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Scott Adams: How to Tax the Rich

• bluedevil2k 16y ago
  I like the "rich" driving lane idea - put up X licenses for auction in each city, let people bid up the price, let the market decide how much time is worth.
  • tomjen3 16y ago
    Yeah, thats the thing - I didn't get why his solution was "bad" in that case.
    • zck 16y ago
      Possibly so he doesn't have to waste time defending it; the argument will center on whether this kind of thing is a good idea, not whether this specific idea is good.
  • ry0ohki 16y ago
    These were kind of proposed in DC (I think they may actually exist in San Diego or somewhere), where you pay a variable rate to use the carpool lanes based on demand. So during rush hour it would cost $6 and 11am on a saturday it would cost $.50. People didn't like the idea because they would be "Lexus lanes" giving special privileges to the rich. Scott Adams is right that if we really want to solve the budge problems we may need to accept that the people who can help the most may need some sort of special privileges.
    • Alex3917 16y ago
      "we may need to accept that the people who can help the most may need some sort of special privileges." Because no-bid contracts, not going to jail when they commit crimes, real education for their kids, not living in crime zones, food that isn't poison, actual health care, living an extra three years, etc. aren't enough already.
      • viraptor 16y ago
        To some extent... no, they aren't. They're the status quo. If you change nothing, the rich will still get them. That was the big point really. If you want to share some of their money, propose something else in exchange. It will only change during an actual complete crash of the value of money. And even then it's not guaranteed, because they will still have access to an extensive network of influential people, while "we" won't.
      • yummyfajitas 16y ago
        no bid contracts, not going to jail when they commit crimes I'd speculate that the vast majority of these benefits are given to government workers, not to the rich. Any government worker with a union has a no-bid contract (it's illegal for competitors to underbid him), and you can find plenty of videos on youtube of cops committing crimes they get away with [1]. [1] Occasionally they are disciplined with a paid vacation.
    • nitrogen 16y ago
      Utah recently installed variable-toll express lanes. It seems to me they make overall congestion worse by creating traffic jams at the entrances/exits to these lanes.
  • jroid 16y ago
    Why not charge a toll depending on traffic ? As the traffic increases, the toll increases (and vice versa), which will keep the lane fast moving. Not my idea, someone has already implemented this.
  • georgecmu 16y ago
    I always thought that institutionalized speeding would be very successful both in terms of additional revenues and time saved. Right now highway speed limits are set to a sort of common denominator: safest for the worst car and driver on the road. But if you're driving a modern, well-maintained car and are adequately trained, there's no evidence that you'd be unsafe driving 20 mph over the speed limit. So, why not for an extra, non-nominal, fee, raise speed limits on interstate highways to qualified drivers? Of course they'd have to take additional driving lessons, pass extra driving tests to extend their privilege every year, and drive only approved cars, i.e. no 1996 Ford Explorers need apply.
    • ams6110 16y ago
      The thing that makes speeding unsafe (up to a point) is not so much the speed itself but the delta between the slowest and fastest cars on the road.
      • georgecmu 16y ago
        Correct, except I would say "in the lane" rather than "on the road". Congestion would limit the speed naturally, but existing regulations such as 'slower vehicles stay in right lane' etc would actually have to be enforced for this to work.
        • jmaygarden 16y ago
          I'd pay an extra 1% if they would just get all the slow folks out of the passing lanes!!!
  • z2amiller 16y ago
    This already exists in California to some degree. The state offered a limited number of stickers to hybrid cars that allows them access to the carpool lanes with a single driver. The stickers were quickly exhausted and now cars that have the sticker sell at a significant premium. (see http://www.greencarreports.com/blog/1021405_california-hov-lane-stickers-for-hybrids-worth-1200-to-1500 http://www.greencarreports.com/blog/1021405_california-hov-l...) The value of these stickers has probably declined significantly since that article was written, as the stickers are only valid until July 1, 2011. A few years ago, my boss (CEO) at my last company bought a Prius at a premium for this reason so he could use the carpool lanes during rush hour. The populist/progressive in me thinks that it isn't "fair" that the rich can pay for faster commutes, but the truth is that he probably created many times more wealth than the several thousand dollar sticker premium by having an extra 30-60 minutes of productive work every day.
