The digital consumption boom continues in New Zealand
12 Jun 2015 Leave a comment
in economics of media and culture, industrial organisation, politics - New Zealand Tags: creative destruction, ICT
The Nordics use optimal tax theory to fund their welfare states
12 Jun 2015 Leave a comment
in applied price theory, economic history, politics - USA, Public Choice, public economics Tags: Denmark, growth of government, Norway, optimal tax theory, Scandinavia, size of government, Sweden, welfare state
Efficient taxes gather more revenue and therefore are capable of funding a larger public sector with less political resistance from groups who are net taxpayers. The so-called neoliberal reforms of the 1980s and 1990s actually saved the welfare state by putting it on a revenue raising structure that provoked less political resistance.
A switch to more efficient taxes through tax reforms allows governments to raise the same amount or larger amount of revenue for the same level of political resistance from taxpayers. This is because less revenue and output is wasted by discouraging labour supply, investment, savings and investment in capital with high marginal rates of tax on narrower tax basis. Everyone gains from converging on more efficient modes redistribution.
The Nordic countries have been on to this application of optimal tax theory to expanding the size of government and the welfare state for a long time. The Nordics have high but flat taxes on labour income, low taxes on business income and a high, broad-based consumption tax be it called a VAT or GST as illustrated by a just published Tax Foundation report.
To begin with, the USA has a smaller government because it relies more income taxes than on consumption taxes.
Governments in Europe switched towards consumption taxes such as the VAT or GST because this allowed them to raise a large amount of revenue with broad-based taxes at low rates. A VAT or GST exempts exports and business to business transactions from taxes so that reduced taxpayer resistance.
Scandinavian income taxes raise much more revenue than in the USA because they are rather flat. That is, they tax most people at these high rates, not just high-income taxpayers. The top tax rate in the Scandinavian countries cuts in at about one and a half times average income or less rather than eight times average income as in the USA.
Flat high tax "How do Scandinavian countries pay for their govt spending?" bit.ly/1KZ7jOs @JimPethokoukis http://t.co/33oRg8Ozqh—
Old Whig (@aClassicLiberal) June 11, 2015
The marginal income tax rates including this top income tax rate cuts in a low level of income is also rather high in the Nordic countries relative to the USA’s top income tax rate with the exception of Norway.
Nonetheless the Nordic countries are alert to not killing the goose that laid the golden egg. Company taxes are relatively low in Scandinavian countries as compared to the USA so that businesses do not flee to other jurisdictions.
Top marginal tax rates on dividends and capital gains are not above-average in the Nordic states but their taxes on less mobile tax bases such as from labour and consumption are much higher.
A large welfare state such as those in the Nordic countries require a significant amount of revenue, so the tax base in these countries must be broad. This also means higher taxes on consumption through the VAT or GST and higher taxes on middle-income taxpayers.
Business taxes are a less reliable source of revenue because of capital flight and disincentives to invest. Thus, the Nordics do not place above-average tax burdens on capital income and focus taxation on labour and consumption.
via Sources of Government Revenue across the OECD, 2015 | Tax Foundation and How Scandinavian Countries Pay for Their Government Spending | Tax Foundation.
Irrational nonsense mapped
12 Jun 2015 Leave a comment
in health economics, liberalism, politics - Australia, politics - New Zealand, politics - USA Tags: anti-vaccination movement, antifluoridation movement, antiscience left, BlackBerry, conjecture and refutation, conspiracy theories, conspiracy theorists, expressive voting, infotopia, rational ignorance, rational irrationality
What are the Anglo-Saxon gender wage gaps?
11 Jun 2015 Leave a comment
in discrimination, gender, human capital, labour economics, labour supply, occupational choice, politics - Australia, politics - New Zealand, politics - USA Tags: Australia, British economy, Canada, gender wage gap, Ireland
Figure 1: % gender gap in median earnings of full-time employees, 2012
Source: OECD family database
The Cook Islands became part of New Zealand today, 1901
11 Jun 2015 Leave a comment
in economic history, politics - New Zealand Tags: British empire, colonialism, Cook Islands
On 11 June 1901 the boundaries of the colony of New Zealand were extended by the UK to include the Cook Islands. http://t.co/BDPElzZovz—
History Facts 247 (@historyfacts247) June 11, 2015
Marco Rubio’s and Hillary Clinton’s houses
11 Jun 2015 Leave a comment
in politics - USA Tags: 2016 presidential election
1,800 mass transit systems in the US — 2% report fare revenues exceeding operating expenses
11 Jun 2015 Leave a comment
in politics - USA, transport economics Tags: buses, green rent seeking, public transport, public transport deficits, trains
Of the 1,800+ US mass transit systems ~2% reported that fare revenue exceeded operating costs bit.ly/1EoQyqD http://t.co/Q6t9pB7q8a—
The Hamilton Project (@hamiltonproj) May 14, 2015
Have the mass kidnappings extended to Oxfam and other principled ODA activists?
