South Korea's program of higher wages and taxes – so far, it's not working
It&#x27;s interesting to see contrasting articles on taxes &amp; growth.  There&#x27;s this article about how South Korea raised taxes in a bid to grow faster and failed, but there are also plenty of articles about how Kansas&#x27;s attempt to <i>lower</i> taxes in a bid to grow faster also failed [1], as well as predictions that California&#x27;s high taxes would hamper growth (which hasn&#x27;t really happened yet).<p>What if the actual conclusion is that <i>it just doesn&#x27;t matter</i>.  Growth is driven by other factors, like when a brilliant but insufferable physicist moves back home to be close to his mother [2], and is a function of individual, private firms performing functions of the economy more efficiently than existing incumbents.  Tax policy follows as a <i>consequence</i>, and can go in either direction: either the newly-rich individuals think &quot;Oh well, I&#x27;ve got plenty of money to spare, I can afford to burn some to ensure the people around me live decent lives&quot;, or they think &quot;I want to keep more of this money to myself so I can decide how to allocate it.&quot;  Regardless, wealth brings power, and so they have the ability to shape local government policy based on their particular worldview.<p>If this is correct, tax policy is a huge distraction, and if governments really want to jump-start growth they should be funding basic research, ensuring that the results are public (to their citizens, at least), and encouraging bright young people from across the world to immigrate to their jurisdictions.<p>[1] <a href="https:&#x2F;&#x2F;www.cbpp.org&#x2F;research&#x2F;state-budget-and-tax&#x2F;kansas-provides-compelling-evidence-of-failure-of-supply-side-tax-cuts" rel="nofollow">https:&#x2F;&#x2F;www.cbpp.org&#x2F;research&#x2F;state-budget-and-tax&#x2F;kansas-pr...</a><p>[2] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;William_Shockley#Career" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;William_Shockley#Career</a>