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> Most jobs aren’t created by private, corporate investment, so raising taxes on corporate income won’t affect employment. But won't raising taxes on corporate

by rdtsc 10y ago

> Most jobs aren’t created by private, corporate investment, so raising taxes on corporate income won’t affect employment. But won't raising taxes on corporate income drive corporation to other jurisdiction? So employment in that company then won't just slowly trail off, but will look like a cliff, dropping to 0. So isn't that idea ignoring the fact that companies don't have to stick into one place and so we arbitrarily tax them and then provide basic income to everyone in that community? It goes the other way as well. In some places like West Virginia they've bent backward to accommodate coal mines, easing EPA regulation, destroying the environment and so on. Just to keep companies around. It is like a bad abusive relationship. Other states for example know the game so they would court and offer incentive for companies to move to their state. I've seen that happen and it was painful for the original community to lose all those jobs. I agree that we need something like basic income and the accounting is not the only problem, the social and moral aspect is a just as big. The pessimist in me says we couldn't even meaningfully have a decent health insurance system like other civilized countries. We are a long way from any kind of distributism. It is good there is talk and discussion about this. The ideological re-framing of this might have to be done very carefully. One quick example I can think off the top of my head is how in Alaska there was redistribution of income from natural resources. People there probably don't think in terms of "socialism" or "handouts". Well at least the people I know there didn't a few years ago... Wonder if basic income can be advocated in those terms - "You deserve this because we've created the automation / robots to work for all of us..." or "We want to free people's time so they can volunteer and help their own communities...". Some will play video games and consume drugs perhaps all day, some will decide maybe they want to visit some lonely elderly person in a nursing home or help in the hospital or soup kitchen some more.

