December 8, 2010

Back to Basics

Let's say that the politicians are genuine. That they, and many Economists and thinkers, do believe that giving tax cuts to the producers encourages them to employ more people. But this is utterly flawed.

As a Businessman, I am not going to employ more people out of a sense of gratitude for tax cuts, LoL. There are only two reasons for going into and expanding a business - the sheer thrill of it, or I have some desires that I can only fulfill if i had substantially more money.

The extent to which I get more tax breaks from the Govt, both the reasons get weakened. It's so flawed to argue that someone will choose not to work as long as he's on measly unemployment benefits, yet argue that another person with surplus income will create employment when you are willing to *increase* his *surplus* *passively* by tax cuts. Weird.

This blogger is veering round the view that the Govt should just go back to BASICS. Progressive Tax to fund Education, Infrastructure, Defence, Survival for the unemployed. Some fresh borrowings from the market will also be good for hardening interest rates, and that rescues retirees from the utter loss of income on their savings placed in low risk avenues. Beyond these, let the Economy take care of itself, under Regulations and Consumer Protections, of course. The Stimulus dragons (whether from tax side or spending) are just giving passive income hikes/maintenance to those already doing well.

If Govt chooses, and I am not advocating that it should, to act to increase employment via Corporate entities THEN Nationalise these first for the period of assistence - at least the Govt can then direct what part of the dole the CEO can keep for himself and how much is to be used for new employees and increasing the income of the existing: the neither-here-nor-there Corporatism is one big BS and free, public welfare for the well positioned, a hopeless 'trickle down' philosophy.

It generates no new employment either.
Published with Blogger-droid v1.5.8

No comments:

Post a Comment