91–100 of 149 posts
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I joined HN four years ago. How would YOU know what belongs on HN? Your comment is extremely shallow and false to boot. It belongs on Rush Limbaugh, not on HN.
def further_proof(age, wisdom): if (age != wisdom): print "forensic"
comic.
Government is the least efficient allocator of resources. For every dollar put to use, many more dollars are wasted due to incompetence or fraud. California's Proposition 30 was a wake-up call for me; despite all the political advertisements to the contrary, the many billions raised for "education" went entirely to shore up the teacher's bloated pensions and benefits fund. Entrepreneurs are some of the most efficient…
This.
The thing that really gets me are the people who should know better, like Warren Buffet. You read the article and he's making straw man arguments about billionaires stuffing their cash in mattresses because their taxes are too high -- nobody is arguing that. The real problem is that taxation is economically distortionary and the higher you raise the rates, the greater the distortion. Because taxes are only due when assets are sold (and in the meantime the owner is collecting asset appreciation on the portion of the value that would have been due in taxes), capital gains tax encourages investors to hold their existing assets rather than seeking out more economically efficient ones. It encourages them to invest in more stable assets that can be held for a long period of time to defer taxes, rather than taking a risk on a startup that could cause tax to be due sooner when there is an IPO etc.
Or the tired numbers about how the rich are a lot richer now than they used to be and their taxes are lower, without providing evidence of causation rather than correlation. I mean sure, the richest might have 4.5X as much as they did twenty years ago instead of 5X, but is that really the big problem? Or is the real problem the regulatory capture and Wall St. shenanigans that allow the rich to double their money every five or ten years while Main St. loses their retirement fund to the same stock market?
At the same time, everybody just assumes that if you want to collect more tax money from the rich, raising the capital gains tax is the way to do it. Or the same with corporations and corporate income tax. But both of them are way, way too easy to avoid and for the same reason -- they depend on measuring profit, and it's gotten to be trivial to make an entity look unprofitable on paper. Raising the rates won't help that, it'll just push more people into tax shelters.
If you want to tax the rich and corporate entities then you have to tax the stuff they don't have a choice about doing. Sales tax, but the tax is paid by the seller not the customer. Income tax, but the tax is paid by the employer, not the employee. If you want to do business you need employees and customers, so they can't avoid paying taxes with shelters and loopholes. That's how you tax the rich. Capital gains tax is just a shell game that encourages accounting tricks and offshore banking.
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Talk about the "ultra-rich" becoming "addicted" to money is loaded nonsense, but never mind. The idea of taxing investment income leads to a lot of terrible, perverse outcomes. It steers wealth towards being locked up in big companies and funds, since this is how you compound investment fashion without that money being repeatedly taxed. It also makes sure the incentive to invest on one's own accord belongs primarily…
http://krugman.blogs.nytimes.com/2012/01/18/the-history-of-c... http://krugman.blogs.nytimes.com/2012/01/19/the-dubious-case...
NPR's Planet Money once brought together a bipartisan panel of economists and asked them what they agree on. Consumption taxes as a replacement for investment+income taxes got universal support: https://nathensmiraculousescape.wordpress.com/2012/08/08/pla...
The effect of a consumption tax would be to never tax investment income until it is spent on something that isn't investment.
Beware Krugman; he is brilliant but sees himself as a pundit in service of a political agenda, and has baldly admitted as much himself. I would be surprised if he disagreed with consumption taxes on grounds other than political expediency. I don't believe that particular question is raised in the posts you link.
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>Government is the least efficient allocator of resources. This is baseless dogma. Government may not always be the most efficient allocator, but it's not always the least efficient either. In cases of positive and negative externalities, the market does not allocate ideally. We need to move past this dogma of "All government is bad government" so that we can separate the good from the bad. Good rules are helpful. Ba…
I think what nugget is getting at, is there are many government programs that are mismanaged (welfare, social security, education to some extent, and others). Who legitimately feels good that they pay taxes only to see other Americans living off of Welfare, generations unemployed, living off of welfare (which btw, I consider to be fraud). People that live on welfare (no, not people who use the program as it was inten…
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Not quite sure why it's an absurd response?
