{"id":11375,"date":"2020-07-13T21:49:57","date_gmt":"2020-07-14T04:49:57","guid":{"rendered":"https:\/\/www.oeconomist.com\/blogs\/daniel\/?p=11375"},"modified":"2022-07-12T02:38:05","modified_gmt":"2022-07-12T09:38:05","slug":"an-exercise-in-economic-thinking","status":"publish","type":"post","link":"https:\/\/www.oeconomist.com\/blogs\/daniel\/?p=11375","title":{"rendered":"An Exercise in Economic Thinking"},"content":{"rendered":"<p><a href=\"https:\/\/www.facebook.com\/danielkian.mckiernan\/posts\/3815714491777797\">Yester-day, I posted a problem to Facebook:<\/a><\/p> <blockquote>Assume that the market for <abbr class=\"noshrink\" title=\"chief executive officer\">CEO<\/abbr>s of large corporations is very tight, with directors competing ferociously for candidates.  How will the burden of a tax on compensation to <abbr class=\"noshrink\" title=\"chief executive officer\">CEO<\/abbr>s be distributed between the <abbr class=\"noshrink\" title=\"chief executive officer\">CEO<\/abbr>s and the stockholders?  If a heavily progressive tax is placed on the incomes of <abbr class=\"noshrink\" title=\"chief executive officer\">CEO<\/abbr>s, what will happen to the pre-tax income levels of these <abbr class=\"noshrink\" title=\"chief executive officer\">CEO<\/abbr>s?<\/blockquote> <p>So far, for whatever reasons, no one has offered answers, though the answers should be obvious.  What makes the exercise <em>interesting<\/em> is the <em>inversion<\/em> of the answer to the second question.  A great many people who could correctly and <em>quickly<\/em> answer the question itself would almost surely miss the inversion if not asked the question.<\/p> ","protected":false},"excerpt":{"rendered":"Yester-day, I posted a problem to Facebook: Assume that the market for CEOs of large corporations is very tight, with directors competing ferociously for candidates. How will the burden of a tax on compensation to CEOs be distributed between the CEOs and the stockholders? If a heavily progressive tax is placed on the incomes of [&hellip;]","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"footnotes":""},"categories":[6,36,4],"tags":[554,553,1483],"class_list":["post-11375","post","type-post","status-publish","format-standard","hentry","category-commentary","category-economics","category-public","tag-tax-incidence","tag-taxation","tag-taxes"],"_links":{"self":[{"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/posts\/11375","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11375"}],"version-history":[{"count":4,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/posts\/11375\/revisions"}],"predecessor-version":[{"id":12038,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/posts\/11375\/revisions\/12038"}],"wp:attachment":[{"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}