Taxes and Spending

Myths about taxation are just one reason we need good economic reasoning now more than ever.

The video game industry has been criticized for taking advantage of tax breaks, with critics claiming that the industry is being "subsidized" by a smaller tax bill. But, there's a very big difference between a tax break and a subsidy.

Economic populists have become skilled at causing economic calamities while escaping the blame. Instead, it’s the non-populists that end up picking up the pieces while getting the blame for the unemployment and wealth destruction that follows in the wake of populist economic policies.

In the wake of the Amtrak railway disaster, we’re likely to hear that the solution to the problem is more tax funding and regulation. Few will suggest privatizing the railways. But the historical record suggests that privatization does indeed make for safer railroads.

Everyone knows about the Great Depression which brought massive government intervention and lasted a decade. But few know of the Depression of 1920–21 which was ignored by government and lasted eighteen months.

David Cameron’s razor-thin win in the UK elections means he’s had to promise a new referendum on EU membership. If the UK were to leave the EU, it may trigger Scottish secession and a major shift in the EU balance of power.

Some now blame employers that don’t pay a “living wage” for the fact that so many people receive welfare payments. So, the politicians want to tax employers for every minimum wage employee they hire. Needless to say, this won’t solve the problem.

The Keynesian multiplier would have us believe that economic growth can come from an increase in demand and spending. But if we look more closely, we find there is never a shortage of demand, and what an economy really needs to expand is more saving.

Many poverty relief laws and policies are premised on the assumption that only "the rich" will bear the costs. In fact, the incomes and well-being of many low-income individuals are taxed and diminished to benefit a nebulous group known as "the poor."

Those who want a higher minimum wage often claim it is necessary to combat a rising cost of living. However, these same people often support policies that raise the cost of living and drive real wages down.