Sunday, May 3, 2015

On the Fact that the Swedish Economy Has Performed so Much Better Now that the Top Tax Rate Is 50-Something Percent than it Did When the Top Tax Rate Was 80-Something Percent

Yet another Festivus for the rest of us miracle, I suppose.

6 comments:

dmarks said...

Did you do more checking on this? Is the causality so strong? I mean, there are global business cycles, other changes in policy like trade that a nation has other than tax rates, the global recession and recovery situation, and the rest.

Will "take no prisoners" Hart said...

There aren't any controlled experiments in the social sciences and so we can never know for sure causality. But economics does have certain principles and as you know one of them is, the more that you tax something the less that you get of it (in Sweden's case you actually had rich people like ABBA, Bjorn Borg, and Ingemar Bergman going as far as to leave the country).

dmarks said...

That makes sense, Will. We must remember that whatever the budgetary intent, the first and foremost result of a tax is to discourage the activity being taxed.

Hike business taxes in the US above what the rates are in other countries, and the result is business moving elsewhere. Hike taxes on cigarettes, and smoking goes down. Hike taxes on rich people living and spending money in your country, and yes, they will go do this in another country.

Rational Nation USA said...

So, if nothing is taxed I guess that would be a good thing? I suppose tariffs and voluntary donations to the treasury might work? Or like China and our other creditor nations going in the loan business is helpful.

All joking aside; 90% is ridiculous.

dmarks said...

Taxes are an evil, Les, but a necessary one. Just have them at a fair rate that minimizes any impact on behavior. Or strive for that at least.

Rational Nation USA said...

I don't disagree, been saying ut all my life. Just be willing to pay for what you want or except the consequences. I think you know well what I am saying.

Get the MIC and neo cons in control and much money would be available for really important stuff like infrastructure, affordable health care, and etc.