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If we take socio-economic mobility as an indication of innovation, and look at effective tax rates rather than book tax rates, the more highly taxed and strictly regulated economies of Europe and the thoroughly Europeanized former colonies have done better than the US in the era of plummeting taxes and deregulation that really kicked of with Reagan.

The only way you can make that claim is if you ignore the over regulation that happpened just before Reagan and during the Reagan years. Holding a mans balls in a vise and clamping it down tighter is not a fair comparison to what he could achieve before you did so.

Also, your wrong to attempt to use socio-economic mobility as a sign of innovation. The biggest innovations in the US would have left people deprived of income and completely offsetting the entire system. As innovation comes about, less work is needed from people which means less pay and a constant increase in less employment. Less taxes make investments possible buy lowing the net gain needed for profit or return on investment which increases the oppertunity for the work thereby increasing the opportunity for income. You need to ask yourself, when is the last time a poor man has given you a job that you could live off of. When is the last time that has happened to anyone you know. It doesn't happen. Taxes take money from people who will give the jobs making jobs less likely to be found. The government then attempts to spend the money which creates a demand which causes jobs to be done. However, because the government is more or less a middle man here, the problems is that the same money is less efficient when the government passes it around. Of course you then get into targeting sectors and stuff like that but that can just as easily be accomplished by targeted tax cuts and direct subsidies.

I often have to backtrack from what people assume my position is when I say things like that.

I can see how you might look at the numbers and come to the conclusions you have. But starting in the 1970's, we started over regulating things and getting concerned about worker safety and the environment. Now we also have two separate tax systems, the federal and the local (state and city) which brings the effective tax rates to a different conclusion. Take states like Road Island and South Carolina and California, you will notice that their effective tax rates are higher then others. It's also the case that their unemployment is higher then others. Now there are many factors for unemployment, GM and other automakers moving plants to Mexico for instance is a reason I didn't include it but when normal economic issues happen, the highest taxed areas generally feel it first and the longest with higher unemployment and so on. Being that the federal government's tax rates are universal across the states, it's easier to see the differences within the states. Here are a few pages you can look through for tax information and unemployment information. Like I said, there are a number of things that effect this stuff, but another indication is the cost of living indexes too. The higher taxes areas generally have a higher cost of living which exaggerate the socio-economic mobility effects you were alluding to before.

I certainly think consequences need to be considered. I even think that the consequences of government inaction, deregulation, loss of public goods, et cetera need to be considered.

Personally, I believe there is a balance that needs to be struck between neccesary services and taxes for them and freedom to keep what you earned. If you get too far to one side, it's off ballance, if you get to far to the other, it's the same. And I believe this g

I know we've gone pretty far off topic here, but there is one point I'd like to make. Here in the US at least, no one really knows what their true tax burden is. There are a number of reasons for this, but I think the most overlooked one is the way taxes roll down hill. That is, things that you buy, apart from any explicit tax applicable for that good or service, has a built in tax as well. Corporations who sell goods and services generally try to do so at a profit. If they do, the "corporate tax" they owe isn't picked up by the corporation, it's passed on to the consumer. Just as when a renter pays the property tax with each rent check they make, so do folks who buy a widget pay the "corporate tax" for selling that widget. Corporations also pay taxes on behalf of the people they employ which is either passed on to consumers or to the employee (most likely both).

There are a thousand ways each dollar you earn is taxed in a myriad of subtle ways. Most countries, I imagine, work the same way. My point here is that how can anyone say they are satisfied with the tax they pay (and by proxy the government services they receive) unless they have a full understanding of what their true tax burden is - in fact no one can make this judgment without tax transparency.

Like I said above, I have no idea what my true tax burden is, but I'd be surprised if I didn't pay more than 60 cents for every dollar I earn directly to the government.

This is quite a misleading table, since it doesn't take into account tax deductions etc. Your tax burden in the US, for state & local taxes, is likely to be closer to 16% (10% state & local + 6% Federal):
http://www.taxpolicycenter.org/TaxFacts/overview/f amily_rates.cfm
http://www.retirementliving.com/RLtaxburdens.html
I just looked at my tax returns from a couple of years ago - my effective tax rates were 5% & 4% rather than 10% & 6%, because I deduct mortgage interest, have kids, etc. If you add property taxes my total tax burden would be around 11%. Sales tax here is 5%, compared to 15%+ in most of Europe I believe. I have lived in the UK & I can tell you that the taxes are a lot lighter in the US, despite what the top marginal rates are. From my experience, from a financial perspective, I would want to be earning almost the same in pounds as I do in dollars to have about the same purchasing power, despite the pound being worth $1.87 today. Now, from a quality of life perspective, there are plenty of arguments in favor of living in Europe, but taxes aren't one of them ;)

I got the numbers from here: http://www.retirementliving.com/RLtaxburdens.html

Interesting, so I did some research.

OECD Tax database gives us a pretty close to median level of taxation for those countries when state and local taxes for all countries are figured in. Interestingly however, another unbiased source seems to show the OECD numbers as being a bit low in their local tax numbers. Either way, it doesn't look like we are among the lowest of the nations, unless by lowest you mean lowest 30-40 percentile. We definitely aren't among the highest though.

The reason I challenged the figures in the first place is that the US is modeled after a union, not a centralized govenment. Even though since the civil war it has become much more centralized than it was originally, the state governments still share a very large burden of the job of govenment and hence a large expense that is not centrally collected, so a direct comparison to a near fully centralized govenment is extremely biased towards downshifting an American tax burden. In absolutely no case is the state burden 0% and the actual rate of local taxes is more believable at the OECD reported comparable mean of 6.4% which pushes out of the extreme lower end of the spectrum.

You aren't entitled to drive on public roads if you don't pay fuel taxes. Where I live, state and federal taxes on gasoline amount to 36.4 cents per gallon -- hardly a ripoff. (Find your state here.) If they were making him pay sales tax, that would be insane, but "fuel tax" is a misnomer. It's really road tax.

Actually, free gifts with MAINE tax dollars!!

I am a Maine taxpayer, I know the difference.

As for you sentiments about stealing from some to give to others I agree with you wholeheartedly. Governor Angus King really outdid himself in this case, because 2 months after the laptop program was started, he announced that the State of Maine was in a 'budget crisis'.

The state congress and former governor Angus King held up the old Maine tradition of being totally irresponsible with the state budget. Governor John Baldacci will not be much better I am afraid.

Oh, and BTW, found a list of the U.S. states with the heaviest tax burdens. Maine is the top.

I should really move.