From Jason Stevenson – Port Phillip Insider (Australia) –
Governments around the world are dead broke, saddled with a mountain of unfunded social promises. Governments simply can’t afford to pay. So logically, they’re looking at cutting spending, right?
Sorry, I thought you could use a laugh.
Of course they’re not cutting spending! Even talking about reducing peoples’ God-given entitlements is political suicide. Instead, to fund the socialist system, governments are looking to tax everything. This is extremely deflationary.
As taxes rise, the economy continues to decline. The less money in our pockets, the less money we have to spend. That hits business profits and, in turn, employee wages. If it gets really bad, employers will need to start downsize to keep the doors open.
Take France, for example. High earners had to pay more than 75% in income taxes — the highest tax rate ever in the developed world. The policy was terrible. High profiled millionaires and businesses left the country. The government had no choice but to repeal their mistake — though France still has the highest income tax in the world today, according to Statistics Canada data. Thanks to the worldwide hunt for lower taxes, we’re seeing businesses leave France.