Tax implications of liquidating a corporation Camfuck caht
Half of the budget is entitlement programs, and 32% of those go to the poorest quintile, so they would get an extra billion. But it’s hard to come up with remotely plausible numbers in which the poor and working-class are better off with the tax bill than without it.I think the assumptions I plugged in were overly generous: the bill won’t really increase growth 1%, and although poor people have 3% of income they get much less than 3% of economic gains.Suppose Alice is an effective altruist who supports whatever charity you think is most important and does a really good job of it. She lives in a town of 1000 people where nobody else is an effective altruist and everyone else just lives a pretty decent life and spends their extra money on, I don’t know, breeding virtual cats or something. Every time Bob pays a dollar in taxes, it destroys a random two dollars’ worth of wealth somewhere in the town.The town elders meet and decide that for some reason they have to lower taxes either on Alice or Bob.Suppose that this tax cut was vastly better at stimulating economic growth than any reasonable person expects, and it increased growth by 1% per year. With extreme good luck, 3% of that might go to the poorest quintile, giving them an extra billion.Or suppose the government keeps the 0 billion and distributes it evenly according to its existing priorities.But although I agree there’s a multiplier, I don’t know if it’s this big.And government programs would also disproportionately help the poorest of the poor, compared to economic gains which would disproportionately help the richest of the poor.
Should we be debating whether running up the deficit is really that bad?The economic case for Bob is overwhelming – taxes on him are especially inefficient because of the extra wealth they destroy. It seems like the only important thing that happens at all in this town is Alice’s charitable donations.The amount I care about this town’s utility focuses pretty much entirely on that.So the best way to convince me to support this bill would be to find a plausible estimate of what level of growth is expected. My best guess from the economist poll is still “approximately zero”.