5 ms·

Marginal tax rates being high is a great idea. I'd be with you if people with high salaries spent all, or virtually all, of their salary. But they don't. In th

by rortian 16y ago

Marginal tax rates being high is a great idea. I'd be with you if people with high salaries spent all, or virtually all, of their salary. But they don't. In this economy we need more money being spent. When things are doing well again, you could try to make a case for the rich being richer, but it's a strange cause to take up.

_delirium 16y ago
They're also exceptionally low, currently. There are no rates above 35%, whereas they used to be above 70% back in the Eisenhower/Kennedy/Johnson/Ford/Carter/early-Reagan days. But I suppose which rates and which kinds of incentives count as too high / too low is always relative and subjective...
- WildUtah 16y ago
  Actually, under Eisenhower and Kennedy the top marginal rate was always between 91% and 95%. Then it was 70% until the early 1980s when it went down to 50%. That's just federal, not including state and city income taxes.
  - pingswept 16y ago
    I found this list of the historical tax rates fascinating: http://www.taxfoundation.org/taxdata/show/151.html http://www.taxfoundation.org/taxdata/show/151.html (Why they have to use "Macromedia Flash Paper " to show a list of numbers is beyond me.)
xenophanes 16y ago
> In this economy we need more money being spent. Economic activity is not economic productivity. Spending money doesn't make us richer. Producing does. Encouraging people to work more would help the economy; encouraging to people to spend more would only help to the extent that it stimulates people to produce stuff for sale.
- rortian 16y ago
  Fascinating definitions but this has more than a whiff of crack pottery. Few things encourage economic activity (and productivity) like a rich person coming with an open wallet. How are people to work more when there's not money to pay them?
  - xenophanes 16y ago
    You are ignorant of libertarian economic views. You are also ignorant that they are common place here, and held by Paul Graham. It's rude to intrude on a community and call status quo views "crack pottery" just because you've never learned anything about them. It is your view that people can't produce things of value unless there's enough money being spent that is truly bizarre. New markets can be created. Value drives circulation of money, not vice versa. Money is just pieces of paper or numbers in a computer for the purpose of conveniently facilitating trade. Ultimately I'm going to produce value in order to use it myself, for fun, or in some way get something useful for it (i.e., I don't want pieces of paper -- those are just temporary -- I want someone to make something useful for me like an iPhone. The more useful products there are, the more I will want to work hard, and the more money I will spend).
    - rortian 16y ago
      Wow. Libertarians are here, sure. However, I'd love to see how many people would really march in lockstep with doctrinaire libertarianism. I'm not ignorant of libertarian views. Nor, am I unused to tantrums such as your own. I'll leave the vocabulary boot camps to you and Richard Stallman. I have that freedom.
      - xenophanes 16y ago
        Could you try saying something substantive instead of following your crack pot insult with a tantrum insult?
- rbranson 16y ago
  Actually, you are both wrong. Production and consumption by themselves do not yield productivity. Both producers and consumers play equal roles in economic productivity. Without active consumption, producers would be completely unproductive, regardless of efficiency. Productivity comes when people are able to increase their economic leverage through efficiencies, but also able to complete transactions in the market. For instance, despite all of the hate of partial-reserve fiat banking systems by pseudo-economists, they are extremely efficient at getting the most productive value out of the money supply. This is also why the Internet creates economic value, because it's able to more efficiently pair producers and consumers.
laut 16y ago
Societies don't get wealthy by consuming. They do by producing. As a rule, if something is taxed there will be less of it. High marginal taxes decreases high value work. It is a terrible idea. Immoral too.
- rortian 16y ago
  >Immoral too. Classic. Moral claims don't get you too far. I could start going on about gentiles eating shellfish, but I'm one of those gentiles. >They do by producing Sometimes. These things are complicated. But if you've already got it figured out, no need to discuss it I guess.
  - laut 16y ago
    > Classic. Moral claims don't get you too far. I think it's immoral to steal and kill etc., but that won't get me far arguing with you I guess? > These things are complicated. But if you've already got it figured out, no need to discuss it I guess. It's not just something I have figured out, there are economists that have thought about it. If you can explain how societies get wealthy by consuming more and producing less I would like to know.
    - rortian 16y ago
      Bringing murder up to justify a moral scheme that few subscribe to is a bit silly. Everyone finds murder wrong, in most circumstances, hardly everyone finds taxing the rich immoral. These things are complicated. Wealth can be generated in a variety to ways. The Phoenicians were quite wealthy for their time for establishing a trade network in the Mediterranean. Apple produces virtually nothing (okay they make software but lets pretend for a minute that we are talking about the hardware. People do rave about the aesthetics of the devices). However, they have plenty of 'wealth' to capture than the manufacturers do for their charging price. They having marketing savvy and they are able to get large numbers of people excited about what they think of. Facilitating transactions and applying knowledge are not exactly producing but doing these tasks can provide a decent living. If you want to extend 'producing' to mean anything that makes people money, your statement could be a truism but it seems you are using produce in a more traditional sense.
fgf 16y ago
This PG essay is a good refutation of the notion that (progressive or, at least, non-regressive) taxes are a "win" for the poor in a zero sum game: "The Pie Fallacy A surprising number of people retain from childhood the idea that there is a fixed amount of wealth in the world. There is, in any normal family, a fixed amount of money at any moment. But that's not the same thing. When wealth is talked about in this context, it is often described as a pie. "You can't make the pie larger," say politicians. When you're talking about the amount of money in one family's bank account, or the amount available to a government from one year's tax revenue, this is true. If one person gets more, someone else has to get less. I can remember believing, as a child, that if a few rich people had all the money, it left less for everyone else. Many people seem to continue to believe something like this well into adulthood. This fallacy is usually there in the background when you hear someone talking about how x percent of the population have y percent of the wealth. If you plan to start a startup, then whether you realize it or not, you're planning to disprove the Pie Fallacy. What leads people astray here is the abstraction of money. Money is not wealth. It's just something we use to move wealth around. So although there may be, in certain specific moments (like your family, this month) a fixed amount of money available to trade with other people for things you want, there is not a fixed amount of wealth in the world. You can make more wealth. Wealth has been getting created and destroyed (but on balance, created) for all of human history. Suppose you own a beat-up old car. Instead of sitting on your butt next summer, you could spend the time restoring your car to pristine condition. In doing so you create wealth. The world is-- and you specifically are-- one pristine old car the richer. And not just in some metaphorical way. If you sell your car, you'll get more for it. In restoring your old car you have made yourself richer. You haven't made anyone else poorer. So there is obviously not a fixed pie. And in fact, when you look at it this way, you wonder why anyone would think there was. [5] Kids know, without knowing they know, that they can create wealth. If you need to give someone a present and don't have any money, you make one. But kids are so bad at making things that they consider home-made presents to be a distinct, inferior, sort of thing to store-bought ones-- a mere expression of the proverbial thought that counts. And indeed, the lumpy ashtrays we made for our parents did not have much of a resale market." http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html Taxes on wealth creation discourages it. (It may still, at least in the short term, be good for revenue)* http://en.wikipedia.org/wiki/Laffer_curve http://en.wikipedia.org/wiki/Laffer_curve

