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You can of course decide to skip the bus ride, but what if the government taxes stuff you can't skip as easily? Like food, water or housing, or air to breathe?
by Luyt 16y ago
You can of course decide to skip the bus ride, but what if the government taxes stuff you can't skip as easily? Like food, water or housing, or air to breathe?
- akkartik 16y agoGovernments tax things that signal an ability to pay. It wastes effort to impose taxes that some people can't pay.
- jerf 16y agoYou either pay the tax or you take the penalty for not taking the tax, in which case you lose pretty much everything and the government is now laying out money to incarcerate you. You can try to take a lower quality food or water but there's a limit on that too. You can actually show that taxing is inefficient and inevitably (in practice) take more out of the economy than the government actually gets: http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_7/PThy_Chapter_7.html http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Cha... though I mean this merely as an interesting fact, not a conclusion or an argument about "proper" taxation. Taxing air is particularly pointless on Earth. It is however more interesting to consider the question of taxing air in a space environment where air is not free. Heinlein in particularly was known to play games with that concept.
- billswift 16y agoJerry Pournelle also spent some time on it in Birth of Fire. In most SF, though, it is not treated or only implicitly.
- jacoblyles 16y agoThat's a good point. Deadweight losses are smaller from taxes placed on goods with "inelastic" demand.