Links for 2009-06-08

  • Capitalists Only Beijing Could Love | washingtonpost.com – «Some Sinologists believe that one reason the urban Chinese haven’t demanded more rights is their fear that in a democratic China, they’d be outvoted by a peasantry that would demand a more equitable distribution of the nation’s wealth»;
  • VAT Time? | Forbes.com – «Eventually conservatives decided that the VAT’s greatest virtue–its efficiency; i.e., its ability to raise revenue at a very low dead weight cost (the cost over and above the revenue collected)–was a defect rather than a virtue. The fear was that a VAT would raise too much revenue, too easily. Better to raise taxes as painfully and inefficiently as possible, many conservatives concluded, in order to limit the government’s tax take»;
  • Marginal Revolution | Carbon tax vs. labor tax – «Most analytical and numerical analyses find that the tax-interaction effect exceeds the revenue-recycling effect, implying no double dividend, and that abatement costs are actually higher due to the presence of preexisting tax distortions. A rough rule of thumb from these models is that the costs of revenue-neutral emissions taxes are about 15 percent greater than the direct cost due to interactions with prior tax distortions, implying the optimal tax is 15 percent lower than the Pigouvian tax»