  • 100k 16y ago
    This is pretty much the idea behind congestion charges (for example in London). New York City tried to institute them, but the State Assembly stopped them (basically suburban interests trumped city interests). It would have made a big difference in commute times by lowering traffic congestion and the nice thing is that those that benefit pay.
    • MrFoof 16y ago
      There is one fundamental issue to congestion charges however: You are not paying for the ability to use privileged roads, you're paying to use all roads, because under a congestion charge, all roads are considered a privilege. Carpool lanes work better in this regard. For example, on 93N heading into Boston, you can use 93N for free. If you have at least 2 people in the car (and I think hybrids and EVs are allowed as well), you can use the carpool lane. However, if you were almost always by yourself, but could pay $2000/year to get a placard to drive in the carpool lane, people would certainly pay it. Motorists without passengers are not required to pay to drive on 93N, however any motorist willing to pay ~$8/workday for the convenience therefore has the option -- that may even exclude the rich, just those who live far enough away from Boston and commuter rail stations where they need the drive (or feel the need to) and are willing to pay for a shorter commute time. Actually, the more I think about this, the more I like it. If you are actively working towards eliminating congestion by carpooling, you still get it gratis. If you're reducing emissions by driving an EV or Hybrid, you get it gratis until that allowance sunsets, because you're making a positive impact with your vehicle choice. Yet if you're willing to just pay... hey, we'll let you in too, so that money can go towards improving something. I like this. I'm trying to find how anyone loses with this idea, because you can still use the four lanes on 93 like anyone else does for free.
• zdw 16y ago
  My bad idea: Taxes and number of votes both increase on how "gifted" you are - smarter people would therefore have more say in the government, and have more incentive to make it more efficient and do it's job better. I have no clue how to measure or implement this.
  • berntb 16y ago
    There is a potential another problem, except for how to implement it. After seeing some strange examples the last few years, I wonder if intelligence is at all correlated to rationality. (Being rich is, I'd assume, more correlated with rationality than being intelligent. At least the rich, unless they inherited the money, did something right.)
  • abstractbill 16y ago
    At any given time the people in power will arrange things so that "gifted" and "smart" means "me, and my friends and family" ;)
  • TomOfTTB 16y ago
    Not to criticize but I think you missed his point. The way I read it the point of the article is this... We can't force the rich to pay more because they always find a way out of it. We know this because there were days when upper tax rates were 90% but tax revenue was roughly the same because the rich can lobby for loop holes and pay people to exploit those loop holes. The rich will find a way to keep from paying too much in taxes even if they have to buy some backwards little country and form their own nation. So the only way to get rich people's money is to find something we can give them which makes them feel like they're spending their money for something rather than giving it away. So the stupid ideas are in the context of "how can we make the rich give us their money?"
    • pzxc 16y ago
      Who is John Galt?
      • sambeau 16y ago
• chrismealy 16y ago
  Why have the rich suddenly became a bunch of babies? What's with all the whining? Having money isn't enough, now they want to be worshipped like feudal lords.
  • preek 16y ago
    Where did they start whining? And when did they expect to be worshipped?
    • ugh 16y ago
      Well, it’s the premise of the article, isn’t it? The whole idea is that you need to somehow appease the rich in order to do what’s necessary. That premise might be wrong but it is the premise of the article.
      • burgerbrain 16y ago
        No, the premise of the article is "these are some 'bad' ideas, kick them around in your head and maybe we'll think up something 'good'". It helps to read.
        • ugh 16y ago
          That’s not a premise what you are quoting there. (Please don’t make pointless accusations.) Scott Adams posits that it is necessary to somehow appease the rich. He doesn’t call them whiners but depending on your perspective that might be a fair extrapolation.
