LiveOffshore - Liberty, Financial Privacy, and Economic Freedom

Race to the Bottom

"Race to the bottom" is the idea that as countries lower their tax rates to attract individuals, business and investment, governments will keep cutting tax rates so low that government revenues will fall below some supposed optimal level.  If this "race to the bottom" continues, governments will not have enough revenue to fund public services.  

This argument presumes that government acts  for the general welfare of citizens.  In reality most of the time, government acts for its own self-interest.  Like the drug dealer who needs addicts, politicians need citizens hooked on government handouts.  The more people look to government to solve their needs, the easier it is for politicians to get re-elected and expand their power and control.