01
Jul
11

Quote of the day, “no wonder we’re fucked” edition

Greg Mankiw finds this excerpt from a Pew study:

Investment in owner-occupied housing faces an effective marginal tax rate of just 3.5 percent. In contrast, investment in the business sector faces an effective tax rate of 25.5 percent. This leads to a tax-induced bias for capital to flow into housing-related uses rather than other types of projects.

Rational agents respond to incentives.  If you’re thinking of investing your money, would you go with the 3.5% marginal-tax-rate investment or the 25.5% marginal-tax-rate investment?  Yeah, you betcha.  This is what we libertarians call “market distortion”, and incidentally points to why I favour scrapping all tax breaks (sorry, “tax expenditures”) for personal and corporate income above roughly the thirty-kilobuck/year level.  Of course, those tax breaks are how Congresscritters supply kickbacks to their supporters and buy votes in their districts, so it’ll never happen.

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anarchocapitalist agitprop

Be advised

I say fuck a lot

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