nico_h 10y ago
This are the idea I have been struggling with: 1) how do you get people to accept the existence of basic income without perceiving the beneficiaries as moochers. 2) what do people on basic do? Right now your example of people visiting the elderly is in some place paid work but can also be performed by volunteer. However volunteers should be vetted. My guess is that when everybody is on basic, you can earn "social credits" for volunteering. But should that grant you access to more resources, or should that be like "Achievements" in video games? And how do you avoid turning that into the Black Mirror episode "15 millions Merits". But even "social credit" cannot prevent the paid workers to look down on the moochers on basic. How do we get to the star trek society utopia...?
- deleted 10y ago
  [deleted]
- nhaehnle 10y ago
  Well, we already have a form of "social credits". It's called money. We're just not used to thinking of it that way, but that's really what money is. So replace "social credits" in your line of thinking by money, and you've basically arrived at the idea of a Job Guarantee. And somebody who works for their money is no longer a moocher, so...
  - nico_h 10y ago
    The flaw in this analogy is that the current top earners (CEO, traders, White collar) net contribution to society has no correlation with the money they extract from the system. Does a CEO improving his company market value by firing people have the same contribution to society as a paramedic saving a life, a nanny taking care of a baby so the parents can work or a teacher educating kids? These are highly valuable services provided to society that are not rewarded in either status or the current social credits.
    - Pyxl101 10y ago
      > Does a CEO improving his company market value by firing people have the same contribution to society as a paramedic saving a life, a nanny taking care of a baby so the parents can work or a teacher educating kids? According to society's value system, as reflected by market pricing, I believe the answer is generally yes, the CEO is valued more. The CEO is valued more because their work affects the company they lead as a whole and the work of many other people at the company - such as by determining what to work on, what initiatives to invest in strategically, or by obtaining funding for the company from investors. Poor decisions by the CEO can cause the entire company to fail; good decisions can create 100x as many jobs at the company, and increase its value by 100x. It is more difficult for people to grasp the value of CEOs because their effect is spread out over a lot of people and abstract concepts like company success. It is easier to grasp the value of a nanny who spends time with your kids. But the fact that the nanny's work is much more concrete and obvious does not mean that it's more valuable. Consider: how much will you personally spend on a nanny? Would you spend 30-50% of your income on a fantastic nanny (the way that many people will spend that amount buying a house?) Most people don't value a nanny that much. For a comparison, think about the effect that a good or bad president will have on the entire US. They can make a tremendous difference to the lives of hundreds of millions of people. A good CEO can do the same for their company, and all of their workers and investors. A bad CEO can do the opposite, and run the company into the ground. Nannys and CEOs operate at entirely different scales. A CEO can destroy billions in value, or create billions in value. This is why companies and their boards and investors value good CEOs highly and pay them well. They want the best possible person for the job, and the best people demand high compensation. There are also factors of supply and demand to consider. Most adult humans are intrinsically equipped to be nannies - to care for children. We're evolved to do it. No specific qualifications are necessary beyond not being a shitty or unreliable person. By comparison, not many people are equipped to be an effective CEO of a large, medium, or even small company. Thus, nannies earn less because there is a large supply of people who can act as nannies (almost the entire adult population), and a substantially smaller supply of effective CEOs. They need intelligence, drive, education, charisma, leadership capability, experience, vision, and other qualities. Regarding your specific point about CEOs cutting jobs, sometimes that needs to happen. Lines of business don't always remain profitable. Sometimes a company needs to shut down unprofitable business units entirely, and exit the business. Sometimes a company needs to lay off workers and find a different approach to remain profitable. Sometimes a job that was done by humans before will be automated tomorrow. For example, the company Hostess that makes Twinkies used to employ 22,000 workers. The company went bankrupt, and people bought its ashes and restarted it. The new hostess now heavily takes advantage of automation and employs only 1,170 people. (1) A lot of people got laid off in that transition. The layoffs were also necessary for the company to continue at all; otherwise it would have gone under for good. They had a non-viable economic model for producing their baked goods. The leaders in charge of the transition took the only reasonable action (in hindsight) to prevent the company from cratering. (1) CEOs are the people in charge of making the best decision for their stakeholders in really tough circumstances. Sometimes layoffs are the best possible outcome among many worse outcomes. No CEO would prefer to lay off their people - it's a horrible thing to have to do - but when the company is in dire financial straights, sometimes there is no better alternative. (1) https://www.washingtonpost.com/news/business/wp/2016/07/05/what-it-took-to-save-the-twinkie/ https://www.washingtonpost.com/news/business/wp/2016/07/05/w...
nico_h 10y ago
A possible solution to the "raising taxes on corporation will drive them to other jurisdictions" problem is to make the taxes the same everywhere, at least within the same country, ideally at the world's level, for a truly level playing field. Another would be to say "we prevent you from doing business here if you don't do something here" (the india / china strategy).
- rdtsc 10y ago
  > is to make the taxes the same everywhere, Yes, try remove the arbitrage opportunity. That should help. Usually one would say competition is good, so different states with different tax laws is good. However, in many cases it is the workers and small communities that end up suffering as result.

by rdtsc 10y ago

nico_h 10y ago

This are the idea I have been struggling with: 1) how do you get people to accept the existence of basic income without perceiving the beneficiaries as moochers. 2) what do people on basic do? Right now your example of people visiting the elderly is in some place paid work but can also be performed by volunteer. However volunteers should be vetted. My guess is that when everybody is on basic, you can earn "social credits" for volunteering. But should that grant you access to more resources, or should that be like "Achievements" in video games? And how do you avoid turning that into the Black Mirror episode "15 millions Merits". But even "social credit" cannot prevent the paid workers to look down on the moochers on basic. How do we get to the star trek society utopia...?

