A Conversation for Economics

50% Taxation

Post 1

Researcher 92294

Governments do not operate in a state of poverty in spite of 50% taxation rates - it is because of them. If you are prepared to cut my lawn provided you end up with $10 in you pocket; then I must have $20 in my pocket first to cover your $10 and the $10 for the taxman. However, to get $20 for my own pocket; I must find someone with $40 in their pocket prepared to hire me first. Every dollar's worth of work that I do for myself instead of hiring someone else saves me from needing to earn two dollars myself. Usually, it is more effective just to cut one's own lawn. The more highly skilled are often able to do unskilled work for themselves; but the reverse is not generally true. The result is an expensive requirement for the government to provide alternative employment and support for those they have effectively priced out of the market - hence the government's poverty.

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