Board 8 > Lower Taxes Are Good - Even If the Deficit Rises [dwmf]

(+) Yeah! (+)

Treasurys Tax Reform Analysis Confirms Republicans Dont Give a Damn About the Deficit Hit & Run : Reason.com
http://reason.com/blog/2017/12/11/treasurys-tax-reform-analysis-confirms-r

The fine folks over at Reason want you to know that theyre super concerned that the GOP tax plan making its way through Congress might brace yourselves everyone raise the deficit!

Oh no! Not the deficit! That sounds really bad! Surely all proper libertarians can therefore agree that this is terrible legislation which must be opposed!

But just for fun, lets stop and think about this for a second. What is the deficit exactly? It represents the amount the government must borrow to finance operations when the revenues produced from taxation are less than the expenses required for various spending programs. The equation then, would be: Spending Taxes = Deficit. Since there are two variables, there are then two ways the deficit could be increased, by raising spending, or by lowering taxes. Everyone onboard so far?

Libertarians believe taxes are bad [citation needed]. But they do not, necessarily, believe that spending is inherently bad. Spending is bad because the source of the spending is typically taxation, which is theft. If Bill Gates voluntarily donated a billion dollars to a centralized agency to spend funding various social programs, there is no valid libertarian criticism. It would be a voluntary act of charity which harms no one. In fact, this sort of logic is the very foundation of much of libertarian theory as to how society wouldnt collapse without the state. Its the non-voluntary aspect of taxation which makes the system immoral, not the spending aspect.

So, if taxation (theft) decreases, this is a morally good outcome. Even if spending remains constant. Because taxes are inherently immoral in a way that spending is not. There is no libertarian reason to complain about lower taxes resulting in a higher deficit.

But wait! If the government lowers taxes without cutting spending (or receiving voluntary donations from billionaires), theyll just inflate the money supply! Well still have to pay the inflation tax!

Now we get into a slightly more coherent and nuanced criticism often made elsewhere, but notably absent from the Reason piece linked above. It is correct that if governments cannot raise the funds needed to finance their spending via taxation or donation, they will end up monetizing the debt and printing money, leading to inflation. Which results in a simple question would you rather pay a straight up income tax now, or pay the inflation tax later?
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And the obvious answer is that youd much rather pay the inflation tax later.

This is not just a matter of opinion; one option is clearly superior to the other. Even putting aside the time value of money (income tax is stolen from you immediately, before you even receive the money, while debt monetization is a process that typically takes several years to fully materialize and money today is more valuable than money in the future), theres a pretty major and obvious way that inflation is a better outcome than income taxes: Inflation is reasonably easy to avoid.

If youre anyone who earns an income, its virtually impossible to legally avoid the income tax (and difficult to avoid it illegally). But there are a whole lot of ways to avoid inflation! Ill bet libertarians have even heard of some of them! For example, did you know that its possible to exchange your federal reserve notes for various inflation-resistant assets such as:

A private, decentralized, impossible-to-inflate online currency entirely consistent with libertarian principles

Precious metals with practical uses that have been a consistent store of value for thousands of years

Real estate, and other physical assets useful for life that tend to maintain their value throughout periods of inflation

Ownership of the companies who own the means of production necessary to produce goods and services that people enjoy and who will be able to charge higher prices as the dollar loses its purchasing power

Whats that? Reason is aware of all of these things and has written about them before? Well thats weird. Given that they acknowledge that there are several different types of assets one can own to immunize themselves against government money-printing, they should be far less concerned about inflation than about the unavoidable income tax, should they not?

And yet here they are, pitching a fit over an increased deficit, even though it means the total amount of theft in society is going to go down. One is hard-pressed to think of any logical reason to take this particular position other than the same tired anti-Trump virtue signaling weve come to expect from the official arbiters of approved opinion. Any organization that is unwilling to celebrate lower taxes is, quite simply, undeserving of the label libertarian.

https://wordpress.com/post/dudewheresmyfreedom.com/980
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Cool story, bro.

What about that little problen that this tax plan doesn't actually lower taxes for a lot of low to middle income people?
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redrocket_pub posted...

Cool story, bro.

