We may agree to give up a portion of the wealth we create in order to pay for such public goods as national defense and a system of justice. But we don't give the government an unlimited claim on our money to use as it sees fit. Private individuals and businesses use money more efficiently than governments do. People with their own money at risk spend or invest it carefully. Money will do more good for more people in private hands than in government hands.
High taxes discourage work and investment.
High marginal tax rates also discourage people from working overtime or from making new investments. But most economists now agree that a reduction in marginal tax rates will increase output to some degree. Income taxes should be cut because the overall tax burden is quite high right now. As of the third quarter of 2000, federal revenues as a share of the gross domestic product hit a peacetime high of 20.8 percent. Prosperity has made Americans more accepting of the rising tax burden, but the current economic slowdown will make high taxes harder to bear.