Sure, tax evasion is a problem, but the fact is taxes have been on a downward curve for decades now. Wealth and corporate tax evasion is a race to the bottom, and requires international cooperation. Should we just shrug and let inequality grow without bounds? We don't need to restrict people's freedom to move, but the EU and US could for example cooperate on introducing tariffs on companies that base their operations in tax havens. Of course, there is still a lot that could be achieved on a purely national level too.
Well you are obviously on another end of the political spectrum, I consider that taxes are way too high in many countries, and that governments should restrict the scope of what they do instead of increasing the tax burden on generations to come. Obviously this is not a very popular stance to have these days, but I am strongly convinced this is the best one if we are serious about our economic future.
While I am strongly convinced more redistribution is needed if we are serious about the well being of humanity. Economy should be a tool to serve humanity, not the other way around. Unless your head has been stuck in the sand, you might have noticed that pretty much all the increased profits generated since the 1970s have gone to the very few and rich.
Even if you only care about economic growth and not about inequality, there is evidence that economic growth is held back by the current levels of inequality:
> Unless your head has been stuck in the sand, you might have noticed that pretty much all the increased profits generated since the 1970s have gone to the very few and rich.
Unless you head has been stuck in the sand, worldwide poverty has decreased significantly since the 1970s and that's become the market has been more opened than before, not because governments have been overspending.
> Even if you only care about economic growth and not about inequality, there is evidence that economic growth is held back by the current levels of inequality
Bullshit. Inequality increase is obviously normal. Someone who starts with more capital will see their absolute income rising faster than someone with lower capital, so obviously "inequality" will rise no matter what. It would be very strange if it went the other way around. Besides, Inequality is bullshit because the level of life for almost everyone on Earth has increased generation after generation, and the poor have been getting less poor than they were, so for almost everyone it is a positive trend. Look at China, if you want an example of how hundred of millions of people benefit from a newly opened market to get out of poverty.
> Where is the evidence for the case that taxes are way too high? Growing public debt will also be a burden on generations to come.
What evidence do you need? When 45% of you gross salary goes back to the government in taxes, that's the only evidence you need.
EDIT/ And, you know, if you want to help the poor, nobody prevents you from giving your savings and income to charity or to whoever you like. You know, you don't need the government to do that for you with added inefficiency and bureaucracy.
To show that increasing inequality is not inevitable, before 1980 wealth inequality levels in the US were either steady or declining (scroll down to the first graph): http://www.cnbc.com/id/101540240
Yes, worldwide hunger has fallen by 17 percent since 1990 (a lot less than world economic and productivity growth in the same period), but there are still 842 million people who don't have enough to eat. We could pat ourselves on the back and say "well done", or we could consider the fact that we're settling for a lot less than what we are capable of - http://www.wfp.org/hunger/stats
Inequality increase might be "normal" in our current political systems, but that doesn't make it desirable or inevitable. A progressive tax on wealth and income could prevent it from getting out of hand. Inequality is not bullshit, because first of all the extreme wealth in the hands of the rich could go a long way to feed and house the hungry and poor, and secondly wealth is power. Wealth can buy political power through lobbying and campaigning, ensuring that policies tend to shift ever in favour of the wealthy. Thus extreme inequality corresponds to extreme imbalances in power, undermining our democratic institutions.
On the first point, "you could approximately double the incomes of those living on less than $1.25 a day worldwide by transferring to them one-third of the consumption growth enjoyed by the world’s richest 1 percent since 1990. Think of it as bringing the consumption levels of the global 1 percent back to where they were around 2003 or 2004, in return for wiping out global absolute poverty. Is that such an unreasonable tradeoff?" - http://www.businessweek.com/articles/2013-12-09/how-to-end-g...
You claimed the fact that people had been lifted out of poverty since the 1970s was a sign that the economy was doing well. Why then is a 45 % tax such a problem, assuming the people paying it don't end up below the poverty level? Considering what governments provide in terms of infrastructure, safety, education, social security, and health care, is that so much to ask for? It seems only fair to pay back to society for the opportunities provided for us. Also from a utilitarian stand-point societies with less inequality have less crime and improved well-being (assuming the GDP per capita is not too low of course). Tax is a necessary part of a well functioning society, not a bogeyman. We should just make taxation more fair by not making the middle class pay a disproportionate share - the wealthy often pay a significantly lower tax percentage on their earnings due to income being taxed higher than capital gains.
High tax rates do not prevent economic growth, in fact the opposite seems to be the case: "During the 1950s and early 1960s, the top bracket income tax rate was over 90%--and the economy, middle-class, and stock market boomed." - http://www.businessinsider.com/history-of-tax-rates
Tax rates are at an all-time low, inequality levels are soaring, and economic growth is poor. The gains from the high levels of productivity growth we've seen since the 1970s have been accumulating among a small elite. Doesn't seem very ideal to me.
Sure, tax evasion is a problem, but the fact is taxes have been on a downward curve for decades now. Wealth and corporate tax evasion is a race to the bottom, and requires international cooperation. Should we just shrug and let inequality grow without bounds? We don't need to restrict people's freedom to move, but the EU and US could for example cooperate on introducing tariffs on companies that base their operations in tax havens. Of course, there is still a lot that could be achieved on a purely national level too.
The US public debt is at 18 trillion USD, whereas total private net worth is at least three times that amount: http://en.wikipedia.org/wiki/Financial_position_of_the_Unite...
Sounds like it should be possible to reduce the public debt to a more manageable level.