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Taxing Growth

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Re: Taxing Growth

#21

Post by throw0101d »

> It’s core argument is simple: in a world where talent and capital move easily […]

I'm not sure about the talent part: unless you're strictly talking about remote work, going to a new country is not what I would think of as "easy".

> Doug explained why a staged path to a 20% flat tax […]

It seems to me that flat taxes ignore the marginal utility of every new dollar of income.

What exactly is having the top income earners keep more money gotten society? It seems like not much besides more inequality (which has probably helped fuel political dissatisfaction):

> This paper uses data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and unemployment. First, we use a new encompassing measure of taxes on the rich to identify instances of major reduction in tax progressivity. Then, we look at the causal effect of these episodes on economic outcomes by applying a nonparametric generalization of the difference-in-differences indicator that implements Mahalanobis matching in panel data analysis. We find that major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment.

* https://eprints.lse.ac.uk/107919/

* https://en.wikipedia.org/wiki/Trickle-down_economics

Re: Taxing Growth

#22

Post by blitzar »

> In 2015, Douglas McWilliams of the Centre for Economics and Business Research, which is based on Old Street, authored The Flat White Economy: How the Digital Economy Is Transforming London & Other Cities of the Future.

> Now, let me just quote some statistics. We have the most successful tech sector in Europe. The reason why is we are outside the Digital Markets Act, the Digital Services Act, and the AI Act, which are three European acts which heavily constrain tech growth in the EU. As a result, the thing that I call the flat-white economy ...

Digital Markets Act (2022), Digital Services Act (2022) and AI Act (2024) - these regulations are obviously totally different to the UK versions - Digital Markets, Competition and Consumers Act (2024), Online Safety Act (2023).

The reason why something was worthy of a book in 2015 is something that happend in 2022 / 2024, the car in the car section must be a delorean. There are a lot of good reasons, making stuff up makes me wonder about the validity of the remainder of the arguments.

Re: Taxing Growth

#23

Post by throw0101d »

embedding-shape wrote: post #5
hcknwscommenter wrote: post #4

Flat tax and dregulation. Pretending like they are new ideas.

Every time someone shares something it has to be new, otherwise it's not worthy of your attention? Couldn't you at least provide some constructive criticism why the argument falls short in your mind, instead of the sharing the first knee-jerky reaction that popped up in your head that just touches the surface?

> Couldn't you at least provide some constructive criticism why the argument falls short in your mind […]

For the flat tax, which is tax cut for the rich:

> This paper uses data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and unemployment. First, we use a new encompassing measure of taxes on the rich to identify instances of major reduction in tax progressivity. Then, we look at the causal effect of these episodes on economic outcomes by applying a nonparametric generalization of the difference-in-differences indicator that implements Mahalanobis matching in panel data analysis. We find that major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment.

* https://eprints.lse.ac.uk/107919/

* https://en.wikipedia.org/wiki/Trickle-down_economics

Re: Taxing Growth

#24

Post by kyledrake »

> Finally to perhaps lighten the mood, rather than the usual book recommendations, the three of them discuss their favourite cars.

I'm sure they're talking about the 8 million dollar Porto Embargo or whatever, but I would love one day to hear a podcast discussing the genius of the Toyota Corolla. Safe, affordable, available, reliable. I've had friends with Toyotas that were about to fall off their base from road salt rust but the engine and transmission still worked perfectly.

Pretty amazing that you can be of modest or lavish means and still own a really solid car that everyone can fix. A lot funner than hanging out in the repair shop waiting for a specialist to fix a blown turbo headgasket.

Re: Taxing Growth

#25

Post by floundy »

Mountain_Skies wrote: post #13
hcknwscommenter wrote: post #4

Flat tax and dregulation. Pretending like they are new ideas.

In the US about twenty years ago, there was a minor movement for a flat sales tax that would replace all other taxes. I lived in Georgia at the time, which was the epicenter of support for the idea. Proponents got themselves stuck in a metaphoric tarpit when they wouldn't accept that most people's way of calculating sales tax was different than what they promoted. At least in the US, if there's a 7% sales tax, it mea…

Laughing aloud at the thought of the average paycheck to paycheck consumerist blowing a gasket when they see a $24k tax bill for their $80k pickup truck.

Re: Taxing Growth

#26

Post by RobKohr »

Or maybe no one with interesting thoughts on anything would invest anything in a nation where if post anything online that might be slightly controversial you might go to jail and not even have the protection of a jury to balance out the overreach of government.

That and other things that are transforming it into a nanny state make it a hell no.

But yeah, it's nice you are lowering taxes and regulations on those who fall in line.

Re: Taxing Growth

#27

Post by blitzar »

andy_ppp wrote: post #15
actionfromafar wrote: post #8

Earlier quoted context omitted.

Gosh, they have statistics! By a man. A man from Goldman! "I was quoted by a man from Goldman's in the mansion house, that in Hong Kong it cost them $70 to onboard a client. In the UK, it now costs them $10,000 to onboard a client just because of the regulation." Well I'll be darned!

It’s probably because of bureaucracy at Goldman - know your customer checks are pretty cheap and there’s APIs that can do it.

"Locals" in HK that do the roles like KYC grunt work make a fraction of their equivalent in London (or their expat boss in HK).

Re: Taxing Growth

#29

Post by graemep »

mytailorisrich wrote: post #14

GDP per capita has been declining in the UK and this is indeed a big issue (people are getting poorer) hidden behind the marginal growth of the overall GDP created by high immigration. This is linked to a long-standing productivity problem. Some of the ideas bring us back to the Brexit debate. Being outside the EU allows a freedom of action but, depending how far deregulation and law taxes are taken, that also means…

> GDP per capita has been declining in the UK

not true:

https://data.worldbank.org/indicator/NY.GDP.PCAP.CN?location...

There were declines in 2009 andd 2020, for reasons that out to be fairly obvious, but overall consistent growth

> that also means retaliatory barriers from the EU, which is still the largest trading partner (41% of exports, twice the volume to the 2nd export market, which is the US

However, trade with the EU was declining as a proportion of total trade even before Brexit, is exaggerated by transshipment, and does not have as significant benefits as trading with economies with different strengths (i.e. more comparative advantage)

Re: Taxing Growth

#30

Post by phkahler »

I'm starting to believe "economic growth" is fiction. Just because an item has a higher price does not mean it's higher output. If we measure the value of things based on say the energy + labor cost to produce it, economic output (or GDP) will look very different. I'm not saying that's a good measure, but that there are other ways to look at it and the current one seems broken.

When Elon Musk says the only way to solve the US debt crisis is through automation and AI to boost GDP, it makes no sense. Government revenue has less and less to do with output and more to do with taxes on labor, so automation will make the problem worse. I'm not saying we shouldn't automate things, but that the ideas of cause->effect when it come to money are not very well thought out - yes, including my own.

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