by rortian 16y ago

_delirium 16y ago

They're also exceptionally low, currently. There are no rates above 35%, whereas they used to be above 70% back in the Eisenhower/Kennedy/Johnson/Ford/Carter/early-Reagan days. But I suppose which rates and which kinds of incentives count as too high / too low is always relative and subjective...

WildUtah 16y ago
Actually, under Eisenhower and Kennedy the top marginal rate was always between 91% and 95%. Then it was 70% until the early 1980s when it went down to 50%. That's just federal, not including state and city income taxes.
- pingswept 16y ago
  I found this list of the historical tax rates fascinating: http://www.taxfoundation.org/taxdata/show/151.html http://www.taxfoundation.org/taxdata/show/151.html (Why they have to use "Macromedia Flash Paper " to show a list of numbers is beyond me.)

xenophanes 16y ago

> In this economy we need more money being spent. Economic activity is not economic productivity. Spending money doesn't make us richer. Producing does. Encouraging people to work more would help the economy; encouraging to people to spend more would only help to the extent that it stimulates people to produce stuff for sale.

rortian 16y ago
Fascinating definitions but this has more than a whiff of crack pottery. Few things encourage economic activity (and productivity) like a rich person coming with an open wallet. How are people to work more when there's not money to pay them?
- xenophanes 16y ago
  You are ignorant of libertarian economic views. You are also ignorant that they are common place here, and held by Paul Graham. It's rude to intrude on a community and call status quo views "crack pottery" just because you've never learned anything about them. It is your view that people can't produce things of value unless there's enough money being spent that is truly bizarre. New markets can be created. Value drives circulation of money, not vice versa. Money is just pieces of paper or numbers in a computer for the purpose of conveniently facilitating trade. Ultimately I'm going to produce value in order to use it myself, for fun, or in some way get something useful for it (i.e., I don't want pieces of paper -- those are just temporary -- I want someone to make something useful for me like an iPhone. The more useful products there are, the more I will want to work hard, and the more money I will spend).
  - rortian 16y ago
    Wow. Libertarians are here, sure. However, I'd love to see how many people would really march in lockstep with doctrinaire libertarianism. I'm not ignorant of libertarian views. Nor, am I unused to tantrums such as your own. I'll leave the vocabulary boot camps to you and Richard Stallman. I have that freedom.
    - xenophanes 16y ago
      Could you try saying something substantive instead of following your crack pot insult with a tantrum insult?
rbranson 16y ago
Actually, you are both wrong. Production and consumption by themselves do not yield productivity. Both producers and consumers play equal roles in economic productivity. Without active consumption, producers would be completely unproductive, regardless of efficiency. Productivity comes when people are able to increase their economic leverage through efficiencies, but also able to complete transactions in the market. For instance, despite all of the hate of partial-reserve fiat banking systems by pseudo-economists, they are extremely efficient at getting the most productive value out of the money supply. This is also why the Internet creates economic value, because it's able to more efficiently pair producers and consumers.

