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Vlerchan
January 6th, 2017, 09:07 AM
I couldn't resist.

If you would like to continue talking about taxes, which are extremely low in the USA compared to most countries, than start your own thread. Believe me, I will respond.

Corporation Taxation

It should be set at zero. Review this former post I made:

I discussed the opposition I had with this in the Who do you support thread (http://www.virtualteen.org/forums/showpost.php?p=3411358&postcount=265), if you missed it. Other than [1] being regressive, insofar as bigger firms are much more capable of avoiding it, [2] acting as a disincentive to capital investment, which hurts output and wage growth [Djankov et al. (2009) suggests it is quite large], [3]: the incidence of taxation being levied on labour, or:

Our central estimate is that the long run elasticity of the wage bill with respect to taxation is -0.093. Evaluated at the mean, this implies that an exogenous rise of $1 in tax would reduce the wage bill by 49 cents. We find only weak evidence of a difference for multinational companies.

Arulampalam, Devereux and Maffini (2010) (http://ftp.iza.org/dp5293.pdf)

Using cross-country data I estimate that a ten percentage point increase in the corporate tax rate of high-income countries reduces mean annual gross wages by seven percent. The results do not support the common belief that the burden of corporate taxes falls most heavily on skilled labor; corporate taxation appears to reduce the wages of low-skill and high-skill workers to the same degree.

Felix (2007) (https://www.kansascityfed.org/Publicat/RegionalRWP/RRWP07-01.pdf)

Controlling for observable worker characteristics, a one percent lower state tax rate is associated with a 0.36 percent higher union wage premium, suggesting that workers in a fully unionized firm capture roughly 54 percent of the benefits of low tax rates.

Felix and Hines (2009) (http://www.nber.org/papers/w15263)

Consistent with our theoretical model, we find a negative effect of corporate taxation on wages: a 1 euro increase in tax liabilities yields a 77 cent decrease in the wage bill [...] ge effect through reduced investment is empirically small due to regional labor mobility. High and medium-skilled workers, who arguably extract higher rents in collective agreements [this is a German-thing, inapplicable to the U.S.], bear a larger share of the corporate tax burden.

Faust, Peichl and Siegloch (2013) (http://ftp.iza.org/dp7390.pdf)

Here's a non-technical piece that discusses the issue with considerable clarity.

Between 1977 and 1991, a one-percentage-point increase in the state corporate tax rate reduced wages 0.27 percent, on average. In comparison, from 1992 to 2005, a one-percentage-point increase in the state corporate tax rate decreased wages 0.52 percent, on average. This jump may be due in part to increasing global competition.

Felix (2009) (https://www.kansascityfed.org/publicat/econrev/pdf/09q2felix.pdf)

In other words, it's the worst; and it hurts workers more than companies, anyways.

Capital Gains Taxation

Before we begin, it is worth noting that this forms a double-taxation on corporations, which reduces output further - which reduces wage growth, further - alongside creating expensive distortions (Desai and Gentry 2003 (http://www.nber.org/papers/w10153)). Otherwise, it impedes investment - and investment is central to long-run growth.

The theoretical literature suggests that the optimal rate is zero in both the long- and the short-run (Atkeson et al. 1999 (https://www.minneapolisfed.org/research/qr/qr2331.pdf)) but empirical experience seems to suggest that it is in-and-around 10% where government revenue is maximized (eg., Evans 2009 (http://iret.org/pub/CapitalGains-2.pdf)) - because I am in favor of social spending I tend towards the belief that it should be 10%, as a result. Trabandt and Uhlig (2011) (http://home.uchicago.edu/~huhlig/papers/uhlig.trabandt.jme.2011.pdf) suggest that a 79% capital gains cut would be self-financing; but also suggest that the optimal rate is 6%.

In other words, whilst the 0.01% pay the vast majority of capital gains tax, they will pay more if you charge them less.

Income Taxation

Should be flat, and set low. Please review this previous post on flatness.

But in the simplest terms, progressive taxation disincentivises the taking an extra hour of work. This effect - most importantly - increases as income rises, as the average tax rate increases with each hour worked*. The added problem here, is that the most productive workers are the harshest affected, because the most productive workers have the highest scaling average tax rate.

