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Ethereal
04-15-2014, 01:31 PM
Three Cheers for Tax Scofflaws (They Keep Us Afloat and Limit Government's Reach) (http://reason.com/blog/2014/04/15/three-cheers-for-tax-scofflaws-they-keep)

J.D. Tuccille | Apr. 15, 2014 12:40 pm

(Reason) - FoterToday is Tax Day, the day by which Americans' tax returns must be postmarked or electronically submitted in order to avoid the wrath of the shakedown artists at the Internal Revenue Service.

<excerpt>

Seventy-six percent of respondents to our recent Reason-Rupe poll say that private charity does as well or better than government in getting mileage from their tax dollars. That means Americans are unlikely to knuckle down and submit to a bigger bill without protest. That's no small concern when you consider that the U.S. has traditionally had the highest income tax compliance rate in the world, and the smallest shadow economy—that is, people engaging in otherwise legal economic activity, but out of sight of the tax man and regulators.

But that's changing.

In recent years, the income tax compliance rate in the United States dipped to 83.1 percent. That's still high, compared to the United Kingdom at 77.97 percent or Switzerland at 77.7 percent, but the gap is closing.

The U.S. shadow economy has also traditionally been smaller than that of other countries. But last year, estimates that it had reached $2 trillion and might account for the country avoiding a return to recession made headlines.

<excerpt>

Why the sudden growth?

Schneider, the shadow economy expert mentioned in that CNBC story quoted above, remarks, "In almost all studies it has been found out, that the tax and social security contribution burdens are one of the main causes for the existence of the shadow economy." He adds, "The bigger the difference between the total cost of labor in the official economy and the after-tax earnings (from work), the greater is the incentive to avoid this difference and to work in the shadow economy."

<excerpt>

Cohn and his friends may not like to hear it, but the tax scofflaws who flee the high taxes he favors have already been credited with keeping America out of recession, and Spain functioning at all. Let's hear it for their scofflaw efforts.

It's basic economics that a tax increases the costs of producing, which in turn increases prices. This has the effect of reducing the quantity of the good or service supplied, which decreases our standard of living. This is called a "deadweight loss" in economics.

http://i629.photobucket.com/albums/uu20/KEG1984/d494a7fd74467664f5833216fd11a43e_zps7f0df567.jpg

But people, by and large, won't sit idly by while their standard of living is reduced by taxation. That is why we have underground economies, because they are how people defend their standard of living from taxation. I'm glad that more and more Americans are dodging taxes and transacting under the table. They are keeping production stable, which increases the supply of goods and services we can purchase at an affordable price. No civilization ever became prosperous because of taxation, so let's encourage more people to transact under the table. It's good for the economy.

Alyosha
04-15-2014, 01:33 PM
But people, by and large, won't sit idly by while their standard of living is reduced by taxation. That is why we have underground economies, because they are how people defend their standard of living from taxation. I'm glad that more and more Americans are dodging taxes and transacting under the table. They are keeping production stable, which increases the supply of goods and services we can purchase at an affordable price. No civilization ever became prosperous because of taxation, so let's encourage more people to transact under the table. It's good for the economy.

I agree with this completely.

Ethereal
04-15-2014, 02:49 PM
http://www.bloomberg.com/video/three-ways-to-not-pay-taxes-legally-0v0Byfg3S9qdtsspJ3MUYQ.html

The Sage of Main Street
04-15-2014, 04:35 PM
It's basic economics that a tax increases the costs of producing, which in turn increases prices. This has the effect of reducing the quantity of the good or service supplied, which decreases our standard of living. This is called a "deadweight loss" in economics.

http://i629.photobucket.com/albums/uu20/KEG1984/d494a7fd74467664f5833216fd11a43e_zps7f0df567.jpg

But people, by and large, won't sit idly by while their standard of living is reduced by taxation. That is why we have underground economies, because they are how people defend their standard of living from taxation. I'm glad that more and more Americans are dodging taxes and transacting under the table. They are keeping production stable, which increases the supply of goods and services we can purchase at an affordable price. No civilization ever became prosperous because of taxation, so let's encourage more people to transact under the table. It's good for the economy.

Profit also increases prices, so profit is a sales tax. The Greedhead parasites' claim that prices are paid voluntarily is no more valid than claiming taxes are paid voluntarily and that the voters automatically endorse tax increases because they elected those who impose them. The only market force is the coercion by large concentrations of power, whether in government or its twin, the private sector. Consumers can avoid private-sector taxes by buying stolen goods.

Peter1469
04-15-2014, 04:41 PM
Profit also increases prices, so profit is a sales tax. The Greedhead parasites' claim that prices are paid voluntarily is no more valid than claiming taxes are paid voluntarily and that the voters automatically endorse tax increases because they elected those who impose them. The only market force is the coercion by large concentrations of power, whether in government or its twin, the private sector. Consumers can avoid private-sector taxes by buying stolen goods.

But the profit margin includes the added benefit of innovation. Get rid of profit and you would still be using Windows 95.

That is just an example. It isn't limited to that.

Ethereal
04-15-2014, 05:07 PM
Profit also increases prices, so profit is a sales tax. The Greedhead parasites' claim that prices are paid voluntarily is no more valid than claiming taxes are paid voluntarily and that the voters automatically endorse tax increases because they elected those who impose them. The only market force is the coercion by large concentrations of power, whether in government or its twin, the private sector. Consumers can avoid private-sector taxes by buying stolen goods.

Prices are a function of supply and demand, not profits. In a competitive market, firms are price-takers, which means they will lose their customers if they raise the price of their good or service above the market price. In a competitive market, firms earn zero economic profit in the long run. The problem of excessive prices, therefore, is one of lack of competition, not something inherent to profit motive. Where robust competition exists, firms must take the price that the market demands, which will be the lowest price possible given present limitations on productivity.

Chris
04-15-2014, 05:53 PM
"For there is one crucially important power inherent in the nature of the State apparatus. All other persons and groups in society (except for acknowledged and sporadic criminals such as thieves and bank robbers) obtain their income voluntarily: either by selling goods and services to the consuming public, or by voluntary gift (e.g., membership in a club or association, bequest, or inheritance). Only the State obtains its revenue by coercion, by threatening dire penalties should the income not be forthcoming. That coercion is known as 'taxation,' although in less regularized epochs it was often known as 'tribute.' Taxation is theft, purely and simply even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State’s inhabitants, or subjects."

~Murray Rothbard

The Sage of Main Street
04-16-2014, 11:15 AM
But the profit margin includes the added benefit of innovation. Get rid of profit and you would still be using Windows 95. That is just an example. It isn't limited to that. It's not an example, it's an exaggeration. Where did I say, "Get rid of profit"? For revenge, see Johnny Cash's "One Piece at a Time."

Ethereal
04-17-2014, 03:25 PM
It's not an example, it's an exaggeration. Where did I say, "Get rid of profit"? For revenge, see Johnny Cash's "One Piece at a Time."

Profit is not the problem, lack of competition is. When the state becomes an impediment to competition, markets go from competitive to oligopolistic and monopolistic in nature. This is the only way that firms can maintain profits in excess of what the free market will bear, when they are able to insulate themselves from competition.

Chris
04-17-2014, 04:15 PM
In free-market capitalism profits are gained in exchange for what people as consumers want whereas in statist capitalism it's gained by rent seeking. The difference between what Oppenheimer called the economic means and the political means.