laut 16y ago

Societies don't get wealthy by consuming. They do by producing. As a rule, if something is taxed there will be less of it. High marginal taxes decreases high value work. It is a terrible idea. Immoral too.

rortian 16y ago
>Immoral too. Classic. Moral claims don't get you too far. I could start going on about gentiles eating shellfish, but I'm one of those gentiles. >They do by producing Sometimes. These things are complicated. But if you've already got it figured out, no need to discuss it I guess.
- laut 16y ago
  > Classic. Moral claims don't get you too far. I think it's immoral to steal and kill etc., but that won't get me far arguing with you I guess? > These things are complicated. But if you've already got it figured out, no need to discuss it I guess. It's not just something I have figured out, there are economists that have thought about it. If you can explain how societies get wealthy by consuming more and producing less I would like to know.
  - rortian 16y ago
    Bringing murder up to justify a moral scheme that few subscribe to is a bit silly. Everyone finds murder wrong, in most circumstances, hardly everyone finds taxing the rich immoral. These things are complicated. Wealth can be generated in a variety to ways. The Phoenicians were quite wealthy for their time for establishing a trade network in the Mediterranean. Apple produces virtually nothing (okay they make software but lets pretend for a minute that we are talking about the hardware. People do rave about the aesthetics of the devices). However, they have plenty of 'wealth' to capture than the manufacturers do for their charging price. They having marketing savvy and they are able to get large numbers of people excited about what they think of. Facilitating transactions and applying knowledge are not exactly producing but doing these tasks can provide a decent living. If you want to extend 'producing' to mean anything that makes people money, your statement could be a truism but it seems you are using produce in a more traditional sense.

fgf 16y ago

This PG essay is a good refutation of the notion that (progressive or, at least, non-regressive) taxes are a "win" for the poor in a zero sum game: "The Pie Fallacy A surprising number of people retain from childhood the idea that there is a fixed amount of wealth in the world. There is, in any normal family, a fixed amount of money at any moment. But that's not the same thing. When wealth is talked about in this context, it is often described as a pie. "You can't make the pie larger," say politicians. When you're talking about the amount of money in one family's bank account, or the amount available to a government from one year's tax revenue, this is true. If one person gets more, someone else has to get less. I can remember believing, as a child, that if a few rich people had all the money, it left less for everyone else. Many people seem to continue to believe something like this well into adulthood. This fallacy is usually there in the background when you hear someone talking about how x percent of the population have y percent of the wealth. If you plan to start a startup, then whether you realize it or not, you're planning to disprove the Pie Fallacy. What leads people astray here is the abstraction of money. Money is not wealth. It's just something we use to move wealth around. So although there may be, in certain specific moments (like your family, this month) a fixed amount of money available to trade with other people for things you want, there is not a fixed amount of wealth in the world. You can make more wealth. Wealth has been getting created and destroyed (but on balance, created) for all of human history. Suppose you own a beat-up old car. Instead of sitting on your butt next summer, you could spend the time restoring your car to pristine condition. In doing so you create wealth. The world is-- and you specifically are-- one pristine old car the richer. And not just in some metaphorical way. If you sell your car, you'll get more for it. In restoring your old car you have made yourself richer. You haven't made anyone else poorer. So there is obviously not a fixed pie. And in fact, when you look at it this way, you wonder why anyone would think there was. [5] Kids know, without knowing they know, that they can create wealth. If you need to give someone a present and don't have any money, you make one. But kids are so bad at making things that they consider home-made presents to be a distinct, inferior, sort of thing to store-bought ones-- a mere expression of the proverbial thought that counts. And indeed, the lumpy ashtrays we made for our parents did not have much of a resale market." http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html Taxes on wealth creation discourages it. (It may still, at least in the short term, be good for revenue)* http://en.wikipedia.org/wiki/Laffer_curve http://en.wikipedia.org/wiki/Laffer_curve