The Principles of Economics - For a Nation

The Principles of Economics for a Nation

Taxes are the primary source of revenue for a government or Nation; in order for government procedures to occur, such as policing, defense, regulations, promoting health standards, directing and building infrastructure as well as coming up with scientific advancements and other situations, the government must have money, and the most logical way for this to occur, and the most fair, is for everyone to pitch in a small amount, what they can, proportionally; these are taxes.

Without these said things, business would have a hard time occurring. Roads, bridges, the direction towards transportation, and the maintenance of such things, such as with traffic signals, policing and the rebuilding of such infrastructure when damaged, are all important. The act of policing allows for reliability in a business environment; when an individual can be held responsible for their actions by and outside force, it takes the strain off business. Just as an individual paying for a product can expect a proper product or be capable of receiving their money back for an improper one, a business can be assured that an individuals will inevitably pay for their product. If one individual violates this, the outside system of policing allows for individuals to be held liable and responsible for their actions, creating a consistent and reliable functional business environment.

Education is also considerable in business. Without the subsidization of various businesses that take long times to pay and have variable yields (such as with agriculture) or that are essential for the growth or sustenance of a nation, or merely things that lead business in the right direction providing incentives and capabilities, potentially and hopefully returning more money than was spent, business would have a hard time growing and becoming successful.

Business is important for a nation. The entire welfare of a government or nation depends entirely upon it's economy; without a stable, productive and functioning economy, a Nation is nearly doomed. Considering that nearly all revenue is generated from taxxes and inputs into the system, without these a Nation will be less successful. Individual income taxes rely on business hiring individuals; business taxes rely specifically on business. Sales tax as well rely on business doing well in order to make money, as well. Therefore nearly all the revenue generated rests solely on business creating money to be taxxed in the first place, which in the case of a capitalistic system occurs naturally.

When an economy is bad, more strain is placed upon a government. Not only do they take in less taxes, but their citizens are increasingly more reliant on their government. In this cases of social security and medicare, those who are unemployed and cannot find a job often rely on welfare programs to stay afloat, requiring government spending, while they increasingly are unable to provide their own healthcare costs or insurance costs. This is turn is compounded by a continued lack of taxes, which drives up spending but lowers money taken in. This can lead to exponential debt ballooning quickly if not resolved.

But just as this is possible, it is also possible to make money exponentially as well. When the economy is doing well, programs such as social security and medicare are less strained, while more taxes from workers and business are collected due to increased business and spending as well as increased incomes. Money spent by consumers is recovered in part by taxes, and money generated by business goes back to consumers to consume more to be effective. The process is somewhat cyclical, with money going to workers, whom generally get payed by businesses, whom then buy things, which goes back into business; a certain percentage of government money also comes back in the form of taxes, and assuming all money is spent it's theoretically possible that a proportional amount will be received that's near the money spent.

The question then arises; how does one improve an economy? Since the welfare of everyone rests upon it, for their standard of living, for the government to do well in order to provide necessities for life and even the continuation of stable business, it is pertinent to improve the economy. Operating on some basic principles, combined with some specific ideas, it is possible to improve the economy and return a nation back to near it's potential of growth and capability.

Essentially, if an economy improves, the entire government improves. The basic fundamental principles to be aware of are, that consumers are generally the majority of people, that is poor to upper class, but not the super wealthy. In general, the bulk of them are paid by, and give their money to, large businesses, or business. If a person receives payment in return for their work, they often give their money back into the economy, to pay for goods or necessities, which are produced in the economy. In that way, the poor and middle class, and even the lower upper class, are the primary consumers, predominately responsible for the bulk of the wealth and work within the country. In a capitalistic system, the wealthy are only wealthy because of the consumers.

As such the trickle up theory works in that, the poor invariably shell out their money back to the people whom give them it, for the most part. Thus the rich, and business, only thrives when there is a strong consumer base, and consumers generally tend to be the bulk of workers, as well. If business improves, than the consumer base can theoretically improve even more (as with the trickle down theory, hence, at most, doubling the effect of improving the consumer base). Hence your primary focus has to be on the primary consumers, so as to provide the welfare and well being of everyone.


Tax Cut for poor and middle class is a Tax cut for the Rich
Another fundamental thing to realize is that the government and business are intricately interconnected. Not only do they receive taxes, but mutually benefit each other with goods, welfare, creation, protection, and a host of other things. If the government is removed, reliable business transactions, with things like roads, police, enforced regulations on unfair business practices, and other things, than business cannot thrive as well as it could. If business is decreased, then the government loses not only the bulk of it's business income, but also the bulk of it's individual income tax, since they are only payed by business. In order to improvement the government's capabilities, to help the people, the people need to be in a strong base. Hence, in order to improve the lives of everyone, the consumer base, or, the majority of people, who tend to be poor, middle class, and the lower upper class, need to be helped. Helping out the poor and middle class helps out the upper class, so by focusing on helping them, you end up helping everyone; this is simply the most logistically efficient way to do business.

How to go about this, is another matter. However, it should be noted that a tax cut for the lower class and middle class, and for the lower upper class, or the predominate consumers, is a tax cut for the upper class and business. Since consumers invariably spend the majority of their money, if given massive tax cuts, then the rich and business will in turn, receive their money, assuming that the majority of the super wealthy got that way by business (which we do in general in a capitalistic theory). Hence, if you want the most logistically efficient way to provide a tax cut to the wealthy and the poor, you provide it simply to the poor, who will then spend their money, which will then go to the rich and business. You could theoretically, even increase taxes on the wealthy, and have the government break even with the money, essentially given to the poor, and taken back up when given to the rich.

The rich don't lose over-all take home profits but the poor get more products for the same salary. Salaries do not need to increase while over-all well being increases. If the economy improves as a result, as in if the economy is beneath a certain threshold, this can also increase money, as well.

So, in essence, giving the poor and middle class a tax cut gives the rich and business one. By giving money directly to consumers, who will spend it, presumably in businesses, the consumers will

Taxes do however provide some degree of stability. If the poor and lower class spend their money out of the country, then the current government will still have some money. In addition, if markets change abruptly, then there won't be too much of a shock in either direction. Hence a low tax rate on the poor and middle class, as well as lower upper class, but a significantly higher or, current tax rate on the upper class and large businesses, is an economically sensible action for providing both the government, people, and business, with as much benefit as possible.