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Reaganomics

Cutting Taxes = Increasing Revenue

Tue, 03/03/2009 - 7:22am | posted by Matt Chancey
Around 150 BC, Emperor Ching Ti came to power in China and immediately faced a major problem: his treasury was empty.

Taxes were very high, but no real revenue was coming in. That’s because the system of taxes at that time was an early form of income tax that centered on the government taking a large percentage of a farmer’s crops.

So Ching Ti did something bold and innovative: he cut taxes.

Overnight, taxes went from over 50% down to about 3%. Farmers, who had fled to the hills to escape draconian tax rates, now came home and began farming again. To make a long story short, Ching Ti’s greatest problem while governing was trying to keep all the grain in his barns from spoiling.

It seems that ancient Chinese history is good for more than just cutesy script on a fortune cookie.

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