Penn and Teller on Progressive Taxation

I try to get across to my students that the government has no money of its own - everything either comes from taxes or from borrowing(which is paid off with future taxes). So in the end, most government programs involve taking money from one group and giving it to another. That's not necessarily bad (there might be a compelling reason to do so in some circumstances), but it's useful to frame things this way.

Here's a videos by Penn and Teller from their Bullsh*t (this is mostly a family friendly blog) series that hits the nail pretty much on the head:


HT: Ace of Spades, which, FWIW, is NOT a family-friendly blog. Funny, but not family friendly)

Forecast For Blogging: Light

Been dealing with taxes the last few days (I took an extension, so I have to have it done by 8/15).

Someone PLEASE shoot me now!

Arghhh! A reader reminded me that (unlike in previous years), the extensions are now until October, not August. At least they're done now.

Taxes Do Matter

The Entrepreneurial Mind quotes from a recent report from the SBA Office of Advocacy:

Reducing marginal income tax rates on entrepreneurs increases entrepreneurial entry, decreases exit from entrepreneurship, and lengthens the duration of entrepreneurial ventures.

Click here for the whole post (and a link to the report).

On of the central themes in finance is that taxes matter. A lower marginal tax rate means that after tax payoffs increase. Not surprisingly, this shifts investor/entrepeneur behavior at the margin. Given the increasing importance of entrepreneurial activity as an engine of economic growth, this is pretty important as a policy issue.

Don't you love it when real world data supports what theory says?