tag:blogger.com,1999:blog-2394855748022311882.post389536780245207028..comments2024-03-21T03:29:36.000-04:00Comments on Dr. Goose's Economical Limericks: National Sales TaxDr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2394855748022311882.post-42342551030296946732011-06-11T12:07:22.557-04:002011-06-11T12:07:22.557-04:00Dear Mr. Lawry,
In spite of our near-constant di...Dear Mr. Lawry, <br /><br />In spite of our near-constant disagreements, I always enjoy the fact that you take the time to lay out a very thoughtful rebuttal. In this case I actually agree with most of what you say, except for the opening line regarding my not considering non-linearity. In this, my limerick may have failed, since the whole point of it was to identify an economic activity that it would be least damaging to discourage based on marginal taxation. I too recall that earlier, misbegotten exercise with the luxury tax, which pretty much had failure baked into it. However, there is a big difference between a 10% punitive tax on luxury goods only and an across-the-board national sales tax or VAT. Most other developed countries have some version of this tax and yet retain a buoyant market for consumer goods. I’m sure you are correct that certain essential items such as food would be exempted from this tax, but I doubt whether this would unduly eliminate trading in non-exempted goods, or drive it all underground, if the experience with state sales taxes is any guide. <br /><br />Please drop me a line (drgoose@verizon.net) if you are ever in New York. I would love the opportunity to meet and talk in person.Dr. Goosehttps://www.blogger.com/profile/18301105891892298426noreply@blogger.comtag:blogger.com,1999:blog-2394855748022311882.post-33069316144031545272011-06-11T09:30:02.272-04:002011-06-11T09:30:02.272-04:00Just wanted to say though, that in spite of my dis...Just wanted to say though, that in spite of my disagreement, I very much enjoy your limericks, and am very glad you take the time to write them.Jonathan Lawrynoreply@blogger.comtag:blogger.com,1999:blog-2394855748022311882.post-18303067495190475622011-06-10T18:48:51.706-04:002011-06-10T18:48:51.706-04:00"Well-off liberals such as Dr. Goose" se..."Well-off liberals such as Dr. Goose" seldom consider non-linearity when proposing new taxes. It's as if the thinking is: "If we tax this something at 5%, we'll get revenue equal to (0.05 x Something). Nothing will change about that Something, and the problem will be solved!"<br /><br />Don't economics courses require calculus and differential equations?<br /><br />Here's what will happen: First, liberals will insist that food, clothing, basic shelter be exempt, because consumption taxes are a regressive tax on the poor, who can afford it the least, and they simply cannot have that. This alone will take away a huge portion of revenue.<br /><br />Next, you will see whatever can be, will be pushed underground. "Well-off conservatives like Jonathan Lawry" will begin to pay their landscapers and whomever possible in cash.<br /><br />Lastly, you will see large discretional purchases evaporate, as wealthy people will decide that their old yacht will simply have to do for a few more years. (this very thing was attempted in 1991 and famously failed).<br /><br />Liberals must decide whether or not they want to use the tax code to maximize government revenue, or to pursue dreams of a more egalitarian society. It simply is not possible to do both at the same time.Jonathan Lawrynoreply@blogger.com