Tax reduction or tax increase ? To all governments of this planet .

As long as the dynamics of an economy are balanced there is no need to change taxes .

The problem is that in a global “open” world market , the rupture of balance between offer and demand is almost a daily topic because of the different situation of each economy and whether we like it or not changes across the world are bound to affect every one .

Besides , facts are showing that governments everywhere are more and more politically minded and less prepared in economy ( Sounds like real good economists prefer to invest in themselves more than in the public function ) and that causes many governments to make electoral decisions very often contrary to what their economy really needs at a certain moment .

Rates and taxes more than anything else are the instruments that governments tend to use to manage economy in a presumably convenient direction .

The problem is that there is something which I define as “Critical point in the elasticity of an economy to tax moves ” and that point determines whether reduction or increase of taxes will have a positive or negative impact on a certain economy at a certain moment and usually governments increase or reduce taxes without really knowing what will happen there after .

It all has to do with the level of balance between offer and demand which is the essential aspect of the economy .

To better undertand that balance or equilibrium , we should simplify it by recalling that citizens of a certain country or economic area , are at the same time instruments of production and consumers of the goods and services displayed by the offer ( the totality of production and service companies of the economy considered ) .

It then obviously follows that the costs of the offered products and services ( prices ) have to be in line with the purchase power of citizens in their consumer role . In other words the average salary has to be in line with prices to guarantee that production is absorbed by consumers in a perfect flowing continue that prevents inflation or excessive indebtment by consumers .

The global equilibrium between offer and demand is what governments are paid to watch for .

In a free economy the different companies that conform the offer are bound to fight for a convenient market quota and rentability and the instrument to achieve this is basically the type of investment that will result in a certain technological level and and/or the capacity to produce the biggest amount of units in the lower possible time with the lower possible ” global cost ” . The companies action along those lines will place their production at a certain level of competitiveness and specific demand .

Governments should be able to asses what is the situation as regards equilibrium between offer and demand ( prices and purchase power ) before deciding what to do with taxes and rates . The assessment should consider degree of inflation and consumer indebtment .

When the equilibrium between offer and demand has been disrupted most probably because taxes and rates plus excess of liquidity have favored speculation , we have what is known as a bubble .

Bubbles can only be confronted with deflation and austerity .

Austerity should be imposed in non producing areas and sectors causing the bubble and miracles on the recovery should not be expected .

Either deflation and cuts are promoted to provide a “V” shaped recovery or then you should be prepared for an “L” shaped recovery that should last well over the period that the bubble took to reach its peak .

The “V” recovery has undoubted advantages specially in the bigger economies , but the problem is that in national economies sensitive to world economy ( external commerce and investments ) unless a consensed action is taken , what a country decides by itself may not find the necessary positive global response and make that country suffer the accumulated effects of a “V” plus “L” recoveries .

In economies where offer bubbles occur with the consequent reduction of global tax revenues by governments , selective austerity and deflation should have priority to tax moves . And fiscal stimulus to investments in areas of strong added value ( technological and competitive ) should be prompted .

As a simple example it is obvious that a tax reduction in Germany is bound to promote activity further without impairing government tax revenue needs .

German economy today has a reasonable degree of flexibility response to tax reduction because domestic prices and purchase power are acceptably balanced and german products and services are competitive for the image they have for a healthy world demand .

In USA they may need to be reduced in some areas while increased in others . A selective managing of taxes is needed depending in the situation of each economy .

Permanent negligible rates are a mistake .The problem today is not so much the cost of money as the absence of investment motivations which favors money concentrating in speculation .

Today is ridiculous to think that Freedman or Keynes have the answer . Economy has become more complicate and subject to faster changes , so you may need to use some of the aspects of Freedman teachings today that will have to be replaced by some of Keynes recommendations in months or both theories might have to partially overlap at times under the conviction that what is good for today may not be good for tomorrow .

Brahmason

Brahmason@gmail.com

Anuncios
Published in: on agosto 25, 2012 at 11:12 am  Comments (55)  

The URI to TrackBack this entry is: https://brahmason.com/2012/08/25/tax-reduction-or-tax-increase-to-all-governments-of-this-planet/trackback/

RSS feed for comments on this post.

