In the chartalist view, taxes drive acceptance of state money. Through one channel, taxes induce labor services. The need to obtain state money to pay taxes ensures a willingness of some individuals to accept employment in the public sector in exchange for the state money. There is another channel that exists under a broader range of conditions. It is the power of government to induce supply of real output from private enterprise. Not only does government induce a private supply of real output to itself (a transfer of resources from the private to public sector), but it also induces a supply of real output to private consumers. Unlike the inducement of labor services, the inducement of private-sector output would apply equally to a pure labor economy or a purely mechanized economy, as well as to intermediate cases.heteconomist
Taxes as an Inducement to Supply Real Output
Peter Cooper
3 comments:
"The need to obtain state money to pay taxes ensures a willingness of some individuals to accept employment in the public sector in exchange for the state money."
Of course, this incentive is inoperative if tax obligations vary with income. If you don't have a job, you probably owe very little if anything to the national government in the form of taxes.
In the real world, the number of people who seek employment so that they can pay a pre-existing tax obligation must be miniscule. People seek employment so that they can get an income to buy things. The tax bill comes later, and is not the reason people work - in whatever sector.
Yes, but there are large property taxes you have to pay and the poor get fined a lot to pay for local govt.
"Of course, this incentive is inoperative if tax obligations vary with income. "
The only reason the tax obligations vary with income in the way they currently do is because the engine is already running. Which generates enough tax obligations that there has to be a demand for the state's money so public workers can spend the money they get from working for the public sector.
To get an engine started, surprise, surprise you do it differently.
Sufficient and necessary. Totally different dynamic concepts.
Post a Comment