Taxes and Spending

Recorded on 4 December 2010 in Rochester, New York.

The issue is whether current tax rates — which had been in place since 2003 — would stay the same, or whether they would go up in 2011. From this perspective, then, this has been a debate over a tax hike, not a tax cut.

Benjamin Franklin once remarked that the only certain things in life are death and taxes. Modern entitlement programs have created a situation in which efforts to avoid death will make tax burdens unbearable.

The fundamental question is, who is the owner of the funds paid in taxes? Is it the citizens, who have earned the funds and who turn them over under threat of being fined or imprisoned — or even killed — or is it the government?

The voters of Washington State crushed an attempt to levy new income taxes on the rich. The viewers of <i>60 Minutes</i>, however, were just told that such taxes are a great idea. Who is right? Robert Murphy explains the economic rationale behind the voters' choice.

It is incredibly complicated to estimate the total "social cost" of a government policy. Ultimately, this difficulty stems from the fact that costs really only make sense in terms of an individual's subjective preferences. In that respect, costs cannot be aggregated.

Under socialism, the costs of one person's decisions are spread equally throughout society, to the point that that individual hardly feels the penalties of his value judgments — short of illness and death.

Caplan could just as easily have written, "An optimal solution to education would actually involve gang members randomly beating up college freshmen." I am not exaggerating. Caplan's statement is literally equivalent to my own suggestion.

What matters for individuals is not whether they are employed as such but the purchasing power of their earnings.

Because they are based upon a falsehood, Keynesian policies fail empirically, quite obviously to anyone with an open mind.