In our spring poll 51% of Dems said #TPP would be a good thing compared w/ 43% of Reps http://t.co/qhNsjnXHPj pic.twitter.com/kCyoI5UiNJ
— Richard Wike (@RichardWike) October 7, 2015
#TPA more popular among democrats
09 Oct 2015 Leave a comment
in income redistribution, international economics, politics - New Zealand, politics - USA, Public Choice, public economics, rentseeking Tags: TPA, voter demographics
Poverty traps in America
02 Oct 2015 Leave a comment
in applied welfare economics, behavioural economics, labour economics, labour supply, politics - USA, poverty and inequality, public economics, welfare reform Tags: poverty traps, taxation and labour supply, welfare state
@NickTimiraos the company tax rate should be zero? Tax havens are working class heros?
30 Sep 2015 3 Comments
in applied price theory, public economics
More than 50% of US corporate profits earned abroad are made in nations considered tax havens on.wsj.com/1h2Uitv http://t.co/6L8Hqislxd—
Nick Timiraos (@NickTimiraos) September 29, 2015
I do wonder how much less wages, innovation, entrepreneurship and investment in capital would be but for the valiant efforts of tax havens to limit the size of government and the burden of business taxation in the developed countries.
Source: Abolish the Corporate Income Tax – The New York Times.
But for the possibility of capital flight, company taxes would be much higher in the industrialised countries.
Why effective tax rates paid by U.S. corporations look a lot lower than the base 35% rate on.wsj.com/1h2Uitv http://t.co/PgRq4FZqOr—
Nick Timiraos (@NickTimiraos) September 29, 2015
Tax havens are working class heroes because of their contribution they make to increasing the returns to corporate savings and private capital formation so vital to high wages everywhere.
@nzlabour @NZGreens New Zealand state-owned enterprises dividends paid and capital injections since 2007
25 Sep 2015 Leave a comment
in financial economics, industrial organisation, politics - New Zealand, public economics, rentseeking, survivor principle, transport economics Tags: government ownership, KiwiRail, privatisation, rational ignorance, rational rationality, state owned enterprises, suppressive voting
The New Zealand Labour Party and New Zealand Greens both make much of the fact that when you privatise a state-owned enterprise the taxpayer is no longer entitled to dividends from the privatised business. The fact that the sale price is the net present value of those future dividends is a rating fallacy that is not the subject of this post.
Source: New Zealand Treasury – data released under the Official Information Act.
What is the subject of this post is whether there are indeed any dividends paid to taxpayers after capital injections. 2007 was the last year in which dividends to the taxpayer exceeded capital injections. The reason was that dog called KiwiRail.
@nzlabour @NZGreens Adjusted return to equity on the New Zealand state owned enterprises portfolio since 2008
24 Sep 2015 2 Comments
in financial economics, politics - New Zealand, Public Choice, public economics Tags: expressive voting, government ownership, privatisation, state owned enterprises
I asked for information from the Treasury for as far back as 2000 but could only get information back to 2008 on the return on equity of the portfolio of state-owned enterprises to the taxpayer.
Source: New Zealand Treasury – released under Official Information Act.
Apparently, long-term information on the performance of the state-owned enterprise portfolio is not available. Anyone wanting to know the performance of an individual or group of listed companies simply looks at the share price was far back as they want. The prices of individual shares reflect market expectations of future dividends and future price movements, and they go up and down as new information is revealed. The history of a share price indicates the ups and downs of a company in one number far better than any other available indicator.
I also included the adjusted rate of return on equity taking out the two dogs in the portfolio: Solid Energy and KiwiRail.
Source: New Zealand Treasury – released under Official Information Act.
The herd immunity role of #vaccinations explained
16 Sep 2015 Leave a comment
in applied price theory, applied welfare economics, health economics, politics - New Zealand, public economics Tags: Anti-Science left, anti-vaccination movement, best shot public goods, cheap riders, common law, free-riders, good shot public goods, herd immunity, measles, New Zealand Greens, public goods, quackery, tort law, vaccinations, vaccines
Some public goods can be not provided much at all if even a few do not contribute – free ride. These are called weakest shot public goods. The link in the chain is only as strong as the weakest link for some public goods. The fighting against communicable diseases is an example of that.
The classic example given by that brilliant applied price theorist Jack Hirschleifer is a dyke or a levee wall around a town. It is only as good as the laziest person contributing to its maintenance on their part of the levee wall. Vicary (1990, p. 376) lists other examples:
Similar examples would be the protection of a military front, taking a convoy across the ocean going at the speed of the slowest ship, or maintaining an attractive village/landscape (one eyesore spoils the view).
Many instances of teamwork involve weak-link elements, for example moving a pile of bricks by hand along a chain or providing a theatrical or orchestral performance (one bad individual effort spoils the whole effect.)
Another example of weakest shot public goods is community cooperation after disasters. The quality of the public good provided is equal to the contribution of the weakest person who may start a criminal rampage despite the good efforts of everyone else.
People tend to be more cooperative after natural disasters. They realise their contribution is more important than normal to the maintaining of the social fabric which is currently hanging by a thread.
Vaccinations are example of a weakest shot public good. The quality of herd immunity depends fundamentally on just about everybody contributing by getting vaccinated. Not all public goods depend on the some of those contributions made. In some cases just a few people choosing to free ride can greatly undermine the public interest.
