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Is It Time to Tax Harvard’s Endowment?

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Re: Is It Time to Tax Harvard’s Endowment?

#91
post #84

Earlier quoted context omitted.

"Because it's a political question" sounds to me like a roundabout way of saying that there is no actual difference, and it's just "disturbing" because the wording you're against disagrees with your particular ideology in some way.

You're being either intentionally or unintentionally obtuse, and I think anyone who is inclined to actually seek and hear an answer to your question already has it. The entire point was the spin being used by the article. It doesn't matter if the result would be the same, because this branch of the discussion was never about the result, but the positioning/spin. I certainly hope that your value function has terms in…

I'm not being obtuse, I legitimately don't understand what the supposed difference is and nobody will tell me because everyone responding to me would rather grind their axe than just give me a friggin explanation.

I finally see a little glimmer of one here, though. The difference is an ethical one, apparently! OK, some progress. What exactly is the ethical difference between the two?

Re: Is It Time to Tax Harvard’s Endowment?

#92
post #91

Earlier quoted context omitted.

You're being either intentionally or unintentionally obtuse, and I think anyone who is inclined to actually seek and hear an answer to your question already has it. The entire point was the spin being used by the article. It doesn't matter if the result would be the same, because this branch of the discussion was never about the result, but the positioning/spin. I certainly hope that your value function has terms in…

I'm not being obtuse, I legitimately don't understand what the supposed difference is and nobody will tell me because everyone responding to me would rather grind their axe than just give me a friggin explanation. I finally see a little glimmer of one here, though. The difference is an ethical one, apparently! OK, some progress. What exactly is the ethical difference between the two?

OK. Let's give it another shot.

Note that I have no axe to grind here; I'm trying to give an explanation, and feeling like that explanation is hitting some filter that makes it get treated like noise. (I can understand tuning out politics or philosophy; I generally try to as well, especially the former. But this is a fundamentally political/ethical question, and it can't be evaluated in isolation in pure economic terms. Or, at least, choosing to ignore everything but the pure economic terms is itself a political/ethical position.)

Forget, for a moment, the number at the bottom of the balance sheet at the end of the day. While I'm a fan of consequentialism (which it seems like you're using as the motivation for asking about equivalence), I consider misleading argumentative tactics to get there unethical in and of themselves. People should be very careful using rhetoric or deception even to enact positive change or produce net-positive consequences. And it's safe to say that the change advocated for here is at the very least not unambiguously positive.

But in any case, the number at the bottom of the balance sheet isn't the only one that matters here.

There's a certain tendency to privilege the status quo, both for invalid reasons (sunk costs fallacy, etc) and legitimate reasons (change has a cost to implement, and frequent change can cause inefficiency). So, as an argumentative tactic, it may be in the best interests of someone attempting to make a change to make it seem like the status quo already, and perhaps instead argue that there's some special circumstance or loophole that's being closed.

Ask people how they feel about raising taxes. Then ask people how they feel about the government spending less money. Even though both change the bottom line of the government budget in the same direction, the former will elicit far more negative responses, and the latter will elicit far more positive responses. And that's not just cognitive bias talking, either (though that likely plays a part too); there's a legitimate semantic difference there. Raising taxes means the government is claiming domain over more resources. Spending less means the government is taking funds it already stakes a claim over and spending less of them. The former makes the government larger (in that it controls more money and passes more money through its budget), while the latter makes the government smaller (in that it controls less money and passes less money through its budget). This obviously intersects with politics (large/small government, and the role of government in general), but even without that, there exists a semantic difference between deleting an expense and collecting a tax.

Let's stop there for a moment; does that semantic difference make sense, without further complication?

Now, as an added complication in this case, we're talking about non-profit organizations, so there's a second semantic quibble there. However, it's not as if non-profit organizations pay tax and then get it all back as a subsidy. They pay 0% tax to begin with. So, again, in terms of government budget size, the hypothetical taxes that would be paid by a non-profit if they were not a non-profit are not part of the bottom line. That then directly gets into the positioning by the article. The amount given to taxpayer-funded universities consists of actual tax funds, collected from taxpayers, included in the government budget, and paid out to universities. The amount of hypothetical tax revenue that would be collected from a non-profit if they were not a non-profit, on the other hand, was never collected in the first place, is not part of the government budget, and does not contribute to the size and purview of the government.

In terms of the number you can look at to see the difference, look at total government revenue and expenses. (Which, I would argue, should be equal, but that's a separate issue.) Either raising revenue or lowering expenses by a given amount has the same effect on the bottom line, but they have different effects on the nature, size, and purview of government.

Re: Is It Time to Tax Harvard’s Endowment?

#93
post #91

Earlier quoted context omitted.

I'm not being obtuse, I legitimately don't understand what the supposed difference is and nobody will tell me because everyone responding to me would rather grind their axe than just give me a friggin explanation. I finally see a little glimmer of one here, though. The difference is an ethical one, apparently! OK, some progress. What exactly is the ethical difference between the two?

