Why is the answer always tax?

The Greens are back at it, asking for a wealth tax to be introduced to cool the housing market. Unphased by the simple fact that increasing tax has never dropped the price in anything. They are demanding we tax house prices down

The mantra of the left is that there is no such thing as trickle down economics, and that neoliberal policies of lowering tax just make things worse. The main aspect is that the poor get poorer while the rich get richer. Lets forget the obvious statistical reasons why the rich get richer and look at the tax cuts versus tax increases and prosperity for the lower middle classes.

I had this lecture the other day from a family member over a glass of wine that ACT’s policies only suit the rich. In the same breath Trump was accused of being the worst of the offenders of this lower tax nonsense. Also the old “look at scandinavia” was introduced into the discussion. Because after all Sweden and its neighbours are the poster children of why tax is good.

So lets look at the USA of recent times. The reason for this is because the claim from my family member is that “there is no examples of where these neoliberal tax reductions have made people better off.”

may I introduce exhibit A

The above graph is from an article discussing how the average wage in the USA rose more in 2018 than what it had in the previous 20 years combined.

The reason for this was the dropping of both Corporate tax rates and personal tax rates. The Gallop pole of how people feel about being better off than under the last administration in the USA had record 57% of people say they were better off under Trump policies than they were under Obama.

This would seem to be a clear indication of how lowering tax helps increase wealth. Those who have owned a business understand the basics of this model, but unfortunately those who hate Trump will never see that some of his policies were great for the poorer section of the workforce.

The reality is this so called ‘experiment” of lowering company tax rates etc has had a huge benefit in the USA. This fact is what would have won Trump the election easily should other factors not been at play in 2020.

Now lets look at Sweden. This is quite an interesting story as Sweden is seen as a socialist county. It is not, in no way is sweden a socialist country – having free health care does not make you socialist.

However up to the 80’s Sweden was a little more that way inclined with high taxes and a lot of government control over industry. This worked well from 1950 to 1970 but then the wheels fell off and they needed to go through some serious rethinking on the government control over business etc.

The government taxed and spent at large in the 70’s and 80’s which didn’t do the economy any good at all. Here is a historical look at their top personal tax rates.

So both instances we see that lowering tax is better then raising them, although as you can see from above the marginal tax rate in Sweden is still very high.

It is obvious that reducing tax and cutting red tape is good to stimulate employment and increase productivity but all you hear is “TRICKLE DOWN ECONOMICS”

It didn’t trickle down it came flooding down but ORANGE MAN BAD

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