"Demand" is not a worship word.
The arithmetic counts for everything in economics, unless you're trying to pull a fast one. Give a new government employee $10,000 tax dollars. Assume he pays 10 percent in taxes (just to keep the math easy). That's $1,000 back to the Treasury. Now he spends $1,000 of the rest on a new stereo. Let's say the private store he buys it from makes a $500 profit, and pays 30 percent tax. That's $150. The people the stereo company buy parts from will pay taxes too out of the $500 expensed, but it will still be less than the $500. You can do this for every nickel this government employee spends, and at the end the total tax return will still be less than the amount the government spent in the first place, the amount that came from the taxpayers.
When a private entity creates wealth, and earns $10,000 that did NOT have to come from the Treasury and pays taxes on it, the government comes out ahead. See?
There's a certain amount of government spending that is necessary, and that a society can afford, and if this remains low enough, the burden on the private sector is tolerable and balanced budgets possible. We passed that point a long time ago.
Dumping billions of tax dollars into the system to "create" jobs that would not otherwise be created by the private sector is lost money. No matter how many private vendors you funnel that money through afterwards, the tax return will always be less than the original amount spent unless you start taxing at 100 percent down the line. If you suck that money out of the private sector to start with, the lunacy is compounded. If you just print the money out of nothing, the lunacy goes off the charts.
Business is paralyzed now because the people in power have declared all-out war on it. God help you if you're a major industry, part of the financial industry, a large corporation, a conventional energy industry, or pretty much anyone with more than fifty employees or that makes more than $250,000 a year.
This is all, of course, assuming the goal is economic growth, not power.
Current Events » in reply to Re: So cutting government jobs is going to shrink the tax base?
You can keep repeating it. It isn't going to help.
The whole thread (18 posts)
- Ron Paul to balance the budget by the 3rd year of his presidency
- Re: Ron Paul to balance the budget by the 3rd year of his presidency
- Re: Ron Paul to balance the budget by the 3rd year of his presidency
- No government job pays more taxes into the system than it uses up. Think about it.
- Re: Ron Paul to balance the budget by the 3rd year of his presidency
- Re: Ron Paul to balance the budget by the 3rd year of his presidency
