Taxation affects economic development.
Notice that the trend in taxation in recent centuries has been away from taxing captial to taxing transactions. That is why people say the same dollar gets taxed multiple times - not so: most taxation has been event-based for a long time. That dollar gets taxed as it gets paid to you in earnings, then it gets taxed again when you spend it.
It would be interesting to find a proper article about how different taxation stimulates economies. If the tax base (could be) shifted to a wealth tax, rather than income/outoings tax, what would we see change? Prices and income would certainly change if they were untaxed, but then people may be reluctant to acquire capital, because that's taxed, now. Rather than people finding ways to minimise income tax, they'd find ways to minimize owning taxable goods. Would it spur more charitable giving? How do you decide what good are taxable? Would people spend more on service and less on goods?
Could be an interesting intellectual exercise.
Wade.