55 comentariosDeja un comentario

  1. Aw, this was a very nice post. Taking the time and actual effort to make a
    great article… but what can I say… I hesitate a lot and don’t manage to get nearly anything done.

  2. Hello my family member! I want to say that
    this article is amazing, great written and come with almost all important infos.
    I would like to peer extra posts like this .

  3. Professional Coaching…

    Tax reduction or tax increase ? To all governments of this planet . « Brahmason’s Blog…

  4. When someone writes an paragraph he/she maintains the plan of a
    user in his/her mind that how a user can know it.
    So that’s why this paragraph is perfect. Thanks!

  5. A motivating discussion is definitely worth comment.
    I do believe that you should publish more about this subject, it might not
    be a taboo matter but usually folks don’t speak about such issues. To the next! Many thanks!!

  6. Discover More…

    Tax reduction or tax increase ? To all governments of this planet . « Brahmason’s Blog…

  7. It’s an awesome piece of writing designed for all the web people; they will get benefit from it I am sure.

  8. Hi there i am kavin, its my first time to commenting anywhere, when i
    read this post i thought i could also create comment due to this brilliant post.

  9. Thnx for publishing this information on your website.

  10. I savour, lead to I found just what I was looking for. You
    have ended my 4 day long hunt! God Bless you man.
    Have a nice day. Bye

  11. I am actually pleased to read this blog posts which contains lots
    of helpful information, thanks for providing such statistics.

  12. Hello to all, as I am really eager of reading this webpage’s post to be updated daily. It includes pleasant information.

  13. cuit vapeur electrique…

    Tax reduction or tax increase ? To all governments of this planet . « Brahmason’s Blog…

  14. My brother recommended I might like this website. He was totally right.
    This post truly made my day. You can not imagine simply how much time
    I had spent for this info! Thanks!

  15. wonderful publish, very informative. I ponder why the other experts of this
    sector do not realize this. You should proceed your writing.

    I am confident, you have a great readers’ base already!

  16. You have written an incredible website.

  17. Appreciation to my father who informed me concerning this weblog, this
    web site is really awesome.

  18. I’ve been surfing online more than three hours today, yet I never found any interesting article like yours. It’s pretty worth enough for
    me. Personally, if all website owners and bloggers made good content as you did, the web will be
    a lot more useful than ever before.

  19. Thank you for the great insight. I love the fact that your website can rank on top with personalized Google + searches.

  20. My family all the time say that I am killing my time here at web, however I know I am
    getting knowledge daily by reading such good posts.

  21. An intriguing discussion is definitely worth comment.
    I think that you should write more about this issue,
    it might not be a taboo matter but generally folks don’t talk about these issues. To the next! Kind regards!!

  22. Highly energetic blog, I enjoyed that bit. Will there
    be a part 2?

  23. Hi there friends, its fantastic piece of
    writing on the topic of educationand entirely explained, keep it up all
    the time.

  24. Your style is unique in comparison to other people I have
    read stuff from. Thanks for posting when you’ve got the opportunity, Guess I will just book mark this site.

  25. I have learn several excellent stuff here. Definitely price bookmarking for
    revisiting. I wonder how so much attempt you set to create this type of great informative web
    site.

  26. Very soon this web page will be famous among
    all blogging viewers, due to it’s nice content

  27. Hello. impressive job. I did not anticipate this. This is a impressive story. Thanks!

  28. Hi, yeah this article is actually nice and I have learned lot of things from it about blogging.
    thanks.

  29. Thanks for your personal marvelous posting!
    I genuinely enjoyed reading it, you will be a great author.
    I will be sure to bookmark your blog and will often come back very soon.
    I want to encourage one to continue your great job, have
    a nice weekend!

  30. This site was… how do I say it? Relevant!! Finally I have
    found something which helped me. Thank you!

  31. It’s awesome to pay a quick visit this site and reading the views of all friends on the topic of this article, while I am also keen of getting know-how.

  32. Good write-up, I’m normal visitor of one’s website, maintain up the nice operate, and It is going to be a regular visitor for a long time.

