Thursday, February 28, 2008

Why Is It Communist Countries Don't Have Bigger Budgets Than Capitalist Countries?

Many thanks to Mr. Hunt for sending me this link that shows Hong Kong CUTTING tax rates because its economy is growing so fast it has that much of a surplus. I was thinking about writing about it, but when I responded to him via e-mail I figured it'd make my point well enough;

Yeah, I saw that. Was going to make a post, but I'm just so damn busy. I really like it in that it shows you something fundamental about economics;
"Communist" countries that are supposed to have high government taxes and therefore high government revenues are dirt poor and can barely afford anything.
"Capitalist" countries that are supposed to have low government taxes and therefore low government revenues, actually have the largest budgets in the world.
In other words, North Korea's government should have TONS more money than the US. But it doesn't because it doesn't have a base to tax.
This shows government for what it truly is; a parasite.

It needs a healthy host to parasite off of. If the government gets too big and the tax base (economy) shrinks, then it doesn't matter what your tax rates are because there's nothing to tax. Which is why I get a kick of how the left wants to "raise taxes" by raising the tax rates. It as the opposite effect. If they really want to "raise tax revenue" then they should lower taxes to attract more commerce.

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