Excellent economic analysis , of course. Important to be ready with the intellect.
I disagree only on the prospect of marginal changes being politically possible. Speaking with Milton Friedman, we need a crisis! And I have no doubt it's in the works. Social security alone should do the trick.
I thought the key argument against Sales / VAT as the main tax was that poorer people spend a higher proportion of their income on consumption. Wealthy people save and invest a proportion of their income which thus avoids the consumption tax. So the tax rate for the poor is higher than the tax rate for the wealthy. Which is unfair. Views?
Taxing consumption is the correct bit in this rant, and VAT is the obvious starting point.
Robert H Frank has articulated this and more for a long time very nicely, also bringing externalites (which do exist, and matter more than Chicago would think) tonbear on policy.
But transition is a bitch and tax reform is impossible in an economically illiterate electorate and politicians, so...
The first tax reform idea must be Pigovian levies. Why we don’t do this is further evidence that research findings lie distant from policy. Next consider taxes which do not obvious harm. Advertising is clearly excessive. Why not tax it? Third although we tax sins (gambling, dope, alcohol,smoking, we don’t tax their advertising. Sin advertising tax should at least reach revenue maximization levels. Finally, a modest financial transaction tax would do little harm. Some of it merely replaces the “tax” that microsecond trading imposed. And there is probably more asset trading than needed to make these markets close to efficient.
Do these. Then we can talk about simplicity and progressiveness.
The only tax that does no obvious harm is the land tax. No deadweight losses, because it doesn't change quantities, just prices. Doesn't apply to the Netherlands.
Excellent economic analysis , of course. Important to be ready with the intellect.
I disagree only on the prospect of marginal changes being politically possible. Speaking with Milton Friedman, we need a crisis! And I have no doubt it's in the works. Social security alone should do the trick.
Dreaming of a Land Value Tax...
You mean a property tax? Got that.
I thought the key argument against Sales / VAT as the main tax was that poorer people spend a higher proportion of their income on consumption. Wealthy people save and invest a proportion of their income which thus avoids the consumption tax. So the tax rate for the poor is higher than the tax rate for the wealthy. Which is unfair. Views?
I like the idea of a card for the first $10k (or some amount) mentioned in the article would work fine.
Pretty please, stop using that invisble pastel green color for links.
Great article.
Taxing consumption is the correct bit in this rant, and VAT is the obvious starting point.
Robert H Frank has articulated this and more for a long time very nicely, also bringing externalites (which do exist, and matter more than Chicago would think) tonbear on policy.
But transition is a bitch and tax reform is impossible in an economically illiterate electorate and politicians, so...
The first tax reform idea must be Pigovian levies. Why we don’t do this is further evidence that research findings lie distant from policy. Next consider taxes which do not obvious harm. Advertising is clearly excessive. Why not tax it? Third although we tax sins (gambling, dope, alcohol,smoking, we don’t tax their advertising. Sin advertising tax should at least reach revenue maximization levels. Finally, a modest financial transaction tax would do little harm. Some of it merely replaces the “tax” that microsecond trading imposed. And there is probably more asset trading than needed to make these markets close to efficient.
Do these. Then we can talk about simplicity and progressiveness.
The only tax that does no obvious harm is the land tax. No deadweight losses, because it doesn't change quantities, just prices. Doesn't apply to the Netherlands.