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smitty1e 6 hours ago

> if the cost of a resource goes up, the total spend on that resource can go down.

Not unlike hiking taxes on the rich, seeing them vote with their feet, and revenue subsequently catering.

But as long as we reward politicians for delivering blame more than results, this political folly will continue.

Until Strein's Law[1] kicks the teeth in.

[1] https://en.wikipedia.org/wiki/Herbert_Stein#Stein's_Law

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neilwilson 4 hours ago | parent [-]

Except that revenue doesn’t crater in a floating exchange rate system. Revenue from them craters but the money moves elsewhere and revenue improves there - including an increase in total transactions. Total revenue will always be Total spend less what people decide to financially save rather than spend. Because tax are percentages and the process is a geometric series.

	▲	AnthonyMouse 3 hours ago \| parent [-]
		"Vote with their feet" means relocating to another jurisdiction. The other jurisdiction doesn't necessarily have to use a different currency, e.g. if businesses move from California to Texas, they both use US dollars. Likewise any two countries that both use Euros. Moreover, when the destination jurisdiction does use a different currency, that increases demand for the destination currency and reduces demand for the original currency, i.e. it devalues the original currency. And then even if your revenue was the same in nominal dollars it would have declined in real dollars. On top of that, non-uniform tax rates break your model wide open. The entities who leave can exchange their currency (independently of whether it gets devalued) for assets, so that the amount of currency (as distinct from wealth, since it's an equal value exchange) increases in the hands of the people who pay lower tax rates. Which likewise has a negative impact on revenue, since they pay lower tax rates.