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This was a descriptive statement. Taxes act like friction and DO reduce the activity that they are attached to. So if one is planning a tax regime, you should

by ghein 8y ago

This was a descriptive statement. Taxes act like friction and DO reduce the activity that they are attached to. So if one is planning a tax regime, you should think long and hard about the first and second order effects of your planned taxes. Unfortunately too many in government and politics don't think about this.

rahimnathwani 8y ago
"Taxes act like friction and DO reduce the activity that they are attached to." This is why it's interesting to consider taxes that aren't tied to activities, or activities that are extremely resistant to change, e.g. - taxing land doesn't impact the supply of land, as (aside from melting ice caps and land 'reclamation' projects) the amount of land on Earth is fixed. - taxing human existence (e.g. an annual per capita flat tax) doesn't impact the number of humans