George Gilder, in his book Wealth and Poverty, produces a lengthy and compelling argument for what he calls supply side economics. He shows that there is nothing wrong with those who are well off shouldering more responsibility for the well-being of their society. This is often reflected in graduated tax rates. However, when the rate approaches 50%, the revenue received by the government actually begins to reduce. This is simply the result of those at this level beginning to work much harder at minimizing their tax. Add to this the dwindling incentive for earning more money, and one begins to see the pratical truth of Gilder's position.
The Laffer curve reveals this theory in a mathematical way. Reagan and Thatcher used this theory to promote tax cuts in the 80s. I'm not convinced, any thoughts?
Churchill once said, something like, people who are socialists in their 20s usually end up capitalists by their 40s. Well, I'm not quite 40 yet.
2 comments:
very interesting.
i cant comment on this in the 'macro'. but in the 'micro', i would say that the answer lies in the question that everybody should ask themselves;
"who am i responsible for?"
the welfare of myself?, of my sibblings?, of my parents?, of my children?, of widows?, of orphans?, of the 'unable'?, of other peoples families? etc ...
we cant care for everybody
i would say that having views on this reduce our succeptibility to 'under-responsibility' and 'over-responsibility', which in turn, are the things which a good government rebalances.
So what's the answer? I think family should come before community, so I think my responsibility would be spouse and children if I had any, then extended family would be a family issue. Community, well isn't that what taxes are for, bringing us back full circle.
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