9 votes

Why can't the Land-Value Tax (in some cases) be passed on to tenants?

Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay, That doesn't make any sense. If more people want to live in a particular place, rents ...
Brythan's user avatar
  • 1,182
6 votes
Accepted

What at all justifies income taxes (as opposed to sales taxes only)?

There's a fair amount to unpack in the question, so it might be useful to take it step by step, and consider everything from a more abstract, economic theory perspective. ...those who are more ...
AndrewC's user avatar
  • 1,370
5 votes

The United States' position on the Laffer Curve

Question B in the link answers your question: most participants believe that taxable income would not rise enough to offset the tax cut, indicating that they do not believe we are on the wrong side of ...
dismalscience's user avatar
4 votes

Paternalistic Government policies

It looks right to me. There's an alternative (but equivalent) way to solve part D: we know that the consumer's choice will satisfy $$ x^* = \frac{ a(m-t)}{ p_x - s} ,\ y^*= \frac{(1-a)(m-t)}{p_y}, ...
Ubiquitous's user avatar
  • 16.9k
3 votes
Accepted

Maximized tax revenue & foreign labor

I give here the procedure but with price $p=1$ you can do it yourself without that simplification. Set up Lagrange $$\mathcal L(c,l,\lambda) = u(c,l) - \lambda (c-\bar w(1-t)(24-l)) $$ clearly $$\frac{...
Jesper Hybel's user avatar
  • 3,356
3 votes

Why can't the Land-Value Tax (in some cases) be passed on to tenants?

There's the theory, and there's the reality. Let's say there's an across-the-board rent tax of \$100 per property. The theory is that if landlords could just arbitrarily increase rent by \$100, they ...
Bill Clark's user avatar
3 votes

What would be the economic impact of the "fair tax" plan?

Some issues to consider when thinking about this: A) The idea is to think about the equilibrium of an economy with a particular tax system. For example, in equilibrium a change from income taxes to ...
Fix.B.'s user avatar
  • 2,658
3 votes
Accepted

What would be the economic impact of the "fair tax" plan?

Well, one advantage to a sales tax is that it affects everyone (even those who don't pay income taxes). However, some people may see that same fact as a problem. This problem lies in analysis of the ...
DornerA's user avatar
  • 1,568
2 votes

The United States' position on the Laffer Curve

To be the wrong side of the Laffer curve would require there to be another lower tax rate which produced the same or greater tax revenues That is not what was being said: Question A addressed the ...
Henry's user avatar
  • 4,765
2 votes

Simple Sketch of Mirrlees 1971

There is also a good discussion in "Contract Theory" by Bolton and Dewatripont. It is discussed in terms of non-linear pricing in Chapter 2, "Hidden Information and Screening". However, Mirrlees ...
jmbejara's user avatar
  • 9,355
2 votes
Accepted

Aggregating in a Continuum

To obtain $\frac{\partial y}{\partial z_n}=0$, you implicitly assume that each consumer takes its own skill level as given. And in such a case, in reality the consumer optimizes with respect to labor ...
Alecos Papadopoulos's user avatar
2 votes

What at all justifies income taxes (as opposed to sales taxes only)?

in America, the higher your income, the higher the percent of it is spent on taxes Progressive taxation is even worse in many European countries. Progressive taxation is marketed by depicting ...
Iñaki Viggers's user avatar
2 votes
Accepted

Are returns from secondary capital market funds (stocks and bonds) a form of unearned income?

This question is quite convoluted and uses accounting terminology rather than economic terminology (those two are diametrically different most of the time) but based on comments and further ...
1muflon1's user avatar
  • 56.4k
2 votes
Accepted

Optimal Top Marginal Tax Rates

The literature on optimal income taxation kicked off with Diamond, Mirrlees (1971). In their model, people differ only by ability, i.e. the highest earning person is the most productive one. As a ...
E. Sommer's user avatar
  • 1,307
1 vote

Why tax investment?

There is something called productive consumption. The coal and the iron a steelmill consumes are productive consumption, as steel cannot be produced without consumption of coal and iron. Plus, the ...
Luís Henrique's user avatar
1 vote

Why tax investment?

