Government

Recently I noticed another difference between government and private business when it comes to economics. Government sees things as static and business sees things as dynamic. Static means that if you change one thing the other things will remain constant. The President is proposing changes in the tax law and he is predicting additional revenue because of the changes. He wants to increase the tax on dividends from the current 15% to 39.6%. The Government Accounting Office (GAO) then calculates how much revenue this will bring in. Any financial planner worth his salt will immediately recommend that all of his client replace their high dividend stock for high growth stock and this will destroy any government estimates. In business when a decision is made all the known possible side effects are first evaluated. If they did not operate in this dynamic matter they would soon be out of business.