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by Decathect
2748 days ago
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If everyone was paid exactly the value they added GDP per worker would be the average wage, with no caveats required. Equal productivity would just mean the average and median wages would be the same. Government spending, funded by taxes, contributes to the GDP like any other spending. |
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That's exactly the problem. You're thinking of Gross Value Added (GVA), which strictly talks about value added through normal economic activity. Once you start "removing" productivity through taxation and "adding" productivity back through spending/subsidies you have a new variable- the presence of that variable is the difference between GVA and GDP. That variable doesn't necessarily net out to 0 either, or even close, if the government runs a surplus or deficit as the United States does.