Draginol-
I agree with everything in your article in theory
The practical application however is a different story, and much of it comes down to this-
the west profited by having those who could take $1 and turn it into $2 have as much freedom as possible.
Now, I agree wholeheartedly with this statement. And in "days of old" it took a loooong time to turn 1 dollar into 2 dollars and it was based on real sales. The widget factory would build widgets at cost x and sell for y price with a profit of z, which would gradually accumulate to the point that the owner could expand his operation and hire more workers, or perhaps buy another factory down the road.
And yes, of course taxes hurt the bottom line for the individual business, but if done properly they can help greater society in a way the ultimately comes back to help the business.
It all depends on HOW the tax dollars are spent. Say for example, that your tax dollars go to build a massive reliable public transit system, making it easier for workers to get to your factory AND easier for potential customers to get to shopping malls to buy the products you produce. That's a benefit that helps you indirectly in several ways. For one, both your workers and potential customers have more money in their pockets as they didn't have to burn through gas getting to and from work and the shopping mall (oversimplified but you get the gist)
Or perhaps the money goes to a better public education system, producing more people who are better educated, therefore providing you the double benefit of having more customers with disposable income to buy your products and a larger pool of talented labor from which you might want to hire more workers.
Again, directly there's no discernible benefit, but indirectly that can have a massive benefit for you.
Universal healthcare, which seems to be a subject of undying hatred for Americans, actually costs less per capita through taxation and overall produces citizens who have more disposable income to buy your products, as they're not worrying about paying 500 dollars a month for a policy that MAY cover them in the case of illness or injury.
Again, indirectly helping business out as you have more customers who are healthy (and can therefore work, giving them more money) and are happier, since they don't have to worry about healthcare, they then give you the double bonus of having more money in their pocket to spend on your products, AND since they don't have a giant millstone of worry hanging around their necks they're more likely to spend anyway.
So the whole point of taxation of business is that the entire system, if done properly, is reciprocal.
Here's the problem I have with "Wealth Creation" and the concept of turning 1 dollar into 2 dollars-
You have a widget that you build. It costs you say, 50 cents to produce and you sell it for the price of 2 dollars, therefore covering the cost of the widget you just sold, leaving you with another 50 cents to build another widget AND a whole dollar of pure surplus profit sitting in your pocket!
Now here is the question- that dollar of profit that you just made... did you create it?
No, you didn't. It was transferred to you by someone who bought your product. And that's the whole point of our economy. No one actually creates money out of thin air, except for of course the government with a nice big printing press and the exercise of monetary policy.
And this is the big disagreement. One side says
"I created this dollar of wealth I hold in my hands, and so it's mine to do with as I please!"
The other side says
"That dollar of wealth you hold was transferred to you in exchange for a good or service you produced. Therefore, you didn't technically create that wealth out of thin air and it's proof that your livelihood and prosperity is based on others transferring their wealth to you. Therefore, since you are dependant on society greater for your profits, it's in everyone's best interest if that society is educated, happy and healthy!"
you regularly see people argue that the government can take $1 from "the rich" and give it to the "needy" but that should only be done as a last resort and only short term since, by definition, the chronically poor are people who will take $1 and turn it into less than $1. They are, literally, consumers.
The beauty of this is that it depends on your perspective. From the perspective of the poor person, yes, they regularly spend all the money they get. From the perspective of the toothpaste company that the poor will spend his dollar on, they count that dollar as wealth creation. So if anything, the poor fulfill an absolutely essential function in that they are one part of the economy that doesn't hold on to money- they continually cycle it upwards, never holding on to it.
So, since the economy isn't about creating wealth but actually transferring it, looking back at historical trends the worst economic turmoil and misery has always occurred when too much wealth (that some will say has been created) is concentrated in too few hands, thus impeding the cyclical flow of money through the system.
The role that the government is to play, through taxation, is to foster the conditions that allow for money to continue to flow through the system in a cyclical, reciprocal fashion. Otherwise, if they don't tax then everything ultimately flows upwards to the king of the hill, where one way or another it stays there or will come back to him indirectly anyway. Winner takes all and then you get a situation very similar to many south american free market experiments (forced on them by the likes of the IMF and world bank)
What kind of society do you get with minimal taxation?
1 % of the population live like gods,
20% live decently as the managers and protectors of that 1 %
Another 20-30 % scrape by in the real economy as the labor (not managers) providing essential goods and services
50% of the population becomes human surplus living in a barrio.
