> A portion of the general sales tax fall on the > so-called "producer surplus", which is really land > rent. Why do you say a producer surplus is only "land rent"? Higher sale prices benefit almost every input to an industry, including wages from labor and profit from capital. Entrepreneurs must bid for workers, intellectual property, and other inelastic resources, just as they bid for real estate.
Of course, you are right that a sales tax which reduces consumption will impact suppliers as well as consumers. I think the intent of this tax proposal was to replace the income tax with a kind of sales tax which would supposedly be "revenue neutral". Harland Harrison on 4/12/08 5:56 AM, Fred Foldvary at [EMAIL PROTECTED] wrote: > --- Harland Harrison <[EMAIL PROTECTED]> wrote: >> In the case of a uniform tax on all goods, the >> consumers will bear all of the burden. > > No. > A portion of the general sales tax fall on the > so-called "producer surplus", which is really land > rent. > With less production and fewer sales, there is less > profit, and so entrepreneurs bid less to rent land, > and so some of the tax is at the expense of land rent. > What enterprises pay in tax, they would have paid in > rent. > >> The consumers >> will either pay more for >> the same goods, or their standard of living will go >> down. > > Some consumers will shift to more leisure and fewer > goods, since there is no tax on leisure. > > Fred Foldvary > > ------------------------------------ > > Yahoo! Groups Links > > >
