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 Tax-loving idiot: Paying for what you use up

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RR Phantom

RR Phantom

Location : Wasted Space
Job/hobbies : Cayman Islands Actuary

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PostSubject: Tax-loving idiot: Paying for what you use up   Tax-loving idiot: Paying for what you use up Icon_minitimeFri Feb 12, 2016 9:49 pm

Among the standard bleats of those who want [to be heard asking for] less taxes on everyone, and want to actually have less taxes on on the bleater personally, is a sort of pugnacious Babbitty claim that “I earned my money by my own efforts and when the government takes it from me it’s theft.” Another is that individuals will spend a given dollar better than the government.
Both of these extremely tiresome memes were thrown around in response to a couple of earlier posts with a confidence that surprised me coming from readers of this blog. So I guess I need to take them on, at least for the record. If you recognize these as ignorant cant, you might as well scroll up or down to the next post which will assuredly enlighten you more than this one. Short version of the first lesson: what’s yours is what’s left after you pay for what you use up, which means after taxes. Shorter version: don’t like government? Try Somalia (and let us know how that works out for you). Short version of the second: just how do you propose to privately pay everyone to mean the same weight when they sell you a “pound” of something? Do you really want to buy a set of the satellites that make your GPS work by yourself? or in a little satellite club with dues and monthly meetings? Shorter version: back to Somalia.

OK, “I earned it and it’s mine”. Meet Anita the small manufacturer, with gross revenues of $10,000,000, and let’s accept that this properly measures the value of her product in everyone’s eyes, and compared to everything else. I have never heard such a person claim that this is all her money and she deserves to keep it all; instead she happily lets her employees, landlord, banker, and suppliers confiscate most of it, leaving her only (say) a lousy 10%, or $1,000,000. She may grouse about the prices they charge and wish she could pay less, but she doesn’t call it theft of what is rightfully hers.
Why does she let them get away with this? Because she’s making deals, agreed in advance, and more important, because these $9m worth of goods and services are completely indispensable to the $10m gross value her business creates. We don’t expect the trapeze catcher to call the flyer a thief when he takes half the gate: they’re partners, joint contributors to the enterprise. Just like Anita and her team. How they divide the gross varies, but everyone gets a share or the whole thing collapses in ruins. The iron law here is, “you pay for what you use up”: “I [not we] earned it” applies at most to net profits, not all the money you take in.

http://www.samefacts.com/2010/09/economics/paying-for-what-you-use-up/
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