June 29, 2004

Economic Wealth Distribution Continued

Mustafa Hirji (email) at 11:48 AM

Mandos is correct to argue that the proper distribution of new revenues is a legitimate policy question as is the level of taxes a legitimate policy question. However, I was trying to point out the incorrect analysis of Frum's position by showing that he is correct in arguing that government took more of the economy's growth than people and that Martin held people's income down through taxation. When I wrote, Normally, the people and the government should have become richer by the same amount, I mean that if all other variables are held constant, both the people and the government should see equal rises in income. Whether or not this is a good thing or a bad thing is up for debate. All I'm pointing out is that it is what happened contrary to earlier remarks by Brad DeLong and Mandos.

However, I'll admit that my reference to "fair" share does expose my personal stance on this matter. I should have used a value-neutral phrase like "normal share."

As for boondogles, I'll freely say that most of the extra revenue collected wasn't wasted or stolen. But some of it was. Taxing people, many of whom need that money to get by, and then wasting it, giving it to friends, and stealing it is reprehensible.

My argument is simply as follows

  1. The government increased taxes over the course of 1993-2003 increasing government revenue more than the personal incomes of Canadians. Frum's argument, despite its biased rhetorical flourish, is correct.
  2. Some of this money was wasted, given to friends of the Liberal Party, and pocketed by politicians. As such, taxes should not have been raised as much as they were.

My value judgement on statement #1 is statement #2. Implying a "fair share" was a faux pas on my part and I appologize for that lapse.

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