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Comment by pdonis | Hacker News Reader

> Taxation is the proper remedy for breaking this power.

No, it's one possible remedy, and historically it doesn't appear to have worked very well. The fundamental problem with taxation is that governments are even worse than individual billionaires like Jeff Bezos at choosing what to do with large amounts of money.

Another possible remedy is to reduce the power of governments, so there is less value to be captured by influencing them. IIRC pg recommended this fix in one of his (fairly early) essays.

> We won't know what's possible until we stop letting barons write the laws.

If you think taxation stops this from happening, I have some sad news for you.

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> The fundamental problem with taxation is that governments are even worse than individual billionaires like Jeff Bezos at choosing what to do with large amounts of money.

Citation needed. When Governments had lots of revenue, they assist the population with public services, which tend to benefit the lowest stratum of society the most. But the cumulative effect is to raise the quality of life of society as a whole. There is little evidence that billionaires have that kind of effect on society as a whole (outside of a few notable exceptions like Gates).

Having a billionaire class that has so much resources that they can influence public policy and Government... is an even worse outcome, and could be considered the only reason to dismantle this class. The Government is elected by the people (in a democracy) and having mini-kings is absolutely detrimental to the health of our democracy.

> Citation needed. When Governments had lots of revenue, they assist the population with public services, which tend to benefit the lowest stratum of society the most. But the cumulative effect is to raise the quality of life of society as a whole.

Citation needed.

> > Citation needed. When Governments had lots of revenue, they assist the population with public services, which tend to benefit the lowest stratum of society the most. But the cumulative effect is to raise the quality of life of society as a whole.

> Citation needed.

That's actually fairly uncontroversial. Small government fetishists insist that left unfettered the flourishing market and voluntary charity would more than make up the resulting gap, but any evidence to the contrary is generally taken as proof that we just haven't lowered taxes and deregulated enough.

The defense of Communism that it hasn't actually been tried for real yet doesn't make any more sense when applied in turn to laissez faire capitalism.

On the other hand, we have quite a bit of data about the broad middle ground, and it is pretty clear that the current settings for the US economy are that taxes are currently too low and not progressive enough (how much is a matter of some debate), and that we probably need to revert to Reagan-era levels if only to be able to afford to refresh and replace crumbling public infrastructure that has been a drag on the economy for a while (because putting off maintenance doesn't save money in the long run) and step up enforcement of existing regulations.

> Small government fetishists insist that left unfettered the flourishing market and voluntary charity would more than make up the resulting gap

I'm not making this claim. I'm making the claim that the government does not actually provide all the benefits you are assuming it does, so the "gap" you speak of, if it exists at all, is much smaller than you think it is.

I think most people simply aren't aware of how much inefficiency there is in government services or how much of their tax money does not actually go to benefit the people they think the government is helping.

If all we expected the government to do was to provide basic national defense (not aggressive foreign wars, just keep the US itself from being attacked), enforce basic common sense regulations (laws against obvious crimes like murder and regulations against obvious bad things like dumping toxic waste in rivers), and maintain basic public infrastructure (roads, bridges, public buildings, basic utilities, national parks), we would not have nearly as much inefficiency. The problem is that we expect the government to do much, much, much more than that, and the government does all those other things so inefficiently that, on net, it would be better if we left them to private entities.

I'd like to point out that regulations against dumping toxic waste into rivers (or enforcement thereof) is exactly the sort of government service that is most often targeted by the folks who are pushing for deregulation.

Anyway, feel free to advocate for greater efficiency in government, by whatever means, including public-private partnerships or full-on privatization. More discussion of what services are needed by society and how best to provide them is generally a good thing.

> Citation needed.

How Effective is Government Welfare Compared to Private Charity? [0]

“[Government] income redistribution agencies are estimated to absorb about two-thirds of each dollar budgeted to them in overhead costs, and in some cases as much as three-quarters of each dollar. Using government data, Robert L. Woodson (1989, p. 63) calculated that, on average, 70 cents of each dollar budgeted for government assistance goes not to the poor, but to the members of the welfare bureaucracy and others serving the poor. Michael Tanner (1996, p. 136 n. 18) cites regional studies supporting this 70/30 split.

“In contrast, administrative and other operating costs in private charities absorb, on average, only one-third or less of each dollar donated, leaving the other two-thirds (or more) to be delivered to recipients. Charity Navigator, www.charitynavigator.org the newest of several private sector organizations that rate charities by various criteria and supply that information to the public on their web sites, found that, as of 2004, 70 percent of charities they rated spent at least 75 percent of their budgets on the programs and services they exist to provide, and 90 percent spent at least 65 percent. The median administrative expense among all charities in their sample was only 10.3 percent.”

Later on Edwards adds: “In fact, the average cost of private charity generally is almost certainly lower than the one-quarter to one-third estimated by Charity Navigator and other private sector charity rating services…” and tells why.

The bottom line: Government spends about 70% of tax dollars to get 30% of tax dollars to the poor. The private sector does the opposite, spending about 30% or less to get 70% of aid to the poor.

[0] https://www.theadvocates.org/2013/06/effective-government-we...

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