In a nutshell, government has only one effect when it enters business and that is to inhibit it. Whether it's regulation or taxation, it only serves to inhibit business. Many will argue that regulation is necessary to prevent fraud, however the fraud is eventually replaced by corruption. Others will argue that taxes are necessary to redistribute wealth. The only problem with that lofty goal is it distributes the yield of someone's labor to someone else who doesn't deserve it. Thus, killing motivation. Why work hard when someone else will do it for you?
Think about it. Taxes do nothing but inhibit the behavior they tax. A few years ago, the U.S. government imposed a luxury tax on purchases of yachts. The liberals, with great fanfare, said that the rich should have to pay extra for their toys. (By the way, I'm far from rich and will never own a yacht.) The effect was business fell so drastically that it stopped yacht building in the U.S. Guess who builds yachts? Yep, middle-class labor.
The workers were laid off their jobs since no yachts were being produced. As no new yachts were being sold, not only was no luxury tax realized but the previously collected sales taxes also ceased. The liberals quietly repealed the tax about a year later.
Similar examples exist in local government. Cities will often see "X" amount of revenue from transit fares. Say they have a hundred thousand riders per a given time period. They reason if they increase fares by a dollar they will realize an extra hundred thousand dollars during the same given time period. When they execute this ill-conceived plan, they are always astonished that they lose money. The reason? The increased fares have caused a decrease in ridership.
You would think that the legislators would have a clue. After all, they tax alcohol, cigarettes and gasoline to limit their consumption. What makes them think that taxing other services and products won't have the same effect? The laws of economics are not changed by the morality of the intent of the tax nor their targets. Legislators always use static analysis when they are trying to increase revenue, while the result of their actions are anything but static.
So, the government's effect on e-bussiness will almost always negatively impact that business unless they are reducing taxes and regulation. Both of which are against the very narture of liberalism/socialism. Thus, everything that is employed, used or depended upon by business will suffer. Especially hard hit are those they are trying to protect with such taxes and regulations.
Just as webmasters look for holes in Google's armor, business will find away around the taxes and regulations. If taxes and regulations are too tight, business is forced underground (drug trade is a good example) and the government not only loses all control but all revenue, as well. The government then spends resources to combat the evasion.
Another good example of this was the Reagan years. Taxes went down and government revenues about tripled. Unfortunately, they were outspent by the liberally controlled congress at the time. Another reason not to give the the government a dollar. They'll spend another two that they don't have.
Conversely, in the Clinton years taxes were at an all-time high. Why was the economy booming? Companies like Enron, Tyson Foods and MCI Worldcom were defrauding the public. Remember what I said? Over-taxation and regulation breeds corruption. Of couse, as with all pyramid schemes, the bottom eventually falls out from under them. The hardest hit were the lowest on the econmic totem pole.
Bottom line: If it is at all possible, keep the government out of your life and your business, including e-business.
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DrTandem's San Diego Web Page Design, drtandem.com
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