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yummyfajitas, I think by "more capitalist" jbooth means "more competitive". You are obviously right that forcing companies to use higher-cost inputs is ineffici

yummyfajitas, I think by "more capitalist" jbooth means "more competitive". You are obviously right that forcing companies to use higher-cost inputs is inefficient, but taxes are not an input -- they're a necessary burden meant to be shared. To take an extreme example, using a tax shelter could lower the cost of a company's services while decreasing the efficiency of the economy.

yummyfajitas 15y ago
Of course taxes pay for inputs - the inputs are public goods. Taxes are compulsory only to prevent freeloading - you might enjoy the benefits of the CT state police without paying for them. Amazon doesn't enjoy the benefit of the CT state police. Hence, it is not efficient to force them to pay for it. A tax shelter is only inefficient if it allows a company to consume services while forcing others to pay for them. If a company does not consume those services, it is inefficient to force the company to pay for them.
- crasshopper 15y ago
  yummyfajitas, can you give a real-world example of a tax haven which is Pareto equivalent or superior to the company paying its taxes? Also, who says Amazon pays the tax? Insert elasticity argument.
  - yummyfajitas 15y ago
    In the real world nothing is Pareto equivalent or superior to anything else, except maybe for gifts given to hermits. Pareto efficiency is a purely theoretical construct.
    - crasshopper 15y ago
      You're dodging the essence of the question. Give us one real world example of a case where tax evasion has been A Good Thing. yummyfajitas, it frankly sounds like you're econtrolling. I looked at your profile and you seem like a smart, educated person, so I'll respond in good faith so you can see how weak your arguments sound. > Taxes are compulsory only to prevent freeloading Says who? This sounds like a stylised model from Econ 101. > A tax shelter is only inefficient if it allows a company to consume services while forcing others to pay for them. Prove it. > Amazon doesn't enjoy the benefit of the CT state police. I don't use the Merritt Parkway but that doesn't mean I don't owe tax on it. > Pareto efficiency is a purely theoretical construct. This from someone who just boiled the entire political economy of Connecticut down to a prisoner's dilemma? > If a company does not consume those services, it is inefficient to force the company to pay for them. What is your reasoning? Perhaps you are sharing these thoughts before giving them a sound-check? I don't mean to be rude but what you're saying doesn't make sense coming from someone of your educational background.
      - SamReidHughes 15y ago
        Literally every case of tax evasion under a government where the tax rate is too high and the marginal utility of higher taxes is negative.
        crasshopper 15y ago
        Can you give a real example of a case where this has actually happened? (by marginal utility I assume you mean marginal revenue; governments do not have utility)
        SamReidHughes 15y ago
        No I mean marginal utility. Governments have utility. For example, they do things like give people money to maintain roads. The marginal utility of higher taxes would be the value of the extra amount of road maintainance, and all other changes to the physical universe, that happens as a result. (Edit: So compare the universes where the government rakes in $x and $x+epsilon of revenue. Which is a better universe? There are plenty of governments where $x+epsilon would produce a worse universe. It might depend on who it gets the extra epsilon from.)
        crasshopper 15y ago
        Utility is only defined for individuals. It sounds like you're trying to talk about how some sum of citizens' utility functions changes as a result of a change in government spending. Response to your edit: you haven't defined "better". And I'm still waiting for a real world case where $x+$epsilon has been dominated by $x.
        SamReidHughes 15y ago
        Yes, that's what I'm talking about. So wait, you're looking for a case where $x+$epsilon government revenue has greater utility than $x? Because that's the opposite of what you were asking for before...

yummyfajitas 15y ago

Of course taxes pay for inputs - the inputs are public goods. Taxes are compulsory only to prevent freeloading - you might enjoy the benefits of the CT state police without paying for them. Amazon doesn't enjoy the benefit of the CT state police. Hence, it is not efficient to force them to pay for it. A tax shelter is only inefficient if it allows a company to consume services while forcing others to pay for them. If a company does not consume those services, it is inefficient to force the company to pay for them.

crasshopper 15y ago
yummyfajitas, can you give a real-world example of a tax haven which is Pareto equivalent or superior to the company paying its taxes? Also, who says Amazon pays the tax? Insert elasticity argument.
- yummyfajitas 15y ago
  In the real world nothing is Pareto equivalent or superior to anything else, except maybe for gifts given to hermits. Pareto efficiency is a purely theoretical construct.
  - crasshopper 15y ago
    You're dodging the essence of the question. Give us one real world example of a case where tax evasion has been A Good Thing. yummyfajitas, it frankly sounds like you're econtrolling. I looked at your profile and you seem like a smart, educated person, so I'll respond in good faith so you can see how weak your arguments sound. > Taxes are compulsory only to prevent freeloading Says who? This sounds like a stylised model from Econ 101. > A tax shelter is only inefficient if it allows a company to consume services while forcing others to pay for them. Prove it. > Amazon doesn't enjoy the benefit of the CT state police. I don't use the Merritt Parkway but that doesn't mean I don't owe tax on it. > Pareto efficiency is a purely theoretical construct. This from someone who just boiled the entire political economy of Connecticut down to a prisoner's dilemma? > If a company does not consume those services, it is inefficient to force the company to pay for them. What is your reasoning? Perhaps you are sharing these thoughts before giving them a sound-check? I don't mean to be rude but what you're saying doesn't make sense coming from someone of your educational background.
    - SamReidHughes 15y ago
      Literally every case of tax evasion under a government where the tax rate is too high and the marginal utility of higher taxes is negative.
      - crasshopper 15y ago
        Can you give a real example of a case where this has actually happened? (by marginal utility I assume you mean marginal revenue; governments do not have utility)
        SamReidHughes 15y ago
        No I mean marginal utility. Governments have utility. For example, they do things like give people money to maintain roads. The marginal utility of higher taxes would be the value of the extra amount of road maintainance, and all other changes to the physical universe, that happens as a result. (Edit: So compare the universes where the government rakes in $x and $x+epsilon of revenue. Which is a better universe? There are plenty of governments where $x+epsilon would produce a worse universe. It might depend on who it gets the extra epsilon from.)
        crasshopper 15y ago
        Utility is only defined for individuals. It sounds like you're trying to talk about how some sum of citizens' utility functions changes as a result of a change in government spending. Response to your edit: you haven't defined "better". And I'm still waiting for a real world case where $x+$epsilon has been dominated by $x.
        SamReidHughes 15y ago
        Yes, that's what I'm talking about. So wait, you're looking for a case where $x+$epsilon government revenue has greater utility than $x? Because that's the opposite of what you were asking for before...