Over at Rates Blog I have put up part 2 or a 6 part series on tax (it was going to be 5 but I’ve extended it. In part 1 we asked “why do we tax“. In part 2 we are digging deeper into the costs of taxation.
We focus on two specific issues, the way taxes distort behaviour, and the idea of where the burden of tax falls. As we explained in the first article these issues are really really difficult to actually work out – and the purpose of the second argument is just to give a “flavour” to the argument. In honesty, if you wanted to figure out the true burden and distortions you’ll have to get yourselve a series of these CGE modeling economists armed with other economists who focus on normative judgments.
Last time I promised to discuss tax systmes that seem idea, that we don’t use. And why we don’t. Well, that is now the next article.
Also, thanks to Agnitio who helped me clear up this article. It is a fairly wonkish one, and he came in at the last minute and helped me clarify what the hang I was doing 😉