Wealth-production is constrained as a result.

Trabandt and Uhlig (2011) suggest that the optimal rate, as far as revenue maximization is concerned, would be 30%. Though, I believe it should be lower regardless, since recent evidence has continued to elaborate on the fact that labor elasticities are, in fact, quite large (For a review see Keane and Rogerson (2012) (https://www.aeaweb.org/articles?id=10.1257/jel.50.2.464)] and, futhermore, have a disproportionately large effect on women, which engenders greater gender inequality.

But, even if neither were the case, taxing consumption and carbon is more efficient, poses less distortions, and is where the actual interests of liberals and welfare-capitalists should lie. As I out it in another thread, there is just more intelligent ways to tax.

- Liberal.

Porpoise101
January 6th, 2017, 03:53 PM
What do you think about Lump Sum Taxation?

I am just curious, but what would be the costs of social tension and envy? If you just did this stuff without giving more out in welfare, education, and other social programs then I would think that this system would engender hatred and maybe even violence among the lower classes. If there are many costs, then perhaps it would be better to have an inefficient system to avoid that.

Vlerchan
January 6th, 2017, 04:11 PM
What do you think about Lump Sum Taxation?
Like regressive income-taxation, it's an interesting theoretical concept that isn't worth the (political, and not) bloodshed. Ask Maggie.

I am just curious, but what would be the costs of social tension and envy? If you just did this stuff without giving more out in welfare, education, and other social programs then I would think that this system would engender hatred and maybe even violence among the lower classes. If there are many costs, then perhaps it would be better to have an inefficient system to avoid that.
I am of the feeling that you could have, 1. a more efficient taxation system, 2. provide the same provision of services, per person. I do agree with the central point anyways, that is the costs of popular rejection outweight the welfare gains brought about by an increase in efficiency then it is not going to be worth making the changes, but I'm of the opinion, that's not the case here.

I suggested, at the end, making up shortfalls with carbon, consumption (and I forgot land, rather importantly) taxation because they create less distortions; the issue with the taxation measures I've discussed is the size of their distortions.

NewLeafsFan
January 8th, 2017, 03:40 AM
Thank you for taking my advice and starting your own thread about this. I didn't think you would.

I live in Canada, which us a socialist country. For those who don't know that mean that we pay higher taxes abd get more from out government. The benefits thst we recieve include but are not limited to free health care and extra social assistance (longer maternity leaves, wealth fare, child credits, lower post secondary education prices).

This system works for everyone. If you cannot afford an operation, cancer treatment, regular doctor visits, ect. If you are lower income and have children, you qualify for a child tax credit. My family doesnt qualify for this so we see it as a form if charity. We don't have thst awful 'what about me?' Attitude. If you have a baby we have something called a maternity and parental leave. The childs parents can split a the minimum one year off but the woman must take a certain amount of time off. University and college are cheaper. Whst teenager can afford post secondary education? Why should theyre options be limited because if the family they were born into? Education increases the employment rate.

Our system is not perfect but I dint believe that there is anything better.

Vlerchan
January 8th, 2017, 07:17 AM
This system works for everyone.
The question I pose in the OP is if it works optimally; what does 'work for everyone' even mean and how does it relate to the economy performing optimally?

We don't have thst awful 'what about me?' Attitude.
Worth noting that you are behind the United States in the World [Charitable] Giving Index so I think we can probably exclude Canadians from considerations of cultural superiority in this regard.

Whst teenager can afford post secondary education? Why should theyre options be limited because if the family they were born into?
I discussed in another thread about how the price of post-secondary education has a modest effect on initial enrollment. So, that you are optimizing government spending by increasing funding for third-level education is probably quite incorrect.

but I dint believe that there is anything better.
In the OP I noted that you could slash capital gains taxation and it would be self-funding. That almost seems like it might be definitional better-ness.

NewLeafsFan
January 8th, 2017, 12:49 PM
The question I pose in the OP is if it works optimally; what does 'work for everyone' even mean and how does it relate to the economy performing optimally?