deleted 10y ago
[deleted]
nhaehnle 10y ago
Well, we already have a form of "social credits". It's called money. We're just not used to thinking of it that way, but that's really what money is. So replace "social credits" in your line of thinking by money, and you've basically arrived at the idea of a Job Guarantee. And somebody who works for their money is no longer a moocher, so...
- nico_h 10y ago
  The flaw in this analogy is that the current top earners (CEO, traders, White collar) net contribution to society has no correlation with the money they extract from the system. Does a CEO improving his company market value by firing people have the same contribution to society as a paramedic saving a life, a nanny taking care of a baby so the parents can work or a teacher educating kids? These are highly valuable services provided to society that are not rewarded in either status or the current social credits.
  - Pyxl101 10y ago
    > Does a CEO improving his company market value by firing people have the same contribution to society as a paramedic saving a life, a nanny taking care of a baby so the parents can work or a teacher educating kids? According to society's value system, as reflected by market pricing, I believe the answer is generally yes, the CEO is valued more. The CEO is valued more because their work affects the company they lead as a whole and the work of many other people at the company - such as by determining what to work on, what initiatives to invest in strategically, or by obtaining funding for the company from investors. Poor decisions by the CEO can cause the entire company to fail; good decisions can create 100x as many jobs at the company, and increase its value by 100x. It is more difficult for people to grasp the value of CEOs because their effect is spread out over a lot of people and abstract concepts like company success. It is easier to grasp the value of a nanny who spends time with your kids. But the fact that the nanny's work is much more concrete and obvious does not mean that it's more valuable. Consider: how much will you personally spend on a nanny? Would you spend 30-50% of your income on a fantastic nanny (the way that many people will spend that amount buying a house?) Most people don't value a nanny that much. For a comparison, think about the effect that a good or bad president will have on the entire US. They can make a tremendous difference to the lives of hundreds of millions of people. A good CEO can do the same for their company, and all of their workers and investors. A bad CEO can do the opposite, and run the company into the ground. Nannys and CEOs operate at entirely different scales. A CEO can destroy billions in value, or create billions in value. This is why companies and their boards and investors value good CEOs highly and pay them well. They want the best possible person for the job, and the best people demand high compensation. There are also factors of supply and demand to consider. Most adult humans are intrinsically equipped to be nannies - to care for children. We're evolved to do it. No specific qualifications are necessary beyond not being a shitty or unreliable person. By comparison, not many people are equipped to be an effective CEO of a large, medium, or even small company. Thus, nannies earn less because there is a large supply of people who can act as nannies (almost the entire adult population), and a substantially smaller supply of effective CEOs. They need intelligence, drive, education, charisma, leadership capability, experience, vision, and other qualities. Regarding your specific point about CEOs cutting jobs, sometimes that needs to happen. Lines of business don't always remain profitable. Sometimes a company needs to shut down unprofitable business units entirely, and exit the business. Sometimes a company needs to lay off workers and find a different approach to remain profitable. Sometimes a job that was done by humans before will be automated tomorrow. For example, the company Hostess that makes Twinkies used to employ 22,000 workers. The company went bankrupt, and people bought its ashes and restarted it. The new hostess now heavily takes advantage of automation and employs only 1,170 people. (1) A lot of people got laid off in that transition. The layoffs were also necessary for the company to continue at all; otherwise it would have gone under for good. They had a non-viable economic model for producing their baked goods. The leaders in charge of the transition took the only reasonable action (in hindsight) to prevent the company from cratering. (1) CEOs are the people in charge of making the best decision for their stakeholders in really tough circumstances. Sometimes layoffs are the best possible outcome among many worse outcomes. No CEO would prefer to lay off their people - it's a horrible thing to have to do - but when the company is in dire financial straights, sometimes there is no better alternative. (1) https://www.washingtonpost.com/news/business/wp/2016/07/05/what-it-took-to-save-the-twinkie/ https://www.washingtonpost.com/news/business/wp/2016/07/05/w...

nico_h 10y ago

A possible solution to the "raising taxes on corporation will drive them to other jurisdictions" problem is to make the taxes the same everywhere, at least within the same country, ideally at the world's level, for a truly level playing field. Another would be to say "we prevent you from doing business here if you don't do something here" (the india / china strategy).

rdtsc 10y ago
> is to make the taxes the same everywhere, Yes, try remove the arbitrage opportunity. That should help. Usually one would say competition is good, so different states with different tax laws is good. However, in many cases it is the workers and small communities that end up suffering as result.