But it wouldn’t surprise me in the least bit that optimal economic growth could be achieved with somewhat higher taxes than we have now – it comes down to the competence of government more than anything. I’d happily argue for tighter constitutional restrictions on *how* taxpayers’s money can be spent.

So therefore for maximum economic activity and growth we should have zero taxes, and hence effectively no government at all?

I’ve often thought how ideal that could be, N, yea. The idea of no government has certain appeal especially when I look at the NSW government

I’m referring to Cap gains tax, which I think is the most insidious of all taxes as it is a tax on capital.

So therefore for maximum economic activity and growth we should have zero taxes, and hence effectively no government at all?

Assuming you don’t believe this, then you accept their is some non-zero level of taxes that provides the optimum conditions for economic growth. And in that case, how can you be so sure it shouldn’t be higher than it is currently?

For example, if the consumption of luxury goods is taxed and these taxes are subsequently invested in infrastructure projects, why would this decrease economic growth?

So, we need to be clear about what we mean by efficiency.

An Okay a good definition is:

Economic efficiency is a general term for the value assigned to a situation by some measure designed to reduce the amount of waste or “friction” or other undesirable economic features present. Economic efficiency is achieved when the cost of producing a given output is as low as possible. Production of a unit of good or services is termed economically efficient when that unit of good or service is produced at the lowest possible cost. In current usage, the term microeconomic reform refers to any policy that promises to increase economic efficiency (whether it does so or not).

Which is pretty well aiignd to what we’re discussing.

Ever seen a tax levied on luxuries that doesn’t go into the general pool? I haven’t, so suggesting that such a tax would be used to fund better roads etc isn’t happening in the real world. In fact most times it would be for more efficient to levy the tax on he direct user: car owners to roads repairs being one example.

You can’t have lasting economic growth without long term productivity improvements (that’s about as close to the round earth theory as you can get in economics) and you can’t have reasonable productivity growth without the taxing system being at least mindful of that. If taxes had zero behavior effect we should levy 100% tax on capital gains. But we won’t because we know the effect it would have.

The more tax one levies on a good or a service the less you get of it. Tax capital through cap gains and the less capital there is for investment which does have an direct effect on living standards. The capital to labor ratio is the direct causal effect on living standards.

First up, in my view “efficiency” is used in a range of distinct ways. For example, one more static use of the term is to refer to an allocation of resources that is pareto efficient (ie, one person can’t be made better off without another person being made worse off). A more dynamic use of “efficiency” appears, for example, in empirical studies of potential “equity-efficiency trade-offs”. In these studies, “efficiency” is usually operationalised, or measured, as economic growth of some kind (for example, growth in GDP, productivity, etc). In my view, there is no reason to think that these two notions of “efficiency” – the static and the dynamic – are linked in the real world.

So, we need to be clear about what we mean by “efficiency”.

If we take “efficiency” to mean pareto efficient resource allocation, I’d agree that taxes can affect resource allocation and hence “efficiency”. But isn’t it true that, in the face of externalities (like carbon emissions), levying appropriate taxes can improve “efficiency” understood in this way? And, no, I’m not ambivalent about the effectiveness of an ETS.

If we take “efficiency” to mean economic growth, it’s not clear to me that levying taxes would decrease “efficiency” in this sense (ie, economic growth). Surely an important factor here is what these taxes are subsequently used for. For example, if the consumption of luxury goods is taxed and these taxes are subsequently invested in infrastructure projects, why would this decrease economic growth?

Economic efficiency (the term Nic used) is a analogous to rising/falling living standards. Taxes affect change behavior patterns and redirect resources. Unless you think all economic activity is neutral and equally valuable then taxes do matter and the level of taxes matter a good deal.

If you think they don’t matter ‘much” then you must be petty ambivalent about the effectiveness of an ETS. Are you?

’small numbers’ not as visible to the naked eye have a big effect over oceans of time . A policy change that allows resources to be directed to more efficient use has a big impact over decades. Take a look with this simple example.

year 1, base = 100 with a change of 1% in productivity improvement over 100 years = 270.50. but isn’t as apparent over say a decade (110.50)

(1) Go to the OECD Factbook 2008 in Gapminder Graphs. (Gapminder Graphs have been mentioned here before.)

(2) For the vertical axis, choose: Macroeconomic trends > Gross Domestic Product > GDP per capita.

(3) For the horizontal axis, choose: Public finance > Taxes > Total tax revenue (as a percentage of GDP).

