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Taxing Top Incomes in a World of Ideas [pdf]

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Re: Taxing Top Incomes in a World of Ideas [pdf]

#31

Post by wav-part »

ip26 wrote: post #29
mbrumlow wrote: post #25

Earlier quoted context omitted.

I think you underestimate how much welth is used as a proxy to guage prestige, power, and influence amung the super rich. People with drive don't do it to just be one of millions to reach a given milestone. People with real drive don't enjoy doing something that many before them have done. Guys like Jeff clearly set out to be the best. Breaking the score bord could very well prevent something like Amazon, and we migh…

Ok so he's a guy with insatiable drive, a hunger for success, a need to be the best- aw, hell, tax rates are a bit too high, why not throw in the towel?

No he would use the same talent to minimize taxes. Why would anyone expect otherwise lol ?

Re: Taxing Top Incomes in a World of Ideas [pdf]

#32

Post by blahblahthrow »

ForHackernews wrote: post #21
darawk wrote: post #7

Earlier quoted context omitted.

Totally, but the point of this paper isn't the people who already have $10mm. It's the people who want to get there , and what they're willing to sacrifice to do it. Building a massive business like say, Amazon, takes enormous personal sacrifice and risk. The high incomes that result from it incentivize that sacrifice/risk. They cause the person who currently has relatively little, to risk what they do have to produc…

> He threw that away to take a massive personal risk to build Amazon. Would he have done that if you capped his potential reward at $10mm? The unexamined premise of this question is that society at large benefits from the existence of Amazon and should want to encourage the creation of similar Amazon-like enterprises.

Exactly. I would argue that the existence of giant, monopolistic companies like Amazon leads to increased income inequality and social instability. We shouldn't be figuring out how to order our economy to make more Amazons, we should be trying to reduce the harm of the current ones with stronger employee protections, stronger consumer protections and stronger anti-trust enforcement.

Re: Taxing Top Incomes in a World of Ideas [pdf]

#33

Post by jacknews »

dahfizz wrote: post #11
yorwba wrote: post #10

Earlier quoted context omitted.

My immediate question is what the innovators do instead of innovating when the tax rate is higher. Taxes reduce income, but they do so monotonically without affecting the relative ordering of options, which is what matters for income-maximizing decision making. The "top" income may be numerically lower, but it remains at the top.

The absolute values do matter. If Jeff Bezos expected Amazon to be much less profitable as it is for him, he may have decided to just stop and retire once it provided enough passive income to let him live comfortably. He would be paid more for the added time and stress of continuing to grow Amazon, as you say, but if that marginal income approaches zero, it just isn't worth it (and we are left without Amazon).

Come on, I don't believe Bezos would put on his slippers and retire to a country cottage because tax rates were too high.

While money is certainly an incentive to innovate, it's also not the only incentive (and probably far down the list if you're already rich), and creative, driven people will do what they do whether or not a chunk of their "earnings" gets given/taken back to the society that enables them to do it.

Re: Taxing Top Incomes in a World of Ideas [pdf]

#34

Post by jacknews »

wav-part wrote: post #31
ip26 wrote: post #29

Earlier quoted context omitted.

Ok so he's a guy with insatiable drive, a hunger for success, a need to be the best- aw, hell, tax rates are a bit too high, why not throw in the towel?

No he would use the same talent to minimize taxes. Why would anyone expect otherwise lol ?

I think we need a movement that glorifies the payment of taxes.

Re: Taxing Top Incomes in a World of Ideas [pdf]

#35

Post by rue »

dahfizz wrote: post #11
yorwba wrote: post #10

Earlier quoted context omitted.

My immediate question is what the innovators do instead of innovating when the tax rate is higher. Taxes reduce income, but they do so monotonically without affecting the relative ordering of options, which is what matters for income-maximizing decision making. The "top" income may be numerically lower, but it remains at the top.

The absolute values do matter. If Jeff Bezos expected Amazon to be much less profitable as it is for him, he may have decided to just stop and retire once it provided enough passive income to let him live comfortably. He would be paid more for the added time and stress of continuing to grow Amazon, as you say, but if that marginal income approaches zero, it just isn't worth it (and we are left without Amazon).

Even if that were true, would that have reduced innovation? How many other innovators has Amazon crushed—fueled by the “top income”?

