Taxes and Economics
29th July 2007
Arnold Kling is a fan of consumption taxes.
Politicians frame the issue as taxing certain types of people. Economists look at what activities are being taxed.
Economists, naive fellows that they are, don’t understand the dialectic. The reason politicians concentrate on what people are being taxed is because they are using taxes as a weapon of social policy, to help certain favored groups and punish certain disfavored groups.
Of course, only in our modern dysfunctional world would unproductive people be rewarded and productive people punished. I’d like to be able to say with confidence that in a hundred years people will look back on this system and say, “Geez, what were they thinking?” Unfortunately, it’s only gotten worse in the last hundred years, and I don’t really expect it to get any better in the next hundred. Unless the Muslims take over, in which case taxation rates will be the least of our worries.