Wednesday, November 2, 2011

Tax the rich to spend on infrastructure, full employment, and redistribution: Why can't the large states do this without the US Federal govt?

It's a question that popped into my head the other day that I've been meaning to post.

4 comments:

  1. States used to do a lot more things now assigned to the federal government, but seem to have largely abdicated responsibility. It seems that ambitious people head to the national government, and states rely a lot on the feds sending money back to them. I think they do some of the stuff you talk about, but on a smaller scale. Taxes cause the rich to "vote with their feet" (something I'm very enthusiastic about), but the benefits of living in, say, NYC, are enough that they stay and the government can still raise lots of money.

    Like Hanson on municipalizing medicine, I want to assign a lot more responsibility to the states (I don't think we actually need a national government, and can handle inter-state issues with one-off agreements rather than a permanent body). I've never been a "Lochner libertarian" for partly that reason, even if I support policy outcomes like that of Lochner itself.

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  2. Hopefully Anonymous said...

    "Taxes cause the rich to "vote with their feet" (something I'm very enthusiastic about)"

    Why? Looters vote with their feet too, not just exploited people at the right tail of some productivity curve. Distinguishing between looters and and productivity optimization migrants is something I'd expect you to do in good faith.

    To answer my own question, I think large population, rich states have their own analogue barriers to taxing for infrastructure and redistribution. I think my post was intented to be more in the direction of "Why don't DeLong, Krugman, Romer etc. also rail at states to increase progressive taxation and redistribution? Why just the federal govt.?"

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  3. It's not the rich specifically but foot-voting generally that I favor. And to avoid looting I think that the destination should be able to veto incoming migrants. But otherwise, immobility is an invitation for others to loot.

    "I think large population, rich states have their own analogue barriers to taxing for infrastructure and redistribution"
    You mean analogous to barriers in at the federal level? I think the legislatures tend to be less balanced.

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  4. Hopefully Anonymous said ...

    TGGPT wrote: "And to avoid looting I think that the destination should be able to veto incoming migrants."

    I feel like you could make the facile observation on your own that destinations can coordinate with emigrating looters to loot origin states.

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