Matt Nolan

Tax working group: The corporate tax rate

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The Tax Working Group has released their report, as you all already know.  The recommendations are as expected, so its not particularly exciting in that sense.

However, there are some issues I would like to discuss – lets start with the idea that we “urgently need to cut the corporate tax rate” if Australia does.

Currently there is talk that, if Aussie cuts the corporate tax rate to 30% we need to do the same immediately.  We are told this as if it is a self-evident truth, and told that if we don’t all investment will head to Australia.  This is a touch over the top.

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Will Taylor

Apparently China needs censorship because Chinese people are stupid….

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….that is the justification offered by a Chinese journalist in this article related to the Google vs China row (blow by blow at Ars technica here). This quote is shocking:

The Chinese society has generally less information bearing capacity than developed countries such as the U.S., which is an objective reality that no one can deny. Chinese intellectuals living in China should show understanding to the motherland’s weakness.

Matt Nolan

Need more behavioural relationships please

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I started life as a microeconomist, which is why the sort of discussion about nominal shocks going on between Sumner, Kling, and Woolsey seems a little weird to me.

To horrendously oversimplify the positions in order to make this post easier to tie together, Sumner seems to state that the Fed needs to print money with a nominal GDP target in mind, Woolsey suggests that the Fed should change inflationary pressure given a set real GDP target, and Kling states that we only have real shocks and so the idea of a “nominal shock” is not of use.

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The Hand

Minimum wage vs inflation: A TVHE discussion

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We are sadly too busy to really post anything at the moment.

As a result, to fill in time we will put up a recent discussion between TVHE writers.  The one thing this conversation shows:  we all agree that arbitrary policies that are introduced to indirectly target a problem (eg changing the minimum wage to target inflation) tend to do more harm than good.

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The Hand

Means testing fines: economic efficiency, or unjust policy.

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As recently reported, European nations are increasingly pegging speeding fines to income levels, in an attempt to standardise punishment for such infringements.

The intuition is simple: a $100 fine to a person of wealth in excess of a billion dollars is trivial. Clearly, there is no (or at the least little) incentive to curb one’s behaviour.

However, in examining a recent USD $290,000 (euro203,180.83) speeding ticket slapped on a millionaire Ferrari driver in Switzerland,  one cannot help but feel this is somewhat excessive.

Conversely, it would seem that such laws have the potential to induce ridiculously low penalties to those without any assets. Is New Zealand society willing to burdening the rich with the external risks created by the poor?

Matt Nolan

Love is a prisoner’s dilemma

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Well that is one of the interpretations from the Google autocomplete results for the search “how can I get my boyfriend/girlfriend to” (ht Offsetting Behaviour).

Why?  Well the third highest result when asking about boyfriends, and the fifth highest when asking about girlfriends is “how can I get my boy/girl to love me again”.  The prevalence of the search suggests that love is something that is valued by both sexes, yet even in terms of a relationship (which is partially just a tacit agreement for providing the service of love) there appears to be an underprovision of love.  (More evidence of a hole in love provision?)

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