8/5 On taxes from the housing thread below. I think this deserves it's
^^^^
own thread. I was thinking about what a 'fair' tax rate is, whether
it is for income, property tax, whatever, doesn't matter. If 'fair'
means the tax has the same level of burden on each tax payer, there
can be only 2 truly 'fair' tax rates: 0% and 100%. Anything else
is going to be unfair to someone. What do you think?
\_ I don't think there is anything inherently unfair in a progressive
tax rate. It may however be stupid, discouraging of enterprise and
hard work, etc. But as long as everyone is in the same system it's
not unfair... no one forces the high income guy to do that work.
Personally I do believe we'd be better off with a small tax rate,
with some progressivity but a pretty low slope up to a defined
"rich point" of at least $150k, and moving up to about 33% as the
very top rate even for super high income. The fed. gov't may be too
huge right now to make it ideal. But even at $150k I'd like to see
less than 15%. Such a system would 1) encourage doing higher paying
work since you can actually get ahead for your efforts, 2) keep
the wealthy still with a big incentive to invest in the economy, and
3) be more fair to those who are able to earn a lot in just a few
years for some reason, rather than a smaller amount each year.
Ideally the gov't would be a lot smaller in the first place. And
I would prefer taxing from the consumption side than the income side
although there are practical problems with that now. --foo22
\_ you could also blame howard jarvis. - danh
\_ Depends on your definition of fairness. I think fairness is
achieved when each tax-payer has approximately the same level
of post-tax income. This is similar to the scheduling definition
of fairness, I think.
\_ Why is that fair? If someone works harder, they should make more
money. If money was not a hoardable resource, I would say
fairness is achieved where everyone has the same results/reward
ratio (note: not effort/reward). Since money is hoardable,
and reasonable people believe in property rights, things become
a lot more complicated. The feeling I get from people who
know a lot more about 'fairness' (as a formal concept) is that
the closest tax scheme to 'fair' (as most people define it)
would be some sort of flat tax scheme. -- ilyas
\_ Is hard work the only contributing factor to income? Should
someone be rewarded for good luck, in the sense of having the
right parents, or born with natural ability, or having chosen
a career that turns out to be high paying rather than not?
Notice you did a switch in your argument. In the beginning
you said "if someone works harder", then in the middle you
switched to "note: not effort/reward". Which one is it?
Do you reward effort? Do you reward result? Do you reward
good luck? Is money the measure? Is societal benefit?
Might incentive for some of the above actually
be detrimental in some societal sense? Fairness. I prefer
the communications model where fairness is achieved when
all competing consumers of a resource have an equal share of
the resource. In that case, a high-consumer of the resource
is throttled (or pay a greater tax, if you will) more than
an low-consumer of the resource. I'd be perfectly happy to
discuss other models of fairness if you wish.
\_ You are right, I did switch (not on purpose). I meant
'results' not 'hard work.' -- ilyas
\_ You are right, I did switch (not on purpose). I believe
results are what's important, not effort. I view money in
a very basic sense: money are the symbol of value. Value is
a very basic sense: money are the symbol of value. Value is
that which people want. I compared money to a resource,
but I don't believe it is, in the same sense as air or oil
or natural gas. However, let's run with it for a while.
It seems your notion of fairness goes something like
this: There are 2 people digging for oil in the desert.
One works 16 hour days, the other works 2 hour days. Both
are equally good diggers, but one digs up about 8 times as
much oil. You say, there are two agents competing for the
same resource, so each should get an equal share of the oil.
I say that's stupid. They should keep what they dig up.
-- ilyas
\_ I'm not the pp. Of course hard work isn't the only way to
make money. Should it be? Should we 100% tax gamblers in
Vegas? The lottery? Should people with greater natural
ability be paid the same as someone doing the same thing
with less natural ability? Should I get the same money as
a million bucks a year NFL quarterback even though I lack
his natural physical ability? To answer your question,
the result is what counts. You don't 'reward' good luck
but I don't see a need to punish it either. How exactly
would you go about taxing good luck, anyway? Why is it
fair that all competitors for a resource get the same
amount? What if one competes harder for it because they
want or need it more than someone who puts in less effort
to acquire the resource? Should they be punished or capped
in their ability to acquire? Should the lazy do nothing
get the same reward for little or no effort? That is
certainly not fair in any sense of the word I know.
\_ When I raised my approximately equal post-tax income
proposal, people complained that it would kill the
incentive to work. I merely observed that there are
many contributing components to income, and hard work
is but one. How about a proposal that says we set up
a tax regime where we limit the post-tax income min-max
spread to 3x? Would that still provide incentive to
succeed and at the same time be more fair?
\_ Do you think it should be results that counts or
ability (I include hardwork as part of ability, you
can say "ability + hardwork" if you wish) that counts?
I can achieve more results than someone more capable
and hardworking than me simply because I have more
resources, for instance. Do you think that is fair?
\_ How can you include hard work in ability? If someone
decides to work hard at writing a book nobody wants
to read should he get the same as the guy who is a
bestseller? --foo22
\_ Just for sake of argument, what if the 2 hour guy
gets lucky and strikes oil and the 16 hour guy
never does? Tough luck? That's my answer, but I'd
like to hear yours.
