This is the Preface of my coming book.
One of the oldest Jokes of Mankind contemplates the inevitability of Death and Taxes. It is rhymed in almost every human society, and has been through much of these societies histories. Leadership always desires payment for itself. It also desires funding for its own pet projects, sustenance for their own personal expansion of power and support; through the use of public funds to enrich the Few, whose support is necessary for continuance in power. Many would claim this a Sour view of Politics; but in its study, One reaches the conclusion no public effort would ever be undergone, if such effort did not benefit some privileged segment of the body politic.
A Case in point can be derived from the Advertising and Entertainment industries, during the Period of the Second World War. Both Industries suffered from personnel shortages, increased supply materials costs, and constriction of shooting schedules and locations. They were intensely supervised by Government, to insure they conformed to the current propaganda effort of the Government; a process which caused an average delay of two months in the production schedule. Both Industries showed consistent Profits in excess of any seen before; all due to very rich Government subsidy. It can be shown these Profits would not have been present with the same level of production evident before the War. It can even be proven levels of production associated with the War would not have produced such Profits, without Federal subsidy.
The Author means not to discriminate against these Industries, who probably expressed as high a level of Patriotism as shown by American industry during the War. They were precisely used because the two Industries actually expressed the lowest markup of wholesale prices for their products as any in America during this Period, and still derived a greater enrichment through Government subsidy. Business personnel who rant against provision of Government supply, because of suggested low profitability; directly lie through their teeth. There is no more lucrative production in existence, especially in the United States.
One of the great angers of Taxpayers lay in the fact they get little market value of purchase with their Tax dollars. Government siphons off the cost of Tax collection, then payment of themselves; all such Wages consistently higher than private employment. They then dispense the remainder of funds to sectors which generate the greater political support; mostly of benefit only to special interest groups outside the general polity. The Government again intervenes to award Contracts based upon the acquirement of additional political support, so the Contracts are slanted to raise Supplier profits higher than the Norm of private business. The above operation cuts approximately Sixty percent of the purchasing power of the Tax dollar. It does not appease the general Taxpayer when this loss of purchasing power provides enrichment to special interests; almost always possessing higher Income and Capital than they themselves; worsened by Tax Break privileges granted to the privileged classes.
The above is not a rant against the American system of Politics, for it stands as the modus operandi of all political systems; no matter how organized. The Privileged subsume control of political leadership, in order to better their already present advantage. Revolutionary regimes inevitably simply institute their own Privileged Class, simply changing the criteria of admission to the special class. There remains no way to forestall the progression of Politics, which retains no difference from Corruption itself. The degree of political corruption can be quantified by the longevity of the regime. We are not on a perfect World; one does not exist.
The evils of Tax use stands in the realm of the Philosopher, not the Economist; both understand the hazards of taxation, but the Economist goes further. He understands the mode of taxation can bring additional duress to Taxpayers, through the simple manner of their implementation. The additional duress expresses itself as greater difficulty for the Taxpayer in the simple process of making a living. Taxes can destroy this ability, not just through simple theft of their property by Government; but in the manner this theft takes place.
The Author must here state he understands the process of Community Services provision, along with the payment of Infrastructure costs. A minimum level of Government stands as mandatory, else the economic process reverts to a tribal level of production. He would like to state for the Record, though, taxes continue at a minimum diversion theft of at least a quarter of the total collected; maintaining a systematic enrichment of privileged classes, all of which is of little benefit to the general polity. Most will discount the above as Liberalism expressing animosity to business; it is not!. Tax Policy Economists continue as enlightened Conservatives, who see large Government budgets for what they are; payments to underwrite an aristocracy, one which is inherently destructive of economic opportunity for the common Citizen.
Government has advanced a great distance from Roman times, where the Senate let Tax Farmers bid on regions of the Republic, and later Empire. Whoever bid the most received control of the region, where he could extort what funds he could from the populace by any means; retaining control as long as he sent back to the Senate what funds he had promised. The tax rate depended upon how many Sword-wielders the Tax Farmer could hire. The after-tax income of the Populace became whatever they could effectively hide. It does and does not remind of the present operation.
This Work examines some of the past efforts of Governments to collect Taxes. It goes further to examine the economic effects specifically of the manner of collection, as well as the social ramifications. It continues to examine some of the current operational systems for collecting Taxes, and examines the effects of these efforts. It finishes with the presentation of certain theoretical tax systems, with estimates of their potential economic impact. The total will hopefully raise common understanding of the process of Taxation, its resultant economic impact, and how certain elemental changes in the taxing systems could improve economic performance.