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    fedilink
    -72 months ago

    @UnderpantsWeevil @Amoxtli

    Taxation takes money out of the economy, runs it through government, and restores a smaller amount to the least productive parts of the economy. It devalues your currency and so prices always go up and quality goes down.

    • @UnderpantsWeevil
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      52 months ago

      restores a smaller amount to the least productive parts of the economy

      Taxation does not restore money to the economy in any capacity or at any productivity level. It is purely fiscally destructive.

      It devalues your currency

      It increases the value of outstanding currency by reducing the total volume in circulation.

      This is Econ 101, Supply & Demand level stuff. Decreasing supply of dollars means reducing the demand for goods and services. If you’re selling widgets for $5/unit and the median spender losses $1 of their available $5 to taxation, this will not cause you to increase the sales price of your widgets. Raising your prices means you sell no widgets and you go out of business. Lowering your price means you capture the available cash flow and clear your inventory.

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        -62 months ago

        @UnderpantsWeevil

        No, because the tax money is spent back into the economy. It is just taken from productive sectors and given to unproductive ones.

        • @UnderpantsWeevil
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          62 months ago

          tax money is spent

          Spending is entirely divorced from revenue. That’s how we run deficits.

          We’ve played the “cut taxes first, cut spending later” game since Carter, and I dare you to show me three consecutive years where the deficit actually contracted.

          is just taken from productive sectors

          Sectors that run high margins are defacto not productive. They are assigning large mark ups over the real cost of production.

          If you want to reduce inflation without hitting productivity, you need to extract taxes from these high margin businesses.

          Once shrinking your margin becomes a tax avoidance strategy, wages rise and prices fall.

          Targeted high margin taxation is a proven strategy for deflating prices. But this requires a level of education that goes beyond Econ 101.

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            fedilink
            -72 months ago

            @UnderpantsWeevil

            Sectors that run high margins also have the ability to reinvest, which is how we get most applied innovation.

            • @UnderpantsWeevil
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              32 months ago

              Sectors that run high margins also have the ability to reinvest

              If you’re reinvesting, you’re running lower margins thanks to increased capital costs.

              I recommend you go back and revisit a basic business accounting class.

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                fedilink
                -52 months ago

                @UnderpantsWeevil

                Reinvesting does not necessary occur in the same cycle where the profit is generated; in fact, it usually involves saving up for some time.