Thoughts on taxes
Government needs revenue for various things it needs to do - military, infrastructure, providing services, for providing some social security and to pay federal administration among other things.
Governments raises taxes in various ways
income
property taxes
capital gains taxes
sales/consumption taxes
payroll taxes
estate taxes
corporate taxes
From a USA perspective, over the years there have been arguments about how one tax or the other incentivizes one thing or the other. For e.g. proponents of low capital gains taxes argue that it increases investments. And various governments have set various taxes at different levels. These different exemptions and levels have some unfair consequences - like long term capital gains tax at 15% is lower than 22% on income if someone makes more than 48k after exemptions. Various governments have tried to correct this inequality but it hasn’t really changed. And various governments have tried to reduce the taxes as they believe government is not really spending the tax money efficiently so they shouldn’t tax much. If governments don’t raise sufficiently money, then they will need to cut back on services or borrow money to pay for them. It seems taxing consumption with exemptions for food/medicine seems like a good way to tax since it incentivizes earning for consumption and it needs to be paid more by those who consume more.
Other countries tax more and provide more safety net to their citizens. There are some arguments that it decreases their economic dynamism. Tyler Cowen strongly argues that higher growth rate automatically lifts everyone though the wage growth relative to inflation in the past few years doesn’t prove that out.
What are the rational course of actions ?
Governments should have enough money to at least provide the basic common services - police, fire, roads, parks, libraries and schools. So support this ability instead of cutting taxes to the bone.
As an individual, asset owners benefit more, it is important to work hard to earn assets rather than relying on wages as soon as possible.
Sources: various economists(more from Tyler Cowen) /llms/youtube.