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   Summary of article:

"The Tax Trap: Hidden Cause of Global Recession"

Showing tables on tiny screens is not possible, so this can only be a brief summary of the article.  This article must be viewed on a desktop or laptop.

Astonishing figures released reveal the harmful effects of excessive (more than 10%) taxation upon the economies and prosperities of nations, which also reveal the hitherto unmentioned, hidden cause of the global recession.

Noting that money siphoned off the Productive Sector by way of taxes has a serious ongoing effect in perpetuity upon the development of the productive infrastructure AND upon a governments future revenue the matter can only be properly understood by looking at the figures over a length of time, here 40 years.

Noting that tax revenue does NOT go directly back into the economy, but much of it goes overseas and only some of it eventually finds its way back into the economy and noting too that in addition to the 28% company tax, the Productive Sector in South Africa pays a great many other taxes, resulting in companies paying in total something to the order of 40% tax if they make a profit or 12% if they don't; accordingly figures are produced showing the accumulation of finance in a tax free environment, followed by results of a 40% tax and the results of a 20% tax (a further 3 tables also show the results for lower profit enterprises).

The resulting, easy to check, figures are shocking.  They show the 40% tax compared to NO tax to have caused the bulk of the funds for economic development to have disappeared.  Compared with a 20% total tax, the 40% tax causes the fiscus to lose 78% of its total revenue over the period. Conversely reducing the tax rate from 40% to 20% causes the authorities to receive 4½ times MORE total revenue over the 40 year period. Increasing taxes does not give the government more money, but far less money in the long run.

Interwoven throughout the article is also the necessity to get rid of the nonsensical and harmful idea that the Productive Sector is a cash cow that can be milked whenever bureaucrats or politicians feel that they would like to be more rapacious, generous, wasteful or extravagant with money which should be funding the Productive Sector to produce full employment and a very very prosperous nation.
AHM

" Not knowing is the only real source of powerlessness;
what we do not understand we cannot control "


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Copyright A H Munger - July 2016