Saturday, December 09, 2006

Greg Mankiw on Taxes

Greg Mankiw is quickly becoming one of my favorite bloggers. In addition to the general support for a gas tax I noted earlier, he also writes in the same post:

The Pigou Club wants to move beyond the rhetorical syllogism, all too common in Republican circles, that

1. Taxes are bad.
2. Pigovian taxes are taxes.
3. Pigovian taxes are bad.

Such a simplistic mindset makes it impossible for people to discuss in a responsible way the relative merits of different tax systems. Instead, we Pigovians acknowledge:

1. There will be some government spending.
2. This spending will be funded with taxes.
3. Government should use the least bad taxes it has available.

It's kind of a shame that this even needs to be said, but unfortunately I think it does.

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