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This is just like the tired old trope of saying run government like a business and it will fix everything. The government is in fact being transformed by tech

by sjg007 8y ago

This is just like the tired old trope of saying run government like a business and it will fix everything. The government is in fact being transformed by technology. The government funds primary research that is the innovation behind the technological revolution. It's unpopular here but AOC is right on the money about increasing marginal tax rates over $10 million. The American market is unique and we can support it. All this talk of capital and billionaires fleeing is FUD.

dnautics 8y ago
> The government funds primary research that is the innovation behind the technological revolution. Why is this gospel? Let me tell you two experiences I had: 1) I worked in a bioenergy lab. We were on a DoE grant. The program manager, who had a BA in biology, did not know what a promoter was. 2) I was asked to write a DARPA grant. I did not particularly want to work for the military, but had to as a personal favor. I deliberately wrote it so that anyone with half a brain would look at it and say "that's too little work for two years". It was awarded. I could go on, but these were the two most entertaining ones. The others are depressing. What's the point. One. Government science initiatives are run by idiots. This has been going on for quite a while (installing a nobel laureate at the top doesn't matter, as evidenced by the first anecdote), and that's largely because you have to ask yourself "who goes to work in the labs and who becomes a program manager" and when they get "outside experts" usually it's professors and the professor promotion pipeline also is horribly broken away from "competent scientists". Two: In the context of the bigger question, increasing marginal tax rates won't help. The big problem is that government mostly gives money to the already-wealthy (I didn't get paid much for that DARPA grant, but I can tell you most of the money for the work I did went to the executives at the small company that got the SBIR). Without getting into how this money comes from stealing from the poor, consider that maybe we look at politics wrong - we think "people have no political power because they are poor" and consider that maybe it's actually "people are poor because they have no political power (to get grants, etc)".
- pcstl 8y ago
  It’s sad how your lived experience is getting downvoted just because it doesn’t line up with peoples’ almost religious faith that the government is wise and government investment in science is always a good thing.
  - dnautics 8y ago
    ok here's one of the depressing ones. When I was on the DoE grant, the place I was working for was applying for a biology DARPA grant (different office from the DARPA grant that I was on later, that was in CS). At the time, Arathi Prabahukar was the DARPA chief and it was being whispered that she was very much grooming one of the "meta-PMs" (I don't know what to call it, but a head of a group of program managers) to a key part of her administration and possibly even her successor someday. So there I was, at the head of the research institute's very nice mansion overlooking the La Jolla shoreline and we were throwing a party for the DARPA PM to try to, uh, nudge the person towards funding the project, basically currying favor. I guess us plebs (postdocs) were invited because it was necessary to show off that we did indeed have some smart people around. Anyways, we didn't get the grant. Around that time, though, a friend and I were enjoying a bit of postdoc-schadenfreude following several science controversies (through retraction watch and pubpeer) and a huge fight broke out over a story that is now called "stripey nanoparticles". In short, a postdoc at MIT was asked to repro some results in the lab and couldn't and was convinced (and made very convincing arguments) that the previous PhD student's work was entirely an instrument artefact. This postdoc was then abused, retaliated against, and railroaded by the Principal Investigator (MIT Professor). Suddenly I noticed that the PhD student's who produced the unreproducible work name was familiar -- it was the DARPA head PM! The head PM's PhD thesis was basically all junk. Really I don't mean to criticize the PM, for this, in particular there should have been more guidance from the MIT professor. But the point is that DARPA just looks at the person and says 'hey, PhD from MIT, must be smart'. There's no deep review. So we were taking bets on how long the head PM would last, and it was about two or three years before the PM disappeared quietly from DARPA activities. I think eventually the furor around stripey nanoparticles got to be so bad that politically the PM's career in the government was effectively iced. I was curious as to what the PM is doing now, and it turns out that - no joke - CTO at a microfluidics-based medical diagnostics company.
notahacker 8y ago
A big question is which marginal tax rates. Because whilst millionaires mostly aren't going to run away from their homes and business, a $10m income tax isn't difficult to turn into equity grants or royalties paid to a holding company etc for the relatively few people earning that much in salary rather than on their capital. Which means the net result might be millionaires structuring their income in a way where they actually pay less tax without any running away at all. If you take the more radical step of slapping the marginal tax rate on dividend income and capital gains as well, you start significantly changing investment behaviour: if you don't allow writeoffs for losses then VC becomes a really, really unattractive way to park your money, and if you do allow writeoffs for previous years' losses you might well be making the risky punt relatively attractive. Obviously changing people's investment behaviour is a desirable side effect, but it's something that needs very carefully thinking though If you really want to change the imbalance between rich and poor you probably go after untaxed extreme wealth rather than earned income though...
- dragonwriter 8y ago
  > If you take the more radical step of slapping the marginal tax rate on dividend income and capital gains as well, you start significantly changing investment behaviour: if you don't allow writeoffs for losses Why on Earth would you not allow write-offs for capital losses? Heck, if you are taxing capital gains as normal income, there's no reason to limit the deductibility of losses against normal income to a small amount per year with carryover the way we currently do (though for the same reason you might want to allow people to recognize gains in advance of or defer part of large ones after realization, you may not to allow deferring recognition of some portion of large losses.)
  - notahacker 8y ago
    I finished the sentence you've truncated on the assumption that the government would choose the option of allowing write-offs rather than the investment-killing theoretical option of not doing so. But that approach radically shapes investment decisions too: capital will be allocated to riskier projects when the government takes 70% of a good year's return on capital but allows capital owners to write off years of losses against it than when the equivalent tax rate is 15% or 20% of a good year's return on capital. Sometimes that might actually be a good thing for the economy, but either way the effects are a lot more complex than the government simply earning higher revenue.

