The Rolling Stones left socialist-labor England for France in 1971, when income tax consumed all but a particle of the band’s income–just as the Beatles had wryly predicted in Taxman. Gimme tax Shelter was as perfect a practical demonstration of the workings of the Laffer Curve as could be devised in an experiment. Nixon’s violent usurpations that same year shifted a tipping point for the return to freedom, and the Libertarian Party came into existence. But what is the shape of this curve economists of the looter persuasion have struggled so tediously to evade since it began to undermine support for the 1848 communist income tax? What numbers that fit the curve?
The fundamental term in the theory of supply and demand is willingness. Therefore the hump in the curve has to lie close to the origin. Intellectuals of the looter persuasion infesting the Wikipedia, pile the hump as close as possible to the 100% rate of a perfectly communist economy. This curve has been around for a millennial’s millennium, and is clearly bounded and defined. So where does the curve for These States quit rising, flatten and start to fall? That zero point at which the slope of the function changes from positive to negative might well be among the most important numbers in all the social sciences. So at what percentage does the change occur? President Coolidge remarked December 3, 1928:
“Four times we have made a drastic revision of our internal revenue system, abolishing many taxes and substantially reducing almost all others. Each time the resulting stimulation to business has so increased taxable incomes and profits that a surplus has been produced. (…) Under this sound and healthful encouragement the national income has increased nearly 50% until it is estimated to stand well over $90,000,000,000. It has been a method which has performed the seeming miracle of leaving a much greater percentage of earnings in the hands of the taxpayers with scarcely any diminution in the Government revenue.” (NY World Almanac 1929 147)
The Laffer Curve turning point, shortly before prohibition and the income tax caused the Great Depression, was clearly around the 5% mark.
When Calvin Coolidge was president government share of GDP was approximately 4% of GDP, and communist socialism had controlled an entire country, Russia, for a mere four years. The mind virus or altruist meme that German communists developed and unleashed on the world spread. It was was nurtured into explosive growth by organized mysticism, machine politicians and union organizers among the vast bureaucracy fed and watered with money taken at gunpoint. Their efforts, by brutality or brainwashing, focus on pushing that turning point closer to the 100% mark. That the political parasitism of looter ideology is best described as a contagious mental illness–or a religion of organized looters–is obvious from comparing the two graphs.
Just as a dog or cow becomes weaker and sicker when infested by fleas, ticks, worms and other parasites, so the economy of a polity is sickened and ruined by infestation by the “unproductive hands” mercantilist prof. Adam Smith warned against as the ONLY cause of the ruin of nations. This observation came 192 years before the development of the non-aggression principle underlying modern libertarian political economy.
Philosopher Ayn Rand warned that an unhealthy fascination with death–clearly visible in today’s Saracen berserkers–is the false value behind all altruistic philosophies, be they bureaucratic or obscurantist. Surely by now the lessons of Christian National Socialism, Soviet Socialism, Prohibition and the Great Depression, Crusades and Jihads, the Holy Roman Inquisition, Pol Pot’s killing fields, the Ku Klux Klan, the People’s Temple in Guyana and Islamic State Sharia law have had time to sink in and be understood even by the laziest of stolid citizens!
If you are visiting this site from Canada, you might visit Canada’s Libertarian Party too.
Find out the juicy details behind the mother of all economic collapses, and how its causes changed the laws. Prohibition and The Crash–Cause and Effect in 1929 is available in two languages on Amazon Kindle, each at the cost of a pint of craft beer.