[quote=FormerSanDiegan][quote=MadeInTaiwan][quote=FormerSanDiegan]
…Regardless of the mechanism, it is naive to believe that the Government will recover the amount of dollars they anticipate by enacting this change. People will react and adapt to the changes in a way that reduces the overall take of the government.
I don’t disagree that in the long run the removal of this subsidy would make the economy more efficient, it’s just that the reaosn for doing so (to generate more revenue for the Government) may not come to pass.[/quote]
I think government will recover the revenue. As capital allocation moves away from non-productive investment like housing and real-estate, it should move into more productive investments that will generate tax revenue. At least that is what I hope happens.
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Interesting counterpoint. But in this case the capital allocation would shift from consumers to the Federal Government. Are you suggesting that the Federal Government makes more productive investments than private individuals ?[/quote]
What I suggest is that more productive investment allocation will lead to more sustainable growth. Goverment will collect more revenue because there will be more taxable personal income and coroporate profits. Hope that clears it up.
Government sometimes make more productive investments then private individuals. Internet which partially came out of DARPA is but one example. Basic science reasearch is another.
