Today will be the third and last day of the National Tax
Association’s 107th Annual Meeting, being held in Santa Fe. It’s been nice to see lots of old friends
here, from economics, law, and accounting.
Obviously economists are the largest group, but the law contingent is
significant these days, and a bunch of junior people appear to be making it a
regular thing, which is great both for them and the NTA. There is some tendency for the economists and
lawyers to do things separately, but there is also a fair amount of
interaction, and in any event the optimal mixing percentage is less than 100
percent given distinct professional interests and styles.
Next year’s NTA Annual Meeting will be held in Boston, which
is certainly easier to get to for many of us than Santa Fe, and the program
chairs will be Matthew Weinzierl of the Harvard Business School and Dhammika
Dharmapala of the University of Chicago Law School.
With lots of good panels in each time slot, one had to miss
a lot of good things. (I also ended up
missing the Georgia O’Keefe Museum, even though it’s right next door.) But there were four general sessions, each
meriting a brief mention here.
The first day’s lunch speaker was Joe Stiglitz. He argues that, with proper use of Pigovian
taxes such as a carbon tax, along with Henry George land or site value taxes,
the U.S. government can raise more than enough revenue over the long run
without doing serious economic harm. He
also pointedly dissented from academic uses of the 1976 Atkinson-Stiglitz
theorem regarding equal commodity taxation to draw pro-consumption tax,
anti-income tax, conclusions. But when
asked what would be wrong with using a progressive consumption tax plus
inheritance/gift tax, in lieu of a capital income tax that may have a hard time
getting away from realization problems, his answer appeared to focus mainly on
rents, which would in principle generally be reached under a progressive consumption
tax and also, to the extent not spent during their lifetimes by those earning
the rents, by the inheritance/gift tax.
Stiglitz criticized Thomas Piketty’s economic analysis (as
distinct from statistical analysis) in Capital in the Twenty-First Century on the
ground that Piketty has confused “capital,” in the sense of productive inputs,
with “wealth,” in the sense of the market value of existing resources. To illustrate (using his example), suppose
that in France there is a huge run-up in the value of real estate – reflecting,
say, the global popularity of Paris and the French Riviera as attractive
destinations. This increases the wealth
held by people in France (ignoring the issue of French versus overseas
ownership of French land). But it does
nothing to increase the capital that can be deployed in economic production. So while the landowners would presumably now
be earning r (the normal return) on a higher valuation, they would not have
increased productive resources in the economy, hence there would be no tendency
for the increased wealth – unlike increased capital being deployed productively
– to bid down r.
Perhaps this is enough for one post, so I will add a second one
on the other general sessions at this year’s NTA.
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