What about that little problen that this tax plan doesn't actually lower taxes for a lot of low to middle income people?

Why should I care about lower or middle income people specifically?

The total amount of taxes is going down. This is unambiguously good (unless you have an irrational hatred of productive people)
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Wealthy individuals are not inherently more productive, nor is their productivity necessarily more beneficial to society. So that's where i take issue.

SmartMuffin posted...

Why should I care about lower or middle income people specifically?

Because in analyzing things at a block level you ignore potential confounding variables at the line level.
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Wealthy individuals are not inherently more productive, nor is their productivity necessarily more beneficial to society. So that's where i take issue.

This doesn't affect my larger point though.

So long as you agree that taxes are bad (which you probably don't, but libertarians probably do), then any policy that decreases the total amount of taxation is good. Even if the bill was nothing more than "We're going to charge no taxes to everyone whose name includes the letter 'E'." That would be arbitrary and unfair, but it would still lower taxes, which I support.
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Whats the point of lowering taxes then?
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To reduce the total amount of theft taking place in society.
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Im guessing that you prefer the government to fund itself with bake sales then.

Or possibly you think Fist of the North Star is really sweet and want to try living in an anarchy filled wasteland for a while.
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Im guessing that you prefer the government to fund itself with bake sales then.

Maybe you should read. The whole point of "the deficit will rise" is that the government will still find a way to fund itself. Otherwise the deficit couldn't rise.
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SmartMuffin posted...

To reduce the total amount of theft taking place in society.

But won't they steal have to "steal" the same amount of money later to pay for the current deficit? All this does is change when the "theft" happens.
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SmartMuffin posted...

Im guessing that you prefer the government to fund itself with bake sales then.

Maybe you should read. The whole point of "the deficit will rise" is that the government will still find a way to fund itself. Otherwise the deficit couldn't rise.

Okay, with what? Budding? Printing more money and pretending it has value? Selling soldiers to foreign nations as mercenaries? Taxation is how we pay for our own services.

Unless you want the government to do stuff for us for free, which sounds like socialism to me. Don't you hate that stuff?
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But won't they steal have to "steal" the same amount of money later to pay for the current deficit? All this does is change when the "theft" happens.

No, because the later "theft" happens via inflation, which I can avoid.

If they try to raise the income tax later, I'll oppose it then too. But that still ignores the time value of money - money right now is more valuable than money in the future.
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Taxation is how we pay for our own services.

Partially, but not totally. If that was totally true then a deficit could not possibly exist.
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Someone has never heard "a penny saved is a penny earned".
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SmartMuffin posted...

Taxation is how we pay for our own services.

Partially, but not totally. If that was totally true then a deficit could not possibly exist.

Yeah, rich people have way too many tax loopholes. And getting rid of stuff like inheritance tax is just going to make taxes have an even harder time covering our spending. Or was your point not to make it sound like you admitted lowering taxes is a bad idea?

I mean, don't get me wrong, I'm sure you love America as much as I do and don't just say you do but want to rob it blind and not pay for what it's doing for you like some CEOs.
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Tomba42 posted...

Someone has never heard "a penny saved is a penny earned".

If you like savings then why would you tax income? Why would you tax capital gains?
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If you like savings, why buy food? Because I don't want to starve. Why give the government money? Because I like having a government.

I'm paying for the government as a service.

Do you think you would be better off with no government at all or do you just expect them to give you handouts all the time of police and fire services and roads and schools?

The alt right can come up with all sorts of asinine reasons why they want to lower taxes on themselves and why they are the true patriots but ultimately all it proves is that the part of America they care about begins and ends with their own wallets. I'm sick of it.
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SmartMuffin posted...

Wealthy individuals are not inherently more productive, nor is their productivity necessarily more beneficial to society. So that's where i take issue.

This doesn't affect my larger point though.

So long as you agree that taxes are bad (which you probably don't, but libertarians probably do), then any policy that decreases the total amount of taxation is good. Even if the bill was nothing more than "We're going to charge no taxes to everyone whose name includes the letter 'E'." That would be arbitrary and unfair, but it would still lower taxes, which I support.

That's clearly not rational unless you believe taxes are an unsurpassable wrong. Otherwise you must acknowledge the total factors involved in the decision. What if we allowed people to not have to pay taxes in exchange for participating in a bloodsport? That lowers taxes, but from a moral standpoint... it seems a little questionable.

If you're willing to claim that taxes are an unsurpassable wrong, I can't really argue, but I also can't possibly come to terms with such a moral compass.
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SmartMuffin posted...

To reduce the total amount of theft taking place in society.

Except youre not reducing the number of people being robbed.
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SmartMuffin posted...

But that still ignores the time value of money - money right now is more valuable than money in the future.

Have you actually taken any courses in accounting? You're bastardizing the concept.
How many individuals would rather have $100 today over $1,000 tomorrow, assuming less than 1000% interest?
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Have you actually taken any courses in accounting? You're bastardizing the concept.
How many individuals would rather have $100 today over $1,000 tomorrow, assuming less than 1000% interest?

Is the government charging/earning 1000% interest?

I have a degree in accounting, a degree in finance, and an MBA.
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If you're willing to claim that taxes are an unsurpassable wrong,

It's been awhile since I've blogged so maybe people who don't post in my topic have forgotten - but yes, this was a post written intended for a libertarian audience, which takes a negative view of taxation as a given. It's also written as a direct response to an article from a so-called libertarian organization that also usually opposes taxes (unless Trump is involved in which case opposing Trump is more important than being logically consistent)
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SmartMuffin posted...

Have you actually taken any courses in accounting? You're bastardizing the concept.
How many individuals would rather have $100 today over $1,000 tomorrow, assuming less than 1000% interest?

Is the government charging/earning 1000% interest?

I have a degree in accounting, a degree in finance, and an MBA.

Ok good. So why are you stating, unequivocally, that money is worth more today than tomorrow? By that logic, every business ever should care about maximizing short term profit and ignore long term financials.
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Is it just income taxes that libertarians are against, since it's involuntary? What about sales/use taxes, excise taxes, etc.? What about payroll taxes and estate taxes, which are more similar to income tax but not really?
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Ok good. So why are you stating, unequivocally, that money is worth more today than tomorrow?

The same amount of money is. That's the entire premise of the time value of money. Of course if you change the actual amounts that's different. But unless someone explicitly says that, it should be assumed the same amount is what's meant.
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EndOfDiscOne posted...

Is it just income taxes that libertarians are against, since it's involuntary? What about sales/use taxes, excise taxes, etc.? What about payroll taxes and estate taxes, which are more similar to income tax but not really?

All taxes are bad, but the income tax is particularly horrible, although that's mainly an economic argument rather than a moral one.
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Would you be okay with it if it was called a "service fee for using the government" and they could refuse to put your house out if it was on fire if you didn't pay it?
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Tomba42 posted...

Would you be okay with it if it was called a "service fee for using the government" and they could refuse to put your house out if it was on fire if you didn't pay it?

You mean if it was voluntary?

Yeah, absolutely. But then it's not a government - it's just a company. Voluntary fire departments already exist BTW.

Government adopting a fee model would be great, but then they'd quickly be put out of business by superior private competition.
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Tomba42 posted...

Would you be okay with it if it was called a "service fee for using the government" and they could refuse to put your house out if it was on fire if you didn't pay it?

You also couldn't use the roads, get city water, use telephone lines, use cell phone towers, go to any businesses that require high school graduation or higher as a requirement for hiring, or call the police if something bad happens to you.
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SmartMuffin posted...

EndOfDiscOne posted...

Is it just income taxes that libertarians are against, since it's involuntary? What about sales/use taxes, excise taxes, etc.? What about payroll taxes and estate taxes, which are more similar to income tax but not really?

All taxes are bad, but the income tax is particularly horrible, although that's mainly an economic argument rather than a moral one.

Why is income tax especially bad compared to other taxes?
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SmartMuffin posted...

Ok good. So why are you stating, unequivocally, that money is worth more today than tomorrow?

The same amount of money is. That's the entire premise of the time value of money. Of course if you change the actual amounts that's different. But unless someone explicitly says that, it should be assumed the same amount is what's meant.

