> Sure, you can tax more up to a point, but eventually that tap runs dry and you're forced to reallocate existing resources.

Since the 1980s, we have been consistently taxing less. If the tap is dry, it isn't because of over-taxation - it's because there's a reservoir of wealth hoarded by the relatively few.

A even cursory glance at the trajectory of wealth distribution will make that clear.

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jbstack 4 days ago | parent | next [-]

> Since the 1980s, we have been consistently taxing less

Who is "we"? We're talking about governments in general ("good" vs "bad" ones), and I have no idea what jurisdiction you are referring to.

In any case, I didn't say the tap is dry. I said if you keep raising taxes it will eventually run dry. Or to put it another way, taxes are not an unlimited resource that you can keep increasing as much as you'd like. At some point you'll hit a ceiling where raising taxes any further doesn't produce additional tax revenue.

For example, as you raise income tax rates, people have less incentive to advance their careers (e.g. by chasing promotions or improving their skills), and people have more incentive to leave the jurisdiction and go somewhere with lower taxes. Up to a point, the increase in tax rates produces a net extra revenue for the government. Above a certain point, the number of people who stop paying taxes (e.g. by leaving or by working less) outweighs the gains from those who continue to pay. This is why you'll rarely see any government with excessively high top-bracket tax rates (e.g. 60 - 100%), because it results in tax losses.

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MrOwen 4 days ago | parent [-]

How are you coming to the conclusion that it will run dry? For example, in the US, arguably the most prosperous period here was in the first half of the 1900s. It is when Roosevelt's New Deal went into place and the US experienced extraordinary growth and prosperity. Do you know what also coincided with this? The marginal income tax rate. From wikipedia:

> For tax years 1944 through 1951, the highest marginal tax rate for individuals was 91%, increasing to 92% for 1952 and 1953, and reverting to 91% 1954 through 1963.

Since that time, the income tax rate has declined, especially for the higher brackets. From my perspective, it kinda just sounds like wealthy people got greedy and they were able to advocate for income tax changes. Back then, they couldn't pull as much funny business as they do today with high compensation modalities ($1 trillion for Musk?) so they opted for marginal tax rate reduction. But there's no evidence from what I can see that the the money was about to "run dry." Quite the opposite it seems. Even in nordic countries, the money is not "running dry". They have great support systems in large part because of the high marginal tax rates.

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jbstack 4 days ago | parent [-]

Consider what would happen if the tax rate was 100% across all tax types, and you'll probably see then how there's an upper limit to how much tax revenue can be raised by a government. Would you get up and go to work if you got to keep 0% of your earnings? How about if you got to keep 1% of them? 2%?

Surely we can agree that there is a threshold, even if we don't agree where that threshold is. That's all there is to the point I'm trying to make: tax resources are limited and therefore all governments must ultimately allocate those limited resources and cannot simply spend unlimited amounts on any "good" projects that they'd like.

	▲	danans 4 days ago \| parent [-]
		> tax resources are limited and therefore all governments must ultimately allocate those limited resources and cannot simply spend unlimited amounts on any "good" projects that they'd like. That's a strawman. There are no proposals for a 100% tax across tax types. There is an argument for reversing the direction of the last several decades in which taxes on the wealthiest have been dramatically cut.

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jonas21 4 days ago | parent | prev | next [-]

> Since the 1980s, we have been consistently taxing less.

Assuming "we" means the United States, this isn't really true. Tax revenue as a percentage of GDP has been remarkably stable, not just since the 1980s, but since the end of World War II [1].

The long-term average since 1945 is 16.85%, the average in the 1970s (i.e. the decade before the 80s) was 16.76%, and the average in the 2020s is 16.96%.

[1] https://fred.stlouisfed.org/series/FYFRGDA188S

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bbarnett 4 days ago | parent | prev | next [-]

Since the 1980s, we have been consistently taxing less. If the tap is dry, it isn't because of over-taxation - it's because there's a reservoir of wealth hoarded by the relatively few.

A even cursory glance at the trajectory of wealth distribution will make that clear.

Others have attempted to refute your above statement, but it's not really relevant. Your response does not really align with the parent post, because at no point did the post you replied to say "We need to tax less all the time!" or even "we need to tax less!" or "we cannot have better health care".

None of these things were said, advocated for, or espoused as a position.

Instead, they said "you cannot solve everything ever, and everything has tradeoffs", along with "because if you try, you run out of money no matter what".

This seems like a fair statement. Would you care to address that?

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danans 4 days ago | parent [-]

> Instead, they said "you cannot solve everything ever, and everything has tradeoffs", along with "because if you try, you run out of money no matter what".

> This seems like a fair statement. Would you care to address that?

Sure. That's like saying fire is hot and water is wet. The fact that tradeoffs obviously exist doesn't mean we can make meaningful changes to improve things.

	▲	bbarnett 3 days ago \| parent [-]
		I think you mean "doesn't mean we can't", but you seem to be hyper-focusing on the summary statement I wrote, of the original author's post. That summary statement was in place to explain why your original post wasn't addressing the issue. But that statement was summarizing a portion of the original author's post. If placed back in the context it came from, you can see the original author was not saying we cannot make meaningful changes. At all. Instead, the author was said: Aside from the fact that there's a subjective definition problem here (how do we decide what people "need"?), I think this an unrealistic view. By this definition, every government that has ever existed or ever will exist is a "bad" government because no government can ever tackle every single problem 100% of the time. Many problems are extremely difficult to solve (e.g. global warming), and others simply cannot be solved without creating other problems. Thus, they are not defining this as a "we cannot improve things", but instead "if we improve things, some will see that as bad" conjoined with "in other cases, we improve things, but not as fast/completely as desired". As far as I can see, there is not a single point that the original author said we cannot improve things. They don't even hint at that.

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dragonwriter 4 days ago | parent | prev | next [-]

> Since the 1980s, we have been consistently taxing less.

In the US at least, that’s the perception because the tax cuts get a lot more publicity than the increases; everyone know that Reagan passed what was, to that time, the biggest (at least in aggregate nominal terms) tax cut in US history, fewer know that he followed it with the biggest increase.

But what has actually happened is a series of tax burden shifts (often, downward from the wealthiest, though some have been the other way or largely orthogonal to wealth.)

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attila-lendvai 4 days ago | parent | prev [-]

sure, but does government prevent wealth inequality, or maybe the very cause of it?

(research hint: inflation, and that millennia old quote/insight: the more numerous the laws, the more corrupt the government...)

	▲	danans 19 hours ago \| parent [-]
		> sure, but does government prevent wealth inequality, or maybe the very cause of it? Neither. Government is just the system through which policy that either greatness or lessens inequality is implemented. For example, government can decrease an inheritance tax, therefore increasing inequality, or they can do the opposite to reverse it.