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> you want to encourage wealthy people to spend Not on cars.

by ucaetano 9y ago

ars 9y ago
Why not? In what way is a cheaper car socially better than an expensive car?
- ucaetano 9y ago
  You don't want cars overall to start with. And as wealth increases, the negative utility of a 1% increase in price of a certain good decreases for that buyer, requiring higher taxes to have the same disincentive than for lower income buyers. Also, cars (especially luxury ones) are highly unproductive assets.
  - ars 9y ago
    > You don't want cars overall to start with. So you punish those who have/want one? Ouch, I wouldn't want to live in your world. Work the other side, make people want to not have one. Making people's life miserable is not a good way to manage your citizens. > And as wealth increases ... lower income buyers. Except that the wealthy person just buys a cheaper car. They still have a car, and you have not accomplished your goal. Your mistake is you taxed spending, without even checking income. Your scheme does not make people not get a car, it causes people to get a cheaper car, that's all.
    - ucaetano 9y ago
      > So you punish those who have/want one? Ouch, I wouldn't want to live in your world. No. Cars have negative externalities to society, so you tax them to account for those externalities. This is the same reason why governments subsidize infrastructure and education, as those generate positive externalities to society, and most of the value generated is in those externalities, you need a negative tax on those items to incentivize them. Or the same reason why governments subsidize electric cars. > Except that the wealthy person just buys a cheaper car. They still have a car, and you have not accomplished your goal. Sure, but you're providing the same economic disincentive as you are for a poor person (in relative utility), which is a fairer way to do it. > Your mistake is you taxed spending, without even checking income. You don't seem to understand the concept of positive and negative externalities. I'm not proposing to tax spending, I'm proposing to tax a good so that its price accurately reflects the negative impact on society it causes.
      - khedoros1 9y ago
        > I'd even go and propose that cars over €50k should be taxed at a higher marginal tax rate than lower-priced cars. > I'm not proposing to tax spending, I'm proposing to tax a good so that its price accurately reflects the negative impact on society it causes. It seems like you're proposing taxing based on the price of the good, not the cost of the negative externalities. It would make more sense to tax based on some combination of the car's weight, footprint, engine size, fuel efficiency, and emissions metrics, based on use of the vehicle, as well as at purchase time. A vehicle that's a luxury item, but otherwise comparable in relevant statistics, doesn't necessarily need to be taxed more heavily than a basic version of the same thing.
        ucaetano 9y ago
        > It seems like you're proposing taxing based on the price of the good, not the cost of the negative externalities. Wrong. I'm proposing that to have the same economic incentive on a luxury version of a certain good you need a higher proportional tax to account for the flattening of personal utility curves. And that's before we get into the fact that luxury vehicles have even higher negative externalities due to increased engine size, lower fuel efficiency, larger size, etc.
        khedoros1 9y ago
        > Wrong Then I think you're being very unclear in what you're saying. The externalities aren't necessarily related to the price of the vehicle.

> you want to encourage wealthy people to spend Not on cars.

ars 9y ago

Why not? In what way is a cheaper car socially better than an expensive car?

ucaetano 9y ago
You don't want cars overall to start with. And as wealth increases, the negative utility of a 1% increase in price of a certain good decreases for that buyer, requiring higher taxes to have the same disincentive than for lower income buyers. Also, cars (especially luxury ones) are highly unproductive assets.
- ars 9y ago
  > You don't want cars overall to start with. So you punish those who have/want one? Ouch, I wouldn't want to live in your world. Work the other side, make people want to not have one. Making people's life miserable is not a good way to manage your citizens. > And as wealth increases ... lower income buyers. Except that the wealthy person just buys a cheaper car. They still have a car, and you have not accomplished your goal. Your mistake is you taxed spending, without even checking income. Your scheme does not make people not get a car, it causes people to get a cheaper car, that's all.
  - ucaetano 9y ago
    > So you punish those who have/want one? Ouch, I wouldn't want to live in your world. No. Cars have negative externalities to society, so you tax them to account for those externalities. This is the same reason why governments subsidize infrastructure and education, as those generate positive externalities to society, and most of the value generated is in those externalities, you need a negative tax on those items to incentivize them. Or the same reason why governments subsidize electric cars. > Except that the wealthy person just buys a cheaper car. They still have a car, and you have not accomplished your goal. Sure, but you're providing the same economic disincentive as you are for a poor person (in relative utility), which is a fairer way to do it. > Your mistake is you taxed spending, without even checking income. You don't seem to understand the concept of positive and negative externalities. I'm not proposing to tax spending, I'm proposing to tax a good so that its price accurately reflects the negative impact on society it causes.
    - khedoros1 9y ago
      > I'd even go and propose that cars over €50k should be taxed at a higher marginal tax rate than lower-priced cars. > I'm not proposing to tax spending, I'm proposing to tax a good so that its price accurately reflects the negative impact on society it causes. It seems like you're proposing taxing based on the price of the good, not the cost of the negative externalities. It would make more sense to tax based on some combination of the car's weight, footprint, engine size, fuel efficiency, and emissions metrics, based on use of the vehicle, as well as at purchase time. A vehicle that's a luxury item, but otherwise comparable in relevant statistics, doesn't necessarily need to be taxed more heavily than a basic version of the same thing.
      - ucaetano 9y ago
        > It seems like you're proposing taxing based on the price of the good, not the cost of the negative externalities. Wrong. I'm proposing that to have the same economic incentive on a luxury version of a certain good you need a higher proportional tax to account for the flattening of personal utility curves. And that's before we get into the fact that luxury vehicles have even higher negative externalities due to increased engine size, lower fuel efficiency, larger size, etc.
        khedoros1 9y ago
        > Wrong Then I think you're being very unclear in what you're saying. The externalities aren't necessarily related to the price of the vehicle.