379. BCA challenges: Excess burden of taxation
Here is the fourth video extract from my workshop called “Benefit-Cost Analysis: Traps, Challenges and Best Practice” presented on 7 February 2022, as part of the Australasian Agricultural and Resource Economics Society Annual Conference. It is about the excess burden of taxation: the efficiency cost of collecting $1 of funding through the tax system.
In this extract from the workshop, I explain what the excess burden of taxation is, I present evidence of how large the excess burden is, I present different opinions about whether the excess burden should be included in Benefit: Cost Analyses as an extra cost, and I reveal my own position about this.
Like all of the presentations in this series, it draws on my 12-week online micro-credential course on Applied BCA. This video is about 8 minutes long.
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Here is a 2015 paper from Treasury estimating the marginal excess burden for various types of tax in Australia. The results are quite consistent with previous estimates.
https://treasury.gov.au/publication/understanding-the-economy-wide-efficiency-and-incidence-of-major-australian-taxes
Thanks to James Fogarty for alerting me to this.