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Taxes don’t decrease the availability of capital, it simply re-distributes it to the politically-connected.
by _9vpl 3y ago
Taxes don’t decrease the availability of capital, it simply re-distributes it to the politically-connected.
- eternalban 3y agoAha. So it's not the politically-connected who manage to keep IRS at arms-length. No. It is 'something but not political connections' that manages to frustrate the unjust greed of the "plitically connected" to tax rightfully earned profits of these corporations. Must be the "hand of God" ..
- amrocha 3y agoAvailability of capital is not a problem that needs to be fixed
- HPsquared 3y agoHousing shortage is an example of poor capital availability.
- _9vpl 3y agoHousing shortage, at least in the US, isn’t really a problem of capital availability. It’s mostly due to local zoning regulations that make it very difficult to actually create housing, regardless of capital availability.
- HPsquared 3y agoI was thinking in terms of "housing is a form of capital"
- amrocha 3y agoHmm, I don't feel like that's what the original comment was getting at since it was talking about taxation.
- bko 3y agoIt also results in dead weight loss. For instance suppose the marginal buyer would spend $20 for a product and the producer can produce for $18 and the market price is $19, resulting in $1surplus to each party. If a $3 tax was put on the product, the transaction wouldn't take place. So you went from $2 social surplus to nothing and no tax benefit. Any arbitrary price distortions will result in dead weight loss or the overall social surplus to go down compared to no distortion
- 411111111111111 3y agoThat's too one-dimensional, as the transaction would still take place later once the market price increased to offset the tax increase.
- bko 3y agoI don't understand what you mean. The market price would be floored at $21 as it costs the producer $18 to produce and a $3 tax. The prior margin was $1 so realistically the producer would eat some of the increase and charge $21.50 For the person who values the good only at $20, no transaction would take place. If eventually the producer cost went down to something like $16, maybe the price would come down to $20 or below but then there's the marginal consumer that values it at $19. Price distortions almost always result in a dead weight loss. Only in perfectly inelastic products does it not exist
- 411111111111111 3y ago> Price distortions almost always result in a dead weight loss. Yes, some trades will not take place take after the distortion, but the the person valuing the good at 20 and still be unwilling to pay 23 after an extended time period in which they're unable to buy it is extremely rare.
- ClumsyPilot 3y agoNot if you use it to pay off national debt