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| Last Updated: Aug 15th, 2008 - 11:26:43 |
Newsletters
:
2005 Newsletters
:
22 April 2005
Thought for the Day
To give up the task of reforming society is to give up one's responsibility as a free man.
Alan Paton
South African writer 1967
Apr 20, 2005, 15:51
Newsletters
:
2005 Newsletters
:
22 April 2005
Politics Causes Unemployment
One of the strangest myths believed by some politicians is that they can legislate for a higher minimum wage and that will make low income people richer. What happens of course is that they lose their jobs.
A business will only pay people up to a level where the business can profit from the exchange. The cost of employing a worker is the sum of the wages paid and the additional costs imposed by governments. (ACC, FBT, payroll taxes etc.) If this is greater than the employee can earn for the business then the employer will not hire that person.
This is a very simple and obvious conclusion but for some reason one section of politicians don't understand it.
Professor Sennholz discusses how politicians generate unemployment in this article from the Mises Institute.
Apr 20, 2005, 16:36
Newsletters
:
2005 Newsletters
:
22 April 2005
The Flat Tax Revolution
The Economist is a very serious magazine dedicated to finding the truth and explaining it as well as they can. This is another very good article on tax regimes in the world.
It is time for us to insist that our governments take a logical and reasonable (even a common-sense) approach to their job. The new tax proposals from the Labour government aimed at helping families will have many perverse effects as they take away the incentive for citizens to work longer, harder and more intelligently for their income.
It seems that a single income family with two children earning $70,000 will only get $2,000 more in the hand than the same family earning $38,000. At this rate all such people on $70,000 will be offering to work for three days for $38,000 and have a four day weekend at a loss of a mere $40 per week. The boss will get 60% of $70,000 or $42,000 worth of work for $38,000 and so could afford to spend half this on extra benefits for the worker. He can have two workers for 6 days a week (3 days each) instead of only 5 days at an extra cost of only $120 per week or $6000 per year.
I guess there won't be many small business owners paying themselves $70,000 per year when they can get almost as much by paying themselves $38,000 per year. (They pay no tax and get a $4000 "top up" from other tax payers)
Soon all the middle class workers will be on $38,000 instead of $70,000 and be much better off. Trouble is, where is the money that lifts their income to come from. Well no doubt the socialists will think of something!
Check out what The Economist has to say.
Apr 20, 2005, 13:08
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