Thursday, November 8, 2018

Who pays a tax? Spaniards seem confused

Very funny post over at Marginal Revolution documenting the political unrest about who should pay a tax? When their Supreme Court ruled that borrowers instead of banks should pay a mortgage tax, it resulted in street protests:
Alberto Garzón, head of the United Left coalition, went even further: “Private banks are thieves, they are the main enemy of democracy and they are responsible for gutting our economies. A majority of the Supreme Court sides with them, ratifying that justice has a price and that the system is rotten and spent,” he tweeted.

Of course, as every economics student knows, a tax drives a wedge between what a seller receives and what a buyer pays, regardless of who nominally pays the tax. In other words, the protest in Spain reflects ignorance, and I blame economists (including myself) for not being able to communicate this better.

Anyone who knows Mr Garzón, please send him this video from MR University on exactly this topic:  who pays a tax?  It is part of a great collection of short videos designed to teach principles of Microeconomics.

No comments:

Post a Comment