{"id":11809,"date":"2021-08-28T16:16:00","date_gmt":"2021-08-28T23:16:00","guid":{"rendered":"https:\/\/www.oeconomist.com\/blogs\/daniel\/?p=11809"},"modified":"2021-11-05T15:18:17","modified_gmt":"2021-11-05T22:18:17","slug":"dissimilar-equivalence","status":"publish","type":"post","link":"https:\/\/www.oeconomist.com\/blogs\/daniel\/?p=11809","title":{"rendered":"Dissimilar Equivalence"},"content":{"rendered":"

One of the points taught in a great many introductory courses on microeconomics is that a tax-cut can be expected to have the same effect on schedules of supply and of demand, and thence on the resulting equilibrium, as would a subsidy. In this sense, economics shows that a tax-cut is equivalent<\/em> to a subsidy. And, ignoring differences in administrative costs, the resources possessed by the state given a tax-cut are equivalent to those after dispensation of a subsidy. But it is only in these effects that microeconomics shows an equivalence; and, even if we confine ourselves to the considerations of non-normative microeconomic theory, we would be speaking or writing rather loosely if we simply said that a tax-cut were the same<\/q> as subsidy.<\/p>

In the sphere of normative<\/em> discourse, whether a party's refraining from taking<\/em> is equivalent to giving<\/em> is determined by whether that person or group of people is entitled<\/em> to take. A person who forgives a debt may be said to give;[1]<\/span><\/span> but the person who does not steal<\/em> that which is yours does not in this way donate<\/em> to you.<\/a> The invaders or other thugs who declared themselves to be lords did not give<\/em> what they merely did not confiscate from the farmers whom they conquered.<\/p>

To treat a tax-cut as morally<\/em> equivalent to a subsidy, or to do as so many progressives<\/q> and left-wing populists — to insist that a failure to increase some tax on some party to a prior or even new level simply is<\/em> a subsidy — is to insist that the state is morally entitled<\/em> to tax at the greater level, that the state owns<\/em> those resources.<\/p>

This moral claim is certainly not<\/em> a principle of economics nor a consequence of bringing economic principles to bear on moral theory, and should not be allowed to pass as such nor by insinuation.<\/p>

[1]<\/span> A creditor who forgives a debt has given<\/em> her rights as surely as if she had assigned them to a third party.<\/p> ","protected":false},"excerpt":{"rendered":"One of the points taught in a great many introductory courses on microeconomics is that a tax-cut can be expected to have the same effect on schedules of supply and of demand, and thence on the resulting equilibrium, as would a subsidy. In this sense, economics shows that a tax-cut is equivalent to a subsidy. […]","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":[6,36,318,4],"tags":[468,1594,1593,553,1483],"class_list":["post-11809","post","type-post","status-publish","format-standard","hentry","category-commentary","category-economics","category-ethics-philosophy","category-public","tag-subsidies","tag-subsidy","tag-tax","tag-taxation","tag-taxes"],"_links":{"self":[{"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/posts\/11809","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=11809"}],"version-history":[{"count":4,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/posts\/11809\/revisions"}],"predecessor-version":[{"id":11868,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/posts\/11809\/revisions\/11868"}],"wp:attachment":[{"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11809"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11809"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11809"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}