February 13, 2019

TAX WHAT YOU DON'T WANT:

Taxation is no way to spur innovation (Sam Dumitriu, 2/13/19, CapX)

When you tax something, you get less of it. That's why when governments want to raise revenue to fund public services, they need to pay close attention to how taxes affect behaviour.

In general, they would be wise to tax 'bads' (e.g. tobacco, pollution, and congestion) before taxing 'goods' (e.g. work, investment, and R&D). 

That is precisely the argument for using taxes to force innovation. Taxing gasoline will reduce its use forcing invention and adoption of alternatives quicker.

Posted by at February 13, 2019 6:37 PM

  

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