"It's time to drive home the lesson of Russia's 13% flat tax - the lowest in Europe. It's amazing what it did to the Russian economy. It blows all the arguments against tax cuts out of the water, as did the 18-year economic boom given to us by Ronald Reagan in the 1980's. "
It's just silly to compare Russia's economy with that of the US with regards to tax policy. The vast majority of people in the US pay the vast majority of the taxes they owe. In Russia, and many other developing countries, many people don't pay any taxes, or they hide much of their income. What is their GNP? Perhaps even Seattle has as large a GNP as all of Russia with several hundred million people, vs our couple of million.
Certainly, if we reduced taxes, then in the short term, we would have more spending. We have seen the effect of this in Seattle, where pretty much every election, we reduce taxes, by removing entire categories of taxes. For example, yearly taxes based on the value of cars are gone, and extra taxes at car purchase time based on the value are gone (we used to have more than regular sales taxes for cars, to help pay for roads).
What's the result of this? The state is paralyzed by tremendous traffic problems, and the legislature struggles to do anything about it. We are on the way to starting an income tax in the next few years, although no politicians are willing to face that.
In Washington state, our dire transportation needs are so much that BUSINESSES (virtually all business organizations throughout the state) want to RAISE TAXES to pay for the needed transportation needs.
Whether you think this is evil or not, taxes are used for useful things like roads, defense, police, schools.
-nick |
