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Flat Tax or Fair Tax?

Macroman Wrote: Jan 31, 2013 8:14 AM
"since every economic theory agrees that capital formation is key to long-run growth." Not true. Modern growth theory and lots of supporting evidence argue that "technical progress" is and always has been the key to long-run growth. The difference is important for policy-making. Taxes that encourage capital formation do not necessarily encourage R&D, which in some form has always been the source of technical progress. For example, a dividend tax can encourage R&D by reducing the number of firms in an industry and thus raising the rate of return to R&D enjoyed by the remaining firms. The interplay of taxation and growth is not as simple as it seems on the surface.
george293 Wrote: Jan 31, 2013 9:56 AM
That's ridiculous - using a tax to put companies out of business is what you advocate?

I’m at Hillsdale College in Michigan for a conference on taxation. The event is called “The Federal Income Tax: A Centenary Consideration,” though I would have called it something like “100 Years of Misery from the IRS.”

I’m glad to be here, both because Hillsdale proudly refuses to take government money (which would mean being ensnared by government rules) and also because I’ve heard superb speeches by scholars such as Amity Shlaes (author of The Forgotten Man, as well as a

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