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RE: OT : taxes

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You missed the part where the government re-spends that money, predominantly in the domestic market. By spending money, the government has made possible further tax-producing transactions, both directly and indirectly. By "borrowing" money, the government may artificially increase the turnover, and hopefully the tax revenue.

<vaguely political> Some believe that this margin spending can allow the reduction in tax _rates_ while increasing absolute tax _revenues_. This is called VooDoo economics (nods to President GHW Bush, and Ben Stein) and has been shown anecdotally not to work by the last professional actor to try it out. </vaguely political>

Jordan

At 02:45 PM 10/31/2004 -0800, you wrote:
Jake,
...

If the government takes 20% of your taxes and you start with %100.
Your left with $80.00; You hire a gardener and pay them $80.00 and the
gardener has to pay the government 20% (assuming the same tax bracket) - the
government earns $16.00 leaving the gardener with $64.00
Now the Gardener pays the housekeeper $64.00 and the housekeeper pays the
government 20% the housekeeper is left with $51.20
She hires a gardener who happens to work for $51.20 and this second gardener
must pay the government 20% leaving $40.96

So far the government has earned $59.04.

How long before the government has taken everything we earn in taxation
where we can not rely upon deducting the interest as a business expense?

The point on this one is that sooner or later the government gets it all!


Dennis S. Wish, PE


California Professional Engineer

Structural Engineering Consultant

dennis.wish(--nospam--at)verizon.net

http://www.structuralist.net



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