          • burgerbrain 16y ago
            "I spent some time working in the television industry, and I learned a technique that writers use. It's called "the bad version." When you feel that a plot solution exists, but you can't yet imagine it, you describe instead a bad version that has no purpose other than stimulating the other writers to imagine a better version." "With that technique in mind, I will describe some bad versions of how society might go about the job of convincing the rich to accept higher taxes on themselves. But first I need to address the illusion of fairness." That is in fact the premise^ of the article. ^"The premise of a film or screenplay is the fundamental concept that drives the plot.", or in this case, the fundamental concept that drives the article.
• bluedevil2k 16y ago
  There's a potentially dangerous line that the US is approaching where, factoring in all the exemptions, credits, and deductions, a majority of the population will not be paying income taxes at all. Thus, a majority of the population will be deciding (via their votes) how much and on what the taxes of the minority will be spent. The only saving grace, if you can call it that, is that the people who actually place the votes (senators and reps) are themselves almost exclusively from that well-off minority.
  • tptacek 16y ago
    This is pretty disingenuous. I've held low-wage jobs, and so have most of the members of my immediate family, and taxes took a serious bite out our paychecks. You are referring to the federal income tax, as many people do in debates like this, but lower-middle class people pay a much greater percentage of their income in payroll taxes than do wealthy people; the "income tax" debate is misleading.
    • mattmcknight 16y ago
      That's only because payroll taxes were sold as a retirement plan contribution for yourself. The idea is that you get all of that money back plus interest. Sadly, it's not run that way. People have the let the money be spent on other items for years, and now they are retiring and it's not there.
      • tptacek 16y ago
        It isn't? Social security is solvent assuming no funding changes until 2037.
        • bd_at_rivenhill 16y ago
          In an accounting sense, but it will start drawing from income sources other than payroll taxes as soon as outlays exceed those incomes, which will happen a lot sooner. The trust fund is an accounting fiction, and a debt to yourself is not an asset.
• 100k 16y ago
  I don't think the rich really get anything out of it, but in the Nordic countries, fines increase in proportion to your wealth. I remember reading about a Nokia exec getting pulled over for speeding. His ticket was like $75,000! http://www.npr.org/templates/story/story.php?storyId=1670583 http://www.npr.org/templates/story/story.php?storyId=1670583 I've often thought some fees should be adjusted for wealth. For example, a quarter a day isn't really enough to get me to take my library books back on time. Maybe for me it should be $2 a day.
  • wigginus 16y ago
    I think many European countries adjust the fines to ones wealth: For example Switzerland: http://www.bbc.co.uk/news/world-europe-10960230 http://www.bbc.co.uk/news/world-europe-10960230
    • jimmyjim 16y ago
      And I want to point out that it makes very much sense to have fines adjusted to one's wealth. When speeding, you're endangering people's lives. There has to be some measure that will make you think twice about speeding the next time around -- if you know that the ticket fine will be a paltry amount to you (relative to your total wealth), that is no deterrent.
      • dustinupdyke 16y ago
        I get what you are saying here, but I think the questions generated by this statement are numerous: "When speeding, you're endangering people's lives." Does this mean 56 mph is, and 55 is not dangerous somehow? By what science is this the case? What about weather conditions? The condition of your car? The type of your car? Your skill and ability to drive? Also, the randomness with which this law is enforced is troublesome as well. But perhaps if speeding tickets were $1000 dollars and up, we'd all think about it a bit more...
        • jarek 16y ago
          If you get a ticket for exceeding the speed limit by 1 mph, there are larger issues at hand than how much this ticket will cost you. Yes, speed limits are to an extent arbitrary, but practical alternative is a total judgment call. Do you always know the entirety of the condition of your car, and if not, should you be limited to 30 mph? Should drivers' licenses include a quantifiable evaluation of your skill and ability to drive and be tied into different speed limits, and how will that be tested? How will police officers know who is exceeding their license's conditions and therefore who to pull over?
• andreyf 16y ago
  I think the "power" category is best, but obviously a sensitive topic. What we need is a layered democracy, where the smart people who understand a field and have power to influence laws there (with the advice of experts in whatever fields those laws have side-effects on), but not in a selfish way. The way congress works now, it's the people with money who influence law, and some of them are doing it either out of self-interest, or in the short-term financial interests of their institutional shareholders (401(k) managers, for example), who don't understand anything about the domain.
