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Maybe the reason it is the financial capital of the entire world is that historically the tax regime let people keep most of the money they earned.
by hollerith 1y ago
Maybe the reason it is the financial capital of the entire world is that historically the tax regime let people keep most of the money they earned.
- TimorousBestie 1y agoIncome tax rates and corporate tax rates were higher during the post-war era than they are now.
- bpt3 1y agoEffective tax rates weren't much different, which is what matters.
- TimorousBestie 1y agoThe effective income tax rate was still on the whole higher for the wealthy in the 20th century. Depending on where you put the percentile cutoff, I’m seeing peak-to-troughs between 5-20%.
- hollerith 1y agoAnd the reason most governments reduced the rate was because economists argued that the higher rate reduces economic activity so much that total tax revenue (collected by the government) is actually higher at the reduced rate. Look up the "Laffer curve".
- 1718627440 1y agoBut taxes don't exist as an income flow, but to give incentives. Taxes exist to reduce economic activity for goods where you want that.
- bpt3 1y agoWhat gives you that impression? I get that they are used that way at times, but the core purpose of taxation is to generate revenue for the government.
- 1718627440 1y agoBecause that's the definition of the term. The other concept is called duties.
- bpt3 1y agoNo, it's not. One example definition of tax: a charge usually of money collected by the government from people or businesses for public use. A duty is a type of tax.
- 1718627440 1y ago> a charge usually of money collected by the government from people or businesses for public use. Yes and what makes it a tax is the intention. If it is to regulate a market to be more free, it's a tax, otherwise it's a duty.
- bpt3 1y agoI'm not going to keep going back and forth about this, but wanted to let you know you are 100% wrong in case you're not a native English speaker or something. Please reference any dictionary since you don't believe me.
- 1718627440 1y agoOk, that might be the case. But these are the words my dictionary gave me. What do you think are the right words for stuff that e.g. needs to be payed to the government a) to regulate the market or b) to provide an income to the government?
- p_j_w 1y agoHave you any evidence for this proposition?