Economics Nobel Laureate Joseph Stiglitz is touring Australia. In last nights ABC Lateline interview he explained why the current Australian governments proposed economic policy is NOT good for our economy! I was impressed by the fact that Stigletz explained the benefits of drawing taxes from miners and property speculators. He also said that there is an international change of perspective on the impacts of socio-economic inequality. See the short interview and read the transcript here: abc.net.au/lateline/content/2014/s4036416.htm BIO: josephstiglitz/ Interview Excerpts: The IMF has pointed out that high inequality is associated with lower economic growth and more economic instability. This is a very big change in perspective from the way we thought about things before. We used to say, Well, inequality is bad, but if we do anything about it, it will slow economic growth. Now we realise that inequality has reached a level where its actually having adverse effects on countries like the United States and other advanced countries. ... Now, it depends to some extent on how targeted you can be in your taxes. If you tax monopoly power, if you tax excess what we call rents of a whole variety of kinds, there are some ways in which raising taxes at the top can actually improve the efficiency of the economy. Let me give you an example. In the United States, the speculators are taxed at lower rates than those who work for a living. The result of that is more resources go into speculation. The result of that?: an economy that has an excessively large financial sector, an economy thats excessively is unstable, excess activities in speculation, and, less of our scarcest resource, our most talented young people, fewer of them are going into research, into the kinds of things - transistors, lasers - all these basic research that would improve our standard of living. Why go into those low-paying research jobs if you can make a lot more money after tax in speculation? ... Ask a simple question: is it better to tax bad things or good things? Is it better to tax something thats destroying the global planet or to tax work or savings? And my view is: lets tax carbon and use that revenue to enable a lowering of taxes on savings and work. To me, its just common sense. Tax bad things rather than good things.
Posted on: Tue, 01 Jul 2014 06:19:07 +0000
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