Worth noting that you are behind the United States in the World [Charitable] Giving Index so I think we can probably exclude Canadians from considerations of cultural superiority in this regard.


I discussed in another thread about how the price of post-secondary education has a modest effect on initial enrollment. So, that you are optimizing government spending by increasing funding for third-level education is probably quite incorrect.


In the OP I noted that you could slash capital gains taxation and it would be self-funding. That almost seems like it might be definitional better-ness.

Working for everyone means thst it foucuses on helping those that need it and in certain situations those that can afford to help themselves.

Thats very interesting that Canadians are less charitable. Their is less poverty by population in Canada than in the states. Must be because our system is more effective. Our taxes prevent poverty.

You want high education prices because it lowers the number of ppl that apply. So in other words you dont want others to have a chance so that you have a better chance of getting accepted.

So what you are saying is that if you didn't have to pay taxes than you could afford to do everything by yourself? Do the math, thats just not realistic.

Vlerchan
January 8th, 2017, 01:36 PM
I would appreciate if you didn't put words into my mouth in future posts. You have - so far - jumped to so many conclusions about my motivations and points that it is mindboggling.

Their is less poverty by population in Canada than in the states. Must be because our system is more effective. Our taxes prevent poverty.
Under Chile's hypercapitalist regime, poverty fell from 47% in 1985 to just 7% in 2015 (Navia 2015). Ergo, low taxes decrease poverty. It must be!

If you thought that was fallacious reasoning then you had better give your own post a read through.

It's worth noting that the poverty rate in the United States has risen substantially in the last decade. This has - in part - been down to the global recession. Prior to this it had a poverty rate that was much closer to the one in the one in Canada - it was actually lower during the 1990s. Current measures are probably off given the lingering impact of global recession on the United State's The United State's also has a larger number of single-income and single-parent families - and a larger and more entrenched underclass given its historical issues with racism (though let us not forget that the poverty rate among indigenous Canadiens is twice that of white Canadians). So let us not jump to undue conclusions here. There's lots of differences between Canada and the United States that would encourage higher or lower levels of poverty; none of which you have given an ounce of consideration too.

It is probably true that Canada's average tax-take and higher spending on transfer programs facilitates less poverty. But the question I asked in the OP was what impact that might have on long-run income generation. The demonstration was that it would constrain it and that would have a negative impact on the population down the line. The issue with your reasoning is that you just care about the status of poor Canadians in the present - and not what opportunities are available to them in the future. You are presuming that poverty eradication in the present is optimal - when there are serious questions about what the welfare of citizens will be further down the line.

Which is why I immediately questions your claim to want to design a 'system works for everyone'; it might leave the present 'everyone' better off; but you will probably end up short-changing the future 'everyone'.

You want high education prices because it lowers the number of ppl that apply.
That's not all; the poor people must also starve! Otherwise my sadism might never be satisfied.

In all seriousness, there are competent arguments against subsiding post-secondary education. The main one is that it has little impact on enrollment (Angrist 2015 (http://www.nber.org/papers/w20800)) and thus ends up being a massive tax cut for middle-class and upper-middle class families..

Now, are you going to attempt to deal with these arguments or are you going to continue making up (necessarily evil) motivations for me that leave you feeling morally superior? If it's the latter then you are probably better off not responding.

So in other words you dont want others to have a chance so that you have a better chance of getting accepted.
Lol. I am a senior; I am graduating university this year.

So what you are saying is that if you didn't have to pay taxes than you could afford to do everything by yourself? Do the math, thats just not realistic.
No, I'm not and somehow this response manages to be more bizarre than the ones above. I'm saying that if you cut capital gains taxation then people will invest more, which creates more taxable income; so much so that a significant cut - to 6% - 10% on average - would end up paying for itself.

