An important economic napkin

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Working Class American Families Face Marginal #Tax Rates up to 43.7%

Everybody agrees there is a Laffer Curve when it suits them.

The Left talks about poverty traps arising from means testing of social insurance and welfare benefits but denies flatly that high marginal tax rates will affect the labour supply of the rich and willing to do.

You cannot have it both ways.

Some #tax cuts produce more growth than others

The benefits and costs of the @NZSuperFund since its inception

The New Zealand Superannuation Fund, the sovereign wealth fund part funding New Zealand’s old-age pension from 2029/2030 onwards, has been a bit of a wild ride. Sometimes the earnings of the Fund were well below and sometimes earning well above the long-term bond rate.

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Source: New Zealand Superannuation Fund Annual Report 2014.

Since its inception, the Fund earned an average annual return of 9.78%, which was 5.06% above the long-term bond rate, and 1.03% above its reference portfolio.

No information was given in the annual report of the New Zealand Superannuation Fund on the marginal dead weight cost of the taxes raised to fund the New Zealand Superannuation Fund to see whether there is any net benefit to taxpayers from its establishment and continued operation.

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The New Zealand Government has contributed $14.88 billion to the fund from prior its inception in 2001 to the suspension of contributions in 2009 by the incoming National Party Government.

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Source: New Zealand Treasury.

Over the nine years in which contributions were made, the company tax rate of 28% could have easily been up to 10 percentage points lower.

The New Zealand Treasury estimates that a one percentage point cut in the company tax costs about $220 million in forgone revenue if there are no other changes to the tax system. These are static estimates that do not include any feedback from  greater investment and higher growth.

The New Zealand Superannuation Fund must beat the market every single year to make up for the deadweight cost of its funding, a premium for the investment risk added to the Crown’s portfolio and the cost to New Zealand’s growth rate of higher than otherwise taxes on income, entrepreneurship and investment.

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Source: Abolish the Corporate Income Tax – The New York Times.

Trigger warning for the Twitter Left

The Rahn curve explained

Who is where on the Laffer curve?

Hauser’s Law: No matter what post-war tax rates have been, tax revenues remained at about 19.5% of GDP in the USA

via Political Calculations: Hauser’s Law.

What are the revenue effects of capital gains tax cuts?

Winston Churchill on Piketty

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Is Thomas Piketty a double secret supply-side economist?

When a government taxes a certain level of income or inheritance at a rate of 70 or 80 percent, the primary goal is obviously not to raise additional revenue (because these very high brackets never yield much).

It is rather to put an end to such incomes and large estates, which lawmakers have for one reason or another come to regard as socially unacceptable and economically unproductive…

The Company Tax Laffer curve

The Australian, New Zealand and Irish company taxes raised similar amounts of revenue as a percentage of GDP. The Irish company tax rate was 12.5% in 2003.

from  The U.S. Corporate Income Tax System: Once a World Leader, Now A Millstone Around the Neck of American Business by the Tax Foundation via The Solution is the problem blog

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