Roger Douglas

I want tax to be as low as possible - and I also want the deadweight loss associated with tax to be low as well.

It's obvious what must be done: A. the productives must reproduce more than the unproductives.
B. we have to get more immigrants here to stay.
C. reform the DPB to limit breeding for welfare checks.
D. Swap the (free to air TV) schedules for Business shows or documentaries with welfare shows like Oprah and Dr. Phil.
If they can get up at 6am to watch TV, they can be ready for work.

We can have a na fault system and private insurance. The Government does not provide fire insurance, but if an arsonist burns down my house, I cannot sue him.

A drop in tax rates can increase total revenue. This phenomenon is represented by the Laffer Curve, named after the economist Arthur Laffer: http://en.wikipedia.org/wiki/Laffer_curve

It seems unlikely that New Zealand's tax rates are at that point. It should be noted, however, that the Laffer Curve only looks at revenue - but actual revenue raised... Read more is not the full cost of taxation. Moreover, the optimal point on the Laffer Curve is not the maximum revenue point, but lower down (see http://www.youtube.com/watch?v=fIqyCpCPrvU&feature=player_embedded#at=13)

The main reason for this is because the cost of taxes is not just the revenue raised. The full cost of taxation includes all the deadweight loss associated with it - all the ways that it affects our behaviour, all the fees for lawyers and accountants to restructure people's affairs to lower the tax burden. The estimated full cost of raising a marginal dollar is actually about $1.50, but it varies depending on the study.

Yep. As proof, my page on the ACT website links here:

http://www.act.org.nz/roger-douglas

I have not been following Australia as closely as I have been following America's issues, but my understanding is this:

Australia has not entered recession, and seems unlikely to do so. This is not because of the stimulus, as most of the money has yet to come online, and to the extent a stimulus is financed by deficits then the permanent income hypothesis would tend to suggest that it will not have much effect.

The stimulus spending will unfortunately increase the overall size of Government permanently. All large expansions of the Government - be it post-depression, or Keynesian spending in the 50s and 60s - has permanently increased the overall size of Government. Mainly, reforming Governments have managed to stop rather than reverse the growth of the state.... Read more

In terms of increasing interest rates, I would make the point that low interest rates do not necessarily imply easy money. In fact, some economists see the relationship acting in the opposite way (http://www.american.com/archive/2009/october/have-we-misdiagnosed-the-crisis). I think it is hard to determine the looseness of monetary policy by examing only interest rates.

Hi Dennis,

I am aware of those arguments for a more liberal approach to drug laws (a good video is available here: http://www.youtube.com/watch?v=nLsCC0LZxkY).

There are two points I would make. First, I think New Zealand is better than the US at enforcing our drug laws - primarily because we have no land borders. Second, drug addiction is a terrible thing, and it is a matter of weighing the unintended consequences of prohibition against the possible increases in the number of people addicted, and the costs that arise therefrom. I have not seen sufficient evidence on this issue to make up my mind. ... Read more

What do you all think?

I guess you have to write that... but the argument for drug prohibition is just about the easiest classical liberal argument to make and win. The costs of prohibition are huge: organised crime; more deaths; more crime; corrupt police; police, court & jail costs; loss of individual freedom etc. And the benefits are approximately zero.

wow- almost makes me want to be back at vic....almost!! way to go guys :)