July 13, 2010

TAX WHAT YOU DON'T WANT:

The consequences of taxation (Arpit Gupta, 07/13/2010, Daily Caller)

America is substantially wealthier than many European countries. For instance, America’s per capita income was over $45,000 in 2007, while Germany’s weighed in at just over $34,000. If Germany were an American state, its per capital level would sit in between South Carolina and Oklahoma. For an even more stark comparison, Greece’s per capital income level is lower than every American state.

A number of economists – among them Ed Prescott – have argued that higher European taxes play a large role in determining this outcome. During the 1970s, Western Europeans worked more than Americans. Now, Americans work 50% more than Europeans. This argues against durable cultural differences as an explanation for greater American employment, and points to recent policy changes.

Posted by Orrin Judd at July 13, 2010 4:49 PM
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