(4) Click “Play”.

Does the situation in 2006 suggest that higher taxes lead to lower standards of living, as measured by GDP per capita? I’d say no. Admittedly, this is hardly a sophisticated analysis! (Although it is at least empirical, rather than being some account of what would surely happen on the basis of some economic theory.)

It’s also fun to play around with the other indicators. Okay, that was a little off topic too…

So? What on earth has it got to do with anything.

You brought up the soft left and i was adding to that point of the discussion. Was that wrong of me, nic?

And no, I don’t think it ought to be a 1% cut in govt/GDP. That was what we got from the Clinton administration (even after he clipped the peace dividend coupon) and it still wasn’t enough.

It should be much, much more. I’ll go with Friedman’s view suggesting the size of the take shouldn’t exceed 10% of GDP.

Surprising you suggest the size of the tax take doesn’t effect economic efficiency as though that was the only thing it affected. Don’t you think we would see a fall in capital expenditure if we saw a cut in depreciation allowances or a rise in the cap gains tax? Wouldn’t a fall in capital expenditure translate into a fall off in economic efficiency? Were you thinking only of small immaterial changes perhaps?

Another exmaple of the effect of taxes on efficiency……..

raising the luxury tax rate has the effect of dissuading the purchase of imported cars for the relatively inefficiently produced domestic variety.

The body of written evidence suggests that the relative tax rate has a material effect on both economic efficiency and living standards.

Not all the GOP was in favor of torture in the same way not all the Dem party was against it. MaCain for instance was an outstanding critic of torture and related techniques. And no I don’t particularly like McCain.

I’m pleased you feel that what you hope to be a govt/GDP ratio one percent lower (even though the GOP is so corrupt and hopeless that it doesn’t actually deliver because it’s way of making government smaller is all the care of tax cuts without the responsibility of cutting expenditure. Pretty easy really. Then when things go wrong you run ads about pigs with lipstick.

Anyway, even if the GOP were the small government party (and there’s bugger all good evidence that the size of the tax take makes much difference to economic efficiency) and even if one cared about an extra 1 odd percent of GDP lower taxes, personally I’d rather that, having got the world through World War’s I and II and the cold war without any official commitment to torture we stuck to that idea. But the GOP couldn’t manage that, and at the first sign of grapeshot rehabilitated torture methods developed by the Spanish Inquisition.

Sounds like a joke doesn’t it. But it’s not.

http://www.splicetoday.com/politics-and-media/the-audacity-of-defeat

The other problem is the Hollywood left, Nic. They are so egotistical, so transparently self serving and so bereft of originality in terms of their politics that they make an Alabama GOPer appear smarter than Einstein.

I don’t disagree with all of your characterizations of the South although I think you’re overdoing it a little, despite the fact there is a kernel of truth to it. Most National party supporters here aren’t much chop either.

However there is little, say a free market/small government type has to choose from in the US other than the GOP. They are much chop, but it’s better than the alternative in my mind except when you want to punish the GOP as the other side not only doesn’t pretend to oppose big government solutions, they celebrate it. So it’s a case of holding one’s nose at times.

This is why the idea of attacking the horrid Maureen Dowd as if shes some spokesperson for the Dems is so off.

I would argue she speaks to the sentiments of a lot of DC/NYC types.

This is why the idea of attacking the horrid Maureen Dowd as if shes some spokesperson for the Dems is so off.

I recall once Andrew Sullivan attacking Dowd, however he made he point that she was loved and respected in DC circles.

I think we need to realize something about people like Dowd, Savage, O’Reilly and Olbermann. They may have strong political views (although more than a few people have mentioned Savage is faking it) and is far more ” liberal ” than he lets on. These people are selling entertainment. It’s a form of entertainment and they are getting richly rewarded.

Starting salary for the ” junior” shock jock is around 2 to 3 million a year. I read that O’ Reilly was on a 35 million 5 year deal. It’s the money.

And i would have to disagree with you, Nic (again ) These people sell their crap because they mostly have audiences that agree with those views.

I did notice that both the interviewer and the interviewee had a very tenuous grasp of their respective briefs

It did make for some excruciatingly amusing television.

This is why the idea of attacking the horrid Maureen Dowd as if she’s some spokesperson for the Dems is so off. Name me a shock jock of the left who is arguing that McCain is a gigolo for having a rich wife. That was a general talking point of right wing shock jockery in 2004 with Kerry running. Completely outrageous – this is the family values crowd.

