What is it with Steven Landsburg and apples?
PART 1: Audrey shops at Wegman’s supermarket, where she spends $20 a week to buy 10 apples and 5 bananas. IF she bought the same 10 apples and 5 bananas at Top’s supermarket, she’d pay $30. True or False: Audrey is wise to continue shopping at Wegman’s. (Hint: This is easy).
PART 2: You earn $100. You can use your $100 to buy 100 current apples, 200 future apples, or any combination in between.
Consider a 50% tax on wages versus a 40% tax on all income (that is, wages and interest income) and assume both taxes raise the same amount of revenue.
Which tax do you prefer? Under which tax do you consume more (and save less) today? (Hint: I’m not sure if this is easy or not).