Would a graduated tax system work well in a small government?

nygiantsfan: Would a graduated tax system work well in a small government?
I’m not too deep into politics and taxes but I do know that conservatives believe in a smaller, less activist government that provides fewer services and less taxes or a flat tax rate and liberals believe in a big government and a graduated tax system where people with higher incomes are taxed higher and people with lower incomes are taxed lower…well i believe we should have a small government but the wealthiest citizens should be taxed higher then middle-class and poor citizens and the…so can the two go hand in hand?

Answers and Views:

Answer by Aspie Kid
I’m a big fan of the graduated income tax too. So is Warren Buffet and Bill Gates, The two richest people in America, because it’s a decent and fair way to pay for the services provided by government, whether big or small. Of course many rich people want to keep every penny they possess and have contributed heavily to elect people to congress who will help them in that endeavor. Remember, 93% of the wealthiest 1% of Americans got there by inheriting their fortune.

Since BIG and SMALL are relative terms, such measurements must be viewed in comparison to other first world countries by looking at tax revenue as a percentage of gross national product. Total tax revenues in the US are 28% of GNP. That is very low. By comparison, Denmark is 50%, Norway, Sweden, France, Finland and Belgium are all in the 40’s range. Of the English speaking countries, the UK is at 39%, New Zealand 36%, Canada 33%, and Australia collects 30% of its GNP to spend on government services. As you can see, Americans on average pay less, both directly or indirectly for government than any of these countries and therefore our government is relatively SMALL.

Regardless, America has had a graduated income tax for 100 years because we are decent people and it is the fairest way to determine each citizen’s contribution to the country which provides them with the economic opportunity to thrive and prosper.

Answer by SDD
Progressive taxation of income simply discourages more production by the highest producers. If you’re trying to slow down economic growth, that’s a good way to do it.

Answer by DoILiveInOz
No.
Higher taxes cause less economic production and at some point even less tax revenues.

Answer by Roger H
Progressive taxation does not cause reduced output from the “highest producers” segment of American society. That, of course, is simply propaganda from politicians sponsored by the wealthy who wish to retain as much of their wealth as they can, and pass their positions of wealth to their heirs (93% of the wealthiest 1% got there through inheritance). If that were the case, then the US certainly would have suffered rather than prospered during the three decades after WW2 when the top tax rate on the very wealthy was as much as 92%. Yet that proved to be one of the most productive times in US history.

Additionally, were that the logical case, then maximum production and employment would be achieved when the wealthy were not taxed at all and all tax burden placed on us worker bees, the middle class. Of course, they’ve invested heavily in politicians and propaganda to achieve this and it’s gaining momentum. CEO’s of Fortune 500 companies now pay a less percentage of their total incomes in taxes than do their own secretaries.

Aspie Kid has a point too. Even higher taxation does not rob a nation of its per capita income or happiness. Danes are the most satisfied people and Norwegians are wealthier. Both countries have a much higher tax rate than the US. Therefore, require these right wing jerks who make such statements to give concrete sources and stats. They always back down sputtering obscenities when confronted with truth.