  • TomOfTTB 16y ago
    That's the whole point of the article. Taxing the rich doesn't work because they always find a way to subvert the taxes. So we have to give them something they can "buy" rather than taxing them in order to get their money without them fighting us on it.
  • rst 16y ago
    But Congressmen and the executive honestly think that they're listening to "the smart people" right now, for the most part. When they consider copyright issues, they listen to the smart people who run record companies and movie studios. When they consider energy policy, they listen to the smart people who run oil companies. (Big oil was in charge of the Gulf oil spill cleanup because the government genuinely didn't have the expertise.) When they consider finance, they listen to the smart people who run the banks. And so forth. Or so they say --- and you can call it rationalization for cashing their lobbyists' large checks, but I think they honestly believe it regardless. After all, these folks do have a record of achievement in their fields, and how else is a Congressman to judge? What we need is a better answer to that question, which has measures for expertise other than "they made a lot of money at it." Unfortunately, it's hard to see anything like Adams's proposal, of explicit preferential treatment for the rich, as being a step in that direction.
• frankus 16y ago
  One thing that at least some rich people will pay for is status symbols (expensive watches, sports cars that will never exceed 100mph, mansions with rooms that are used only a couple of times a year, $500 t-shirts). Status signaling is ultimately a zero-sum positional arms race that can lead to some pretty ridiculous conclusions(1) and doesn't really leave anyone better off (other than, perhaps, luxury goods suppliers). The bad version of this idea would be a special ID card and/or bumper sticker or t-shirt or watch that was given to top-bracket taxpayers. It would have to be reasonably hard to forge (or at least as hard to forge as, say, a Rolex) and able to be either displayed publicly or flashed discreetly in situations where one wants to assert status. Another variation could be some kind of property tax where certain sub-neighborhoods would have exceptionally rates, say 100x what the ordinary tax on the land and improvements would be. Then people could signal status by living or staying in those areas. (This is actually not too different than somewhere like Manhattan or San Francisco currently, except the windfall is going to existing property owners rather than the government). The nice thing about status symbols is that, like fiat currency, they can be rather cheaper to produce than what their value to the status-seeking public is. That is the government could potentially retain a very high seignorage, as it were, on this stuff. Ultimately it would have to be determined whether the status symbols could be legally transferrable, and what, if any, penalty there would be for forging them. As an aside, it strikes me that this sort of thing would be extremely similar to fiat currency, maybe identical. [1](http://www.google.com/products/catalog?client=safari&rls=en&q=watch+winder&oe=UTF-8&um=1&ie=UTF-8&cid=15774647568013127762&ei=8U5ETfn9LpL2swOnueCSCg&sa=X&oi=product_catalog_result&ct=result&resnum=3&ved=0CF0Q8wIwAg#ps-sellers http://www.google.com/products/catalog?client=safari&rls...)
  • TomOfTTB 16y ago
    American Express has built an empire on your "bad idea"
  • yummyfajitas 16y ago
    The problem is that it's hard to create a high status item. Say you invent the "US Govt. Certified Top 0.1% Badge" - do you really think Peter Thiel, John Paulson or Alex Rodriguez will really give a crap? Taxing existing luxury status symbols could work, and is very likely a good idea. Creating new status symbols is likely to fail horribly. Also, the tax on certain neighborhoods neglects the very large non-status reason why those neighborhoods are valuable: proximity to something cool. Manhattan is expensive not just because it raises your status to live there, but also because if you work at Goldman Sachs, you are willing to pay $3000/month rent + ridiculous NYC income taxes to avoid a 1 hour commute. I suppose we could also bring back the Sumptuary laws: http://en.wikipedia.org/wiki/Sumptuary_law http://en.wikipedia.org/wiki/Sumptuary_law
• KMStraub 16y ago
  Lots of gems in here. My favorite line: "They also know that any project can get by with 10% less money if there is no alternative." The world would be a much better place if there was less quibbling overall.
