Monopoly Government vs. Competitive Business

BornFree Friday, 07 of September, 2012

Government is and acts like a coercive monopoly, constantly raising the cost of doing business and wondering why businesses move abroad

WSJ:US Firms Move Abroad to Cut Taxes

Many government leaders believe the way to increase government revenue is to raise the price of government, aka raise the tax rates.  Try raising prices in business and see what happens to revenue.  The strategy only works for coercive monopolies, like the government where you can force people to buy your products no matter what the price. 

Since companies have to compete to stay alive, they are moving abroad to decrease their costs, specifically their tax costs.  They have to compete with companies that operate in countries with wiser leaders who understand that lower taxes entice business to move into their sphere of influence, providing jobs, growth and a broader tax base that generates more government revenue at lower tax rates.

If we really want job creation here in the US, we should eliminate corporate taxes all together.  There would be a flood of businesses moving into instead of out of the country.  Then there would be more jobs with more people earning more money and paying more taxes.

California that was losing good jobs even before the recession and is continuing to lose jobs at a high rate because of its high taxes and regulation could learn something from this idea but won’t until it goes bankrupt.   

 


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