fiscal compass
Four arguments, not one
“Higher taxes are good” is not a single claim. It is at least four claims, each with a different target and a different failure mode. Higher taxes can be good because inequality is harmful, because public investment has high returns, because debt or deficits must fall, or because some taxes discourage harmful behaviour. The same lever, the same revenue, but the case for pulling it is structurally different in each.
Redistribution: the problem is concentration.
State capacity: the problem is what the state cannot yet do.
Consolidation: the problem is the deficit.
Corrective: the problem is an unpriced harm.
Pro-tax is not austerity
Calling tax-increase advocates “austerity advocates” is imprecise. Austerity means reducing deficits, by spending cuts, tax increases, or both. The famous expansionary-austerity economists, Alesina and coauthors, generally argue that spending-based consolidations are less contractionary than tax-based ones. So they are austerity advocates, but not straightforwardly “raise taxes” advocates. The redistribution and state-capacity camps are the opposite: they want higher taxes, but not in order to shrink the state.
Why a compass
The compass needle is the vector sum of how strongly the current world-state supports each rationale, independent of the rationale you have selected. It answers a different question from the scorecard. The scorecard asks “given the argument you are making, does this package score well?” The compass asks “given the world as you have described it, which argument should you be making?” When the needle and your selected rationale disagree, that gap is the interesting part: you may be reaching for the wrong instrument.
What is solid, what is a toy
The four-way taxonomy and the author placements are a fair summary of the public-finance literature: Diamond and Saez on progressive taxation, Lindert on welfare states and growth, Alesina on consolidation composition, Pigou and Nordhaus on corrective taxes. The scoring model is a toy. It treats the rationales as separable additive channels with a fixed cross-weight, has no business cycle, no expectations, and no debt dynamics. Its job is to make the shape of the arguments comparable, not to estimate any country. The calibration table is a sanity check on argument shape, not an econometric fit.
Model changelog
- Four tax rationales as separable additive benefit channels: redistribution, state capacity, consolidation, corrective
- Five-outcome scorecard (welfare, growth, equality, fiscal repair, legitimacy) with a revenue and a deadweight-loss index
- School-matched gains amplified, cross-rationale leverage kept at a fixed 0.4 weight
- Fiscal compass: a needle built from the vector sum of how strongly the world-state supports each rationale, independent of the chosen school
- Six presets spanning inequality crisis, high-return state, debt squeeze, austerity trap, carbon logic, and the nordic model
- Searchable author map placing 19 economists under the rationale they are the strongest reference for
- Parameter sweep across all six inputs, sensitivity tornado on welfare, and a calibration table against five historical episodes