Peter C. McCluskey wrote:
Mancur Olson claims in his book Power and Prosperity that the
marginal income tax rate was effectively zero. The effective taxes
were near 100% of what a typical worker in any given position could
produce, but workers producing more than expected kept all the
unexpected wealth. That created stronger incentives on each person to
work hard than in the west, strong incentives to prevent others from
working hard, and some incentives for each industry to deceive the
system about what a typical worker can produce. There were few
problems with the total amount of economic activity under Stalin. The
problems were with the goals which that activity satisfied.
Much as I admire Olson, this is crazy. Collectivization didn't just
costlessly move resources from agriculture to industry/military
production. There was an enormous deadweight cost in reduced production
*per farmer*. Not to mention massive destruction of human capital -
i.e. death. He has a slightly better case for industry - Stalin did
firmly back unequal pay. But a 0% marginal tax rate cuts against
everything I've ever read about Soviet economics under Stalin.
--
--
Peter McCluskey | Everyone complains about the laws of
physics, but no www.bayesianinvestor.com| one does anything about
them. - from Schild's Ladder
--
Prof. Bryan Caplan
Department of Economics George Mason University
http://www.bcaplan.com [EMAIL PROTECTED] http://econlog.econlib.org
"Isolated among strange influences, Lavinia was fond of wild
and grandiose day-dreams and singular occupations; nor was
her leisure much taken up by household cares in a home from
which all standards of order and cleanliness had long since
disappeared."
--H.P. Lovecraft, "The Dunwich Horror"
