No. of Recommendations: 0
In my mind, Optimal Tax Policy is what results in the largest overall amount of taxes going to the Government over the long term. That sounds counterintuitive, if not blasphemous, to tax hawks, but think about it. Lower rates increase tax revenue, but only to a point. If the Government were to simplify taxes and lower the rates, they would receive as much or more as they do now. If the Government were to look at the long term, they would be motivated to keep tax rates as low as possible, while still paying off debt as quickly as possible.

I don't think we need to worry about the situation about paying off our debt too quickly such that we would need to lower rates beyond the tax maximization point, at least in the short term.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.