Originally posted by Darth Jello
Taxes and wages (meaning both the amount of money and the purchasing power of that money) in a market economy are directly related. Meaning that as taxes go up, wages go up, as taxes go down, wages go down.
Which isn't a good thing.
Originally posted by Darth Jello
In a society with low taxes, inflation is driven by market prices whereas in a society with high taxes, inflation is driven by wages and prices can never keep up.
Inflation is driven by the overprinting of money in high tax societies since the increases in taxes and minimum wage laws causes inflation to correct itself and get back to the original value of the dollar, meaning every time wages go up inflation adjusts and no change is made. We see that over and over again with increases in minimum wage here.
Originally posted by Darth Jello
How this works in practice: Basically, in a democratic society with a market economy, the only people hurt by taxes in the long run are the mega rich.
Not really because of the amount of tax loopholes that the mega rich can exploit with their ability to hire many tax professionals. Warren Buffet did this and only had to pay 17% while his secretary had to give 35%
Originally posted by Darth Jello
[B]As taxes increase, the government is better able to fund and provide services which are considered natural monopolies and therefore should not be privatized such as national parks, roads, power, water/sewage, health care
Healthcare is not a natural monopoly, and all of these things can be funded with low taxes with a growing economy, as we can see with places that have placed flat taxes in their countries.
Originally posted by Darth Jello
[B]and in most western societies, things like employee benefits, unemployment insurance, and kurzarbeit (the german system which bails out companies and prevents layoffs based on market forces rather than arbitrary financial loans or gifts).
All of which are not necessary government functions.
Originally posted by Darth Jello
[B]This creates higher taxes which by the laws of the labor market forces employers to pay higher wages.
Which are adjusted by inflation to not matter in the end.
Originally posted by Darth Jello
According to the Indian School of Economics (which thus far, has been most accurate in terms of economic predictors in the 20th century),
Next to Austrian and Chicago school economic theorists which predicted the market failure well before anyone else.
Originally posted by Darth Jello
Income inequality is the number one cause of economic instability and collapse.
No it's not. Artificial markets created by government intervention failing causes economic instability.
Originally posted by Darth Jello
Another factor is the so called "free market". A laissez faire free market economy is worse than communism in the speed and way in which these systems destroy economies and countries.
Yes, because the middle class was created in a socialist state, right?
Originally posted by Darth Jello
They encourage the buildup of monopolies and plutocratic families which collude with governments-themselves becoming kleptocratic, which leads to anarchic failed states or to crises which lead to the democratic election or uprisings leading to fascism.
This is complete bullshit and misunderstanding of what a free market. What you're describing is not a free market but a government intervention into the market to help big business like most countries started doing during the turn of the century. Monopolies cannot exist without government help to keep them alive.
Originally posted by Darth Jello
The convergence of these two factors have been observed in many countries throughout history. One need only observe the factors leading up to the first great depression and the current troubles for an American example.
Of which both were government involvement created a larger problem then needed.
Originally posted by Darth Jello
[B]More extreme cases include Chile, Argentina, and many members of the Commonwealth of Independent States and Soviet Sattelites during the 1990's. Russia, Ukraine, and Lithuania being prime examples.
Chile failed, and came back and is now the strongest economy in South America. Argentina did not have a free market, they had a corporate favoritism model like fascism.
Russia, Ukraine, and Lithuania never fully privatized, and when they did, first dibs were given to the rich and regulations were passed that kept it in their power. Do you know the strongest economy among former Soviet Republics is? It's Estonia, which espoused a flat tax and it is currently at I think 18% and their economy is still the fastest growing.