Koogie wrote: ↑03 Sep 2017 16:19
I'm sure those are sound academic theories. Of course, people have to actually live through these forced transitions. "Low value" jobs may disappear but those people don't conveniently do the same nor can they all be retrained into being "useful".
We've been here before, of course. I remember when we had large numbers of textile workers in Canada. My wife comes from the Eastern Townships, and textile mills were a mainstay of life there, along with agriculture. Now the textile mills are gone, and the family farms have been consolidated into agribusinesses employing a small fraction of what they used to employ (oh, and lots of low-paid temporary foreign workers).
The young people moved and retrained. The old people took early retirement. It wasn't easy for either group. But the changes were necessary. Taxation had a role, but it was a relatively minor one.
Do academic theories explain at what level of taxation we move past low skill job losses and onto people who "matter" economically ? Because if we extrapolate upwards to higher and higher levels of taxation, it implies that if we can be taxed out of our jobs, they mustn't matter.
To economists, everyone "matters". But again, we are facing much stronger forces than taxation when it comes to the creation and destruction of jobs. Right now, the big threat is automation. Smaller but still significant threats are an inadequate education system, minimum wage laws and other (misguided) attempts at social justice, unproductive government spending that sucks resources out of productive uses in our economy, and counterproductive and anticompetitive regulation. Once we have made progress on those, I'll get right on to the case for lighter taxation.
How about farmers.
Dairy and poultry farmers are high on my public enemies list. They have corrupted governments and harmed us all.
Finally, is it economically sound to force the good engineers, CEOs and lawyers of the world to spend their productive time shoveling their own driveways, cutting their own grass and baking their own bread ?
A good point. But I suspect that high minimum wages are an even bigger contributor than high tax rates.
George