Open Veils · Answer
What is the optimal level of taxation?
There is no single 'optimal' tax rate — the answer depends entirely on what you are optimizing for. Austrian and libertarian economists argue the optimal rate approaches zero; Georgists argue land and resource rents should bear nearly all taxation; MMT theorists argue taxes exist primarily to control inflation, not fund spending. The Laffer Curve debate places the revenue-maximizing federal top rate around 39%, but revenue maximization and human flourishing are entirely different objectives.
Evidence
- G. Edward Griffin and Murray Rothbard framed taxation itself as institutionalized coercion — Rothbard arguing in 'The Ethics of Liberty' that no rate of involuntary extraction can be called 'optimal' from the perspective of natural rights.
- Richard Werner's credit-creation research redirects the entire framing: governments that issue sovereign currency do not need tax revenue to fund spending in the conventional sense.
- Hudson's work, particularly 'Killing the Host,' documents how the post-WWII tax structure was progressively dismantled from the 1980s onward, shifting burdens from capital to labor.
- The Tax Foundation's Laffer analysis (October 2026) pegs the revenue-maximizing federal top rate at 39% — nearly identical to the current 37% — suggesting diminishing returns on further increases.
- Ron Paul has consistently echoed this, noting that the income tax as a concept was alien to the American founding and was introduced alongside the Federal Reserve in 1913 as a coordinated control mechanism.