On the duck hunting issue, the RSPCA and AA are pushing a particular barrow so I would want independent verification of their injury figures. But in any event, the anti-duck hunting lobby should be aware that, contrary to the impressions given in Walt Disney cartoons, nature is indeed red in tooth and claw and utterly, ruthlessly amoral. I doubt a duck gives a damn as to whether it is suffering pain because it has a bullet wound as opposed to a gut full of parasites or a chunk of flesh missing after being mauled by a fox or raptor. Death with dignity and humane treatment of the injured and diseased are very rare indeed outside of humanity. Life in nature is nearly always short, nasty and brutish.

Irrespective of the above, in response to Melaleuca’s set piece at #20, let me reassert that I can’t empathise with people who kill animals for fun. Pride in hunting skills can be pursued through target shooting or wildlife photography.

Sorry for the derailment, Nicholas. (Perhaps we should open a duck shooting open thread.)

And why do we need to ban an activity just because cripple rates are so high – why not only issue licenses to those who can prove they are capable of killing more accurately?

(Now giving up all hope of keeping this on topic, whatever the topic was…)

These just seem like pejorative labels to me.

As an aside, I think of the South as a psychotic society. Their behaviour in starting the civil war that they were bound to lose was truly unhinged. They were a terrorist state before then (Before the civil war, Jesse James used to go on massacre parties killing whole families of ‘bad types’ who were out of favour locally). They returned to their status as a terror ridden society after the civil war when lynching remained standard operating procedure until (I think) towards the end of the 1960s.

But it’s still a deeply sick society with creationists and all sorts of weirdness. If the South wasn’t part of the US, the US would be a normal polity instead of the weird place it is today a place where those who might benefit from things like tax credits and universal health cover somehow get to vote against those things on the strength of the weirdest kinds of cultural warfare – gay marriage, abortion, guns and on it goes.

James Farrell said:

As for the duck shooting thing, is there any reason at all why that has to be framed as a left-right issue at all? (Ive never understood why anyone would take pleasure in murdering animals, but as long as the hunter eats the duck, thats one less duck that needs to be raised in a battery, and so much the better.) The right wing propagandists aganda is not to expose the irrationality of the anti-hunting campaigners (which is self-evident), but to brand it as left wing and thereby taint progressive politics generally with the same irrationality. If the same people believe in labour standards who want to save ducks from hunters, then what an absurd cause labour standards must be.

I must be self-evidently irrational. Be that as it may…

I agree: battery cages, factory farms, intensive farming – all of these are vicious ways of growing your food. But equating killing a duck in an abattoir with killing a duck through duck shooting is misguided. With duck shooting, not all ducks shot are killed outright by the shooter. Some are brought down and killed by the shooter on retrieval, for example, by wringing the neck. Some ducks are crippled (brought down but not retrieved) and die within hours, days, or weeks of being shot. Other ducks are wounded but not killed. In short, duck shooting involves cruelty that killing in an abattoir does not.

What is the rate of crippling and wounding caused by duck shooting? On the whole, studies indicate that between 6.6 and 10 ducks are crippled or wounded by duck shooters for every 10 ducks shot and retrieved. (Note that these rates of crippling and wounding have nothing to do with shooters being drunk or sober. They have to do with the uncertain nature of shooting moving animals with a shotgun.)

It’s for these kinds of reasons that the RSPCA opposes duck shooting.

(For more information, see the RSPCA website here or, for the audacious, the Animals Australia website here or here.)

If anyone knows of other studies of crippling and wounding rates – apart from anecdotes – I’d be happy to hear about them.

Do you honestly mean the comment that the GOP supporters are white trash? And then you’re suggesting the GOP holds the other side in contempt? Huh?

I think a lot of city folk think shooters are all dumb drunk slobs who’d happily shoot anything. IMO James is going along with that stereotype, but maybe I misjudge him.

The field and game folk- including duck shooters- have a vested interest in conservation. Some of them do voluntary work helping to restore degraded wetlands etc.. But if you try raising such a point of view with soft left types- as I did when I was an inner city Greens member- you’ll be dismissed as the very devil himself.

Naturally I despise wanton environmental vandals, for example the idiots who have clubbed to death fairy penguins on the Tasmanian coastline on several occasions. But let’s not conflate these sick puppies with your average field and game shooter.