Wednesday, 13 May 2015

More Not Seeing the Bleedin' Obvious


So this implicitly recognises that tax cuts boost economic activity. So why not extend that thought and cut taxes everywhere?

Now we know that this is about making some areas less tax costly than other areas. Fair enough. I can see what they are trying to do, but the way they are going about it...?

Since the prime tax cost difference area to area is 'rent' - which reflects itself through the productive factors of production - labour and capital - you'd thunk it bleedin obvious just what to do nationally.

Or have I missed something, again?


The Stigler said...


I've written here before about this: when government gives money to TV companies to shoot epic dramas in Ulster or for video game companies to move to Wales, they are acknowledging the systemic problems with income tax, and crudely fixing them with complicated schemes and to some extent, picking winners.

I get work in Swindon from companies in London because people in London can't compete with me. I'd be pretty tempted to move to a more rural location if the incentive was greater.

Lola said...

TS Ditto. I work in Ipswich at Ipswich prices (i.e. 'rents') for and undercut people in London.