All I am saying is that it is possible, *in principle*, for the effect of the increased tourist consumption to overcome the costs imposed by this tax.
The point is that everybody benefits from the advertising investment, and if this investment was voluntary (i.e. not a tax), it could happen that while the investment pays off as a whole (i.e. total return > total investment), it doesn't pay off for the people who made the investment (i.e. return for investor I <= investment by investor I) (e.g. if they were the only ones investing in it). Whereas, if the investment was mandatory (i.e. a tax), the return for most individual investors could exceed their investment. Of course this has problems, as some businesses may NOT benefit from the investment the are paying for. Not to mention the ethical problems of taxation. If you are saying that this is impossible, the burden of proof is on you. Gustavo ----- Original Message ----- From: "Alexander Guerrero" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, October 31, 2001 2:57 PM Subject: Re: Tax with positive growth effect > This statemente is not true, investment decision are no taken for government > advertisement campaigns. Investors ask for, first of all, the rule of law to > be accomplished, clear rules of the game, low taxes, they know hau to > calculate the return of their investment. On the other hand, taxes collected > for this advertisement campaign, recue consumption, investment and make > investment costly, so reduces wealth. > Alexander Guerrero > St Antonys College > Oxford University > > > ----- Original Message ----- > From: "Gustavo Lacerda" <[EMAIL PROTECTED]> > To: <[EMAIL PROTECTED]> > Sent: Thursday, November 01, 2001 2:14 AM > Subject: Re: Tax with positive growth effect > > > > In the following example, it isn't the taxing itself that promotes growth, > > but its spending. > > > > If a state uses tax money to attract rich tourists to the area (by > > advertising, for example), that could promote consumption, in such a way > > that the tax promotes growth more than it hampers it. Whereas if there was > > no tax (i.e. if it was voluntary), individual businesses would be > reluctant > > to use their money that way, even if they knew that everybody would be > > better off if everybody invested their share into the collective fund > > (prisoner's paradox). > > > > I would be interested to know if there are real-world cases of this, or of > > any tax promoting economic growth. > > > > Gustavo > > > > > > At 08:20 PM 31-10-01 +0200, you wrote: > > > > >Has anybody read/heard about a tax which does have a positive effect on > > >the economic growth? The professors at my university say so, but I > > >wouldn't be so sure so that's the reason I'm asking. > > > > > >Also I'm writing my course paper about the effects of the fiscal policy > to > > >economic growth. Any good links, thoughts, ideas etc. would be > > >appriciated. > > > > > >Regards, > > >Kristjan Kanarik > > >
