If a tax cut increases government revenues, you haven't cut taxes enough.
Interpretation
A tax cut can lead to increased government revenue, but if it does, the cut was not substantial enough.
Milton Friedman suggests that if reducing taxes results in higher government revenues, it indicates that the tax rate remains too high. This implies that a more significant tax cut could further stimulate economic growth, leading to increased revenues as businesses and individuals have more capital to spend and invest.
In practice
During a debate on economic policy, a candidate might quote Friedman to argue for more substantial tax cuts.
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.
It is an extreme perversion of capitalism if you can trade in something before you have even paid for it.
The natural effect of low interest is to increase trade and industry; because undertakings of every kind can be prosecuted with greater advantage.
Actually, in my advanced, high-falutin' frontier economics, I often work with what I define as 'money metric utility,' and I ask people, 'Do you really want that? What are you willing to pay for that?'
With neoliberalism discredited and austerity failed, we need to rewrite the rules of the economy once again. But this time in the right way. We need rules that focus on long-term economic growth, and the only kind of sustainable prosperity is shared prosperity.
Economy is the method by which we prepare today to afford the improvements of tomorrow.
In our high-tech, high-skilled economy where low-skilled work is being scaled back, phased out, exported, or severely under-compensated, all the right behavior in the world won't create better jobs with more pay.
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