Agreed. Mr. Buffet is free to donate as much of his 'tail wind' wealth as he chooses. But please, hands off of my wallet.
You know, I've never had a problem with the income taxes that I pay. They're taken out of my check and I work with what's left. I never think "oh man, they're taking my money" any more than I think "oh man, I totally deserve to win the lottery".
I do think there's something about earning money through investments that makes paying taxes "feel" more like your money is being taken away from you. It's not automatically deducted. It's not there every week. Sometimes you lose money. You have to pay it all at once. Taxes are not part of the mental calculation of how much you made on that sweet stock investment. I think that's WHY the rates are lower. People just feel like the rates SHOULD be lower. But it's a psychological effect. When I look at the economic effects of the current tax scheme on a large scale, it seems to me that this kind of benefit is just a giant tax dodge.
Let's say that the tax rate is structured in a way that the cost of doing productive "work" with your capital is 30%, but the tax rate for just shuffling the money around through a bunch of investment vehicles is %15. Well, you've suddenly got a free %15 to play around with. And if you only need to return %10 to be considered a pretty good investment, then it seems like you really can't fail as long as you've already got enough money to play a different game than the rest of us. But those guys are already orbital, and the rest of us can never achieve escape velocity. I'd prefer to not live in a cyberpunk future where the rich get their own orbital gardens and the rest of us have to live in the ruins they left behind.
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> With the threshold at $250k, the tax hikes would still only bring in enough added revenue to cover 8 days of federal spending. Does that include the restoration of pre-Bush capital gains tax? Because I'm sure that would add up to a lot. In fact, I think that's the biggest thing that the ultra-rich have become addicted to in the past decade.
not precisely what you asked, but a useful approximation: "If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion. That’s only a third of this year’s deficit." [2012] -- http://www.forbes.com/sites/danbigman/2012/04/03/john-stosse...
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The whole point of my post is that progressive taxation is a question of which individuals pay what, not whether money stays with individuals or goes to the government. You appear to be caught up in the framing of political rhetoric.
As if 'framing' isn't an important part of communicating ideas? In this case you chose to frame the discussion in the form of the government 'giving' its money to the people. I'm rejecting that formulation. That doesn't mean I'm rejecting the idea of taxes or more specifically progressive taxes.
By introducing variability of how much the government takes total it adds another question that is being used to persistently distract from the question of progressivity. When people say "the wealthy should bear a larger portion of the burden" a typical response is "we should be spending less on government!" – which is no response at all, just a distraction.
You said: "The notion that taxation should be predicated on whether the government or the person can 'better use' the person's money is damn scary." – which is EXACTLY what I was pointedly NOT asking. The degree of progressivity in a system does not determine whether a person or the government has the person's money, but WHICH people have how much money.
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I don't think I misunderstand the context. The definition that people generally use when discussing this is making some fundamental assumptions that simply do not hold up. Efficiency for efficiency's sake is meaningless--its always in the pursuit of some greater goal. For the private citizen, that goal is different than for a government. It is a flawed argument to assume that the government does, or should, have the…
There's a fixed amount of labor capital in the US. Who decides how it should be allocated? Let's pretend you believe we need to hire more teachers. Are you right? If you were the government, you'd wave your hands and make it so. But are you wasting labor on teachers we don't fully utilize? Perhaps we could have really benefited from additional plumbers. How can we know? The only known way to answer those questions is…
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http://krugman.blogs.nytimes.com/2012/01/18/the-history-of-c... http://krugman.blogs.nytimes.com/2012/01/19/the-dubious-case...
Lazily posting links without further comment is not really what I think constitutes a good discussion, but I'll bite because I happen to have a link of my own handy. NPR's Planet Money once brought together a bipartisan panel of economists and asked them what they agree on. Consumption taxes as a replacement for investment+income taxes got universal support: https://nathensmiraculousescape.wordpress.com/2012/08/08/pl…
Your last comment is largely an ad hominem. Consumption taxes are typically regressive.
Edit: your last link did not say what you said it said. It did not say to replace capital gains taxes with a consumption tax. It didn't mention capital gains at all.