The benefit of a debt tax is a big fat zero The benefit of a debt tax is a big fat zero There is a story doing the rounds this morning that families could be hit with a debt tax to help pay off the budget deficit.which we dont need. All that such a debt tax imposed by the government to reduce governement debt and deficit would do is transfer household savings from the private sector (where savings fall and / or debt increases) to the government sector (where debt falls). $10 billion of revenue from the tax, for example, would reduce household savings by that amount whilst simultaneously reducing governemnt debt by that amount, less the red tape and administration costs of course. The net effect on national savings, which is the thing that matters to all sensible macroeconomists, is a big fat zero. thekouk/blog/the-benefit-of-a-debt-tax-is-a-big-fat-zero.html#.U1x7qfmSzXr
Posted on: Sun, 27 Apr 2014 03:52:52 +0000
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