Capitalism and Taxes

While people are generally governed to a large extent by self interest, it isn't often that self interest and the good of the country don't go well together.

It was called the invisible hand of economics and the idea is that everybody pursuing what is best for them will result in the overall best result.

There are some problems with that, the different level of power and influence being the main one, but generally it works pretty well and is to a large extent the basis of capitalism.

No other system has in fact produced greater economic well being than capitalism.  We do have to remember that capitalism is in fact an economic system, not a social one.

Since it does in fact generate the most wealth it provides the greatest tax base.

This is where capitalism as an economic system needs to serve the greater needs of society.

It is never generally in anyone's best economic interest to fund social programs, at lest not directly.  Of course it does help stabilize society and make economic pursuits safer.

This leads to the question of what tax levels should we have to fund social programs?

Well economically it should be the largest amount that doesn't impact economic growth.

Since economic growth is the engine that drives the economy we don't want to kill it, but a tax rate is a funny thing as far as motivation goes.

At every tax rate, a capitalist will engage in activities that are profitable.

We hear some proposals talking about Tax rates as high as 70%.  We had those during some of our most prosperous times.  We have now made it possible for those who have been helped the most by this country to pay a much smaller share in the name of tax relief.

Creating an environment for success is essential but tax rates are seldom much of a factor.  Funding the programs that promotes the good of the many over the few is the role of government.