Gas taxes and climate change

Two questions about gas taxes and climate change: 1. In the diagram (from the Canadian Tax Federation), how much tax is embedded in "Refining," "Crude," and "Marketing"? And 2.: How far does this level of taxation leave us from efficient carbon taxation? What is the all-in marginal external cost of a litre of gas?

Bi-polar tax rates

Average and marginal tax rates, Canada, single-parent families making 67 per cent of average labour income, 2010
Income tax plus employee and employer contributions less cash benefits (as % of labour costs)	-8.3
Increase in net income after 1% increase in gross wage earnings	0.37
Source: OECD, Taxing Wages 2009-10, Tables I.1 and I.8.

Quebec METR

 

Source: Finn Poschmann and Alexandre Laurin, "What has happened to Quebecers' marginal effective tax rates?", C. D. Howe Institute e-brief, May 18, 2011.

Dividing line for the species

We may divide the whole struggle of the human race into two chapters. First, the fight to get leisure; and then the second fight of civilization--what shall we do with our leisure when we get it?

James Garfield, quoted by Judith Flanders in the TLS, "Song and dance," April 22, 2011.

Major in economics

Nicholas Kristof says in today's NYT that if he had it to do over again, he'd major in economics, not political science: "It possesses a rigor that other fields in the social sciences don’t—and often greater relevance as well. That’s why economists are shaping national debates about everything from health care to poverty, while political scientists often seem increasingly theoretical and irrelevant."


Kristof, "Getting smart on aid," NYT, May 18, 2011

La différence

The media in France are not allowed to show pictures of DSK in handcuffs but are reporting the name of his accuser. The US media have shown the perp walk endlessly but have not mentioned the accuser's name. Are any countries doing both? Neither?

Whatever happened to "an old tax is a good tax"?

James Cloyne of University College London has an interesting new paper on the effects of taxes on growth: "What are the effects of tax changes in the United Kingdom? New evidence from a narrative evaluation." The narrative evaluation in question, provided in an exhaustive companion paper, summarizes British budgets going all the way back to 1945. The purpose of the narrative, in part, is to try to judge whether the tax changes reacted to macroeconomic circumstances, so that the statistical relation between taxes and GDP would be contaminated by feedback effects. Cloyne finds a number of cases where tax cuts were introduced more or less independently of macro conditions, including four periods of "supply-side reform" (1957-8, 1970-3, 1983-4 and 1995-6, all under Conservative governments). Cloyne judges that subsequent changes in GDP were pure tax effects. He finds that these effects are large: "Output increases by around 0.6 per cent on impact, rising to 2.5 per cent over 3 years. This implies that tax cuts stimulate above trend growth for over three years" (p. 27).

What's also intriguing is that Cloyne identifies 2500 discretionary tax changes between 1945 and 2009, an average of 39 per year. Whatever happened to the idea that an old tax is a good tax?