> 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.

▲

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.

▲

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.