  33. Thanks for finally writing about >Tax reduction or tax increase ?
    To all governments of this planet . Brahmason’s Blog <Loved it!

  34. I don’t even know the way I ended up right here, but I thought this publish was great. I do not realize who you are but definitely you’re
    going to a well-known blogger in the event you are not already.
    Cheers!

  35. Great work! That is the kind of info that are supposed to be shared across the net.

    Shame on the search engines for not positioning this submit upper!
    Come on over and discuss with my web site . Thank you =)

  36. Aw, this was a very nice post. Finding the time
    and actual effort to create a really good article… but what can I say… I put things off a
    whole lot and don’t manage to get nearly anything done.

  37. If you are going for finest contents like me, just pay a quick visit this web page every day since it gives feature contents, thanks

  38. When someone writes an article he/she maintains the plan of a user in his/her mind that how a user can understand it.
    So that’s why this post is amazing. Thanks!

  39. Wow that was unusual. I just wrote an incredibly long comment but after I
    clicked submit my comment didn’t appear. Grrrr… well I’m not writing all that over again.
    Anyway, just wanted to say wonderful blog!

  40. whoah this blog is excellent i really like studying your articles.
    Keep up the good work! You realize, lots of persons are looking round for this
    information, you can help them greatly.

  41. Thanks for this blog post. I find it difficult to see excellent information out there when
    it comes to this topic. I appreciate the thread!

  42. Greetings! I’ve been reading your web site for a while now and finally got the bravery to go ahead and give you a shout out from Kingwood Texas! Just wanted to tell you keep up the excellent job!

  43. Aw, this was a very nice post. Taking the time and actual effort to generate
    a very good article… but what can I say… I hesitate a whole lot and don’t seem to get nearly anything done.

  44. I was curious if you ever thought of changing the layout of your blog?
    Its very well written; I love what youve got to say. But maybe you could a little more in the way of content so people could connect with it better.
    Youve got an awful lot of text for only having one or two pictures.
    Maybe you could space it out better?

  45. This is a topic which is near to my heart.
    .. Thank you! Where are your contact details though?

  46. What a material of un-ambiguity and preserveness
    of precious experience regarding unexpected emotions.

  47. Wonderful article! We will be linking to this particularly great article on our website.

    Keep up the good writing.

  48. Hi to every one, the contents present at this site are in fact remarkable for people knowledge, well,
    keep up the good work fellows.

  49. This post will assist the internet users for building up new blog or even a blog from start to end.

  50. I have to thank you for the efforts you have put in penning
    this blog. I’m hoping to see the same high-grade content from you in the future as well. In fact, your creative writing abilities has inspired me to get my own site now 😉

  51. hyip…

    Tax reduction or tax increase ? To all governments of this planet . « Brahmason’s Blog…

  52. Get quick $400 payday loans online St. Louis, MO Get urgent $600 online
    payday loans Anchorage, AK Get fast $700 payday loans Tucson
    Arizona

  53. I just like the helpful info you provide in your articles.
    I’ll bookmark your weblog and check once more here frequently. I’m slightly certain I’ll be informed plenty of new stuff proper right here! Good luck for the following!

  54. No matter if some one searches for his necessary thing, so he/she desires
    to be available that in detail, therefore that thing is maintained over here.

  55. Hi, i think that i saw you visited my web site thus i came
    to “return the favor”.I am trying to find things to improve my website!

    I suppose its ok to use some of your ideas!!


Responder

Por favor, inicia sesión con uno de estos métodos para publicar tu comentario:

Logo de WordPress.com

Estás comentando usando tu cuenta de WordPress.com. Cerrar sesión / Cambiar )

Imagen de Twitter

Estás comentando usando tu cuenta de Twitter. Cerrar sesión / Cambiar )

Foto de Facebook

Estás comentando usando tu cuenta de Facebook. Cerrar sesión / Cambiar )

Google+ photo

Estás comentando usando tu cuenta de Google+. Cerrar sesión / Cambiar )

Conectando a %s

A %d blogueros les gusta esto: