If. Uncle taxes households with a high marginal propensity to save out of income
and transfer the proceeds to households with a high marginal propensity
to spend out of income
You can increase spending without changing the fiscal budget balance
And if domestic investment by firms
is in some way positively related to final household demand
You can induce higher investment
Larry Klein I think in the golden 40's was keen on some way to implement
this transfer
Much of post high 60's macro has been about destroying this simple mechanism
At the theoretical level
But its never failed empirically because it has never been tested
Of. Course one can well imagine. Both the target of the tax and the various claimants to the payments could create a very complex and
well blocked passage way
and transfer the proceeds to households with a high marginal propensity
to spend out of income
You can increase spending without changing the fiscal budget balance
And if domestic investment by firms
is in some way positively related to final household demand
You can induce higher investment
Larry Klein I think in the golden 40's was keen on some way to implement
this transfer
Much of post high 60's macro has been about destroying this simple mechanism
At the theoretical level
But its never failed empirically because it has never been tested
Of. Course one can well imagine. Both the target of the tax and the various claimants to the payments could create a very complex and
well blocked passage way