Flint
Posts: 478
Joined: Jan. 2006
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haceaton:
If you disagree with the gist of what I'm saying, I'm glad to discuss and even concede that you're probably right. We surely both recognize that nearly any statement about economics is going to have exceptions or be subject to debate.
| Quote | | Besides the pure perception issues, an accelerating highly skewed distribution of wealth will have long-term unhealthy consequences for the nation. |
So long as we agree that "unhealthy" is a value judgment. Highly skewed distribution IS a consequence of certain policies. There are indications that this is a positive-feedback tendency, feeding on itself. If you suggest a few methods by which this skew can be reduced, we might consider the side-effects of those methods. Right now, the top 10% of income-receivers are paying HALF of the US national income taxes. So maybe income taxation isn't a good method?
| Quote | | Funny that those business for whom it "makes no difference" are pouring millions of dollars into lobbying for laws to allow purchasing pollution tax credits. |
A puzzle to me too. My speculation is that these businesses are hoping to better quantify and predict their operating costs. Fines can be capricious, and criminal penalties can't be ruled out.
| Quote | | Personally as a policy matter I favor the criminal approach - throw the polluter (the CEO who orders it done) into jail. |
Yes, this is certain to be perceived as an unacceptably high price by the CEO. It might be perceived as a bargain by the board of directors. That might be an interesting battle...
| Quote | | You began this all by indicate it was a matter of ignorance that a layperson questioned the appropriateness of policy ideas such as tax reductions for the wealthy, etc. This implies that you think you know what global economic effects these policies will have and that they are "good". |
I disagree. Perhaps my style is smug (though this seems an eye of the beholder thing), but we've already gone over this. I didn't question "appropriateness" in the sense I think you mean. I questioned the presumed impacts. Let's say someone writes "Fires are bad things. Let's throw more wood on them to satisfy them so they'll go away." If you come along and point out that the recommended action will have unintended consequences, you are NOT commenting one way or another on whether fires are bad. So let's say that someone jumps up and claims you are defending fires. It sounds that way to him. Is he correct?
| Quote | | At the same time you admit no economist has a real good idea of how these policies actually work in the real world, except for that they do know the immediate effects on the people that matter (i.e. the rich). |
So long as we agree that the "people that matter" are the intended voting constituency. The reason those below the median income pay essentially none of the income taxes is because they have half the votes, but make so little money that revenues aren't damaged much by eliminating their income taxes.
| Quote | | This is why Dean sees you as having mathematical certainty (you smuggly *know* that certain policies will have "rising tide" effects) |
Then this is a failure of presentation on my part. I observe, from multiple historical experiences, that certain policies have nearly always had "rising tide" effects, while other policies have not, or had the opposite. So I "know" this in the sense that I "know" that if you invest your money, you'll end up with more of it. You can find countless exceptions to this rule of thumb, of course, but on the whole it's true for reasons fairly well understood.
We're really talking about two parameters here: Total wealth creation within a political economy, and wealth distribution within that economy. Economists think they understand, in general terms, what factors influence both of these things, and in what directions. There is some debate as to how independent these parameters are.
| Quote | | Heck, you even wrote (seriously) that Walmart's strategy is to have the lowest prices. Bzzzzt! Their strategy is to make the most money for themselves; low average prices to gain customers and ultra-low costs through any cost shifting they can get away with (whether legal or not) are only the tactics used to execute that strategy. |
From what I have read about WalMart (quite a bit), you are simply wrong. WalMart makes lots of money. What do they DO with that money? Do they pay their upper management exorbitant salaries? No. Do they pay out high dividends to their stockholders? No. Do they pay decent wages or bonuses to their rank and file? No. So where DOES the money go? By observation, WalMart converts their cost savings (however achieved) into lower prices. By comparative industrial standards, they aren't doing this to get personally rich. Their profit margins aren't exceptional. So you have fallen one step short here. You notice that WalMart does everything possible to reduce their costs, some of it legally shaky, some of it hard on their employees or on other retailers in the community. You're right; they do this. What I pointed out was, they translate these things into lower prices. It is WalMart's corporate policy. If it did not succeed, people wouldn't shop there so exclusively as to skew community economies so badly.
So I repeat: their goal is to minimize their prices. NOT to pocket high profits, which they do not make.
| Quote | | Ok, I'll bite. Please provide a mathematical definition for efficiency of a market and provide the units (you can claim it's dimensionless if you like). Now tell me ... |
Here's a start. I think I will rescind my claim of "fairly rigorous", since this is misleading enough to be incorrect. I had intended to state that the notions of efficiency and desirability are qualitatively different. Desirability is purely subjective; efficiency is not (at least, not intended to be).
| Quote | | Finally, I'd like to comment that you've got the usual conservative straw-man list of "which is fair?" tax strategies; none of them are fair if they're based on income. As I pointed out with the Paris example, for those with large amounts of capital they can continue to grow and spend their money without ever incurring any tax liability at all. A fair tax scheme might be one in which every person pays a fixed fraction of the values of all of their assets each year, coupled with a VAT tax to cover consumption. |
We are probably going to have to disagree here. "Fair" is a pure value judgment. Most parents with more than one child can understand this. Is it "fair" to treat them equally, when their desires or needs differ? Is it "fair" to accommodate their differences, if one needs more than another? Maybe the parent is "fair" if the children perceive no favoritism?
If I follow you, you are proposing a tax based on wealth instead of income. Hopefully in practice this won't devolve into a "whack the investor" proposal. If you and I have the same income, but you spend every penny you make, while I scrimp and save so as to have as much savings as possible, then you pay no tax while I pay some fixed percent. To counter this problem, you propose that an extra tax be levied on consumption, which would affect you more than me. Yes, it would extract a bunch of money from those who inherit a fortune, win the lottery, or whatever. Hey, I'd be willing to give it a try and see what unanticipated consequences we'd need to adjust for later.
However, I hope we agree that Congress is psychologically incapable of leaving any tax structure alone. In their view, the tax system has two primary purposes: to fund government activities and programs, and to modify public behaviors through social engineering. Which of these two purposes is more important, they probably couldn't say. But within minutes, the "flat tax" would be encrusted with many thousands of exceptions, VAT rates would be highly variable, no two alike. Politicians from poor districts would trade exceptions for certain classes of wealth (perhaps no tax on houses), in exchange for exceptions to certain classes of poverty (maybe no VAT on food).
I predict it would also be politically difficult to impose a wealth tax. A few years ago, some politician (from a poorer district) proposed that inheritance be taxed to draconian levels, perhaps 90% or more. He figured that the poor (who had nothing to inherit) would support this proposal, so he was astonished to find that the poor opposed it overwhelmingly. Turned out, after some investigation, that the poor realized that the only chance they had at any real money was some unexpected inheritance. To be remembered in the will of some wealthy person. They knew the chances of this were infinitesimal, but they were NOT willing to give up what they saw as their only chance altogether.
The picture is of income as a hose to the bucket of wealth. The hose leaks, because the government taps into it every which way they can dream up. But dammit, whatever reaches that bucket is MINE, safe from government confiscation. Why, even if I won the lottery (the poor person is thinking), I can't take the lump sum and invest it wisely; the government will extract a pound of flesh out of it every year until it's gone.
So what I'm saying is, I don't believe most people would regard a wealth tax as "fair". People want, they dream of, beating the system. A system you can't beat might be "fair" but it won't be popular.
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