Here's a question LVT Cafe-ers... We often argue,...
12:32pm Apr 30
Here's a question LVT Cafe-ers... We often argue, quite correctly, that every dollar raised by LVT is better than a dollar raised on capital and especially labour.
But my question is *how* much better?
It is typically assumed that $1 raised by LVT whilst reducing capital/labour taxes by the same amount is the equivalent of putting $2 back in the economy.
But we have to account for strategic public investments, the fact that capital/labour taxes are often based on high incomes which are spent poorly (remember Adam Smith's comments about taxing luxuries).
Are there any empirical studies on this which indicate a ratio? For example every dollar raised from LVT equals two fifty raised by payroll tax?
I know of the Henry Report in Australia which spoke of 'welfare loss' due to different tax systems (the Petroleum Resource Tax - a type of LVT - came out the best), but are there any others?