From the Visiting Professor

This low tax rate creates a number of perverse incentives. ….. Third, it reduces the impact of fiscal policy as tax incentives and allowances have limited value.

Low tax rates are bad because the distortions introduced into asset allocation by stupid government are reduced.

11 thoughts on “From the Visiting Professor”

  1. “the impact of fiscal policy as tax incentives and allowances have limited value.”

    You see, in Spud’s perfect state, the tax rate is 100% and allowances are based on your obedience and devotion to the state.

  2. Infliction of lots of torture allows us to modify your behaviour in ways we like by offering the incentive of relief from said torture.

    if we don’t torture you, we lose that power to modify your behaviour in ways we like.

  3. Dennis, He Who Calls Out Bullshit

    This is even better, Timmy:

    First, it encourages the diversion of any income into a company to save tax. No tax system should undermine itself in this way.

    Reinvesting profits is bad because it lowers taxes collected. Tax policy that encourages such reinvestment is to be considered – at least by Murphy fans – to be offering a “perverse incentive”.

  4. He believes that taxes do not influence behaviour, so what is a “tax incentive” and why is he complaining about it?

  5. Allowing people to keep their money and spend their money on things that they have decided for themselves will improve their lives will produce perverse incentives. Stealing a large proportion of people’s money and spending it on things that their government has erroneously decided will improve their lives won’t. Is this an example of that Orwellian thing where you say the opposite of what you mean?

  6. @Noel – the fat one said he’s going to eat one less sausage in his breakfast because of the “climate emergency”. He’s only sucking up to the crazies because he hopes they’ll finance him, so he doesn’t have to get a job.

  7. On the other hand Tim, our was in the ASI blog {not you) where I read that governments could create, in effect, sovereign wealth funds and invest in the future of business by use of tax credits/reliefs etc. I thought it was bollocks tbh but linked myself to pointing out that this was done more effectively the higher the underlying tax charge.

    I enjoyed commenting on that post.

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