Comments on: Tax debate should bypass old German theory Mon, 26 Sep 2016 03:26:00 +0000 hourly 1 By: jayar39 Sat, 09 Oct 2010 01:00:34 +0000 The history of ROI on marginal investments actually supports Wagner quite well. As societies expand their wealth and use of resources, greater amounts of the GNP are invested in economic and social activities intended to solve global social problems and to control economic activities: transportation, extraction, manufacturing, agriculture, etc. Eventually, the return on these marginal investments must, and will, become negative. The government’s role is pivotal: to collect taxes at an increasing total amount needed to fund an increasing amount of activity, including control and regulation.

For good overview of this in action – Roman Empire to present – see Tainter, J., “The Collapse of Complex Societies,” 1991. Although Tainter approaches his thesis from an archaeologist’s point of view, his research is solid and he includes numerous economists in his citations.

It is almost universally thought that taxes should be less and, by corollary, that government should spend less and be smaller. Similar general agreement will not be found on what and where to make those spending cuts.