Attention Economy


Wednesday, April 24, 2019

Taxes, Government Spending, Public Debt, and Intergenerational Conflict

Soak the Boomers to Save Capitalism
“… the U.S. government should cut taxes on workers and replace them with taxes that target the lifestyles of the more fortunate. A straightforward way of doing this would be to cut or even eliminate payroll taxes and slowly replace them with a value-added tax, or VAT. Payroll taxes are the most significant taxes that young and lower-income people pay. Reducing or eliminating them would significantly raise the incomes of working people and encourage businesses to hire workers with less experience”.

Everyone’s practicing the politics of evasion on Social Security and Medicare
https://www.washingtonpost.com/opinions/everyones-practicing-the-politics-of-evasion-on-social-security-and-medicare/2019/04/24/c2015362-669e-11e9-8985-4cf30147bdca_story.html

A Politics of Public Goods
Eli Lehrer notes:
“Although federal budgets have grown by trillions of dollars over the past half-century, one activity of government has become steadily less substantial: the percentage of the federal budget and the share of the national wealth spent on public goods. The provision of things like clean air, national defense, basic scientific research, and roads — things, in short, that benefit the great bulk of the population through their very existence — has long been a core state function. The shift in spending away from these goods and increasingly toward social-insurance programs has correlated both with the growth of the state and a decline in the respect Americans have for it.”

Distortionary Taxes – An Example
The Economist notes:
“… private jets are booming again. …the boom is also a result of tax breaks, which are even more generous than those lavished on ordinary airlines. In Europe firms and individuals can avoid paying value-added tax on imported private jets by routing purchases through the Isle of Man. This scheme has cut tax bills by £790m ($1bn) for imports of at least 200 aircraft into the European Union since 2011. America’s rules are loopier still. Donald Trump’s tax reform allowed individuals and companies to write off 100% of the cost of a new or used private jet against their federal taxes. For some plutocrats this has wiped out an entire year’s tax bill. For others, it has made buying a jet extraordinarily cheap.”