Saturday, December 17, 2011

A "Universal" Lesson From Postal History On Government,The Market & Taxation

Here is a universal lesson from 111 years ago which, although it hasn't sunk in with defenders of the growth of government, is universally valid as an economic truth.The example is from postal history but applies across the board.


It is self explanatory, but briefly, the reduction of price, especially with government charges, results in an increase in revenue through, presuming the "product" is what the market wishes to obtain, increased volumes. This  applies of course to the reduction of taxes on manufacturers which will, in due course, result in an increase in government revenue through the mechanism of expanded industry. It is remarkable how this simple truth is ignored and distorted by the political left.

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