---

It's also worth noting, if you read the OP, you would see that I am arguing against three taxes in particular. I have also suggested replacements. So, this tangent really isn't an argument against my proposals, since I am arguing for a design intended to be revenue-neutral. So, whilst I am willing to humor this tangent just because we don't discuss enough economics on this forum, if you want to address the specifics argument I made against taxing high-income individuals, companies and investment, that would be cool.

bentheplayer
January 10th, 2017, 12:11 PM
Haha. I am sorry but couldn't help it. I think for all purposes you are way too focused on statistics. The problem is stats is just stats. Many of them especially in the field of finance and finance are mostly approximations and predictions based on economic models that don't work very well. Stats can always be easily manipulate to prove our point so I always use them very jadedly.

Even the world giving index is hilarious once you read up on their methodology. From wiki it is calculated based on these 3 questions.
which of the following three charitable acts did you do in the past month:
helped a stranger, or someone you didn’t know who needed help?
donated money to a charity?
volunteered your time to an organisation?
Now come on, tell me that this is a good enough measure of charity. This survey seems skewed towards those who perform many small acts instead of perhaps one large act per say. My point is there isn't a point trying to quantify such stuff. Its just plain snobbery.

Now onto taxes. All that you have mentioned so far are academic papers but nothing in the real world. Sure, all the arguments that you have made are all very sound and sound extremely logical except they don't accurately capture what happens in the real world.

Despite all these seeming high official corporate tax rates, did you know that many companies pay just a token sum by utilizing highly sophisticated schemes from accounting tricks to offshore HQ and transfer pricing. This website gives 3 basic example why corporate tax is still needed.
http://ctj.org/ctjreports/2013/06/fact_sheet_why_we_need_the_corporate_income_tax.php#.WHUREFN964Q


I am not against tax reforms but so far all these tax reforms have been meaningless especially to (U)HNW individuals/household. Being born into this group, I have seen how taxes are pretty meaningless to us. First off CGT/dividend tax mean little as they are various tax shelters to minimize such cost such as offshoring those funds. Income tax is usually an area that most people resent because its hard to avoid and its pretty high. Instead the idea of a consumption tax highly appeals to many as we can then pay less income tax, buy big ticket items overseas in countries with no consumption tax and have even more money left over to create even more wealth. Really please don't fall into this trap of trickle down economics and taxing consumption instead of income. It won't work in real life but sounds real good on paper because as a group many of us are pretty mobile and can easily find loopholes in the law. While the current laws aren't perfect changing it to those you mentioned will only worsen the inequality.

I have always hated this topic and areas on wealth as here things can get real dirty. The most important concept that many people forget in this sector is that no one has perfect information which is what academics always assume. To make things even simpler, look at your professors in school. Do you think those economics/finance prof are rich?

Vlerchan
January 10th, 2017, 01:59 PM
Even the world giving index is hilarious once you read up on their methodology.
I chose that to form a quick rebuttal, without reading the methodology. We can discount that point.

All that you have mentioned so far are academic papers but nothing in the real world.
When people use the term 'the real world' they normally just mean special cases. If you want to introduce them, we can discuss them one by one. Otherwise, I don't see why we should discard the insight of consistent results that point the same direction - stats can be misused, is not an argument against the stats that I have used.

Despite all these seeming high official corporate tax rates, did you know that many companies pay just a token sum by utilizing highly sophisticated schemes from accounting tricks to offshore HQ and transfer pricing. This website gives 3 basic example why corporate tax is still needed.
I am well aware of this. In fact, I live in a quasi-tax haven. It's worth noting that in the OP, one of the argument I listed against corporation tax was that it was regressive, insofar as larger firms had an easier time avoiding it - in other words, had an easier time justifying and paying high accounting fees, or lobbying.

I am now going to examine your source.

1. Without a Corporate Income Tax, Retained Profits Would Not Be Taxed. As a Result, High-Income People Could Defer Paying Personal Income Taxes on Much of Their Income Indefinitely.
The very richest can already do that using the tax repatriation methods you mentioned above. You precede to discuss below how coming from a higher income family that taxes are quite 'meaningless' anyways so I am not sure with what your concern here really is.

It's worth also noting that the money would be taxed when it is taken out to be spent, too.

3. The Corporate Income Tax Is Borne by Shareholders and Thus Very Progressive.
It offers a single dead link which is disputed by the multiple sources I highlighted above.

