Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Ben Steverman examines the unfairness of the U.S.' tax system - which, like Canada's, offers gratuitous giveaways to wealthy investors which force workers to pay more:

Politicians have intentionally set tax rates on wages much higher than those on long-term investment returns. The U.S. has a progressive tax system in the sense that well-paid workers sacrifice much more than poor workers on their “ordinary income.” But Americans with so-called unearned income—qualified dividends and long-term capital gains—get a break. A billionaire investor can pay about the same marginal rate as a $40,000-a-year worker, a fact Warren Buffett has famously lamented.
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There’s a big flaw, though, in the argument that lower taxes on the rich stimulate longer-term investment, and thus jobs, famously labeled as “trickle-down economics.” While tax rates might affect the timing of some investor decisions in the medium term, it’s much harder to see how they affect long-term behavior. No matter the tax rate, investors ultimately look for opportunities to get richer.

“There is little empirical evidence showing that taxing investors less stimulates savings and growth,” said Emmanuel Saez, an economist at the University of California at Berkeley.

Supply-side economists disagree, and can point to tax cuts in the 1980s that seemed to spur the U.S. and U.K. economies. But there’s little evidence of a relationship between economic growth and investment taxes over the long term.

- Annette Alstadsæter, Niels Johannesen and Gabriel Zucman connect (PDF) the wealth hidden away in tax havens to its national sources - and then to develop a more accurate estimate of top-end wealth which has been siphoned off. And the Equality Trust offers a set of policy proposals for Labour to reduce inequality in the UK - with both regional imbalances and social ownership among the key economic priorities.

- Meanwhile, Brent Patterson examines how the oil industry - with the assistance of Lib insiders - is trying to limit public regulation of pipelines through NAFTA.

- Kevin Quigley notes that while a trial of the conductor involved in the Lac-Mégantic rail explosion will offer some testing of the causes of the disaster, more important systemic issues are going unaddressed in the absence of a broader inquiry.

- Finally, Don Pittis examines the social benefits of post-secondary education which are being lost in an effort to extract money from students. And Erika Shaker points out that Statistics Canada is making it more difficult to compare tuition across provinces.