Lesson # 111 - Taxes And Myths - Part 5
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CONSUMPTION TAXATION
In Theory
As its name indicates, consumption taxation targets our consumption levels. In other words, the more we buy, the more we pay in taxes. What can be fairer?
There are many types of such taxes, the most important are:
- Sales Tax: this tax is applied at the point of sale. Who is taxed and how the tax is applied vary significantly from country to country. In some…
Lesson #110 - Taxes And Myths - Part 4
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REGRESSIVE TAXATION
In Theory
Regressive taxation is bad when it is applied to income. It is so because it extracts the most taxes from low income people to provide for all people, including rich ones. Those who earn the least must support the government and those who earn the most. It is obviously unfair because it is not equitable.
Regressive taxation is not black and white when it is applied…
Lesson #109 - Taxes And Myths - Part 3
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PROPORTIONAL TAXATION
In Theory
This type of tax is mainly known as a “flat tax”. This is because in a purely proportional taxation system, everybody pays exactly the same percentage with no exemptions. However, in reality, there are many variations on a flat tax. For example, there could be a minimum untaxed income. Or there could be only two flat taxes for two income levels; one for the low and…
Lesson #108 - Taxes And Myths - Part 2
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PROGRESSIVE TAXATION
In Theory
These are the most common type of taxes on income because they appeal to politicians and low income people alike. It only seems fair. Those who earn the most must pay the most. Politicians maximize their income and with it their vote purchasing capability. Low income people receive the maximum benefit taxation can provide and politicians allow. This is reality; however, it is not all the…
Lesson #107 - Taxes And Myths - Part 1
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There are so many theories, myths and fallacies about taxes, that we deemed it necessary to clarify this situation. Taxes and myths is what this article is all about.
It is not possible to argue about taxes without first taking a look at their legitimacy, or lack of thereof. If something is not legitimate, this is, agreed upon by people in a straightforward and commonsense manner, without subterfuges or lies,…
Lesson #106 - Deflation Is A Good Thing
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Over many decades, people have been programmed to think that deflation is a catastrophic economic event spelling doom and destruction if we let it happen. Thankfully, we have all those central banks who fight deflation with inflation, which is also bad but not too bad. Bull shit! Deflation is a good thing.
During our life we have seen this argument play out time and time again. Politicians drone this so-called…
Lesson #105 - Unemployment, Inflation And The Stupidity Of Economists
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Keynesians are obsessed with the “correct” parameters and models to “manage” the economy in an “appropriate” manner. Therefore, they are always looking for mathematical or statistical relationships between “things that matter” to politicians. Two of these things are unemployment and inflation. We are going to study their relationship and the stupidity of economists.
Once upon a time there was an economist called A.W.Phillips. He postulated (said) that there was an…
Lesson #104 - The Economy Cannot Be Forecasted
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We have explained this fact with some latitude in our lesson Austrian Economics In Theory but it is something worth repeating. It is impossible to forecast any economic parameter with sufficient accuracy to be of any use to anybody in the long term or in detecting changes. The economy cannot be forecasted.
Many people get confused and impressed by the jargon many economists use when explaining why tomorrow interest rates will…
Lesson #103 - The Cure For Deficits
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Many people believe that deficits are a bad thing. However, they all want something for nothing. Give me, give me, give me seems to be the battle cry; me first and then deal with deficits. Politicians listen but don’t do anything. Surprised yet? No, right? So, what is the cure for deficits?
The origin of deficits
We have seen in previous lessons that politicians need to keep spending all…