\_ In my experience (with commercial fishing, not
with oil specifically) the two hour guy probably
did not just find the valueble stuff because
of luck. The same skippers get "lucky" or
"unlucky" way too many times in a row for it to
be luck. If one guy takes the time to read up
on the behavior of the fish they're hunting for
and catches all the fish he certainly earned
his massively larger keep even if there was some
luck involved. I think the same thing is almost
certainly true in the oil industry. Why do you
think that Monkey Boy was unable to find any
oil in texas with Arbusto? it wasn't luck.
\_ You think oil company executives personally choose
where to drill?
\_ Them's the breaks. Maybe we can create a government
entitlement system for oil hole diggers who never hit
it big? Or maybe the 16 hour guy was just stupid and
didn't know as much geology as the 2 hour guy so
education wins out? Or maybe the oil just wants to
be free so we should tax both of them at 100% and
take the oil by force and just keep it for the rest
of us because after all we stand on the shoulders of
(oil digging) giants and without the guys who came
before us to invent shovels we wouldn't have any oil
today.
\_ Mmmm, socialism. You do realize that this is all well and good
until someone loses an eye, right?
\_ It's easy to give something a label and dismiss it based on
that label. It's easy, but all it is is intellectual laziness.
that label.It's easy, but all it is is intellectual laziness.
Propose your model of fairness or attack mine, if you can.
\_ I'm not the pp, but, that pretty much sounds like
Socialism, man. The reason it doesn't work is because
it removes incentives.
\_ I said "aproximately the same level of post-tax
\_ Do you know anything about Europe? There is very
little downward/upward mobility in Europe. The
rich have always been rich and will always be
rich. The poor and middle class have little chance
at being rich. My whole family is European and
this is what Europe is like. Do you really want
that? In the US, most uber-rich families are back
to the mean in about 3 generations and there are all
\_ Good post, dim. One serious difference tho--a
lot of the immobility in Europe is the way the
educational systems and vocational training are
structured (there's also not as much sideways
professional mobility as in the US.) -John
\_ Yes, but this ties into it. If your parents
went to a certain school or had a certain
vocation then you have a much better chance at
it. I know, for example, that science positions
in France factor in who your parents were
and your age. That's ridiculous and it is why
so many foreign students come to the US to
study and perhaps even to stay. --dim
\_ Not with the Bush tax cuts. Goodbye estate taxes,
goodbye investment taxes. This is the most
disturbing part of Bush the younger's policies.
--scotsman
\_ But you ignore the other side of the coin where
the poor stay poor in EU as well. You seem
more interested in tearing down the rich rather
than raising up the poor.
\_ I haven't said anything to the other side
of the coin. That's not to say I ignore
it. Are you suggesting that Bush's tax
policy raises up the poor? How 'bout his
other economic policies? His environmental
policies? --scotsman
\_ Haven't said = ignored. Anyway, Bush's
tax policies don't hold down the poor,
they allow the poor to keep what they
have should hard work and/or luck lead
them to being rich. What other economic
policies are you refering to? What about
his environmental policies is bad for the
poor or worse for them than the rich? We
all drink the same water, breath the same
air, and get the same cancers.
\_ That's not true, although it's
certainly not the fault of policy
at the federal level. A
disproportionate number of destructive
polluting industries get located in
poor areas, such as power plants in
cities. Of course, this problem
will really only get solved by
making the factories and power plants
not kill people anymore, which
will only come from technology.
\_ Please explain how tax cuts for the rich some
how oppress the poor.
\_ It's a systemic effect. These tax cuts
create a tendency to horde. Wealth begets
wealth, and humans are horders. I don't
want to see a pure plutocracy in this
country. There's also the direct effect
of massively shifting the tax burden onto
income tax. When it comes to paying of
the current deficits it will be much harder
politically to make the case for restoring
those cuts than to tell the public "we all
have to tighten our belts..." -scotsman
\_ So you think making people have less
money will make them spend more absolute
dollars of those they have left? This
makes no sense. By your reasoning, the
richest person would spend near zero
absolute dollars and the poorest would
spend more absolute dollars than the
richest person. This is clearly false.
People who have more money available
to spend will spend more money. I don't
understand how anyone could claim the
opposite. As far as hording goes, so
what? If someone somehow makes a billion
dollars and doesn't spend any of it,
hordes it as you say, so what? It is
their money to spend or save as they
choose. The government sure as hell
won't spend it more efficiently. If the
government were more efficient then
communism would be the most efficient
economic system which we know to be
false. So, how exactly is it that rich
people keeping more of their money is
bad for poor people again?
sorts of rags-to-riches success stories. Hard work
here can get rewarded. The person who mentioned
incentives is exactly right. --dim
income". You can go a long way to reduce the min-max
spread in American income distribution (the European
spread is, what, an order of magnitude or two less?)
and improve fairness without eliminating incentives.
\- i havent read the entire thread above
however if you look at say the bottom
quintile in the US, they are essentially
at the same place as the bottom 20%
in sweeden in terms of purchasing power,
or absolute terms. in relative terms,
the top 10% here is a lot wealthier
than all the other normal countries.
which make "inquality" in the narrow
statistical sense greater. as a crude
measure you can see if you can find a
number called the "gini coeficient"
for the national economies you are
interested in. --psb
\_ So, a heavier margin-based tax rate with a higher
exemption? I can get behind that. But i'm deeply
bothered by the european VAT taxes.
\_ Wow, so you're definition of "aproximately" is
"within 2 orders of magnitude?" I guess it
kinda works on an astrophysics scale.
\_ You need to work on your reading comprehension.
You also need to learn how to use quotation marks.
\_ So taxing the rich at a really high
rate is really about bringing them
down, not about bringing the poor up. |
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