The Gross National Product (GNP) is the value of all the goods and services produced in an economy, plus the value of the goods and services imported, less the goods and services exported.

Now according to Harvey's reckoning if you increase taxes you influence all of the first part, have no control over the import part and you obviously have an effect on the export side.

Your higher taxes increase costs, this must be reflected in the price of the goods and services you produce. Compared to goods and services being provided elsewhere you are now less attractive, even to your own domestic consumer base. They import more, buying less of the home produced goods. In turn because your higher taxes have increased your costs you cannot export as much as you did before.

Now you tell me Harvey are we in better shape than before or are we poorer off. Is the Government going to take in more revenue or less - whether it is in direct or indirect taxation it doesn't matter a damn.

By the bye, well said beardedbruce, you at least, have a handle on how things actually work out in practice.