Comment by shimman
9 hours ago
No, this is the core of a particular brand of politics: neoliberal politics. Where the financialization of everything is what's most important. There was a time, still in lived memory, where the US government was able to complete many types of projects and it also coincided with the period of lowest economic inequality (the great compression), the expansion of civil rights, and had the highest taxes against the elites this country has ever seen.
Obviously if you hate democracy you'll want to destroy this system, which is what they've been working at for the last 50ish years.
Tax rates are not the same as effective taxes paid, and US taxes as a percent of GDP are at an all time high. This is besides the fact that gdp is many times higher, growing geometrically.
It is an interesting question of what changed in terms of ability to execute, but lack of funding isn't the answer. I suspect it is a combination of scope creep, application to intractable problems, and baumols cost disease at work.
> Tax rates are not the same as effective taxes paid
Correct, but the tax system is nonetheless quite effective at setting behavioral incentives and disincentives. Higher income and estate tax rates incentivize capital being locked up in investments instead (for lower capital gains taxes); those investments put people to work and are subject to Labor negotiating higher compensation. Allowing donations to non-profits to deduct from other taxes allows private individuals (compared to a government bureaucracy) to more efficiently fund social welfare programs, which incidentally, also put people to work in the administration of such programs.
Funding government is not the sole goal of higher taxation rates, but rather, also how incentives in society are shaped.
Don't forget vetocracy.
Every regulation, whether it's environmental, DEIA or anti-fraud, adds a few steps to each project. With enough regulations and enough steps, things just slow down to a crawl.
As governments and legal systems get older, they get into more and more situations where a bad thing happens, and the politicians must show that they've done something to stop a similar thing from happening again. Nobody can publicly admit that it's fine to letting a 5-year-old kid die once in a while, even if that would be the right call. This results in more and more layers of regulation being added, which nobody has an incentive to remove.
I found this from the Federal Reserve: "Federal Receipts as Percent of Gross Domestic Product"
https://fred.stlouisfed.org/series/FYFRGDA188S
It looks pretty steady around 17%. It was as high as 20% in the late 1990s. However, this does not include state and local taxes. I could not find a source for it. What is your source of information?