I don’t like tax increases, but I like having additional evidence that higher tax rates change behavior. So when my leftist friends ‘win’ by imposing tax hikes, I try to make lemonade out of lemons by pointing out ‘supply-side’ effects.
Such as the big drop in soda purchases after a tax on sugary drinks was imposed in Berkeley. Such as the big drop in home sales after a tax was imposed in Vancouver on purchases by foreigners. I’m hoping that if leftists see how tax hikes are ‘successful’ in discouraging things that they think are bad (such as consumers buying sugary soda or foreigners buying property), then maybe they’ll realize it’s not such a good idea to tax – and therefore discourage – things that everyone presumably agrees are desirable (such as work, saving, investment, and entrepreneurship).
Though I sometimes worry that they actually do understand that taxes impact pro-growth behavior and simply don’t care.
This post was published at Zero Hedge on Jan 18, 2017.