The reverse of a weakest shot public good is best shot public goods. Example of this is the development of vaccines themselves. The public good is only as good as the best effort at developing the new vaccine with all the others efforts pointless because the best of the vaccines is chosen.
The most curious people in New Zealand to oppose measures to address the under provision of weakest shot public goods are the New Zealand Greens.
https://twitter.com/KevinHague/status/642505850360213505
The Greens are usually the 1st to stress the importance of communities working together for the common good.
https://twitter.com/KevinHague/status/642530277177192448
Herd immunity protects those who cannot be safely vaccinated including new babies, those for whom the vaccine fails, which occasionally happens, and those with compromised immunity such as adults receiving chemotherapy.
Deliriously hot @guardian sim shows why anti-measles jabs help protect your whole community gu.com/p/45f7e/stw http://t.co/H31ZKbXkqg—
Info=Beautiful (@infobeautiful) February 05, 2015
We are all in this together. It is time for the New Zealand Greens to stop pandering to those are only think of themselves and what a free ride on others including the very sick and new babies.
Source: NOVA | What is Herd Immunity?
Herd immunity requires vaccination rates of about 94%. The near universal vaccination rates required for herd immunity are to smaller margin to pander to an awkward squad who do not want to vaccinate despite the harm they do to others.
Harm to others is grounds and has always been grounds for public policy and public health interventions. Instead, the Greens are anti-science, anti-public health.
Measles is the most contagious disease known to man. Seven children died in New Zealand in the last measles outbreak in 1991. The dead are already too many from the anti-vaccination quacks and cranks.
A Comparison of the Tax Burden on Labor in the OECD
10 Sep 2015 Leave a comment
How high is the US #tax burden on labor? Here's an OECD comparison tax.foundation/1LNpE4W by @samcjordan_ @kpomerleau http://t.co/unaxWM1BgH—
Tax Foundation (@taxfoundation) July 27, 2015
Payroll taxes make up a large portion of a worker's #tax bill: tax.foundation/1g1nd1w by @samcjordan_ @kpomerleau http://t.co/yHx4kQTmr6—
Tax Foundation (@taxfoundation) July 21, 2015
via A Comparison of the Tax Burden on Labor in the OECD | Tax Foundation.
US federal revenue has always hovered around 17% of GDP.
07 Sep 2015 Leave a comment
in economic history, politics - USA, public economics Tags: growth of government, Houser's law, size of government
Marginal tax rates of 2-income couples with 2 children in USA, UK, Australia and New Zealand since 2000
23 Aug 2015 Leave a comment
in economic history, economics of love and marriage, labour economics, labour supply, politics - Australia, politics - New Zealand, politics - USA, public economics Tags: Australia taxation and labour supply, British economy, marriage and divorce
Source: OECD StatExtract.
Taxes on dividend income across the OECD
21 Aug 2015 Leave a comment
The U.S. places a high #tax on corporate income: tax.foundation/1Jf0ytp http://t.co/6inEfqftpQ—
Tax Foundation (@taxfoundation) August 18, 2015
The U.S. has the highest corporate income #tax rate in the developed world: tax.foundation/1WlGhIf http://t.co/Cp35sRwHjo—
Tax Foundation (@taxfoundation) August 13, 2015
The U.S. corporate #tax rate is out of line with our trading partners: tax.foundation/1UO4gy5 http://t.co/FzWDDTNrvC—
Tax Foundation (@taxfoundation) August 17, 2015
Marginal tax rate of average earners in USA, UK, Australia and New Zealand since 2000
21 Aug 2015 Leave a comment
in applied price theory, business cycles, economic growth, economic history, labour economics, labour supply, macroeconomics, politics - Australia, politics - New Zealand, politics - USA, public economics Tags: Australia, British economy, productivity shocks, real business cycles, taxation and labour supply
Interesting to notice that in New Zealand and the USA after these increases in marginal tax rates on single taxpayers, their economies slowed down. What appears to have happened is a number of people reached the next income tax marginal tax rate threshold.
Source: OECD StatExtract.
The great divergence in average and marginal tax rates in New Zealand since 2000
20 Aug 2015 1 Comment
in applied price theory, applied welfare economics, human capital, labour supply, politics - New Zealand, public economics Tags: family tax credits, lost decades, taxation and the labour supply
21% would have been a good guess of the average and marginal tax rates of the New Zealand single earner or couple including with children and even a second earner in 2001. New Zealand average and marginal tax rates have been on a wild ride since the year 2000.
Sources: OECD StatExtract and OECD Taxing Wages.
As the above chart shows, while the average tax rate of a single earner with no children is pretty much unchanged at about 20%, he now faces a marginal tax rate of 30% or more rather than 21% in 2001.
For a married couple with one income, as the above chart shows, their average tax rate has been about zero for a good 10 years now but their net marginal tax rate is a good 50% or more because of abatement rates on family tax credits, which is a skewed incentive situation. A large income effect from the family tax credit encourages the consumption of leisure but a high marginal tax rate discourages working more.
Sources: OECD StatExtract and OECD Taxing Wages.
For two earner couples, their average tax rates have fallen because of family tax credits but their marginal tax rates have gone through the roof as the above chart shows. A tax system that discourages quite severely any further work or investment in human capital by average earners may have adverse effects on the long-term trend growth rate of New Zealand.
Utopia, you are standing in it! 
Recent Comments