Raising Tax Rates Reduces Tax Revenues

The new security devices that are intended to stop robots making someone answer 3 + 5 = ?, may be beneficial but it most likely also prevents politicians from entering your site since they know how to BS, write laws, but cannot do math. Increasing tax rates reduces tax revenues and that was treason to socialists. But when Reagan did cut the tax rates, tax revenues rose.

They are discovering that in Greece where since 2010, they have raised the VAT rates 44% – i.e. from 4.5% to 6.5% and from 9% to 13% – while the main rate has grown 22%, from 19% to 23%. Those tax hikes were all  intended to increase the government’s revenue, but in fact they totally failed reducing revenues by 20%. The 2014 VAT revenues dropped below €14 billion, to €13.6 billion. For 2015, politicians always assume growth and the budget had provided for VAT revenues of €14.4 billion. Of course, during the first five months there has already been a shortfall of €350 million.

The politicians just cannot figure it out that they are not neutral in the economy. They consume money, they do not add to the national wealth. The more they squander, the lower the economic growth and the lower the living standard. The greater they tax small business, the higher the unemployment rate will go creating the lost generation among the youth.