The problem isn't taxes... the problem is that we have socialism in the public sector. Lowering taxes is good in the sense that it reduces the size of the problem... but as long as we have socialism in the public sector there will always be negative externalities... such as unnecessary wars. The government will borrow money to fund these wars and then taxes will go back up.

So the solution isn't to lower taxes... it's to create a market in the public sector by allowing people to choose where their taxes go (pragmatarianism). In a pragmatarian system... congress would still control the tax rate. The difference is... taxpayers would control congress's funding. So if taxpayers weren't happy the tax rate... then they could boycott congress.

What do you think would happen to the tax rate? At first I was pretty darn certain that the tax rate would decrease... a lot. But then, after thinking about it... I came to the conclusion that the market in the public sector would actually be better than the market in the private sector. Why? Because the value signals in the public market would be more accurate.

The foundation of the private market is "one price fits all" (OPFA). But does one price really fit all? Does everybody who purchases a book for $7 value it equally? Of course not. Everybody's different so one price really does not fit all. As a result, value signals in the private market are inaccurate. They aren't totally inaccurate but they are still inaccurate.

In the public market though... the foundation really would not be OPFA. Maybe I value space colonization more than you do so I'd spend more of my tax dollars on space colonization than you would. So value signals would be more accurate and the tax rate would increase until it reached 100%.

In any case, you're right that the current system cannibalizes itself. But attacking the tax rate really isn't striking at the root of the problem. The root of the problem is that we have socialism in the public sector. As long as you condone some socialism... you'll always inadvertently undermine your case for markets.