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Supply-side economics: Do lower taxes increase a country's economic health?

Results so far:

Yes
67% 459 votes Total: 690 votes
No
33% 231 votes

by Bob Totterer

Created on: November 01, 2008   Last Updated: December 16, 2010

Mr. Wilson Built a Factory

The good people in the small town of Nowhere had a problem; their town was dying. Folks were moving away a household at a time. You see, Nowhere had no industry or commerce to speak of. A depressed economy had made what little they had untenable. The residents now had to travel to a nearby metropolis in order to find work, buy essentials and seek entertainment. "Why stay in Nowhere?" they thought, and packed their things.

The town fathers decided to take action. They drove to the neighboring metropolis and called on Walter Wilson. Mr. Wilson owned a chain of factories and assembly plants there and in adjoining states. Their request of him was simple: that he should build one of his factories in their town. To this, a bemused Mr. Wilson asked, "Why on earth would I build a factory in Nowhere? I have everything I need in this big city." "We'll make it worth your while," they responded. "We will levy no property taxes on your place of business." At this, Mr. Wilson's eyebrows shot up. He rose from his desk, extended his hand and said, simply, "Deal."

Mr. Wilson built a factory.

He built it on the outskirts of town and it went up rather quickly. Over three hundred people were hired to work in that factory, with nearly half of them coming from Nowhere's four hundred-plus residents. No longer having to drive into the big city, they saved money on fuel, day care and other necessities. This was money that they could now invest or use to raise their standard of living. Best of all, they stayed in Nowhere and the little town stopped shrinking.

On his first day of work, Joe Radcliffe's wife, Hannah, brought sandwiches for him and his circle of friends. They thoroughly enjoyed this treat so she promised to do the same on the following day. After all, it was better than packing a lunch bucket. Soon, Hannah's pies and sandwiches were such a hit that she bought a lunch wagon and drove it to the parking lot of Mr. Wilson's factory every day. The lines became so long that Hannah was forced to hire two ladies to assist her. The money rolled in. Before long, she decided that she could at last realize her life-long dream.

Hannah Radcliffe opened a diner.

Hannah's place was scarcely a block from Mr. Wilson's factory and featured a blue plate special on weekdays. Soon, three cooks and four waitresses could no longer keep up with the press of hungry workers. Hannah decided to expand. She talked to Ralph Winter, a commercial real estate developer, who at

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