OK. Let's give it another shot. Note that I have no axe to grind here; I'm trying to give an explanation, and feeling like that explanation is hitting some filter that makes it get treated like noise. (I can understand tuning out politics or philosophy; I generally try to as well, especially the former. But this is a fundamentally political/ethical question, and it can't be evaluated in isolation in pure economic ter…

The difference between raising taxes and cutting spending in general are enormous. Money gets shuffled around, economic activity changes, different people lose their jobs, etc. You don't need politics or ethics to see the difference there. Yes, the government's balance sheet has the same number at the end in both cases, but everybody else's are massively changed.

When you then cut it down to only look at non-profit organizations, and their taxes, all of that goes away. The outcomes in both cases are now identical in every respect.

As far as "claiming domain," and such that sounds like typical loaded-words meaningless politics to me. If the only difference between giving a non-profit a tax exemption and giving that non-profit a subsidy of the same amount is "claiming domain" then there is no actual difference.

Re: Is It Time to Tax Harvard’s Endowment?

#94
post #93

Earlier quoted context omitted.

OK. Let's give it another shot. Note that I have no axe to grind here; I'm trying to give an explanation, and feeling like that explanation is hitting some filter that makes it get treated like noise. (I can understand tuning out politics or philosophy; I generally try to as well, especially the former. But this is a fundamentally political/ethical question, and it can't be evaluated in isolation in pure economic ter…

The difference between raising taxes and cutting spending in general are enormous. Money gets shuffled around, economic activity changes, different people lose their jobs, etc. You don't need politics or ethics to see the difference there. Yes, the government's balance sheet has the same number at the end in both cases, but everybody else's are massively changed. When you then cut it down to only look at non-profit o…

> The difference between raising taxes and cutting spending in general are enormous. Money gets shuffled around, economic activity changes, different people lose their jobs, etc. You don't need politics or ethics to see the difference there. Yes, the government's balance sheet has the same number at the end in both cases, but everybody else's are massively changed.

OK, glad we could at least get that far. I wasn't sure we would.

> When you then cut it down to only look at non-profit organizations, and their taxes, all of that goes away. The outcomes in both cases are now identical in every respect.

It's still exactly the same difference between raising taxes and cutting spending.

> If the only difference between giving a non-profit a tax exemption

And here we have the problem. The non-profit already pays 0% tax. Their hypothetical taxes if they were not a non-profit aren't part of the budget in the first place; they don't get counted on the books as incoming taxes and a subsequent payout. Taking away their tax exemption would be raising taxes. Whereas taking away a subsidy given to another organization would be cutting spending. You already acknowledged a difference between raising taxes and cutting spending. Done.

And if you continue to dismiss anything you don't care to hear about as "meaningless politics", you're never going to get why people find some things "disturbing". But I no longer particularly care, either.

Re: Is It Time to Tax Harvard’s Endowment?

#95
post #93

Earlier quoted context omitted.

The difference between raising taxes and cutting spending in general are enormous. Money gets shuffled around, economic activity changes, different people lose their jobs, etc. You don't need politics or ethics to see the difference there. Yes, the government's balance sheet has the same number at the end in both cases, but everybody else's are massively changed. When you then cut it down to only look at non-profit o…

> The difference between raising taxes and cutting spending in general are enormous. Money gets shuffled around, economic activity changes, different people lose their jobs, etc. You don't need politics or ethics to see the difference there. Yes, the government's balance sheet has the same number at the end in both cases, but everybody else's are massively changed. OK, glad we could at least get that far. I wasn't su…

"You already acknowledged a difference between raising taxes and cutting spending. Done."

OK, clearly you're not interested in actually paying the least bit attention to what I'm saying, and your complaints about "ignoring arguments" are just projection. Sheesh.

Re: Is It Time to Tax Harvard’s Endowment?

#96
post #95

Earlier quoted context omitted.

> The difference between raising taxes and cutting spending in general are enormous. Money gets shuffled around, economic activity changes, different people lose their jobs, etc. You don't need politics or ethics to see the difference there. Yes, the government's balance sheet has the same number at the end in both cases, but everybody else's are massively changed. OK, glad we could at least get that far. I wasn't su…

"You already acknowledged a difference between raising taxes and cutting spending. Done." OK, clearly you're not interested in actually paying the least bit attention to what I'm saying, and your complaints about "ignoring arguments" are just projection. Sheesh.

mikeash I think you were really patient here. Any economist would agree you are correct that there is no practical difference except perhaps electoral spin. JoshT appears to be either trolling or trying really hard to make a point that has nothing to do with your question. I have nothing against his point, I'm not a big fan of taxes either, but it was clear about ten posts ago that he isn't really responding to you. I think anybody reading this finds it clear so, again, bonus points for your patience!
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