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Subsidies increase the amount of money in circulation and taxes decrease it. The price of goods is set relative to the amount of money in circulation (this is w
by pclmulqdq 2y ago
Subsidies increase the amount of money in circulation and taxes decrease it. The price of goods is set relative to the amount of money in circulation (this is what inflation does). Hence, exact equivalence of taxing sugar and subsidizing foods without sugar.
- s1artibartfast 2y agoSeems like a very narrow definition. If I take $100 from your wallet, or give $100 to your neighbor, is that exactly the same to you?
- pclmulqdq 2y agoNo, the effect is amortized over everyone. If you elect to take $100 from half the country or give $100 to the other half it's pretty much exactly equivalent. We saw this experiment with COVID helicopter money causing inflation. You weren't seriously suggesting taxing or subsidizing only one person, were you?
- s1artibartfast 2y agotaxes are generally levied on a small portion of people and subsidies normally go to even smaller portion. Taxes and benefits are extremely unequal in their application.