The main problem with taxing positional goods is that the consumption just moves to another country.
I don’t have an economics degree, but:
1) governments could cooperate to tax positional goods (such as with a treaty)
2) governments could repair the reduced incentive to work hard by lowering taxes on the rich
3) these 2 would result in lower prices for non-positional goods
4) governments could adjust for lost tax revenue by lowering welfare programs because of (3)
The flaw I can think of (there are probably others) is that workers in positional goods industries might lose their jobs.
What other flaws are there or why isn’t this happening already?
https://en.wikipedia.org/wiki/Luxury_tax Bush senior did pass such a tax but the Clinton administration allowed it to be repealed.
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The main problem with taxing positional goods is that the consumption just moves to another country.
I don’t have an economics degree, but:
1) governments could cooperate to tax positional goods (such as with a treaty)
2) governments could repair the reduced incentive to work hard by lowering taxes on the rich
3) these 2 would result in lower prices for non-positional goods
4) governments could adjust for lost tax revenue by lowering welfare programs because of (3)
The flaw I can think of (there are probably others) is that workers in positional goods industries might lose their jobs.
What other flaws are there or why isn’t this happening already?
https://en.wikipedia.org/wiki/Luxury_tax Bush senior did pass such a tax but the Clinton administration allowed it to be repealed.