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You cannot destroy the incentive structure for economic activity (financial rewards) without catestrophic consequences. People don't pull start-up hours so that

You cannot destroy the incentive structure for economic activity (financial rewards) without catestrophic consequences. People don't pull start-up hours so that their neighbors can prosper, they do it for themselves. When you take away the possibility of great rewards, you destroy the incentive to add great value. See the entire history of collectivism.

ClumsyPilot 7y ago
The conversation is about what's fair incentive structure, correcting it does not amount to its destruction. Also we do not require people to pull startup hours, and only a minority of the population ever does that. I dont see how that comes into this conversation.
- MiroF 7y ago
  It's a Rawlsian question of "how can we structure incentives such that everybody is better off?" Now, the metric for "everybody is better off" is still an open problem, but there seem to be near pareto optimal steps we can take, like a high threshold wealth tax.
- marcusverus 7y ago
  I'm not sure what conversation you're participating in, but the parent comment was flippantly discussing the possibility of taxes so draconain that the GIDI coefficient would approach zero: "The wealthy kind of are an endless source of loot because the definition of wealthy is one relative to a median, so you'll either end up with everyone roughly equal in wealth (is that a bad thing?) " In the world advocated for in that comment, with aggressively averaged out income/wealth, there is no incentive to produce value above what is required to reach the average income.
MiroF 7y ago
A 2% wealth tax above a few hundred of millions of dollars doesn't destroy the incentive structure for economic activity, it is disingenuous to suggest it would.
- mrep 7y ago
  I wouldn't say destroy, but it definitely distorts things and I would prepare for some unintended consequences. For example, it incentivizes those taxed by such a scheme to become citizens of low tax countries like new zealand where there is no wealth tax and even no cap gains tax, renounce their US citizenship, and move there. Peter thiel for example recently got a new zealand citizenship likely to prepare for such an event.
  - MiroF 7y ago
    "New policy will have unintended consequences" is a pretty unassailable position and of course not one I disagree with. I don't think you can say apriori that it would cause more harm than good though. I'm sure that gimmick-y things to avoid wealth redistribution can be legislated on as they have been in the past.

ClumsyPilot 7y ago

The conversation is about what's fair incentive structure, correcting it does not amount to its destruction. Also we do not require people to pull startup hours, and only a minority of the population ever does that. I dont see how that comes into this conversation.

MiroF 7y ago
It's a Rawlsian question of "how can we structure incentives such that everybody is better off?" Now, the metric for "everybody is better off" is still an open problem, but there seem to be near pareto optimal steps we can take, like a high threshold wealth tax.
marcusverus 7y ago
I'm not sure what conversation you're participating in, but the parent comment was flippantly discussing the possibility of taxes so draconain that the GIDI coefficient would approach zero: "The wealthy kind of are an endless source of loot because the definition of wealthy is one relative to a median, so you'll either end up with everyone roughly equal in wealth (is that a bad thing?) " In the world advocated for in that comment, with aggressively averaged out income/wealth, there is no incentive to produce value above what is required to reach the average income.

MiroF 7y ago

A 2% wealth tax above a few hundred of millions of dollars doesn't destroy the incentive structure for economic activity, it is disingenuous to suggest it would.

mrep 7y ago
I wouldn't say destroy, but it definitely distorts things and I would prepare for some unintended consequences. For example, it incentivizes those taxed by such a scheme to become citizens of low tax countries like new zealand where there is no wealth tax and even no cap gains tax, renounce their US citizenship, and move there. Peter thiel for example recently got a new zealand citizenship likely to prepare for such an event.
- MiroF 7y ago
  "New policy will have unintended consequences" is a pretty unassailable position and of course not one I disagree with. I don't think you can say apriori that it would cause more harm than good though. I'm sure that gimmick-y things to avoid wealth redistribution can be legislated on as they have been in the past.