Thread: Taxes
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Old 02-23-2013
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Fat1Fared Fat1Fared is offline
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Lower taxes=Good

This is one of histories great lies. There is a wonderful study, somewhat suppressed, which was done by the EU. In that study it found that the countries in the EU with the Highest tax had not only the highest living standards, but also the highest levels of satisfaction among the populous.

Popular culture likes to tell us that 'money will make us happy!' This is wrong, money can sometimes give us a means by which to obtain the things which can sometimes make us happy, but actually what makes most people happy is self-fulfillment, and in the countries with the highest tax, often self-fulfillment is at its highest. Why is this? Well simple, in these countries the system is set-up in such a way that the birth lottery is a lot less stacked against you. This means every citizen has a stake in society. Every citizen has a chance to achieve their aspirations.

This is because rich, whether they like it or not, are providing the poor with good education, healthcare, transport...etc all the things that in countries with low taxes stand as barriers to social mobility. Tax always has been, and until someone comes up with a better system, always will be the best way to achieve social mobility.

Let me explain this in a more practical sense, or give a more real example, there is this idea that if I give a small number of people lots of money, they will reinvest it in society thus creating a boom period which creates wealth for all. This is the justification for low taxes. A very good example of it is the small-to-medium sized business model which conversatives love. The problem is that actually, if you give a small number of people a lot of money, they do not invest most of it, most of it goes into a big volt somewhere deep under ground, where it remains, being pasted on from one generation to the next. The reason for this once people have certain amount of money they have no reason to spend it, other than to provide security for their children, which in most cases makes them only more fugal with their wealth.

However, there is another idea that if you give lots of people a small amount of money each, that money will quickly be reinvested in society because those with it have no choice but to spend it in order to survive. This is why social welfare and faninical redistribution is so vital to an economy, and why those Europe countries, like my own sadly, who decided to join the race to the bottom have the ground with a crunch, rather than bang; because by taking money away from the poorest to cut taxes, suddenly the rich lost their biggest customer base. Without their customers the shops had no income, which meant they had no need for staff, which saw them close and even more people out of work, which meant these economies had even less people with money to spend, which caused even more businesses to go bust, which saw even more unemployed which led to even less spending...etc and growth flat-lined, then left and then triple dip recession...Low taxes are only good for creating low interest rates on government loans, but it does not matter how low they are if no one has any money to spend to generate Government income.

Now why is the Government lacking income such a bad thing? Especially if you support the idea of small government. Besides a few peasant types going hungry and fewer bombs going off in the middle east, what would a poor government mean for me?

Well, quite a lot actually, you see Government's do not just waste their money (though they do have a habit of being wasteful) on welfare and schools and hospitals and other unimportant things like that for those peasant types, it also invests in the countries infrastructure. You see, what people often forget is that every country's biggest customer is the country itself. Whether you are a supermarket or a multi-national building corporation, your market's biggest customer/investor is the Government. Unlike the private sector, governments can pool resources (economic stimulus) into a multiplie of different industries, thus creating wealth and growth.

Now, in both the US and UK there are many great examples of what happens when Governments decide not to invest in a infrastructure and leave it to the private sector, especially during the recession when Austrian schools and Chicago schools of economic growth become popular, but as public transport is pet-love, I will use that as an example.

The last Government of Britain thought building a giant, ugly tent was more productive than investing in Britain's train-lines. They thought the 'private' free market could deal with the railways. The result, Britain now has to invest 3 times what it originally would have had to invest in a rail-link which is still going to be ten years behind the rest of Western Europe. This has not only been a feck-up for the railways though, nope, it has also caused the house prices in London to rise at an above inflation rate, which has led to social displacement and slum developments throughout Britain's capital. Alongside this, it has also completely centralised our economy, which has caused further poverty in most northern regions. It has caused railfares to raise at an above inflation rate meaning travel is too expensive, causing northern students and poorer workers to have less opportunity for internal migration of opportunity. I took my degree in the midlands meaning I had less chance to undertake work experience and other opportunities due to the lack of internal travel offered in my country. Next, it has undermined our internal tourist industry, one of the biggest employers outside the sector. The result of all of this is by not putting a little money into our railways the British economy became much weaker, causing less jobs, meaning less expenditure, meaning less growth.

I could go on, but I think my point is clear enough. Taxes are not just morally justifiable, they are fundamental to society. Without Government investment and support, a country cannot grow. This is because even a poor decision in one small part of a country's internal structure, like the country's rail-links, can have massive, long lasting and catastrophic effects. And in 9 out of 10 cases, not investing in your country's infrastructure is a bad decision.

Small Government [ When you work in Government, you quickly realise that that this part of the debate has nothing to do with taxes, it is just regional Government offices like to say it does, so they have a scapegoat when they raise taxes; however, it is something I find interesting all the same, so I will comment on it anyway. ]

Now, as a Liberal, I probably should think the idea of 'small' government is a wonderful thing, but I do not. I leave small-minded thinking to men like David Laws. [ Can you tell I do not like him. ] I think small governments lead to the real problem, centralisation. We want 'big' governments we if the Government is big then its understanding is big. To me, when you say small Government, I instantly think, Westminster or the Whitehouse...etc. Small square plots of land which completely do not understand the world beyond their own doors. What we want is localisation. We want it that instead of Government being a small square mile which superimposes it will on the outer-regions, whose small-minded regional government offices do not look beyond their own small boarders with small-mind, one size fits all decisions, we want a big Government, where every part of it, from your small parish council all the way down to Westminster is part of big identifiable Government

We do not want a small centralist based heart with lots of small body parts dotted across the country all going their own way, that is too small, but nor do we want a small centralised Government superimposing itself on the rest the country by using its regional governments as little more than administrative office blocks. We want to spread the power and initiative based decision-making across the country equally, so each part in country and in-sink with the others. So Local government offices have the power to make localised decisions which meet the specific needs of their region, while having the mind and initiative to think of the wider results of their actions. Central Government and Big are not the same thing, nor is small and localisation. Most centralised Governments are very small, as the regional ones, but could someone unify them into one, efficient and cohesive Government, then you would have something special.

Last edited by Fat1Fared; 02-23-2013 at 10:08 PM.
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