Instead the idea of a consumption tax highly appeals to many as we can then pay less income tax, buy big ticket items overseas in countries with no consumption tax and have even more money left over to create even more wealth.
This section only deals with VAT for private individuals who buy goods for personal use.

In general, you have to pay VAT and import duty on any goods you are bringing into Ireland from outside the EU. This includes goods purchased online and by mail order. You will have to pay VAT at the same rate as applies in Ireland for similar goods.

Within the EU, VAT is usually paid in the member state you purchased the goods, however, there are some exceptions - see below.

http://www.citizensinformation.ie/en/money_and_tax/tax/duties_and_vat/value_added_tax.html

In most European states it is the case that you pay consumption tax on goods purchased abroad. This would have to be introduced as part of any sensible tax reform in the United States, if it isn't already the case.

Though, I would also support screening your personal income, and so on, to ensure against tax evasion.

It won't work in real life but sounds real good on paper because as a group many of us are pretty mobile and can easily find loopholes in the law.
Rich people can find loopholes in any law. To quote you above again, taxes are 'pretty meaningless'. Nevertheless, consumption tax, applied as per above, is more difficult to avoid than income tax because it is normally paid at the till. Though, if it is the case that income tax is the one that is, in fact, more difficult to avoid, then you can replicate what I intend by just granting a 100% tax credit on savings.

The most important concept that many people forget in this sector is that no one has perfect information which is what academics always assume.
This chapter explores the implications of asymmetric information on taxation. Analysis under the assumption of asymmetric information is inherently second-best because first-best analysis requires that agents have perfect information about everything relevant to their economic decisions and exchanges. The problem of asymmetric information has been a focal point of public sector analysis for the past 15 or 20 years, just as it has been in almost all fields of economics.

Tresch, R. W. (2002) 'Public Finance'. (http://www.sciencedirect.com/science/article/pii/B9780126990515500169)

To make things even simpler, look at your professors in school. Do you think those economics/finance prof are rich?
I have no idea why you think academics not earning six figures (on average) implies any sort of incompetency.

bentheplayer
January 10th, 2017, 03:52 PM
When people use the term 'the real world' they normally just mean special cases. If you want to introduce them, we can discuss them one by one. Otherwise, I don't see why we should discard the insight of consistent results that point the same direction - stats can be misused, is not an argument against the stats that I have used.


Unfortunately, in the realm of economics the qualifier of ceteris paribus makes economics the special case not the real world. The point is that this largely hinges on simulation and hence the results generally don’t mean much other than a rough guide. Take Brexit for example. Chief economist of Bank of England recently apologised for errors in Brexit forecasting. What I meant is these stats are totally irrelevant as ultimately its human behaviour that matters. If all of them are using the same methodology then obviously the same result will be had. I don't have the time to analyse every single link you posted but I am sure that they made a number of assumptions in them which won't hold true all the time.


I am well aware of this. In fact, I live in a quasi-tax haven. It's worth noting that in the OP, one of the argument I listed against corporation tax was that it was regressive, insofar as larger firms had an easier time avoiding it - in other words, had an easier time justifying and paying high accounting fees, or lobbying.

I am now going to examine your source.

1. Without a Corporate Income Tax, Retained Profits Would Not Be Taxed. As a Result, High-Income People Could Defer Paying Personal Income Taxes on Much of Their Income Indefinitely.
The very richest can already do that using the tax repatriation methods you mentioned above. You precede to discuss below how coming from a higher income family that taxes are quite 'meaningless' anyways so I am not sure with what your concern here really is.

It's worth also noting that the money would be taxed when it is taken out to be spent, too.

3. The Corporate Income Tax Is Borne by Shareholders and Thus Very Progressive.
It offers a single dead link which is disputed by the multiple sources I highlighted above.


Well tbh I only gave the site a cursory glance. The main problem is I don’t know which part of the world you are referring to. The conditions of each market are generally different which makes it challenging to comment as globally there will always be exceptions. In the US if there is zero corporate income tax people will simply create shell companies to avoid income tax. There are many ways to exploit a zero corporate income tax regime.
Anyways seems that even in academia no one can agree on whether corporate tax is progressive or not.

http://www.csmonitor.com/Business/Tax-VOX/2010/0222/Is-the-corporate-tax-progressive


This section only deals with VAT for private individuals who buy goods for personal use.

