Pat Gunning wrote:
>----------------- HES POSTING -----------------
>Doug Mackenzie wrote:
>>
>>Such things are not fixed in stone, and vary according
>>to context. I suspect that a land/resource tax might
>>generate "enough" revenue in Saudi Arabia.
>
>
>If a tax on oil was anticipated, it would reduce 
>the incentive to search for oil.


This implies a linear relationship between 
incentives and production. So that if the 
incentive at $50/barrel is X, then the incentive 
at $100/barrel is 2X., and at $150 it is 3X, etc. 
So, is there no point of diminishing returns on 
incentives? The real question is whether 
incentives are unique among all economic 
phenomena in that they do not have a diminishing 
marginal utility. I rather doubt that.

John C. M?daille