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I don’t understand, how is that different from taxing and giving workers money that way? They should have the same effect in terms of economic efficiency. The o
by mikeash 7y ago
I don’t understand, how is that different from taxing and giving workers money that way? They should have the same effect in terms of economic efficiency. The only reason we use taxes for this sort of thing is because it’s harder to cheat.
- harryh 7y agoIf you do it by pushing wages around artificially then you artificially change the prices of certain goods relative to others. If you do it via taxes and transfer payments then you don't distort the prices of goods.