Sunday, April 01, 2007

Taxation in Georgia

Shindisi, Georgia -- I lectured this morning on taxation. After pointing out that taxation is not dues or the price paid for services, but rather a forced exaction that creates two classes -- taxpayers and tax-consumers -- I explained that government cannot "efficiently" use taxation for social engineering (even if were desirable) because people are ingenious at adjusting their conduct in response to the incentives and disincentives created by the particular system. Thus government's targeting taxes at particular groups or activities is like an archer trying to hit a target in a dark room while blindfolded. As long as there are taxes, I told the students, the objective should be to keep them (and government spending ) as low as possible and taxation highly visible.

That's my good friend Gia Jandieri and me during a break in the action.

2 comments: