To the same extent that other forms of taxation make sense. I wish people had this same sudden interest in protecting the free market and maximizing trade when we're taking about income tax or sales tax or property tax, etc.
> I wish people had this same sudden interest in protecting the free market and maximizing trade when we're taking about income tax or sales tax or property tax, etc.
But people do have these interests!
Different taxes distort markets differently. Tariffs are one of the worst ways to tax. Similarly transaction taxes, like a Tobin tax or stamp duty, are bad.
Income tax ain't great, but it's ok. (Details depend on implementation.) Property tax is one of the best taxes, only beaten out by land value taxes. VAT is ok.
And, btw, a tariff designed to raise revenue is very different from a tariff designed to change the balance of payments.
Glad to see someone with economics knowledge! The best taxes are Pigouvian taxes on externalities. They not only raise revenue but distort the market in the right direction. Carbon tax comes to mind (though that's a tricky case as there is no world government, tax works best for local externalities like air pollution).
Well, for Pigouvian taxes to make sense, you first have to argue why in your specific situation Coasion bargaining breaks down.
Similar to how, if you want to use 'market failure' to justify your favourite government intervention, it actually comes with lots and lots of restrictions and only justifies a very narrow slice of possible interventions.
To the same extent that other forms of taxation make sense. I wish people had this same sudden interest in protecting the free market and maximizing trade when we're taking about income tax or sales tax or property tax, etc.