Dom post article: The technocrat’s tax
Give an independent body (akin to the RBNZ) the ability to set tax rates
Discuss (but preferably read the article first 🙂 )
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[…] is a good reason why I want tax policy to be set independently – so that the true cost associated with the dumping of the regional fuel tax can be […]
One good thing about government’s setting tax trates is that we can vote for or against them every three years. We wouldn’t have that power over an independent body.
One good thing about an independent body setting tax rates is that they might do what’s right rather than what’s popular because they wouldn’t have to face voters.
“One good thing about government’s setting tax trates is that we can vote for or against them every three years. We wouldn’t have that power over an independent body.”
But the body sets taxes based on spending – we elect a government based on the amount they spend, and thereby implicitly we elect the level of our taxes as well
“One good thing about government’s setting tax trates is that we can vote for or against them every three years. We wouldn’t have that power over an independent body.”
Responsiveness to public opinion can lead to bad policy if the public votes expressively. I suspect we’d be in much worse shape today without central bank independence.
“Responsiveness to public opinion can lead to bad policy”
Or even if the public is time inconsistent.
However, we need to balance this with the fact that we do need some mechanism to reveal the preferences of society …