Replies

We need to make a whole college course on conservative economics based on stories like this

I have a great example of two men in a closed system that goes like this:

There are two men on an island

One works and gets paid 100 dollars, the other one is unemployed.

The magic government fairies that watch over these two men decide to tax the rich man $20 so that they can give the money to the poor man in ‘unemployment’

So there is still only 100 dolars in this system. The rich man has 80 and the unemployed man has 20.

After a while the poor man says how unfair that he canot live on $20 so they tax the rich man $50 and ‘spread the wealth around’ so now they both have $50.

But the rich man decides not to work anymore, since being unemployed earns him just as much as being employed.

Now there is ZERO in this system because no one is working at all.

Then a smart Sarah Palin Fairy comes along and says “look, we cannot take your money to give to someone for doing nothing” But we will allow a tax deduction for the expense of hiring someone.

So the rich man goes back to work and makes $100. He then HIRES the poor man to build him a boat, and pays him $50.

Now... the Rich man has $50 cash, and he ALSO has a $50 boat, and the poor man has $50 cash. So now there is $150 in this closed system.

An increase of $50 because WORK CREATES WEALTH. Taxation DESTROYS WEALTH

next... the government fairy discovers capital gains taxes (To Be Continued)