Since Antiquity

This is from one of our "Pages," library we use as it is more efficient to link to than insert it the whole piece, as regular readers will know about the concept, but it should be explained occasionally.

We call this the Genesis Curve, named for Genesis 47:26 of the New Testament where we see the first mention of the concept of an optimum tax rate in an historical record.  The critical phrase is, "...and Pharoah shall have one in five."

We believe this Old Testament truth inspired the "The King's Fifth" of Medieval Europe which was then a laboratory of economics and government for the 1,000 years of the Dark Ages.  Every ratio was tried and it was observed those taxing too little could not defend themselves while those taxing too much became corrupt.  Surpluses inspire sticky fingers as does unlimited borrowing or printing power which we feel has corrupted our government completely.

We extracted 211 data sets from the Statistical Abstracts of the United States from 1776 to 1987, one set for each year.  This was before the data was available in computer file formats and our original work would now be very difficult to deal with, requiring many hours to transcribe to spreadsheet, which is unfortunate as I prefer to redo studies every few years to confirm and learn from them.  

From yearly data we extracted Federal taxes, which was fairly easy as it was for most of the time only import duties and whiskey imposts, with the only difficulty accounting for inflation, which was minimal as the currency was linked to the gold in reserve.  We made a scattergram and the above curve approximates the data as a single line, a standard statistical procedure.  The curve through the scattergram showed an optimum of 18.3%, very close to the "one in five" or King's Fifth for historical concept confirmation.

At the present time our federal, state and local governments take 40% of the economy through taxes, fees and borrowings.  Borrowed money at 3% in 30 year bonds virtually double, increasing by the factor of 1.9, but that is rarely accounted for by politicians; only we who pay for it realize it when their numbers don't work and we derive ours, which do.  They now try to improve "revenues" by taxing 60% of the economy with "fees," "fines" and "investments" ever-avoiding the word "tax."   

The way to increase Federal revenues is to lower the total tax rates to 10% Federal and another 10% to all other, state and local, entities.  That will give us the maximum growth rate for the economy and tax revenues.  It is a fact known before the Bible was compiled, i.e. since antiquity.

Adrian Vance