On your assumption "I assume that investing is more useful than consuming for society as a whole, at least in the long run." This is not necessarily true. Imagine if all factories were geared towards ...
Giskard's user avatar
  • 29.5k
1 vote

A utility function that gives a regressive tax rate

I don't see how the log-log utility function you specify would justify a regressive tax rate. In a simple setup, where government engaged in lump sum spending that had to be financed by a consumption ...
BKay's user avatar
  • 16.3k
1 vote

Reference books that treat retirement savings/pension systems

If you look for some introductory treatment you can have look at Baar The Economics of the Welfare State Ch 7. However, you should also read some of the preceding chapters to get full context. What ...
1muflon1's user avatar
  • 56.4k
1 vote

A tax-to-GDP ratio of 100% or more

You could tax more than GDP with any kind of taxes on assets, including land value tax. A traditional Georgist land value tax could not do this however, because such a tax is advocated at the rate of ...
Governology's user avatar
1 vote

A tax-to-GDP ratio of 100% or more

Yes it is possible by taxing wealth such as land. Only thing that it implies is that amount of tax is larger than yearly gross output of the nation. It does not mean all incomes are spent paying tax ...
1muflon1's user avatar
  • 56.4k
1 vote

Deadweight loss of lump-sum tax

With a lump-sum tax it doesn't seem reasonable to ignore the impact on the supply and demand diagrams, in fact the demand curves generally shift downward from what they would be without any tax ...
1muflon1's user avatar
  • 56.4k
1 vote

Laffer curve and Pareto-efficiency

Generally no. In fact any tax by definition will not be Pareto optimal. Pareto optimality is a point where no individual or preference criterion can be better off without making at least one ...
1muflon1's user avatar
  • 56.4k
1 vote

Relationship between taxation, national debt, and pool of private investment money

You are right that these questions have complicated answers, so i will put foward some simpler points that may help understand the situation: Your argument that the capital gains tax is a reallocation ...
Br.M's user avatar
  • 159
1 vote

Relationship between taxation, national debt, and pool of private investment money

That idea does not work empirically or theoretically. This is not to say that one cannot make some arguments for non-zero capital taxes but not via this channel. Empirically: Capital taxation is ...
1muflon1's user avatar
  • 56.4k
1 vote

Does Progressive Taxation Actually Follow The Decreasing Marginal Value of Wealth?

tl;dr No they do not for several reasons: Your post is based on misinformation, I know of no work on optimal income taxation that would aim to 'equalize sacrifice' (heck you would not find such ...
1muflon1's user avatar
  • 56.4k
1 vote

Why can't the Land-Value Tax (in some cases) be passed on to tenants?

Supply response causes a change in prices, the incidence which is shared between the producer and the consumer. As land is defined as everything not supplied by human effort, thus perfectly inelastic, ...
benjamin weenen's user avatar
1 vote

What at all justifies income taxes (as opposed to sales taxes only)?

As I'm sure you're aware, sales tax is regressive, and income tax is at least intended to be progressive. This is viewed as basically a mechanism to transfer wealth from the rich to the poor. Some ...
Governology's user avatar
1 vote

Should housing be considered a form of capital for the purpose of capital gains taxation?

Should housing be considered a form of capital for the purpose of capital gains taxation? Chamley-Judd's proposition aims at avoid[ing] unlimited growth in tax compounding as the horizon extends. ...
Iñaki Viggers's user avatar
1 vote
Accepted

Should housing be considered a form of capital for the purpose of capital gains taxation?

I think there are a few different ways one can go about examining the topic and general question you bring up. For that reason, I'd like to highlight that this isn't my primary field, and so my answer ...
AndrewC's user avatar
  • 1,370
1 vote

Is corporate tax an argument in equal income tax (from labour and capital) debate and does the return on capital depend on rate of the corporate tax?

There are too many questions in your post, and I advise to edit out most of them, especially those that are not answerable (like "is the system just" etc). For just the first question the answer is ...
Alecos Papadopoulos's user avatar

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