by sjg007 8y ago

dnautics 8y ago

> The government funds primary research that is the innovation behind the technological revolution. Why is this gospel? Let me tell you two experiences I had: 1) I worked in a bioenergy lab. We were on a DoE grant. The program manager, who had a BA in biology, did not know what a promoter was. 2) I was asked to write a DARPA grant. I did not particularly want to work for the military, but had to as a personal favor. I deliberately wrote it so that anyone with half a brain would look at it and say "that's too little work for two years". It was awarded. I could go on, but these were the two most entertaining ones. The others are depressing. What's the point. One. Government science initiatives are run by idiots. This has been going on for quite a while (installing a nobel laureate at the top doesn't matter, as evidenced by the first anecdote), and that's largely because you have to ask yourself "who goes to work in the labs and who becomes a program manager" and when they get "outside experts" usually it's professors and the professor promotion pipeline also is horribly broken away from "competent scientists". Two: In the context of the bigger question, increasing marginal tax rates won't help. The big problem is that government mostly gives money to the already-wealthy (I didn't get paid much for that DARPA grant, but I can tell you most of the money for the work I did went to the executives at the small company that got the SBIR). Without getting into how this money comes from stealing from the poor, consider that maybe we look at politics wrong - we think "people have no political power because they are poor" and consider that maybe it's actually "people are poor because they have no political power (to get grants, etc)".

pcstl 8y ago
It’s sad how your lived experience is getting downvoted just because it doesn’t line up with peoples’ almost religious faith that the government is wise and government investment in science is always a good thing.
- dnautics 8y ago
  ok here's one of the depressing ones. When I was on the DoE grant, the place I was working for was applying for a biology DARPA grant (different office from the DARPA grant that I was on later, that was in CS). At the time, Arathi Prabahukar was the DARPA chief and it was being whispered that she was very much grooming one of the "meta-PMs" (I don't know what to call it, but a head of a group of program managers) to a key part of her administration and possibly even her successor someday. So there I was, at the head of the research institute's very nice mansion overlooking the La Jolla shoreline and we were throwing a party for the DARPA PM to try to, uh, nudge the person towards funding the project, basically currying favor. I guess us plebs (postdocs) were invited because it was necessary to show off that we did indeed have some smart people around. Anyways, we didn't get the grant. Around that time, though, a friend and I were enjoying a bit of postdoc-schadenfreude following several science controversies (through retraction watch and pubpeer) and a huge fight broke out over a story that is now called "stripey nanoparticles". In short, a postdoc at MIT was asked to repro some results in the lab and couldn't and was convinced (and made very convincing arguments) that the previous PhD student's work was entirely an instrument artefact. This postdoc was then abused, retaliated against, and railroaded by the Principal Investigator (MIT Professor). Suddenly I noticed that the PhD student's who produced the unreproducible work name was familiar -- it was the DARPA head PM! The head PM's PhD thesis was basically all junk. Really I don't mean to criticize the PM, for this, in particular there should have been more guidance from the MIT professor. But the point is that DARPA just looks at the person and says 'hey, PhD from MIT, must be smart'. There's no deep review. So we were taking bets on how long the head PM would last, and it was about two or three years before the PM disappeared quietly from DARPA activities. I think eventually the furor around stripey nanoparticles got to be so bad that politically the PM's career in the government was effectively iced. I was curious as to what the PM is doing now, and it turns out that - no joke - CTO at a microfluidics-based medical diagnostics company.

notahacker 8y ago

A big question is which marginal tax rates. Because whilst millionaires mostly aren't going to run away from their homes and business, a $10m income tax isn't difficult to turn into equity grants or royalties paid to a holding company etc for the relatively few people earning that much in salary rather than on their capital. Which means the net result might be millionaires structuring their income in a way where they actually pay less tax without any running away at all. If you take the more radical step of slapping the marginal tax rate on dividend income and capital gains as well, you start significantly changing investment behaviour: if you don't allow writeoffs for losses then VC becomes a really, really unattractive way to park your money, and if you do allow writeoffs for previous years' losses you might well be making the risky punt relatively attractive. Obviously changing people's investment behaviour is a desirable side effect, but it's something that needs very carefully thinking though If you really want to change the imbalance between rich and poor you probably go after untaxed extreme wealth rather than earned income though...

dragonwriter 8y ago
> If you take the more radical step of slapping the marginal tax rate on dividend income and capital gains as well, you start significantly changing investment behaviour: if you don't allow writeoffs for losses Why on Earth would you not allow write-offs for capital losses? Heck, if you are taxing capital gains as normal income, there's no reason to limit the deductibility of losses against normal income to a small amount per year with carryover the way we currently do (though for the same reason you might want to allow people to recognize gains in advance of or defer part of large ones after realization, you may not to allow deferring recognition of some portion of large losses.)
- notahacker 8y ago
  I finished the sentence you've truncated on the assumption that the government would choose the option of allowing write-offs rather than the investment-killing theoretical option of not doing so. But that approach radically shapes investment decisions too: capital will be allocated to riskier projects when the government takes 70% of a good year's return on capital but allows capital owners to write off years of losses against it than when the equivalent tax rate is 15% or 20% of a good year's return on capital. Sometimes that might actually be a good thing for the economy, but either way the effects are a lot more complex than the government simply earning higher revenue.