Taxation and the Losses of Nations (Tideman & Plassmann)

Summary

In The Losses of Nations: Deadweight Politics versus Public Rent Dividends (Fred Harrison ed., Othila Press, 1998), Nicolaus Tideman and Florenz Plassmann calculate the deadweight losses of conventional taxation across the G7 and the output gains available from shifting revenue onto land rent — the figure Harrison's Boom Bust carries as roughly $7 trillion of foregone output (Ch. 14 §2), and an ancestor of Tideman's later per-worker gains estimates and the 2021 super-stimulus modeling.[1]

Verification note (2026-07-11, Hermes fact-check lane) — method and figures partially confirmed; the "$7 trillion" magnitude needs care. The primary chapter PDF (sharetherents and other mirrors) could not be fetched this pass, but the chapter's approach and headline numbers were corroborated from a direct book review (Roger Sandilands, 1998) and secondary summaries. Year basis: 1993 data. Method: Tideman & Plassmann fit an aggregate production function relating output to land, labour and capital, each supplied in accordance with its marginal after-tax return (drawing on Feldstein's labour-supply elasticities), then compare actual output under the existing tax regime with potential output under a revenue-neutral regime that shifts taxation off labour and capital and onto economic rent; results are described as conservative because they assume only 1% exogenous annual technical progress. Figures: removing the deadweight loss raises US output by nearly 30% — 1993 US GDP of about $5.495 trillion versus a counterfactual of about $7.097 trillion (i.e. the deadweight loss is ~23% of potential output) — and by over 90% in higher-tax European countries (a ~50% deadweight loss). Caution on the "$7 trillion" figure: the sources located report per-country / per-group results, not a single combined G7 aggregate dollar loss. The number $7.097 trillion is the US counterfactual GDP level (what US output would have been with the rent-based regime), not a G7 foregone- output loss; the wiki's "≈$7 trillion of foregone output for the G7" (carried via Harrison, Boom Bust, Ch. 14) may conflate that US counterfactual level with an aggregate loss. The primary Losses of Nations chapter has not been independently obtained: the sharetherents mirror and other known copies return HTTP 404, and no free or archived full text has been located, so it has not been possible to confirm whether the volume itself reports any single combined-G7 loss figure or exactly what Harrison's Boom Bust Ch. 14 §2 states. Pending recovery of the primary text, the "$7 trillion" magnitude should be read as most consistent with the US counterfactual GDP level documented above rather than treated as a verified aggregate G7 foregone- output loss.

Second corroboration pass (2026-07-17) — chapter now precisely identified; still no free copy found. The chapter's exact identity is now pinned: "Taxed Out of Work and Wealth: The Costs of Taxing Labour and Capital", Chapter 6 of the volume (also independently confirmed via Wikipedia's "Georgism" article references and corroborating web search as pp. 146–174), citation confirmed verbatim in the Labour Land Campaign's Cut Out the Deadweight briefing, fn. xiv.[2] The sharetherents mirror (dead since at least the prior verification pass) was hunted exhaustively this session: sharetherents.org's own current /publications/ page lists The Losses of Nations (1998) linked only to an Amazon purchase page, confirming the free PDF was withdrawn rather than merely moved; no Wayback Machine capture of the sharetherents PDF URL exists at any timestamp; no copy was found at landresearchtrust.org, cooperative-individualism.org, SSRN, archive.org, or via the authors' institutional pages; the book remains undigitized (not on the Internet Archive; Google Books holds a metadata-only record). Two independent secondaries now give identical figures — 1993 US GDP of $5.495 trillion versus a $7.097 trillion counterfactual (a ~23% US deadweight loss), with European losses nearer 50% owing to VATs[3] — so the reading above (US counterfactual level, not a G7 aggregate loss) is corroborated rather than resting on one summary. The same briefing adds a per-country UK result: 1993 UK output at 55% of its counterfactual under the rent-shift regime (per-capita net domestic product of £15,000 actual versus £27,000 counterfactual) — further evidence the chapter reports country-by-country results. One loose end: that UK figure implies an output gain of ~80%, slightly below this page's earlier "over 90% in higher-tax European countries" paraphrase; which country (if any) reaches 90%+ can only be settled against the primary chapter, which still requires recovery. Retryable status tracked in sources/verification-backlog.md.

See Also

• Deadweight Loss · Land rent could fund government
• Goodhart, Hudson, Kumhof & Tideman (2021) — the modern successor
• Harrison, Boom Bust (book) — carries the figure at Ch. 14
• Gaffney & Noyes (1998): The Income-Stimulating Incentives of the Property Tax — the immediately following chapter of the same Losses of Nations volume

Sources

1. Nicolaus Tideman & Florenz Plassmann, "Taxed Out of Work and Wealth: The Costs of Taxing Labour and Capital", Ch. 6 in Fred Harrison (ed.), The Losses of Nations (London: Othila Press, 1998), pp. 146–174. Primary text not independently obtained — the former sharetherents mirror returns 404, no working copy or archived snapshot was found as of 2026-07-17, and the book is undigitized (Google Books record). — used for thesis and venue (A-claims; full text unfetched from this environment). Carried into the wiki via Boom Bust, Ch. 14 §2 (Heavy scan).
2. Labour Land Campaign, Cut Out the Deadweight (briefing), pp. 7–8 and fn. xiv — confirms the chapter title and citation, the aggregate-production-function method on 1993 data, and the UK per-country result (output at 55% of counterfactual; per-capita NDP £15,000 vs £27,000).
3. Matt Leichter, "Actually, There's Quite a Bit of Research on Land Taxes" (2013) — independently states the Ch. 6 figures: 1993 US GDP $5.495tn actual vs $7.097tn counterfactual (~23% US deadweight loss; ~50% for VAT-heavy Europe).