Re: Taxing Top Incomes in a World of Ideas [pdf]

#37

Post by ThomPete »

lazyjones wrote: post #36
ThomPete wrote: post #22

So many great ideas are horrible businesses. Not sure exactly how that is going to be done in reality but interesting perspective.

> So many great ideas are horrible businesses. Maybe, but great businesses are usually based on good ideas.

Sure that's not the point though. If you tax ideas and they are shitty businesses are you going to allow people to deduct that too?

Re: Taxing Top Incomes in a World of Ideas [pdf]

#38

Post by soVeryTired »

nabla9 wrote: post #23
soVeryTired wrote: post #19

There doesn't appear to be any empirical justification for anything the author has done here. Does anyone really believe that 1/ the "stock' of ideas can be measured by a real number and 2/ national output is proportional to some power of the "stock" of ideas? Like, how do you even measure an idea? The paper feels like the author has done a load of maths and shoehorned one particular interpretation onto his equations…

That's exactly what he has done and there is nothing wrong with that when it's done right (Charles I. Jones is a top man). >Does anyone really believe that 1/ the "stock' of ideas can be measured by a real number and 2/ national output is proportional to some power of the "stock" of ideas? System dynamics can be modeled with numbers that can never be measured or are hard to measure. The exact number of working hours…

> That's exactly what he has done and there is nothing wrong with that when it's done right (Charles I. Jones is a top man).

That sounds like an argument from authority to me. If he decides to use the form Y = A^b L and I decide to use, say, a confluent hypergeometric function, who's to say who is correct?

Re: Taxing Top Incomes in a World of Ideas [pdf]

#39

Post by scotty79 »

soVeryTired wrote: post #38
nabla9 wrote: post #23

Earlier quoted context omitted.

That's exactly what he has done and there is nothing wrong with that when it's done right (Charles I. Jones is a top man). >Does anyone really believe that 1/ the "stock' of ideas can be measured by a real number and 2/ national output is proportional to some power of the "stock" of ideas? System dynamics can be modeled with numbers that can never be measured or are hard to measure. The exact number of working hours…

> That's exactly what he has done and there is nothing wrong with that when it's done right (Charles I. Jones is a top man). That sounds like an argument from authority to me. If he decides to use the form Y = A^b L and I decide to use, say, a confluent hypergeometric function, who's to say who is correct?

> who's to say who is correct?

Nobody. My friend studied econometry. I was appaled to hear that they just take some real process, assume it's governed by some equation then massage all the maths they can out of it.

They consider different equation for the same process (although they usually have favorite one) and never bother themselves with proving if any of them is actually reflected in reality of said process.

It's basically philosophy for people that can do some math.

They also use the math without deep understanding of it (sort of cargo cultishly). That I know because I worked for a prof and a post docs of econonometry on some project later.

Re: Taxing Top Incomes in a World of Ideas [pdf]

#40

Post by sooheon »

mbrumlow wrote: post #25
sooheon wrote: post #13

Earlier quoted context omitted.

Since this is a claim asserted without basis (nobody can claim to know a counterfactual, let alone someone else's mind), I can also assert the opposite: Bezos didn't get to where he was without having a hell of a drive for success, and that drive is not 100% driven by monetary reward. Prestige, power, influence are all incentives built into us at the biological level, and if he gets to be the all powerful CEO of a $8…

I think you underestimate how much welth is used as a proxy to guage prestige, power, and influence amung the super rich. People with drive don't do it to just be one of millions to reach a given milestone. People with real drive don't enjoy doing something that many before them have done. Guys like Jeff clearly set out to be the best. Breaking the score bord could very well prevent something like Amazon, and we migh…

I don't buy this, because we're not proposing to only tax Bezos until he has the exact same net worth as Joe Schmoe who collects POGs--this is a straw man. If we tax all the uber-rich 5% more, everyone would be in the exact same position on the leaderboard, just with slightly deflated numbers. We'd be having the conversation about breaking the $1T barrier 12 months down the line, BFD! It's just numbers to the rich, but it's life or death to the poor.

There's a story about a society of peacocks who grew their tails so big and beautiful it started interfering with survival. They'd get it stuck in branches, be too slow to run from predators, etc. No one peacock was willing defect and shorten his tail because he'd lose out on the mating game. If they could all just get together and agree to shorten their tails by 25%, they could keep the relative pecking order and also be agile enough to survive.

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