POLITIK'N

There is currently only one Empire Economy in the world, the United States of America. Many would have once argued that the European Union, with its diverse, merged economies, would rival the dominance that America has enjoyed for the better part of the 20^th and 21^st centuries.  However, the EU has shown cracks in the very foundation of their economic ideology.

Germany is a prime example of the fall of what was once an emerging empire economy.  The creation of the European Union was the pitfall of this once global economic force.  The failure of this noble socialistic model is due to the conglomeration of goods and services that created a level playing field among emerging and dominant economies, which is counterproductive to capitalism.  Eventually both dominant and emerging economies suffer for various reasons.

Small economies in the Eurozone cannot afford to have their EU contributions used for the gain of the larger dominant economies, i.e. the PIIGS cannot afford their piece of the EU pie to support the operations in Libya, so that France can have a product monopoly in that country, thereby furthering their economic dominance.  Likewise, France must be able to use its finances for military support to protect their products, such as the Francophone, of which Libya is a major consumer based state, instead of bailing out Eurozone PIIGS.  France, like any EU member, does not want to ask for permission to protect a product or source of revenue, the loss of which could have dramatic effects on their GDP.

-Politik’n

(Source: politikn.com)

For those who wanted a historical reference for evidence that this works:

In 1924, Secretary of Treasury Andrew Mellon wrote: “It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower rates.” Exercising his understanding that “73% of nothing is nothing”, he pushed for the reduction of the top income tax bracket from 73% to an eventual 24% (as well as tax breaks for lower brackets). Personal income-tax receipts rose from US$719 million in 1921 to over $1 billion in 1929, an average increase of 4.2% per year over an 8-year period”

More evidence: The Adam Smith Institute stated in a 2010 report that “The 1997 Budget in Ireland halved the rate of taxation of realized capital gains from 40% to 20%. The then Minister for Finance, Charlie McCreevy, was heavily criticized on the grounds that this change would reduce revenues. He countered by predicting that revenues would rise substantially as a result of the lower tax rate. Revenues rose considerably, almost trebling in fact, and greatly exceeded official predictions.”

Obama should take a page from a fellow who lived in 600AD. Even back then they understood these benefits…

“If the tax-payers complain to you of the heavy incidence to taxation, of any accidental calamity, of the vagaries of the monsoons, of the recession of the means of irrigation, of floods or destruction of their crops on account of excessive rainfall and if their complaints are true, then reduce their taxes. This reduction should be such that it provides them opportunities to improve their conditions and eases them of their troubles.

Decrease in State-income due to such reasons should not depress you because the best investment for a ruler is to help his subjects at the time of their difficulties. They are the real wealth of a country and any investment on them even in the form of reduction of taxes, will be returned to the State in the shape of the prosperity of its cities and improvement of the country at large. At the same time you will be in a position to command and secure their love, respect and praises along with the revenues.”

—Ali ibn Abi Talib, Nahj al-Balagha, Letter 53