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Governments certainly have limits in their function. There a maximum of GDP percentage they could consume, if they go beyond them they blood drain they economies they live on. Limits to governments are not a bad, but a good thing. History has showed us that too powerful governments both slowed down economies and spoiled personal freedom and thereby the lives and wellbeing of their people. Don't aspect solutions from the big issues from governments. Governments are more catalysts, than that they are processors and realizers. Democratic governments are too busy with pleasing their voters and also maintaining existing structures and too less with the important development of the near future, this must change. Totalitarian Governments only serve a small part of society very well and care too less for the whole society / the full population, this must be changed. Governments are the steer wheel of economy and society. Not the motor. The motor is the market and the people. History has showed us when governments also tried to be the motor, there was no power. History has showed us when corporations also tried to be the steer wheel, there was no justice. The limit of the governmental layer is therefore also her asset. Governments can't solve PeakOil or PeakOil related issues. PeakOil and its effects and consequences of the effects just are there, no government (also not the USA government by both the dollar hegemony undermining the Saddam Hussein Administration and the PeakOil driven invasion of Iraq) that is able to solve PeakOil, they just can adjust/response their policies to it. The market and the people must do the work concerning response to PeakOil. Governments can steer this development, but never power it. The parable of the motor (market and people) and the steer wheel (governments and politics) and its both specific (but related) functions is very crucial. Governments have beside a functional limit, also a financial limit: Governments get paid by taxation (economic status defines the more taxation possibilities) and by funding budget deficits (economic status defines the limits of funding of budget deficits). The financial limitation of governments will be resized by economic crimp due to PeakOil (giving less taxation and less governmental credit possibilities), but also by more external (low priced) taxation. In a global economy based on e-trade more and more companies will decided to go shop globally for a better taxation regime. And emerging countries will facilitate that severely (by offering low offshore taxation rates), which western countries can not ignore and will lead to lower taxation rates. In a digital era, even local based companies can reduce the taxation pressure by 'stalling' their brand rights or IP (intellectual property) right, or software right (almost any equipment has these days) in trust offices in lower taxation rate offering nations. Taxation has become a product and companies can choose where to 'buy' the taxation. This taxation shopping development also will slash big holes in the (relatively high) governmental budgets of the Western World. Small companies will get the same smart taxation knowledge as formerly only multinationals has. Eventually governments will skip labor, profit and capital taxes and will concentrate their income on consumption taxes.

Author: Gijs Graafland

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