4 ms·

Without any explanation of why this is ideal, this just comes across as a way of rewarding the rich 'land holders' and forcing the tax burden on the poor. What

Without any explanation of why this is ideal, this just comes across as a way of rewarding the rich 'land holders' and forcing the tax burden on the poor. What the logic behind this 'ideal'?

ThrustVectoring 8y ago
Investment is, broadly speaking, how individuals use current production to fund future consumption. Investment taxes are a tax on future consumption over and above taxes on current consumption, creating a distortionary effect.
leetcrew 8y ago
i don't intend to argue GP's point for them, but it is important to be aware of the difference between paying a tax and actually bearing the burden of that tax. if (hypothetically) you increase some tax by 5% and all the companies raise their prices by 5%, you might end up with a situation where the companies "pay" the tax, but it entirely comes from the pockets of consumers. this is called tax incidence, and you can read more about it here: https://en.wikipedia.org/wiki/Tax_incidence https://en.wikipedia.org/wiki/Tax_incidence the corporate tax is actually very controversial among economists. it seems like a straightforward case of "making the big corps pay", but there is very little consensus as to who ultimately foots the bill for this type of tax.
- ThrustVectoring 8y ago
  Agreed. This is one of the reasons why a land-value tax is so good, in my opinion. Pretty much all of the burden of the tax is placed on landlords - if they could raise rents, they'd have already done so, so the tax pretty much entirely comes from the unearned value generated by holding the right to use a piece of land.
  - leetcrew 8y ago
    LVT is very appealing from the theoretical perspective. i would very much like to see it play out at scale somewhere. unfortunately, while it is fairly easy to add new taxes, you rarely see a new tax substituted for an old one.

4 ms·

Without any explanation of why this is ideal, this just comes across as a way of rewarding the rich 'land holders' and forcing the tax burden on the poor. What

by mattmanser 8y ago

Without any explanation of why this is ideal, this just comes across as a way of rewarding the rich 'land holders' and forcing the tax burden on the poor. What the logic behind this 'ideal'?

ThrustVectoring 8y ago
Investment is, broadly speaking, how individuals use current production to fund future consumption. Investment taxes are a tax on future consumption over and above taxes on current consumption, creating a distortionary effect.
leetcrew 8y ago
i don't intend to argue GP's point for them, but it is important to be aware of the difference between paying a tax and actually bearing the burden of that tax. if (hypothetically) you increase some tax by 5% and all the companies raise their prices by 5%, you might end up with a situation where the companies "pay" the tax, but it entirely comes from the pockets of consumers. this is called tax incidence, and you can read more about it here: https://en.wikipedia.org/wiki/Tax_incidence https://en.wikipedia.org/wiki/Tax_incidence the corporate tax is actually very controversial among economists. it seems like a straightforward case of "making the big corps pay", but there is very little consensus as to who ultimately foots the bill for this type of tax.
- ThrustVectoring 8y ago
  Agreed. This is one of the reasons why a land-value tax is so good, in my opinion. Pretty much all of the burden of the tax is placed on landlords - if they could raise rents, they'd have already done so, so the tax pretty much entirely comes from the unearned value generated by holding the right to use a piece of land.
  - leetcrew 8y ago
    LVT is very appealing from the theoretical perspective. i would very much like to see it play out at scale somewhere. unfortunately, while it is fairly easy to add new taxes, you rarely see a new tax substituted for an old one.