It is happening every day now. Businesses are taking actions to remain in business, not to mention be competitive in today’s economic climate. You see it happening in Newspapers, broadcast radio, and now GoLeftTV on the Internet.
Obviously, the current state of the economy is not good. But that hasn’t always been the case. These media have had problems generating revenue for years. Adding to that, one could argue that the product these media are delivering is defective to the point that there is not enough support in the free market to keep them in the black, forcing them to find a Sugar Daddy like George Soros to keep them going. Air America Radio seems to have found Big Labor, you know, one of those evil ‘special interest’ groups. Ring of Fire Radio has resorted to Google Ads. And GoLeftTV has apparently given up and moved their site to YouTube, which is free. It is a sign of the times.
related links: Go Left TV Takes On Conservative Media | Newspapers are feeling the economic pinch, too | Could Newspapers Be The Next Bailout?
The notion that increasing taxes will increase revenue is bogus. Winston Churchill nails it with this famous quote, “We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
There are examples in the United States that demonstrate that revenues increase by lowering taxes, and decrease by raising them. There is an optimum point in the taxes/revenue equation and it has a name. It is called the Laffer Curve.
Since classical economic theory back in the early part of the 20th century economist have always known about money circulation. What is referred to as velocity. The faster money goes through the economy the more money people make and the more taxes are collected. Since then the equations have gotten a lot more complex with partial differentials, regression analysis and other mathematics. The principals are the same. The faster the economic activity the more jobs, income and taxes.
So how do we get a faster economy? There has to be some tax rate that allows maximum tax collections right? Yes there is. Arthur Laffer took a simple business principal studied by millions of business majors the world over. The maximum profit point or maximum revenue point. It the point where the price of your Chevy trucks makes you the most profit. Charge too much and you lose customers. Charge to little and you lose money. It’s not that complex. Disney does it for ticket prices. Walmart does it for their store pricing policies. All business does it. So why when Arthur Laffer does this same thing for government maximum revenues is he ridiculed for “trickle down,” “Voodoo” and other names too discredit his theory?
By understanding the Laffer Curve and the adoption of the Fair Tax, you will easily see how beneficial and growth oriented the Fair Tax would be to the economy.
Please check it out.
Link: Fountainhead Zero: Taxes 101: The Laffer Curve