And you're assuming that the amounts lost by income taxes today would be equivalent to amounts "lost" by inflation in the future why?
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So youre saying you want private corporations to run everything?
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Tomba42 posted...

So youre saying you want private corporations to run everything?

They already do run almost everything important.
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redrocket_pub posted...

Why is income tax especially bad compared to other taxes?

Because it punishes/discourages income, which if it isn't an exact proxy for productivity, is pretty damn highly correlated.

Generally speaking, you want to tax things that are bad in order to get less of them. Income is the exact opposite of that. It distorts literally the entire economy and encourages people to not work.
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Well what about sales tax/VAT? It discourages purchases... of just about everything!
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redrocket_pub posted...

Well what about sales tax/VAT? It discourages purchases... of just about everything!

Yeah. Given that savings grow an economy and consumption does not, this is a better alternative.
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SmartMuffin posted...

redrocket_pub posted...

Well what about sales tax/VAT? It discourages purchases... of just about everything!

Yeah. Given that savings grow an economy and consumption does not, this is a better alternative.

That seems the opposite of true.
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SmartMuffin posted...

Generally speaking, you want to tax things that are bad in order to get less of them.

basically my argument for why we should tax the rich!
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basically my argument for why we should tax the rich!

You want fewer people to be rich and more people to be poor?
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SmartMuffin posted...

basically my argument for why we should tax the rich!

You want fewer people to be rich and more people to be poor?

Taxing the rich more wouldnt make more people poor. Itd make more people middle class.
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SmartMuffin posted...

You want fewer people to be rich

Did I stutter??
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smuffin, i know i won't be able to convince you of anything. at the same time, i worry that you are living in a fantasy land where your feelings about taxes, governments and corporations are more important than facts and reality

there are so many different lines of discussion i'd enjoy going down with you that i don't even know which to start with, because you can't argue with an ideology that changes forms depending on the argument

money, at the highest macro level, is simply a social system to convince people to do what has to be done. i use money to convince people to grow food, transport it to a store near my house, keep it relatively fresh, and give it to me. if an economic system can't do that efficiently it is a failure.

in your system, you're basically saying everyone should just use gold.

explain to me why i would i ever sell my gold to someone for money, when that gold/finite/resource/whatever will just immediately jump up in value the instant after i sell it? this is called hyper deflation, and it crushes economies.
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Kenri posted...

SmartMuffin posted...

You want fewer people to be rich

Did I stutter??

Nope. Nice to see someone actually admit it for a change though. Most socialists lie and pretend like their preferred policies would make the poor rich, rather than admit that no, they'd prefer the rich to be poor instead.
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in your system, you're basically saying everyone should just use gold.

Gold is money. It was money 2,000 years before federal reserve notes were even a thing, and will continue to be money long after they cease being a thing as well.
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my opinion on the deficit is that it is a good control valve on unemployment.

when real unemployment is above 5%, let the deficit grow. when real unemployment is below 5%, let it shrink.

the question is what do we do with the deficit to help our society. your argument is (basically) to just hand it out to rich people. i personally believe we should decide what is important to us (transportation, utility, and education infrastructure are three obvious categories) and then work from there.
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SmartMuffin posted...

in your system, you're basically saying everyone should just use gold.

Gold is money. It was money 2,000 years before federal reserve notes were even a thing, and will continue to be money long after they cease being a thing as well.

do you spend gold at the corner store? gold is not used as the primary currency anywhere. if it were, we would be suffering under deflation
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my opinion on the deficit is that it is a good control valve on unemployment.

when real unemployment is above 5%, let the deficit grow. when real unemployment is below 5%, let it shrink.

This nonsense (aka keynesianism) was proven factually incorrect by the existence of stagflation in the 1970s.
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SmartMuffin posted...

in your system, you're basically saying everyone should just use gold.

Gold is money. It was money 2,000 years before federal reserve notes were even a thing, and will continue to be money long after they cease being a thing as well.

Gold is a pretty rock. It only has value because people assign value to it (just like paper money).
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do you spend gold at the corner store?

You did prior to the Nixon administration.

And you will again.
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