Richard Murphy tells us that it is not possible for there to be anything other than harmful tax competition. All such competition must, by definition, be harmful. This relies upon an argument that insists that the correct and best method of provision is monopoly. For as he says, competition means there must be winners and losers. The logic therefore being that we should not have competition - in order to prevent there being losers - and this so clearly and obviously being tosh that we can reject it out of hand.
Any even scanty look backward at the 20th century shows that the economies in which there was market competition did better than those in which there was not. From Paul Krugman we've had the point that the Soviet Union managed an increase in total factor productivity of entirely nothing over the course of its 70 years existence. From Brad Delong, calling upon Bob Solow, we've that the living standards of the average person in the market economies increased by a factor of perhaps 8 over the century.
Competition works that is. As standard economics also tells us it does. It works by those who are less efficient producers losing out to those who are more so as producers. The winners being the consumers, who are able to gain their consumption desires from the more efficient producers. Yes, this also applies to matters international. Indeed, it's one of the arguments in favour of trade itself. Given that mediocrity is pervasive...
Over at Politico there is the assertion that one reason for past inflation was that women joined the workforce. If there are more people earning then of course prices will rise. Don Boudreaux takes this on:
Victoria Guida offers the following as a reason for the 1970s’ high inflation rates: “double-income households as women entered the workforce in droves” (“Why big-spending Biden can shrug off GOP warnings of inflation,” April 12).
She’s mistaken. Inflation is not caused by an expansion of the workforce. Yes, the money that women earn is spent, and this additional spending would indeed push prices up if the amount of goods and services available for sale were to remain unchanged. But women entering the workforce earn for their households additional money to spend precisely by producing and making additional goods and services available for sale.
Which is a good answer, but it's not a whole and complete one....
This is a common complaint about the British economy, that we can invent things but don;t then go on to make fortunes out of them. The problem here is that the base idea is wrong. What makes us rich is being able to use inventions, not the creation of them:
It’s a familiar story, so much so that it has become something of a cliché; Britain is very good at discovering and inventing stuff, but when it comes to commercial exploitation it’s been an abject failure. Magnetic resonance imaging scanners and the world wide web included, Britain’s post-war history is littered with groundbreaking inventions that for one reason or another the nation has been unable to turn into sustainable sales and profit. Those benefits have instead tended to go to others.
The problem with MRI should be put at the feet of the NHS. A Stalinist bureaucracy is not going to...
Those progressives over at American Prospect, it is possible to wonder whether they've quite got the basics of how the economy works at times.
So, sure, they want to spend lots more money through government, we get that. We think they're insane, getting the Feds to do stuff is not efficient. Still, differences in political beliefs and all that.
We can also note that they're already running out of money. They've only been in power under 3 months and are already worrying about how they can retop the coffers. You know, having already spent everything.
At which point this suggestion:
President Biden is proposing to spend $2 trillion on physical and human infrastructure, and more in additional waves of social investment. He wants to pay for this with some $2 trillion in revenue increases over 15 years, which will cover the costs of the spending, and then begin to reduce deficits.
So Richard Murphy told us how lovely the Biden corporate tax plan is over at FT Alphaville. I pointed out in the comments that the underlying data is not quite as Murphy - or Biden - would have it:
Figure 1 and following shows a decline in corporate tax as a percentage of the tax take, also relative to GDP, relative to other OECD countries and so on. OK.
Except that is not tax collected from corporations. That is the corporate income tax. They are different things. In the US, very different things for they have C and S corporations. C pay the corporate income tax, S pay - as with Richard Murphy's own corporate body, an LLP - the individual income tax as flow through bodies.
This matters. Since the 1980s fully 50% of American business activity has moved from C to S corporations. One CBO estimate has it...