Monday 8 July 2002

A good read

I am gradually re-reading the enormous (1,000 double sized pages with small print!) Capitalism by George Reismann, Professor of Economics at Pepperdine University.

Today, I came across this passage:

What has enabled Sweden to have one of the world's highest burdens of taxation and, at the same time, to remain a modern country, more or less advancing, is the fact that the tax burden in Sweden falls far more heavily on the average Swedish wage earner than it does on Swedish business.........If Swedish business had to bear the burden of taxation borne by Swedish wage earners, the Swedish economy would long since have been in ruins.

Reismann's point is that taxation on capital and profits is far more harmful in the long run even for the wage earners because ultimately wages depend on capital formation and expansion. It occurred to me that Ireland has been adopting a similar policy of taxing wage earners relatively more than business. Some in the SNP seem to be arguing for a similar policy in Scotland. I wonder if they have been reading Reismann!