link to original reddit post by /u/whatafoolishsquid
Microstates like Hong Kong and Andorra always have incredibly low tax rates relative to other developed nations (among other classical liberal policies) and incredibly high economic success. Yet there is seemingly no "trade off." These countries also have all the same social programs that statists use to justify high taxes like public health care and *gasp* roads.
Granted, microstates rarely fund their own defense, but this hardly seems to make up for the tax difference when even in a military behemoth like the US, at most 16% of your tax dollars (only accounting for federal taxes) are going to defense.
In a high-tax European nation like Spain for example, only 3% of revenue is spent on defense, while the tax rates are a MINIMUM income tax rate of 19% (max 47%) and a 21% sales tax, among others.
Defense can hardly makes up for the tax difference with Andorra, which is right next to it and has the lowest sales tax in Europe (4.5%) and a MAXIMUM income tax of 10% (that they were bullied into).
So what gives? How does one even begin to justify these high tax rates? What is being paid for?