impact on the economy by diverting efforts of the most productive people of the society away from active efforts to create more ideas, inventions, goods, and services to not less vigorous, demanding, but economically non-productive activity of saving what they already have from taxes. 


Probably the most interesting point that the author makes is that actual tax rates for the rich remain the same regardless of the declarative tax rates. I always enjoy seeing this graph, which so nicely demonstrates how taxes work:

I think that the problem is not really with taxes and their rates. The problem is with the use of the state by the elite in control. Is it used as a valuable tool for prosperity or as a mechanism that negatively impacts the population’s life? I believe that the simple rule is this: a state is a machine of violence, and as such, it should be used exclusively for the prevention of violence, its suppression if prevention fails, and for retaliation against individuals that use it. All other uses of this machine always have one and only one main cause: the poor functional design of processes used for the generation and allocation of resources in the society, including non-material resources such as respect of individuals to each other and prestige of individuals in the eyes of others.


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