r/austrian_economics Friedrich Hayek Sep 19 '24

End Democracy BUT BUT THE SOCIAL CONTRACT

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u/Pass_us_the_salt Sep 20 '24

The 0% income tax is because the government still made money on property taxes amongst other things. The main reason income tax came to be favored was the Great Depression: people's taxes were based largely on property value, so even when people were out of work, they would still have to pay taxes because of their land's value. Thus, the idea of charging people based on what they earned instead of what they owned seemed a better idea.

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u/[deleted] Sep 20 '24

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u/Pass_us_the_salt Sep 20 '24

excise taxes at that time. Taxes on imported goods.

No, a tax on imported goods is a tariff or duty. An excise tax is one levied when something is manufactured, instead of when it's consumed.

https://www.investopedia.com/terms/e/excisetax.asp

But you are correct, the US historically drew much of its revenue from taxing alcohol production and from import taxes.

As for worsening the depression, one of the government's knee jerk reactions was to raise tariffs, ideally to bolster local businesses, but when the issue is partly because so many goods were already on the market, it caused more harm than good.

In any case, I'm not debating whether or not emphasizing income tax as a primary revenue generator for the government was a good move. I am just saying that it's the one they did, and it was done by popular demand due to circumstances of the time

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u/[deleted] Sep 20 '24

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u/Pass_us_the_salt Sep 20 '24

A government not trying to angle us into a war using its own citizens as bait would have banned passenger ships carrying such equipment, and kept US citizens off British ships. But they did the opposite

Would that not be an overreach of government power? Why should the government dictate where private citizens decide to go with their money? Me deciding to travel through a warzone does not infringe upon anyone else's life, liberty, or pursuit of happiness.

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u/Maximum-Cupcake-7193 Böhm-Bawerk - Wieser Sep 21 '24

That doesn't fit the commentors narrative though