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Pastimes : Let's Talk About Our Feelings!!!
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To: Zoltan! who wrote (73650)2/2/2000 10:05:00 AM
From: greenspirit  Read Replies (2) of 108807
 
I believe it's the difference between understanding the "system of taxation", versus viewing it as a linear equation. The linear thinker will say "higher taxes equates to lower revenue". The systems thinker will say, "it depends on what type of tax, where it's targeted and how much of a rate change". Then develop models simulating the various causal and non-causal effects.

Just two years ago most of the linear thinking economists predicted we would experience drastically lower capital gains revenue when the congress lowered the rates. They were wrong again, just as they were wrong in 1981 with their dire predictions of grossly lower revenue when Reagan lowered the rates.

When human motivation and activity is concerned a "systems thinking approach" is necessary. It's sad so few economists understand or attempt to learn the discipline.

It appears instead of insulting people who challenge his views by calling them "ignorant". Nihil needs to attend a good lecture from Milton Friedman.

Michael
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