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Earl Aagaard’s opinions about everything that interests him. Og also enjoys gardening, travel, reading, woodbutchery, and lots of other stuff.
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Economics
Monday, March 07, 2005
FORMER COMMUNIST NATIONS LEAD THE WAY…....THEY KNOW THE TRUTH FROM EXPERIENCE!
There’s a growing number of countries around the world abandoning the progressive income tax - the great monument to class envy that substitutes appearances for reality. The major “gift” of high marginal tax rates is slower economic growth, and lower living standards for average citizens. BUT, we all get to “stick it to the rich”, right? Well, NO, actually:
...as former California governor Jerry Brown pointed out during his 1992 presidential campaign, the rich will always be able to hire experts to lobby for tax loopholes and avoid the higher rate traps set for them.
Indeed, under existing flat-tax systems the wealthy end up paying a larger share of total tax revenues. In flat-tax countries, taxpayers in the highest brackets move from consumption or tax-sheltered investments to more productive, taxable investments. Many higher earners work harder or take additional risks, rewarded by higher after-tax returns.
So, if rich people pay more of the costs of government under a flat tax, WHY do we keep the complicated, expensive, and frustrating system we’ve got now?
Envy and the lust for the political control that complicated tax regimes can provide are powerful motivations to keep progressive tax systems in place.
What’s REALLY fascinating is that, despite the fact that the graduated income tax was #2 on Marx’s list of things a society based on class struggle simply must have,
every country that has adopted the flat tax is a former communist nation—except Hong Kong, the modern originator of the concept, which has seen its new communist rulers retain the flat tax as a centerpiece of its economic policies.
Perhaps we shouldn’t say “Despite the fact…”, but should substitute “Because of…..”! Maybe the formerly Communist nations know something that our political class is ignoring, and trying to hide from the rest of us…......READ the whole thing…..
Reading
- BlogsForDummies :)
Web resources
- Arts & Letters Daily
- Ravi Zacharias
- Southern Adventist University
- The SAU Biology Deptartment - where I work with a bunch of very neat people.
- Venezuelan news—FROM Venezuela