The Economy Is Rigged
Monday, February 29, 2016
Olin Humanities, Room 102
4:45 pm – 6:00 pm EST/GMT-5
Part I. What Bernie doesn’t know (but Trump does)
Improper design of public revenue systems distorts economic incentives and diminishes the economic surplus. The evidence of dysfunction includes economic and social polarization, stagnant wages despite rising labor productivity, escalating public and private debts, a dearth of working capital, recurring booms and busts, and a headlong rush toward global resource depletion and ecological catastrophe. We use simple tabular models to illustrate that: (1) Taxes reduce economic surplus by the sum of tax revenue and excess burden. (2) Capital can combine with more or less labor by turning over faster or slower. Capital that has a low turnover rate is associated with lower output, lower payrolls, higher interest costs, and higher land requirements per job compared to capital of short life. (3) Tax regimes favor slow turnover and favor both capital and land over labor. They create a powerful bias against enterprises that generate high sales, employment, and net income. They favor low-intensity land uses that waste natural resources while generating few jobs and little income.
For more information, call 845-758-6822, or e-mail [email protected].
Time: 4:45 pm – 6:00 pm EST/GMT-5
Location: Olin Humanities, Room 102
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