Taxation and the Losses of Nations (Tideman & Plassmann)
Tideman and Plassmann's chapter in The Losses of Nations (Harrison ed., 1998) quantifying the deadweight losses of conventional taxation across the G7 and the output gains from shifting to rent-based revenue — the movement's headline excess-burden calculation.
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.
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
Sources
- Nicolaus Tideman & Florenz Plassmann, in Fred Harrison (ed.), The Losses of Nations (Othila Press, 1998). PDF (sharetherents mirror) — 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).