White House Burning..Our National Debt

169 "...tax systems should be simple. A more complicated system not only increases administration and compliance costs but also creates opportunities for legal or illegal tax evasion: For example, Google funnels its revenues from European operations through a subsidiary in Ireland, a subsidiary in the Netherlands, and another Irish subsidiary located in Bermuda in order to legally avoid billions of dollars in taxes--not only lowering government tax revenues but also diverting large amounts of money to lawyers and accountants whose main business is tax shelters."http://www.amazon.com/White-House-Burning-Founding-National/dp/0307906965

"...the corporate tax amounted to 4.8% of GDP in the 1950's and 3.8% in the 1960's, it fell to 1.9% by the first decade of the 2000's and only 1.3% in 2010.  Including state taxes, corporate taxes in the U.S. are among the lowest as a share of GDP in the industrialized world." (even though businesses and their lobbyists complain that the 35%  RATE is the (second) highest in the world, loopholes make it one of the lowest real taxe rates in the world). 121

Since wage income has a cap of 106k for social security taxation,  someone who makes only 50k will pay 15.3% of his/her income; while someone who makes 200k pays 19k or a rate of only 9.5%.  ...a regressive tax rate rather than a progressive tax rate. 120

 Regressive taxation now accounts for 6% of GDP while in 1950's only 2%.  Hense "..an increasing share of government revenues have come from regressive rather than progressive taxes, shifting the overall tax burden onto lower-income people."

If we raised the cap to 250k, Social Security would be viable for 75 more years.  Easy fix--unless you're wealthy. 120

Given that modern societies depend upon markets to "produce outcomes that are beneficial for everyone...much of modern economics is devoted to identifying and explaining the many situations where pure free market systems fail to produce socially beneficial outcomes.  The limits of the free market are one of the major conceptual reasons we need governments." 167

http://www.politicususa.com/bernie-sanders-exposes-18-ceos-trillions-bailouts-evaded-taxes-outsourced-jobs.html

"In a low tax/low benefit world, you bank account is a little bigger (if you make enough money to pay taxes), but you face more risk of running out of money in retirement or not being able to afford health care; in a high-tax/high benefit world, your bank account is a little smaller but you face less risk.  Since rich people are better able to self-insure, they gain less by pooling their risk with other people, and so they might be better off in a low-tax/low benefit world; poor people cannot self-insure, so they gain the most from risk pooling, and they will be better off in a high-tax/high benefit world. 134

"Compared to current policy, reducing benefits so we can keep our low tax rates is a form of redistribution from the poor to the rich; raising taxes so we can maintain todays benefit levels is a form of redistributing from the rich to the poor (assuming tax increases are progressive)." Either way will work. What we decide is a political decision not an economic one, and it depends on what kind of government we want. 134