Thread by @YohannesBecker

@alexcobham @FaccioTommaso @iaincampbell07 @D_Langenmayr @Omri_Marian @DanNeidle @gabriel_zucman @J_C_Suarez Actually I don't think that the primary/secondary question is just semantics. Let me explain. 30 years ago, it was almost academic consensus that taxes don't matter. Here is Hines (1999):

@alexcobham @FaccioTommaso @iaincampbell07 @D_Langenmayr @Omri_Marian @DanNeidle @gabriel_zucman @J_C_Suarez Joel Slemrod edited a book in 1990 with the title "Do Taxes Matter?" (because at that time it was the "if", not the "how much" that was questioned). It was part of a growing literature that, over time, provided lots of evidence that taxed do matter a lot.

@alexcobham @FaccioTommaso @iaincampbell07 @D_Langenmayr @Omri_Marian @DanNeidle @gabriel_zucman @J_C_Suarez Today, the "taxes matter" message is often used by those who want to shift the burden from capital to labor or to reduce the size of government. If you don't like this agenda, there are two ways of dealing with this.

@alexcobham @FaccioTommaso @iaincampbell07 @D_Langenmayr @Omri_Marian @DanNeidle @gabriel_zucman @J_C_Suarez 1) Insist that behavioral effects are just one side of the trade-off, the other being fairness, public goods etc.

2) Reject the existing evidence and only account for studies that show weak response to tax.

@alexcobham @FaccioTommaso @iaincampbell07 @D_Langenmayr @Omri_Marian @DanNeidle @gabriel_zucman @J_C_Suarez A good example for 1) is the paper by @gabriel_zucman and Saez on wealth taxes which explicitly assumed a substantial response to a 2 percent wealth tax (15 percent evasion/avoidance). gabriel-zucman.eu/files/saez-zuc…

@alexcobham @FaccioTommaso @iaincampbell07 @D_Langenmayr @Omri_Marian @DanNeidle @gabriel_zucman @J_C_Suarez I intepreted your tweet, Alex, as an example of 2) - sorry if I misread it. By denying or ignoring the existing evidence, one might lose those who - like me - share the goal of fair taxation, but believe the evidence.

@alexcobham @FaccioTommaso @iaincampbell07 @D_Langenmayr @Omri_Marian @DanNeidle @gabriel_zucman @J_C_Suarez So, I do think that tax competition is real and I don't like the consequence (mostly in terms of distribution - and, yes, @J_C_Suarez has a paper on this as well 🙂).

@alexcobham @FaccioTommaso @iaincampbell07 @D_Langenmayr @Omri_Marian @DanNeidle @gabriel_zucman @J_C_Suarez All this said, @alexcobham , there are incidents where certain people assert large responses/elasticities where they don't exist (because they like the consequence: tax cuts!). E.g. in labor supply of high-income individuals. \end