turns out its a bad idea in practice
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there are many flavors of taxes status as theft aside, all have ups and downs
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eg: the so-called head tax, where every person is just charged a fixed amount independent of everything is nice in that its minimally-distortive; it doesn't fuck up markets but, bad because it requires 95yo broke man to pay same amount as Bezos (ie its "regressive")
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generally if you tax a thing you can expect to get less of it on the margin sometimes this is used a la pigou to discourage things with alleged bad spillover effects, but mostly its an unhappy side effect also every tax will fuck up markets to some extent (bad)
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seigniorage is uniquely bad because it fucks up prices by generating lots and lots of inflation this in turn fucks up everything else that people try to do
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I'll give some examples but a nice read for background on why fucking up prices willy nilly is bad is The Use of Knowledge in Society, by Hayek Dozen pages, plain English, great paper Anyway
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Anyway suppose you adopt seignorage and are generating inflation at say a nice 50% annual rate This means that the price of things will double in less than two years Are you signing a contract? Better figure out how to account for that Hope you can do that math in your head
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Your salary will need to be adjusted or you will find yourself very poor very quickly, good luck predicting Lending a buddy money? Suddenly repayment on time matters a lot more Run a restaurant? Youll be printing menus quite a lot
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All of this is difficult to deal with day to day but there's more Suddenly holding onto cash becomes costly You'll want to be shifting it into "real" denominated assets as much as possible--assets that are Things like houses or cars Better hope they don't depreciate
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Replying to @eigenrobot
You are very patient in explaining an idea that is obviously stupid on its face.
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its fun revisiting optimal taxation theory
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Replying to @eigenrobot @mwotton
Mankiw and Weinzierl is my favourite contribution to this fieldhttps://www.nber.org/papers/w14976
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one of my long-standing academic regrets is that I never had that much fun writing a paper
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