That's worth close analysis, but I'd suppose in general "infrastructure", the science and R&D, CPB, NASA, NOAA but if you want to fund them with taxes, that's even better,
Did you read Kurt Couchman's work on TABOR? It isn't likely TABOR will ever succeed anywhere else anywhere ever again other than Colorado. A better solution in structural balance is neccessary.
Thank you for your thoughtful message. While the structural balance approach has theoretical merit, its success relies on political discipline that often falls short due to public choice incentives. Without strict spending limits, deficits can persist in downturns, and surpluses during booms may never materialize. A better approach is to limit spending growth to the rate of population growth plus inflation. This matches the natural growth of the tax base because tax revenue tends to follow personal income growth, which is the sum of population growth, inflation, and private productivity growth. By capping spending at this sustainable rate, surpluses can be generated and returned to taxpayers as tax cuts, incentivizing policymakers to prioritize economic growth and fiscal responsibility while avoiding harmful tax increases.
Highlighting personal income growth clarifies why this approach works: population growth adds more workers to the economy, inflation reflects rising wages in nominal terms, and private productivity growth drives real income gains. Taxing productivity growth is counterproductive, as it penalizes the innovation and efficiency that drive prosperity. Connecting surpluses from restrained spending to tax cuts ensures that excess taxpayer funds are returned to the private sector, where they can fuel further economic growth. This approach fosters fiscal stability while empowering individuals, limiting government expansion, and letting people prosper.
I just want to see increased taxes on consumption considered along with reduced spending on activities that have NPV <0 in the _hugely laudable_ goal of reducing deficits to = Σ(expenditures with NPV>0)
But I'd also like to see, within the area of reducing Σ(expenditures with NPV<0), the greatest effort going into those with the MOST negative NPV, expenditures that incentivize departures form Pigou tax-corrected market outcomes.
I’m not entirely happy calling externalities “market failures.” Maybe they are but a very specific kind. At least a this point in time we do not know how to create a market in whihc people who will be harmed by CO2 emissions to buy non-emission from emitters.
SFAIK the lowest cost way to optimize the amount of harm (optimize the trajectory of CO2 accumulation in the atmosphere) is to tax net emissions. There could be estimates of the harm and of the DWL of the tax that yielded a rate of zero, but that is my approach.
Adopt Strict Rules: #1 = Σ(expenditures with NPV>0)
Which programs are NPV >0?
That's worth close analysis, but I'd suppose in general "infrastructure", the science and R&D, CPB, NASA, NOAA but if you want to fund them with taxes, that's even better,
Did you read Kurt Couchman's work on TABOR? It isn't likely TABOR will ever succeed anywhere else anywhere ever again other than Colorado. A better solution in structural balance is neccessary.
Thank you for your thoughtful message. While the structural balance approach has theoretical merit, its success relies on political discipline that often falls short due to public choice incentives. Without strict spending limits, deficits can persist in downturns, and surpluses during booms may never materialize. A better approach is to limit spending growth to the rate of population growth plus inflation. This matches the natural growth of the tax base because tax revenue tends to follow personal income growth, which is the sum of population growth, inflation, and private productivity growth. By capping spending at this sustainable rate, surpluses can be generated and returned to taxpayers as tax cuts, incentivizing policymakers to prioritize economic growth and fiscal responsibility while avoiding harmful tax increases.
Highlighting personal income growth clarifies why this approach works: population growth adds more workers to the economy, inflation reflects rising wages in nominal terms, and private productivity growth drives real income gains. Taxing productivity growth is counterproductive, as it penalizes the innovation and efficiency that drive prosperity. Connecting surpluses from restrained spending to tax cuts ensures that excess taxpayer funds are returned to the private sector, where they can fuel further economic growth. This approach fosters fiscal stability while empowering individuals, limiting government expansion, and letting people prosper.
I just want to see increased taxes on consumption considered along with reduced spending on activities that have NPV <0 in the _hugely laudable_ goal of reducing deficits to = Σ(expenditures with NPV>0)
But I'd also like to see, within the area of reducing Σ(expenditures with NPV<0), the greatest effort going into those with the MOST negative NPV, expenditures that incentivize departures form Pigou tax-corrected market outcomes.
What market failures? How would Pigouvian taxes solve the “market failure” and bring in tax revenue? Which government program have a positive NPV?
I’m not entirely happy calling externalities “market failures.” Maybe they are but a very specific kind. At least a this point in time we do not know how to create a market in whihc people who will be harmed by CO2 emissions to buy non-emission from emitters.
SFAIK the lowest cost way to optimize the amount of harm (optimize the trajectory of CO2 accumulation in the atmosphere) is to tax net emissions. There could be estimates of the harm and of the DWL of the tax that yielded a rate of zero, but that is my approach.