Ideally one could indeed argue that it should be set as low as possible. OTOH there are also some practical concerns which IIRC is why Germany made it 5 % to prevent the problem caused by extremist parties as seen in the Weimar Republic. (technically it is possible for a party to get in with less than 5% but requires winning 3 constituency seats which is rather rare)
A minimum of 5% might be the best for large nations as regional differences could produce too many small parties. Israel is a good and perhaps a unique example of way too many parties for such a small country.
TBH I do not see that allowing more parties automatically means extremist groups. Nor do I see many of them in the countries I mentioned. There might not even be that much of a difference between them but it can enable a voter to shift his vote to another party or candidate without feeling he is voting for the "other side".If an idea is such that the vast majority of people don't support it, then those that do can either try and persuade them or maybe the idea just sucks you know. If the group is big enough it is courted by one of the 2-party groups.
Don't you think having less influence from small special interest extremist groups is a good thing?
Of course it is all rather moot as USA has a separation of powers which makes the Congress not as important as it would be in a parliamentary system.
There are several ways to do it but I just think the voters deserve more choice than they currently have in USA.
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