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The objection to the welfare system, or to national defense, or to national parks, for that matter, is peripheral to the discussion of tax fairness. A lot of people oppose ANY form of taxation when the proceeds are used for entitlement programs. A lot of other people oppose spending on national defense, but in my experience they rarely object to "taxing the rich."

Cam, the fact that we still have money left over after taxes to engage in equity investment doesn't address my point, which is that in a society founded upon the principle of POLITICAL equality under the law, it is fundamentally inconsistent to impose differing tax burdens based on income. If we get drafted to fight in Iraq, the USA doesn't expect me to serve twice as long. I don't get two votes when someone with lower income gets one. The fact that our government CAN impose a higher tax burden doesn't necessarily mean that it SHOULD, I guess.

I don't completely follow your point about inefficiency of private investment if dollars were shifted from taxes to other forms of spending. In fact, with our lower tax rates on capital gains and dividends, the system is encouraging investment in equities. I'm not sure if your point is that retail investors lack the sophistication to differentiate between a good investment and a bad one, or that our consumption of scarce resources is an equilibrium between the availability of capital for investment and taxes.

Hey, taxation can be thought of as a form of consumption spending that's not strictly market driven-- a "command" part of the economy vs. a "demand" part of the economy like the private sector. The decision to spend tax dollars on missile parts or cheese isn't driven by market forces, it's driven by career bureaucrats doing their best to assess forward demand for those things, which by its nature will result in spending on the wrong stuff, allocation of resources where they don't belong, waste and a whole lot of noise. The difference with respect to the private sector is that the decision to TERMINATE an unprofitable activity comes a hell of a lot quicker, e.g., a pharmaceutical company, attempting to develop a blockbuster drug, will terminate their clinical trial and stop wasting money as soon as they fail the primary endpoint. Contrast that with the willingness of government to carry on even when it appears futile. . .

You guys that despise welfare, do you despise progressive taxation because of the disincentive it represents, or would you oppose a flat tax if the proceeds went to welfare, too?