Re: What if and Why of Zero Taxation

[larson@xxxxxx]

Quoting Schulte-baeuminghaus <schulte.baeuminghaus@xxxxxxxxx>:

> Investment - private and public - but not casino-type speculation -
> makes a
> community rich, if the aggregate investment is kept high; it makes the
> community poor if it stays low.
> If private investment begins to lag a bit, make sure interest rates are
> kept
> low but ALSO GET IN THERE WITH PUBLIC INVESTMENT.

I agree that investment should be high, but this has nothing to do with
interest rates. There is no scientific study anywhere - and I've looked for a
while now - that proves ANY kind of correlation between investments and
interest rates. The I=I(r) is one of the most persistent macroeconomic myths in
our world. The correct one is of course I=I(AD), with appropriate periodicity
in denotations.

As to taxes, I agree with the idea of zero taxation. In fact, my just-out
book "Uncertainty, Macroeconomic Stability and the Welfare State" is an entire
argument that the foundation of any welfare state - or even welfare system - is
full employment, not taxes. In view of this Europe is amazingly persistent in
going the wrong way, a trend accentuated by the idea of an EU tax layer on top
of the three existing ones.

/srl

--
Sven R Larson
PhD; Assistant professor of economics
Department of Social Sciences, Bldg. 22.2
Roskilde University
Pb 260
DK-4000 Roskilde
Telephone: (+45) 4674 2910