In general, you have to pay VAT and import duty on any goods you are bringing into Ireland from outside the EU. This includes goods purchased online and by mail order. You will have to pay VAT at the same rate as applies in Ireland for similar goods.

Within the EU, VAT is usually paid in the member state you purchased the goods, however, there are some exceptions - see below.

http://www.citizensinformation.ie/en/money_and_tax/tax/duties_and_vat/value_added_tax.html

In most European states it is the case that you pay consumption tax on goods purchased abroad. This would have to be introduced as part of any sensible tax reform in the United States, if it isn't already the case.

Though, I would also support screening your personal income, and so on, to ensure against tax evasion.


Do you honestly think that I would bother to declare? Haha. Most of these people simply hand carry those stuff. Who uses mail order for big ticket items? Who is going to be responsible if that emerald arrives in pieces? In all seriousness consumption taxes are regressive and conventional wisdom has proven it time and again. Just look up any stats and compare the ratio of taxes paid by wealth. We know that for spending on luxury goods, people will simply buy them at a place that has minimal consumption tax. Incidentally is there VAT on art?

Also for the same rate of consumption tax vs income tax which do you think will raise more money cheaply and effectively?

In any case, citizenship of convenience is rising. I must admit that my
family is somewhat guilty of that too.




Rich people can find loopholes in any law. To quote you above again, taxes are 'pretty meaningless'. Nevertheless, consumption tax, applied as per above, is more difficult to avoid than income tax because it is normally paid at the till. Though, if it is the case that income tax is the one that is, in fact, more difficult to avoid, then you can replicate what I intend by just granting a 100% tax credit on savings.

The cost of implementation any scheme has to be taken into account as well. Generally most schemes are present today partly for cost effective reasons. Collecting at the till is more troublesome that directly from citizens via an annual exercise. Think of the number of transactions handled daily. Also I have found the setting of the VAT highly amusing in Europe. Watching those MEP arguing over the rates.


This chapter explores the implications of asymmetric information on taxation. Analysis under the assumption of asymmetric information is inherently second-best because first-best analysis requires that agents have perfect information about everything relevant to their economic decisions and exchanges. The problem of asymmetric information has been a focal point of public sector analysis for the past 15 or 20 years, just as it has been in almost all fields of economics.

Tresch, R. W. (2002) 'Public Finance'. (http://www.sciencedirect.com/science/article/pii/B9780126990515500169)[/indent]

Ok great. So how does that translate to tax revenues planning? Whats the possible application of that book? Just because asymmetric info is recognised doesn't mean that they are able to account for it.

I have no idea why you think academics not earning six figures (on average) implies any sort of incompetency.

I am not saying that they are incompetent, just that they usually have no idea how we live. Don’t forget that economics is ultimately about human behaviour. Anyways most academics have pretty crappy pay. Only the super stars in academia make that kind of money by peddling their ideas. These people are usually those with the best understanding of real world economics.

Ultimately, understand that most IRS wants to collect tax revenue cheaply and easily. Progressive taxation and tax fairness are all nice to have but ultimately what they care about is the final revenue. That’s why so many of fortune 500 companies are able to strike special deals with the IRS. It’s a lot easier to deal with 1 organisation than thousands of organisations. Even the concept of economies is exploited here by the big companies. Also, these companies have a greater bargaining power as they create thousands of jobs.

When it comes to public policy there is little value in picking examples of where polices has failed s what matters is whether the policy will work in that country. As such I find such types of discussions pretty meaningless as every economy is structured differently.

I used to think of these issues a few years ago but then realised there is no such thing as total fairness. Even for tax there will never be total fairness. What seems fair to you may not seem fair to another but neither party can ever be more correct than the other. However what I realised is that a low tax rate is great for wealth creation and this will in turn result in greater asset inequality. I believe that in today’s society income inequality is minuscule compared to wealth inequality but to each his own.

