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 the practitioner-author Fred Harrison's Boom Bust carries as roughly $7 trillion of foregone output (Ch. 14 §2; see the caution below), and an ancestor of Tideman's later per-worker gains estimates and the 2021 super-stimulus modeling.[1]

The primary chapter has not been directly obtained. The chapter's exact identity is established: "Taxed Out of Work and Wealth: The Costs of Taxing Labour and Capital," Chapter 6 of the volume, pp. 146–174, confirmed via Wikipedia's "Georgism" article references and the Labour Land Campaign's Cut Out the Deadweight briefing, fn. xiv.[2] No free copy is available: the sharetherents.org mirror once hosted a PDF, but its current /publications/ page links only to an Amazon purchase page, and no archived capture of the old PDF URL has been found; no copy exists at landresearchtrust.org, cooperative-individualism.org, SSRN, archive.org, or the authors' institutional pages; the book remains undigitized (Google Books holds only a metadata record).

The chapter's approach and headline figures are corroborated instead from a direct book review (Roger Sandilands, 1998) and two independent secondary sources that give identical numbers.[2][3] 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). The same briefing also gives a UK figure — 1993 UK output at 55% of its counterfactual (per-capita net domestic product of £15,000 actual versus £27,000 counterfactual) — which implies an output gain closer to ~80% for the UK specifically, slightly below the "over 90%" paraphrase above; which country, if any, reaches 90%+ can only be settled against the primary chapter.

Caution on the "$7 trillion" figure: the secondary 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 §2) may conflate that US counterfactual level with an aggregate loss. Whether the volume itself reports any single combined-G7 loss figure, or exactly what Boom Bust Ch. 14 §2 states, remains unconfirmed pending recovery of the primary text. Until then, the "$7 trillion" figure is best read as the US counterfactual GDP level documented above rather than a verified aggregate G7 foregone-output loss.

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
• Gross & Klein (2026) — a more recent deadweight-loss formula, for commodity taxes and market power rather than labour and capital taxes

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 accessible — the former sharetherents mirror no longer serves the file, no working copy or archived snapshot has been found (last review 2026-07-17), and the book is undigitized (Google Books record). — used for thesis and venue (A-claim; full text not accessible at last review). 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).