| > Do you have any evidence for these simplistic Econ101 theories? Yes, deductive logic. Way better than empirical studies, if that's what you were looking for. You only need the assumption that demand curves in the labor market slope downward to deduce that taxes in that market cause deadweight losses, and the evidence that demand curves nearly always slope downward, not just in the labor market, is every transaction you have ever made and every transaction you have ever heard anyone talk about. There are empirical studies that confirm this, but they are irrelevant because you have access to much better evidence, and you should just dismiss the empirical studies that say otherwise. If controlled experiments showed this wrong, you should assume that the researchers are lying about their results, because that would genuinely be a more likely explanation than demand curves not actually sloping downward. By the way, simple theories are more likely to be true, not less. > Economic growth is probably only a matter of distribution. There are exactly two reasons there can be an increase in economic growth and they are intensive and extensive growth. Either you make more efficient use of inputs or you have more inputs. Deadweight losses mean you make less efficient use of inputs. In principle, the inefficiency caused by the taxes could be offset by the way they are spent if they were used to correct a market failure, which could increase economic efficiency or even increase the inputs. But market failures do not exist so in practice this does not happen and taxes always harm economic growth. |