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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Terry Maloney who wrote (267419)	11/15/2003 4:09:55 PM
From: GraceZ	Read Replies (3) \| Respond to of 436258

There is an optimum level for taxation. Somewhere between 0 and 100% there is a rate where the economy operates efficiently and taxation doesn't inhibit economic activity or increase ridiculous distorting tax avoidance activity. For the middle class this is a level somewhere between 20-30% average tax (including Fed, state, Real estate and sales as well as the various user fees). When it starts creeping past that level (which it has been in this country and has been in EU countries for some time) then it has the effect that taxation becomes a very large incentive trap. No one has an incentive to conserve, they have an incentive to try to get as much back from the government as they possibly can. This country is full of groups that work round the clock to try to get funding from the government for their particular special interest group, as much as they can. The government supports all sorts of endeavors that our founding fathers had never dreamed of when they drafted the Constitution. We were a nation of self sufficient people that have become a nation of dependents in need of government assistance for everything from buying a house to feeding their children. It's hard to believe that the descendants of a lot of Californians walked across the country next to covered wagons and not that long ago. They did it without government subsidy or tax incentives. I'm sure you know what an incentive trap is, but for those of you who don't, here is a quick explanation: It's like going to dinner with a large group knowing that you will pay an equal portion of the bill regardless of what you order. Since you will pay regardless of how conservative you order, it's in your interest to order the most expensive item on the menu because if you order a salad and mineral water you are still paying as much as the guy next to you when he orders the filet and lobster.