11 Jun 2015 Leave a comment
in applied welfare economics, development economics, economic history, growth disasters, growth miracles, politics - Australia, politics - New Zealand, politics - USA Tags: extreme poverty, global poverty, Left-wing hypocrisy, The Great Enrichment, The Great Escape, The Great Fact
Oxfam and other ODA activists should be dancing in the streets to celebrate the doubling of global median income in the last 10 years.
This is awesome news!!
Global median income has doubled(!) over the last 10 yearsNew paper: bit.ly/1JRwv90 http://t.co/4cq6x5pXpu—
Max Roser (@MaxCRoser) May 17, 2015
The only reason for them not doing this as they must have been kidnapped en mass.
Staggering #inequality: Top 1% will own 50% of world's wealth by 2016. Help us to #EvenItUp! http://t.co/NcNOqVcTgS—
Oxfam International (@Oxfam) March 20, 2015
We can only hope for their safe release.
Securing a just world means challenging the power of the 1% say civil society groups #WSF2015 oxf.am/ZfkL http://t.co/r2S0lkBoC2—
Oxfam New Zealand (@oxfamnz) March 23, 2015
Lower prices for oil/other commodities have intensified the slowdown in dev'ing countries wrld.bg/O9hq8 #GEP http://t.co/2IsmedNmgW—
World Bank Pubs (@WBPubs) June 11, 2015
Composition of the bottom 40% of the population in #LAC countries: wrld.bg/NkKZP #sharedprosperity http://t.co/MdublHSp59—
World Bank Pubs (@WBPubs) June 09, 2015
The extreme poor live in conflict & rural areas: wrld.bg/Nynge #endpoverty http://t.co/43HDDI11JR—
World Bank (@WorldBank) May 31, 2015
Richard Branson has announced a great paid leave policy for .2 percent of his workers
11 Jun 2015 Leave a comment
in discrimination, entrepreneurship, gender, labour economics, labour supply, occupational choice, politics - Australia, politics - New Zealand, politics - USA Tags: entrepreneurial alertness, maternity leave, paternity leave, Richard Branson
Trends in what drives single motherhood
11 Jun 2015 Leave a comment
Divorce used to be biggest engine of single parenthood in America. No more. It's nonmarital childbearing cc@davidfrum http://t.co/J5yZtUukNW—
W Bradford Wilcox (@WilcoxNMP) June 10, 2015
What it would take for the US to run on 100% renewable energy
10 Jun 2015 Leave a comment
in energy economics, environmental economics, global warming, politics - USA Tags: expressive voting, geothermal power, hydroelectric power, rational ignorance, rational irrationality, renewable energy, solar power, tidal power, wind power
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How do presidential candidates spend $1 billion?
10 Jun 2015 Leave a comment
in politics - USA, Public Choice Tags: campaign finance regulation, expressive voting, rational ignorance, rational irrationality
New Zealand primary school teachers have experienced rapid wages growth by international standards
10 Jun 2015 Leave a comment
in economics of education, human capital, labour economics, labour supply, occupational choice, politics - Australia, politics - New Zealand, politics - USA Tags: teachers pay
Should the New Zealand superannuation fund try to beat the market?
09 Jun 2015 Leave a comment
in entrepreneurship, financial economics, politics - New Zealand Tags: active investing, ageing society, demographic crisis, efficient markets hypothesis, entrepreneurial alertness, New Zealand superannuation fund, old age pensions, passive investing, retirement savings
Most mutual funds still can't beat their benchmark read.bi/1GkTig1 http://t.co/r7ezoDGJbV—
BI Chart of the Day (@chartoftheday) June 03, 2015
Household energy price inflation in New Zealand
09 Jun 2015 Leave a comment
in energy economics, politics - New Zealand Tags: child poverty, consumer price index, CPI inflation, energy prices, family poverty, fuel poverty, power prices
Energy prices seem to have been roaring ahead of consumer prices since the first quarter of 2001. Maybe that is a major contributor to fuel poverty in New Zealand and material deprivation among more poor households in the winter. What gives?
Figure 1: ratio of household energy price index to consumer price index – all groups, March quarter 1995 – March quarter 2015, base = 1995
Source: Statistics New Zealand Infoshare.
Figure 2: Household energy price index and consumer price index – all groups, March quarter 1975 – March quarter 2015, base = 1995
Source: Statistics New Zealand Infoshare.
Utopia, you are standing in it! 
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