Higher taxes never reduce the deficit. Governments spend whatever they take in and then whatever they can get away with.
Interpretation
Higher taxes do not solve government deficits, as spending continues regardless of tax revenue.
Milton Friedman argues that increasing taxes does not necessarily lead to a reduction in governmental deficits, as governments tend to spend all of their revenue and often more. This suggests that merely raising taxes might not lead to improved fiscal responsibility, as it does not inherently alter the spending habits of governments.
In practice
Discussing fiscal policy changes in a public forum.
The economic miracle that has been the United States was not produced by socialized enterprises, by government-unon-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures, as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline.
Universities exist to transmit knowledge and understanding of ideas and values to students not to provide entertainment for spectators or employment for athletes.
There is no place for government to prohibit consumers from buying products the effect of which will be to harm themselves.
There is one and only one social responsibility of business - to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
The great danger to the consumer is the monopoly -whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him. Alternative sources of supply protect the consumer far more effectively than all the Ralph Naders of the world.
The strongest argument for free enterprise is that it prevents anybody from having too much power. Whether that person is a government official, a trade union official, or a business executive. If forces them to put up or shut up. They either have to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business.
The introduction of a substantial Government transfer tax on all transactions might prove the most serviceable reform available,with a view to mitigating the predominance of speculation in the United States.
The big bankers of the world, who practise the terrorism of money, are more powerful than kings and field marshals, even more than the Pope of Rome himself. They never dirty their hands. They kill no-one: they limit themselves to applauding the show.
What brought mass innovation to a nation was not scientific advances - its own or others' - but 'economic dynamism': the desire and the space to innovate.
I think if you look back through time, the history of income, wealth and taxation is full of surprise. So I am not terribly impressed by those who know in advance what will or will not happen.
The 'boom-bust' cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.
I think there's a lot of merit in an international economy and global markets, but they're not sufficient because markets don't look after social needs.
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