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When you believe that you can lower labour taxes and raise property taxes, and that these will compensate each other, you are engaging in a version of the loanable funds fallacy.

They will more than compensate, because increasing wealth creation cannot affect negatively to any payments or valuations now or future.

On consumer prices? No.

Of course prices will not fall, because increasing supply creates increasing demand. Let's put it this way: more value with same price; more wealth, less parasites.

by kjr63 on Sat Jun 18th, 2011 at 08:11:09 PM EST
[ Parent ]
One elaboration:

increasing supply creates increasing demand

To be more precise, income distribution to wealth creators creates increasing demand in a parasite-free economy. With multiplier effect.

by kjr63 on Sat Jun 18th, 2011 at 08:16:31 PM EST
[ Parent ]
They will more than compensate, because increasing wealth creation cannot affect negatively to any payments or valuations now or future.

You are confusing stocks and flows. You cannot use higher income tomorrow to answer margin calls today.

Of course prices will not fall, because increasing supply creates increasing demand.

Say's fallacy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jun 19th, 2011 at 10:00:24 AM EST
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