At the moment, I believe that the biggest lie being sold to developed countries is the concept of trickle down economics. Its largely bs as most of the capital ends up being siphoned away into the developing countries to generate even more wealth. To get a higher roi, companies are looking at expanding so the purported benefits will be felt by others.

Vlerchan
January 10th, 2017, 05:28 PM
Unfortunately, in the realm of economics the qualifier of ceteris paribus makes economics the special case not the real world.
The entire-point of least-squares econometrics is that it allows you to effectively simulate ceteris paribus conditions. I have no idea why you think that these conditions being simulated makes them a rough guide - I would agree that with social science data you are typically only receiving a rough guide to the event but it has nothing to do with the requirement to simulate ceteris paribus.

Take Brexit for example. Chief economist of Bank of England recently apologised for errors in Brexit forecasting. What I meant is these stats are totally irrelevant as ultimately its human behaviour that matters.
1.a Macro is a joke. Macro-forecasting is an even bigger joke. Frankly we don't understand enough about how the macro-economy operates to draw conclusions about past events, let alone make predictions about future events. For that reason you will only ever see me use micro-estimates.

1.b Ergo, issues in macroeconomics lead to issues in macroeconometrics.

2. When prices go up, the average consumer buys less of that product. You can demonstrate that with 2SLS model despite it being human behavior. This is because human beings aren't so unique that, on average, you won't see similarities.

In the US if there is zero corporate income tax people will simply create shell companies to avoid income tax.
Would you mind explaining to me why rich people haven't done this yet? With the sophisticated repatriation methods that are open to corporate firms, if rich people wanted they could already be using this tax method to avoid taxation. (The reason is probably because the richer people that want to get away with paying little tax, can already do so quite effectively).

Anyways seems that even in academia no one can agree on whether corporate tax is progressive or not.
I'm not sure what your point is. In any academic field there is frequent disagreements.

Your source is also citing a source that uses some surveys from two decades ago, before the recent Felix literature, and then precedes to cite five studies that all agree with me - and have reservations about each other's methodologies. It, itself, is a simulation, attempting to see how exactly it hits labor are concludes that where a majority falls on labor, it hits the lower-wage workers the hardest.

Do you honestly think that I would bother to declare? Haha.
It's more than possible to track how much someone earns in a year. If their is cash that then goes inexplicably missing from their account you can then retroactively apply the tax - with an added fine, progressively adjusted, for tax evasion that will pay for the costs of enforcing such a system.

In all seriousness consumption taxes are regressive and conventional wisdom has proven it time and again. Just look up any stats and compare the ratio of taxes paid by wealth. We know that for spending on luxury goods, people will simply buy them at a place that has minimal consumption tax.
You can design consumption taxation so that it is progressive, using the system of account monitoring above. Ideally you might want to have a fully digital currency so that people can't just ask for their earnings in cash, and stuff it under the bed at home, but then that was always an issue with income tax anyways - ask your plumber.

We know that for spending on luxury goods, people will simply buy them at a place that has minimal consumption tax. Incidentally is there VAT on art?
I can't see why their wouldn't be.

Also for the same rate of consumption tax vs income tax which do you think will raise more money cheaply and effectively?
At the same rate, across the same distribution, yes.


In any case, citizenship of convenience is rising. I must admit that my
family is somewhat guilty of that too.
Of course. Though I find it bizarre that you think that this is a criticism of my specific reforms rather than taxing in the current year, period.

Collecting at the till is more troublesome that directly from citizens via an annual exercise.
No, it's not. Businesses just file it at the end of the month.

Ok great. So how does that translate to tax revenues planning? Whats the possible application of that book? Just because asymmetric info is recognised doesn't mean that they are able to account for it.
It's incredibly difficult to offer up actual publications when you are not specifying what information you figure is important and asymmetric.

[...] just that they usually have no idea how we live.
Which might be an operable criticism of economics research if it wasn't highly empirically-orientated. If they didn't have a clue about what was going on then that would show up quite quickly.

In terms of policy research, I don't hold to the belief that countries are so radically different that economic research can't be held valid whilst detached from the context the finding emerged in. You still see the same principals cropping up again and again.

Though, when it comes to development and unlocking long-run growth, I do agree.