Now the state has four people. The government collects $13 in taxes ($4 + $4 + $4 + $1) to be spent on services. But because government services are distributed equally, Al, Bo, and Cy now receive only $3.25 each in services ($13 / 4), even though each still pays $4 in taxes.
-
-
For a primer on why the free market is superior to central planning, read this: https://fee.org/articles/the-use-of-knowledge-in-society/ …. In short, keeping more money in the hands of everyone produces better economic outcomes than giving a special advantage to one person.
Show this thread -
When advocates of Di's special tax break talk about the economic growth and jobs it will create, they commit the broken window fallacy: https://fee.org/articles/the-broken-window/ …. They ignore the break's opportunity cost; the government has deprived Al, Bo, and Cy of a tax break. That's a net loss.
Show this thread -
We can imagine variations of this illustration. For example, maybe Al, Bo, Cy, and Di already live in the same state, and then the government gives Di a special tax break for "economic development." The end result, however, is the same: The special break is economically harmful.
Show this thread -
This illustration is not meant to suggest that humans can design a perfect tax code. But when the government intentionally gives a special tax break to one entity, not only is the government undermining the Rule of Law, but it also is knowingly harming the economy.
Show this thread -
Bottom line: Targeted tax breaks are bad.
Show this thread -
Happy birthday, Frédéric Bastiat!
Show this thread
End of conversation
New conversation -
-
-
This is free market though. If the others want the tax break, let them be as attractive and valuable. Treating everyone the same no matter the value they bring is socialism.
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.