Jan 16 2012

Tax avoidance is rent seeking, not productive activity

Posted by: Nick Shaxson in: Thoughts

It’s a point I’ve made repeatedly, in Treasure Islands and elsewhere. But I just looked up ‘rent seeking’ and this is Wikipedia‘s contribution:

In economics, rent-seeking is an attempt to obtain economic rent by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. .  . attempting to enrich oneself by increasing one’s share of a fixed amount of wealth rather than trying to create wealth . . .the extraction of uncompensated value from others without making any contribution to productivity . . . people accused of rent seeking typically argue that they are indeed creating new wealth

Goodness me. Tax avoidance and evasion: doesn’t the shoe just fit perfectly?

(And for those who aren’t familiar with ‘rent-seeking’ – economists regard it unequivocally as a bad thing.)

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