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Three Greater Than Ten?

In Tax on April 7, 2010 at 10:35 pm

According to Reuters, while at a New York Historical Society event on Tuesday, Paul Volcker stated: “If at the end of the day we need to raise taxes, we should raise taxes.” In context, he is talking about two specific taxes that people are very divided over: VAT & Carbon Tax.

My question is, did anyone at that dinner who actually understands history from a high fact oriented perspective have the intestinal fortitude to stand up and ask him why we would ever need to raise taxes? In that History and Science show a different solution.  Namely that Ronald Reagan who lowered taxes actually proved tax rate reductions created more revenue for the Federal Government because more business was accomplished and therefore more revenue generated.  Did anyone show a graph of history depicting what happens when the stranglelold of taxation was loosened?  I think I can answer that question with an emphatic “no”.  If it had been asked, the outraged tax lovers would have run the person out of the dinner and that would have been a bigger story than Paul’s lapse in judgement statement.

Opinion”C” is:

On VAT. In a nutshell it is a national sales tax.  I would not mind this actually.  But NOT in addition to income tax.  Pick VAT and lose the IRS.  At least I get to choose how much tax I hand over to the government by deciding how much I spend on items with a VAT tax.

Carbon Tax.  Joke of all jokes if everyone in the audience was smart enough to know that carbon is the gas released from all humans as they EXHALE.  Yea.  Breathing.  And the TREES LOVE IT.  That is how they grow.  They thrive on it.  So this is not a valid source of income on any level.  I wish it would just be declared the hoax that it is and move on.  Don’t believe me? Listen to a voice of real science: Video

When it comes to tax rates, the less tax extracted per transaction there is, the more commerce there is.  The more commerce there is the higher the volume of purchasing.  The higher the volume the larger the taxable quantity of transactions.  The more transactions taxed, the less tax needed per transaction.  Did you follow that.  If not, here is a question you need to answer, then you’ll get why lowering taxes is better for the economy AND THE GOVERNMENT.

Question: Would you rather have A) 3% of a $1,000,000 or B) 10% of $100,000.

Answer: Ok I’ll give it to you.  If, in fact, you would rather have more money than less, you would go with A, 3% rather than 10%.  Sure 3 is less than 10, but A is $30k and B is $10k.  Of course this assumes the economy would have 10 times the revenue stream because of all that comes with a lower tax environment.  In fact that is basically what would happen if companies were free to GROW.  There is a long story to this and it begs our journey to longer articles that we have to stop here.  But read the works of Mises and more.  You will be surprised how often less is more.

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