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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 pa

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...
        crasshopper 15y ago
        First you have to define what "better" means since there are O(300 million) utility functions in the U.S.A. Second, I want a real-world example of a "negative marginal utility" of taxation -- which tax rate was raised, who it affected, how they evaded it, and why it was good for the society at large.
  - yummyfajitas 15y ago
    First of all, you are conflating tax avoidance (taking actions to avoid tax liability) with tax evasion (lying to the tax authorities about your liabilities). In the real world, one efficient "tax shelter" is Amazon locating itself outside of CT. If Amazon were to pay taxes to CT, then CT would produce the public services necessary to support Amazon. Since Amazon is not located in CT, this would be wasteful. Thus, Amazon locating themselves outside of CT and avoiding CT taxes is A Good Thing. [edit: you appear to have edited your post extensively after I responded to it. It's generally polite to indicate when you do this.]
    - crasshopper 15y ago
      > you are conflating tax avoidance with tax evasion Fair enough. I meant to use tax evasion as an extreme example to prove the inner case, but I can see how it would look like conflation. > one efficient "tax shelter" is Amazon locating itself outside of CT Petitio principii. > Since Amazon is not located in CT, this would be wasteful. Does not follow. Where is the dead weight loss?

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...
        crasshopper 15y ago
        First you have to define what "better" means since there are O(300 million) utility functions in the U.S.A. Second, I want a real-world example of a "negative marginal utility" of taxation -- which tax rate was raised, who it affected, how they evaded it, and why it was good for the society at large.
- yummyfajitas 15y ago
  First of all, you are conflating tax avoidance (taking actions to avoid tax liability) with tax evasion (lying to the tax authorities about your liabilities). In the real world, one efficient "tax shelter" is Amazon locating itself outside of CT. If Amazon were to pay taxes to CT, then CT would produce the public services necessary to support Amazon. Since Amazon is not located in CT, this would be wasteful. Thus, Amazon locating themselves outside of CT and avoiding CT taxes is A Good Thing. [edit: you appear to have edited your post extensively after I responded to it. It's generally polite to indicate when you do this.]
  - crasshopper 15y ago
    > you are conflating tax avoidance with tax evasion Fair enough. I meant to use tax evasion as an extreme example to prove the inner case, but I can see how it would look like conflation. > one efficient "tax shelter" is Amazon locating itself outside of CT Petitio principii. > Since Amazon is not located in CT, this would be wasteful. Does not follow. Where is the dead weight loss?