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Money can buy happiness, but not unconditionally

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Re: Money can buy happiness, but not unconditionally

#61

Post by pmiller2 »

nicoburns wrote: post #25
Kaveren wrote: post #7

Earlier quoted context omitted.

Taxes already do focus on the wealthy with progressive taxes (in many countries), though. From an American perspective, the top federal income tax bracket is 37%. The top state income tax rate can be anywhere from 0% to 12.3% (California), so in total you can pay up to 49.3% of a potion of your income in taxes. In America, the top 1% paid 45.7% of total income tax in 2015 [1] (earning 17% of "expanded cash income"),…

This makes it sound like double is a big proportion. But given how much of the wealth the rich control, I'd expect it to be closer to 80 or 90% of tax coming from the rich. They just don't need it.

I agree. The top federal tax rate at one time was over 90%, and some economists believe it should be that high again. See https://www.nber.org/papers/w20601 for instance.

Re: Money can buy happiness, but not unconditionally

#62

Post by [deleted] »

dorchadas wrote: post #55
nightski wrote: post #47

Earlier quoted context omitted.

How do you avoid a sales tax by paying cash? I don't understand that at all. Sure, the tax can't go back in time and make up for the poor system we have now. But you have to start somewhere - at least we could get on the right track.

> How do you avoid a sales tax by paying cash? Simple: you just make a deal with someone saying that, if you pay cash, they won't report or charge the tax. Maybe you'll even pay them a bit more (but less than it would've cost you with the tax) to do so. With cash, how can you trace it? But, a sales-tax based system is absolutely awful regardless; it does nothing but hurt those who can least afford it.

[deleted]

Re: Money can buy happiness, but not unconditionally

#63

Post by nightski »

dorchadas wrote: post #55
nightski wrote: post #47

Earlier quoted context omitted.

How do you avoid a sales tax by paying cash? I don't understand that at all. Sure, the tax can't go back in time and make up for the poor system we have now. But you have to start somewhere - at least we could get on the right track.

> How do you avoid a sales tax by paying cash? Simple: you just make a deal with someone saying that, if you pay cash, they won't report or charge the tax. Maybe you'll even pay them a bit more (but less than it would've cost you with the tax) to do so. With cash, how can you trace it? But, a sales-tax based system is absolutely awful regardless; it does nothing but hurt those who can least afford it.

There are quite a few people who take cash and yet do not report it as income. However, in the case you are describing a business would have to sell something illegally (without reporting their sales to the IRS). In my mind controlling businesses is far less burden on the IRS than individuals (how many returns are audited again? less than 1%?).

Not only that, if that money is then used to purchase legitimate goods the tax is still received. However, in the case of not reporting income you can consume whatever you want to from society without incurring any tax.

Re: Money can buy happiness, but not unconditionally

#64

Post by hnmonkey »

esotericn wrote: post #3

I don't think anyone contests the fact that money increases happiness _up to a point_. Once you have full financial security though, it becomes quite nonlinear. Outside of bonkers areas, 1 million NW gets you retirement. 10 million NW gets you that plus... toys. It's a major reason why taxation should focus on the rich (as opposed to the 'well off' e.g. high incomes). They really will not notice it aside from ideolog…

What's your definition of 'bonkers areas?' Can you show how 1 million net worth gets someone retirement? It seems to me that if you're retiring on 1 million dollars you're going to run out of money pretty easily unless you're living off rice and beans. And in many places with just $40k a year (assuming a 4% withdrawal of the 1 million) you might not be able to even cover your mortgage/rent/property taxes/bills not even factoring in food/healthcare/entertainment. These days people who retire can potentially live another 20 years or so and 1 million in the bank won't cover it at all.

Re: Money can buy happiness, but not unconditionally

#65

Post by howlgram »

amoitnga wrote: post #15

I think it's a well-established fact that going from poor to middle class makes a huge difference, from middle to top makes difference too, but not as big. 5 years ago I was a carpenter in New York making some 30k a year, I was miserable. I wanted a different job, but not only because of a better paycheck, but also a kind of work I'd do, the way I'd spend my days. Now I'm a web developer and having that background re…

I'd put it more like

M(1/T)+QT

Re: Money can buy happiness, but not unconditionally

#66

Post by howlgram »

lhnz wrote: post #8
esotericn wrote: post #3

I don't think anyone contests the fact that money increases happiness _up to a point_. Once you have full financial security though, it becomes quite nonlinear. Outside of bonkers areas, 1 million NW gets you retirement. 10 million NW gets you that plus... toys. It's a major reason why taxation should focus on the rich (as opposed to the 'well off' e.g. high incomes). They really will not notice it aside from ideolog…

Are you speaking from personal experience or is this just what you've heard elsewhere? I've still not reached the point where more money hasn't increased my happiness, however I'm definitely making far more than an above-average wage in London. I think a great number of people could be happier with more money assuming they have good ideas on how they can spend their money to improve their lives.

I think there are different plateaus, for money there'll will be a point where it stops being as important as quality of social life, or quality of the work you do to earn it. However if you clear these plateaus I think you go back to money being the big factor.

