Comment 31857

By A Smith (anonymous) | Posted June 18, 2009 at 03:16:39

mikeonthemountain >> Riding a bike HAS ALREADY made my tiny little corner of hamilton more prosperous sans car payments, insurance, repairs, etc

That's like saying, being on a diet will make you more prosperous because you buy less food. True wealth comes from increased output and consumption across the board, not simply shifting consumption patterns. In order to increase real output, you need a way to measure the success of your investments and the only way to do this is to charge people for that good or service, in order to find out how much they value it.

If a restaurant can charge X + $2 for a meal that only costs them X to produce, then $2 in real wealth has been created. On the other hand, if government invests Y in bike trails, how does anyone know if Y + $ has been created. Because the trail is free, the city can't ever know if society values it more than the cost to build it, or whether they value it less.

In the private sector, when a business produces a good or service that only produces value to consumers of X - $, eventually that business goes belly up. However, with taxation, we have a system whereby people (politicians) can invest X and produce X - $, thereby destroying real wealth and yet still be rewarded with more money to invest next year.

Furthermore, when a large percentage of your local economy is based on this type of investing, where the value of the investment to society is completely unknowable, the obvious result is an economy that makes fewer profitable investments and more wealth destroying investments.

Unfortunately, because most people are ignorant of how wealth is created, they fall for the ramblings of "caring" politicians, rather than greedy business owners. It's not a surprise that the pro-worker, anti-business belief system in Hamilton has driven wealth creating businesses from this city, leaving nothing more than welfare cases and government subsidized employees to take up the slack.

Cut tax rates to 0.5%, increase the proportion of economic transactions that create real value to the people of Hamilton and this city will once again be prosperous. Alternatively, keep high tax rates, allow politicians to make lots of investments that destroy wealth and continue living in a poor, run down city. The choice is obvious for anyone willing to embrace the truth.

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