Steve Teles: recommendation

Transcript context

…If we look at the federal budget and the tax system that accompanies it, that’s relatively easy to measure. Do you see the net impact of our tax and budgetary decisions as being progressive or regressive? For one thing, so the book is all about the regulatory system. And I know that by saying that one argument we make, and this relates to an article I wrote called “Kludgeocracy,” which is that it’s really these other parts, other ways the government influences the economy other than directly through taxing and spending that are most likely to have these anti-growth, incumbent-protecting kind of qualities. That is the more salient, the more visible the policy instrument is, the more easy it is to capture for the purposes of upward redistribution. Given that a substantial amount of our spending is entitlements and they… We have difference of opinion. I think those are basically progressive on net given the inflow and outflow in them. And that our tax system, if anything, may be too progressive. That is, it’s too progressive to raise the amount of revenue that we need for the amount of state that we want. I think our tax and benefit system, which could be doing better or at least doing better than our regulatory and litigation systems. What if there is a potential default hypothesis? That policy just doesn’t change the distribution of wealth very much. The tax and fiscal side, that makes things somewhat more progressive. The regulatory side, as you argue convincingly in the book, that’s regressive and inefficient. And in part, we let the regulatory side get away with that because on the fiscal side we adjust, and maybe policy as a whole just doesn’t change the overall broad features of the distribution of wealth, something a bit like Pareto’s old law. And maybe it’s just much harder to change the distribution of wealth than we think because rent-seeking is another activity and the forces that are good at other things. And is government when it comes to distribution actually, ultimately, maybe awash? Yes or no?…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.