re: On a dollar basis, taxation does not hurt nor benefit an economy

quote:

---

Hemp, is money destroyed when it is transferred? NO

---

Certainly not, but this isn't about money supply, it's about allocation and distribution.

quote:

---

because someone who received the money will most likely be spending it.

---

Just as a thief would.

quote:

---

The vast majority of taxation goes, eventually, into the pockets of people that will spend it.( people on state aid, government employees, etc). This money eventually goes right back to the businesses that pay for it.

---

Good grief. Might as well walk around breaking windows so we can all become "rich".

quote:

---

If the firm doesn't spend that money it effectively disappears from the economy.

---

Good lord.......

Authority, what money is taken out of the economy when taxation occurs? Do gov workers and gov dependents not put the money back into economy

quote:

---

And on a work/calorie basis, there's no difference between walking and running in exercise. As long as you ignore the efficiency of things.

---

Was going to type a much longer post but this is basically the crux of it.

Generally, the private economy will spend the money more efficiency thereby increasing productivity resulting in higher growth. In other words the same people WON'T be getting their money back and some portion will be diverted to *ahem* economically less than maximally efficient recipients.

NOW, there are some policy goals where spending is done more efficiently by the government (court system, public safety, infrastructure). So the above assumes some minimal level of spending to meet these basic goals/functions of government.

quote:

---

NOW, there are some policy goals where spending is done more efficiently by the government (court system, public safety, infrastructure). So the above assumes some minimal level of spending to meet these basic goals/functions of government.

---

I would say this is debatable. Except for a true court system, there are public entities that are involved in your other examples. If the government was more efficient in public safety, then there would be no mall cops. The mall would pay the local government to supply security. The government does not actually do most of the infrastructure work. They take bids from private companies and outsource the work. They do some maintenance, but I wouldn't say it's efficient.

quote:

---

I don't think you understand my point. Let's say that a grocery business owner loses a thousand dollars in tax money that goes toward SNAP funds. The SNAP recipients are going to give that money right back to the grocer.

---

But that grocer would not get exactly what they put in.

There is some chance they could get more and some chance they get less. They problem is that this redistribution is based on political goals and not market forces. Now maybe that is a good thing for all sorts of reasons, but it certainly isn't an efficient thing. And that lack of efficiency hurts the economy.

Take an absurd but illustrative example. Let's say everyone pays their taxes but they immediately gets back what they paid (like withing 24 hours for 95% of the the population). No effect right?

But you can't do that. You would need some minimum government to collect the taxes and send them back. Plus all the time and energy spent filing the taxes from the private sector. So even though people might get back 99.999% of what they sent in, some of it was siphoned off for a relatively unproductive use.

quote:

---

Authority, what money is taken out of the economy when taxation occurs? Do gov workers and gov dependents not put the money back into economy

---

What money is taken out if we break every window in the country, then put lots of people to work repairing them?

You're premise is a variation on the classic broken window fallacy.

We could just as easily cure unemployment by getting half of the unemployed to dig holes, and the other half to fill them up.

Malinvestment is a real thing. If you want to generate wealth, you have to spend capital on economically productive pursuits.

quote:

---

It is a net zero on the functioning of the economy.

---

Taxation = The Government (be it a dictator or The People) making decisions instead of the market. In some cases this is good as we tend to be more grasshopper than ant and there are many things we undervalue as a market but not as a society, such as security/insurance when there is no present threat. However, even if there is good justification for going against the market in some instances, I think it is well documented how much less efficient and effective our government is than the market in many, many areas. Taxation is not a net zero because it puts too many resources in the hands of inefficient producers and unnaturally motivated consumers.