Quote:
Originally Posted by woj
your line of reasoning would be true under capitalism... under socialism however it's not...
imagine country has 10 people each making $10 = $100 total
50% gets paid in taxes, so government gets $50 for various gov services
now 1 person that is happy to work for $5 immigrates to your country
he replaces 1 of the 10 people that were productively employed, so now total = $95
producers are happy, cause now they pay $95 instead of $100
consumers are happy, cause it drives down the cost of goods, etc
BUT government (tax payers) is not happy, cause now they get $47.50 instead of $50
AND they have to feed the person that got replaced by the immigrant at lets say cost of $5, so government (tax payers) are left with only $42.50
... but $42.50 is not enough, so gov services need to be cut or taxes raised....
so immigration only works well under capitalism, under socialism the net result is certainly debatable, but likely negative like described in the simplified example above...
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your example is true in a closed environment...where no international trade exists and where exports are completely insignificant to the economy...most of what you said still stands true in the real world, where exports play a significant role, YES there will be less tax base...but the cheap workers allow you to produce/operate cheap...this in turn allows you to export at competitive prices...
you can not have a cake and eat it at the same time...you can pick only one option...either you keep the cake and you do not eat it....or you eat the cake and you do not keep it...it is impossible to do both...