Quote Of The Day

“Here’s the $64 dollar question for which I’ve never seen progressives provide a satisfactory answer.  Why is per capita GDP in Western Europe so much lower than in the US?  Mankiw seems to imply that high tax rates may be one of the reasons.  I don’t know if that’s the answer, but if it’s not my hunch is that the factors that would explain the difference are other government policies that the left tends to favor (strong unions, higher minimum wages, more regulation, generous unemployment insurance, etc.)  So I think Mankiw is saying that if we adopt the European model, there really isn’t a lot of evidence that we’d end up with any more revenue than we have right now.  Further evidence for this hypothesis is that the few developed countries that do have much lower tax rates than the US (Hong Kong and Singapore) now have much higher per capita GDPs (PPP) than Western Europe.  Yes, they are small and urban, but Western Europe is full of small countries of about 6 million people that have less than 5% of the population in farming.”  — Scott Sumner, professor of economics at Bentley University, discussing a post by Mankiw that Yglesias responded to

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