Often we’re told that we’re overtaxed, we pay too much in taxes. But how do we know that?
I understand looking at the percentage we pay in taxes, but that doesn’t necessarily mean it’s too much. It’s like saying milk costs too much, but only saying the proof is that it’s more than we want to pay.
How do we decide what the proper amount is? Is it determined by what it pays for and whether it covers costs? If it doesn’t cover the expenses it’s supposed to cover, is it not enough? Should taxes be raised if expenses aren’t being covered? Or is that a separate issue of efficiency?
If we pay 75% of our income into taxes and that effectively covers everything we want taxes to cover, wouldn’t that mean we’re not overtaxed? Even though it’s a high tax rate, it wouldn’t be overtaxation, right?
So how do we determine what the appropriate amount is?