The Republican dream: Would total elimination of taxes actually help?

[Hope springs eternal]

In all seriousness, the Right-wing mantra of "no taxes, no time" seems to be their selling point on the economy. Would no taxes in the US what-so-ever really bring about a good economy?

I mean, if someone earns 50K a year, they may truly gain 20K in extra income from no taxes. Will that extra money truly help the economy? Will employers raise or cut wages? Will healthcare and education costs overwhelam the middle class? What do the economists say?

[DBoon]

1. No taxes = no war in Iraq

that might help the economy.

The only bright spot in a consistently libertarian philosophy is that it would put an end to military adventures

[RUMMYisFROSTED]

2. No taxes = no roads.

No police.
No schools.
No army.
No Congress.
No President. :think:
etc.

It'd be wonderful. :eyes:

[jody]

3. No taxes and zero interest rate would balance the budget, bring full

employment, etc.

How would John Maynard Keynes react to that economic miracle?
Probably join me in :rofl:

[sepia_steel]

4. It'll never work.

How many rethugs would actually give money to help run their country if it wasn't required by law?

[A Simple Game]

6. Probably the same number that pay taxes.

None!

[unblock]

5. well the simple answer ... and a bit more complex answer:

the simple answer is that, assume your employer has to pay $50K in order for you to take home $30K due to taxes. if taxes are removed, then your employer can pay you less and yet you earn more. simplistically, let's say you split the difference and your employer pays you $40K and you take home $40K.

So you and your employer split the benefits of the tax cut. you benefit and save more and also buy more. your boss benefits grows as well.

more complicated is that, employers have more bargaining power than employees, so over time, your employer will eventually take most of the benefit of the tax cut, it won't be split 50-50.

but more crucially, all the goodies that the government returns vanish. this means that you would now have to pay for a private company to fix potholes on your street, take a toll road to work, and pay for a private security company to guard your house and your car.

your employer won't get the benefits of government contracts or free government research, so those become private expenses. patents are unenforceable without government, so no one would spend much to try to invent anything. business becomes only about positioning and delivering rather than creating.


and of course, eventually some other country attacks and we have no defense.

sounds great!

[dcfirefighter]

7. User Fees

No taxes could mean full employment and increased standard of living for everyone.

What is the market value of government recognition of titles, permits, patents, and licenses?

Quite a bit: I've seen studies that put the sum total of license in the US at $4 Trillion, about what all levels of government spend now.

If those taxes (burdens) were removed, the value of those licenses would increase - the expected profit would increase.

In other words, there are good taxes and bad taxes, mostly bad taxes:
Historically, governments have taxed windows, rooms, chimneys, road frontage (Charleston side houses), fruit trees, and other things. In each of these cases, the quantity of the item taxed has decreased.
Tax wages, and you get smaller wages.
Tax capital, and you get less capital.

For land titles, the present value is generally considered to be the present value of expected future earnings. Balance those future earnings against future taxes, and you reduce sales prices to zero - collecting for the public the value created by community and public infrastructure.

Currently taxes favor returns to land (taxed at roughly nothing) to returns to capital (taxed at roughly 15%) to returns to labor (taxed at roughly 30%). Remove those taxes and they compete on an even field. If the elasticity of demand for labor is 1/4 the change in price, eliminating taxes agains wages (payroll tax, income taxes below $100k) should result in full employment.

However, if all those taxes were removed, land prices would skyrocket, and most of the benefit of reduced taxation would accrue to those who can charge rent or sell their land.

[stevebreeze]

8. not one bit! in fact Somalia has that kind of lack of government.

here is the reality that the nuts if shacks in Montana know about fiat currency that most people don't. Assume a world with one thousand dollars worth of stuff, and one thousand things to buy. The average cost of all goods would be $1. Now if there was suddenly $5000 available to buy stuff, inflation would occur and the average price of a good would fall to $0.20. If the cash is distributed the same way over the population would you be any better off? Of course not.

What is also very unappreciated is governments role in the smooth running of the economy and growth in the economy. If for instance government stopped enforcing copyright law how much would the value of microsoft be? About the same as the royalties earned from software in China, very close to zero. With no profit to be made who would develop microsoft products? Of course no one.

What the republicans are really doing with their "tax cutting" is to redistribute the tax burden from the wealthy to the middle class. The middle class pays higher taxes today, then 25 years ago when Reagan swept into office on the promise of lower taxes. The wealthy far far less, even as the income of the wealthy and only the wealthy has soared.

[nick303]

9. Devil's adv.

The short answer to the question is no.

Realistically, there is no one on the other side of your argument (well, perhaps a few anarchists).