Re: Money can buy happiness, but not unconditionally

#67

Post by dorchadas »

nightski wrote: post #63
dorchadas wrote: post #55

Earlier quoted context omitted.

> How do you avoid a sales tax by paying cash? Simple: you just make a deal with someone saying that, if you pay cash, they won't report or charge the tax. Maybe you'll even pay them a bit more (but less than it would've cost you with the tax) to do so. With cash, how can you trace it? But, a sales-tax based system is absolutely awful regardless; it does nothing but hurt those who can least afford it.

There are quite a few people who take cash and yet do not report it as income. However, in the case you are describing a business would have to sell something illegally (without reporting their sales to the IRS). In my mind controlling businesses is far less burden on the IRS than individuals (how many returns are audited again? less than 1%?). Not only that, if that money is then used to purchase legitimate goods th…

> There are quite a few people who take cash and yet do not report it as income. However, in the case you are describing a business would have to sell something illegally (without reporting their sales to the IRS). In my mind controlling businesses is far less burden on the IRS than individuals (how many returns are audited again? less than 1%?).

You can easily do the same thing. Just take the cash from selling stuff and don't report it as income. Hell, you could report it as a loss at that, and maybe even get some benefit from that. There's still ways around it, and they will be found by those who have the money to find them.

> Not only that, if that money is then used to purchase legitimate goods the tax is still received.

But it's not. The tax on what the new person bought is, but not on the original purchase. The tax of the original purchase still isn't received.

Either way, it hurts honest people and the poor, who likely don't have the connections or money to get around paying taxes; not to mention it's a much higher percentage of their income that's being taxed, so it doubly impacts them if it's sales-tax only.

Re: Money can buy happiness, but not unconditionally

#68

Post by nicoburns »

_kxbd wrote: post #50
nicoburns wrote: post #25

Earlier quoted context omitted.

This makes it sound like double is a big proportion. But given how much of the wealth the rich control, I'd expect it to be closer to 80 or 90% of tax coming from the rich. They just don't need it.

Since you said "expect", this comment isn't directed at you specifically. But let's say someone is advocating for that 80%-90% tax-rate on income: 1. Why should I try to make more money if I'm going to be taxed at 80%-90%, forking over such a massive sum of my money as to make it mostly worthless? 2. Even if this advocate believes the rich don't need the money, what makes the government entitled to take the vast majo…

1. Yes, why should you try to make more money if you already have that much? There's more to life than money, and I'd argue that incentivising people already earning millions to optimise for making more money is probably not good for society.

2. What makes them entitled to that money in the first place? Surely nothing other than the economic system which is grounded in a democratic negotiation. You may be interested to know that other languages don't use the word "earn" for income. For example, Spanish uses "ganar" which means "win". Just because you complete a task for which you are rewarded with money by our current economic system doesn't mean you have earned it (see also: people who think things are immoral just because they're illegal)

Sure, it's anti-capitalist. Why do you think that is a bad thing? I believe it's the government's role, because that extra freedom granted to the rich is taking what I consider to be far more important freedoms away from the poor.

Re: Money can buy happiness, but not unconditionally

#69

Post by nicoburns »

sovietmudkipz wrote: post #35
nicoburns wrote: post #25

Earlier quoted context omitted.

This makes it sound like double is a big proportion. But given how much of the wealth the rich control, I'd expect it to be closer to 80 or 90% of tax coming from the rich. They just don't need it.

That seems like it would decentivize being rich pretty dramatically. The truth is that many rich people are the main movers of the economy, generating positive value for everyone (versus rent seeking). If you decentivize being rich you decentivize generating value. Ayn Rand explores a world where the rich value creators go on strike when people and the government “loot” and plumber their wealth, through regulations a…

I don't agree with this at all. I don't think we have a talent shortage. You are correct that this would reduce incentives for the rich (although would it really be by that much - they would still have a huge incentive to maintain a high wealth level than a lower one).

But if the capital were sensibly redistributed (I advocate for spending some on things like univeral healthcare, and then directly sharing the rest out) it would also enable a vast group of people to take entrepreneurial risks that are not in a position to do so now.

Re: Money can buy happiness, but not unconditionally

#70

Post by stanleydrew »

mpreda wrote: post #52
stanleydrew wrote: post #29

Earlier quoted context omitted.

The idea is nice, and I'm sure I'm not introducing anything you haven't already considered, but a flat consumption tax is in fact regressive. The simplest way to think about it I guess is that regardless of wealth, everybody needs a certain number of calories to live. If you are poor and can only afford subsistence, you are paying a much larger portion of your overall wealth just to stay alive. That may be ok with yo…

A flat consumption tax would be regressive if the two extremes (rich vs. poor) would buy the same goods; but they don't. The very poor buy cheap food, the very rich buy diamonds and services ("dog walking", "garden design", "personal trainer"). Not to mention the two buying different kinds of habitation, in different locations, at very different price-points.

This is all true but doesn't invalidate the point unless the rich and poor are spending the same proportion of wealth/income on these various categories.

The fact that the rich can afford to save more of their income proves that isn't true.

A more pedestrian proof would be that even if I make 10 times as much money as someone else, the most expensive gallon of milk I can buy is still only double or triple what a poor person would pay.

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