India Uncut

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Wednesday, August 24, 2005

Hey, that's our money

It is perhaps no coincidence that the most popular Desi blog, Sepia Mutiny, also has the most interesting comments, which often take the discussion significantly forward instead of being just a forum for rants and back-scratching. Here's an excellent comment I came across on a Sepia Mutiny post by Vinod, by someone named GC, which explains succintly why low taxes are good for us:
[S]uppose you paid $1000 in taxes, and got a line item bill of exactly what that was spent on. Say $100 on defense, $50 on poverty, $500 on politician's salaries, and so on.

Here's the thing: you aren't choosing how that money is spent. Some of the things on that list are things -- like food or health care -- that you could have chosen to buy for yourself. For many of those goods, you would get a better price and a better product than the one the government got you... because you know your situation, your tastes, and your needs.

In other words, if you got that tax bill, many people would compare it with the bills they voluntarily incur. And they would find that it was an inefficient use of resources... and if possible, they'd opt out of paying those taxes.

That's really the key point. There's a box on the tax form that you can fill in to send more $ to the government. At any time you have the choice of giving up any amount of your income to the government to spend as they see fit, hopefully on your behalf.

Most people don't fill in that box, because most people know that they will allocate that money more efficiently for their own benefit than some distant third party.
That isn't an argument for no taxes. (There are other arguments for that, though none that I think apply to India yet.) But it is an argument for the government getting out of all areas in which the private sector can enter, because the private sector will invariably be more efficient, and the taxpayers' money will invariably be wasted. Remember, everything the government does is paid for by you and me. We have a right to demand that they spend it carefully, and they spend it well.
amit varma, 9:08 PM| write to me | permalink | homepage

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