• maeon3 16y ago
  Tax the rich too much and then they stop creating jobs for all you whiners who can't hold on to your money. The whole notion of taxing the rich more than the poor seems unfair, what makes you worthy of benefits and him worthy of a penalty? Just because he was more responsible and hard working than you were? Americans are not broke, it's the government that is broke and instead of take the negative consequences, they would rather have someone else do it.
  • spankythemonk 16y ago
    > Tax the rich too much and then they stop creating jobs for all you whiners who can't hold on to your money. This is true. You're essentially increasing the tax burden on the entrepreneur class. This means less money spent on business formation, job creation and capital investment. The last thing that the US Economy needs right now. Not only that, but many "rich" might just decide to leave the country and go somewhere where they are allowed to keep the money they earn. What will you tax then? Taxing the rich is a stupid policy. Look at the unintended consequences. There are two sides to every coin. The problem with the US economy is simply that there is too much government and it's choking the private sector like a giant parasite killing it's host. CUT GOVERNMENT SPENDING.
    • vannevar 16y ago
      Or the problem might be that wealth is increasingly concentrated in the hands of a few who are vulnerable to groupthink and consequently triggering financial disasters with their incompetence. DISTRIBUTE MORE OF THE WEALTH.
      • rick888 16y ago
        "Or the problem might be that wealth is increasingly concentrated in the hands of a few who are vulnerable to groupthink and consequently triggering financial disasters with their incompetence. DISTRIBUTE MORE OF THE WEALTH." "distribute more of the wealth" sounds so clean and nice. What you are really doing is taking this money away by force, which is anything but. Here is a scenario: Let's say you are a senior developer for a company and you make $90,000/year. A new guy joins the company with almost no experience and your boss tells you that he needs to "distribute more of your wealth". You will make $60,000 so he can make $30,000 more. He is putting in much less effort than you. This is okay, right? Everyone that wants wealth redistribution should be put into the same situation. I think we would have much less people out there interested in taxing the rich to death. "consequently triggering financial disasters" What about the people that took out loans they obviously couldn't afford? It's the same with credit card debt. People blame the credit card companies for giving them the loans in the first place, yet they keep putting themselves into more and more debt buying things they don't need. We need more personal responsibility.
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• forensic 16y ago
  Scott Adams is just talking about moving towards a visible aristocracy. These are the first baby steps. Soon the rich will have special privileges just like the old days.
  • viraptor 16y ago
    First steps - maybe, but does it really have to be full aristocracy? What if the ideas were just a really simple separate ideas not affecting others in more than 2% of some arbitrary measure for each of them? If we could offer packages that would be available to everyone but easy to buy at the same time, wouldn't it be good for everyone? For example you can pay $X for the "lexus lane", $X for another privilege, etc. - this way if someone actually wanted the privilege, but wasn't "really rich", they could still get it - not a total aristocracy and noone is forced to do anything. Private companies have been doing this for a really long time as small benefits. Think about airport/travel if you pay extra: you can get express checkin on the airport, no security queue, better comfort of travel (business class), better quality food, pick-up service on arrival, luggage transport taken care of, complete booking / planning from a third-party. I have never heard of people complaining about "visible aristocracy" when travelling though. Could the taxes work as a payment gateway for small luxury services? Meanwhile - it doesn't prevent anyone of us from getting the same. Want a better place on the plane? You can still get it without going for the whole "rich person package".
    • forensic 16y ago
      >If we could offer packages that would be available to everyone but easy to buy at the same time, wouldn't it be good for everyone? For example you can pay $X for the "lexus lane", $X for another privilege, etc. - this way if someone actually wanted the privilege, but wasn't "really rich", they could still get it - not a total aristocracy and noone is forced to do anything. This is completely different because everyone would be eligible for the Lexus Lane. It's very likely that plenty of middle-class people would choose to pay for it. The defining characteristic of an aristocracy is special rights under the law for an elite class. All you're talking about is a service the government is offering with an aim to profit. Scott Adams on the other hand is talking about restricting to the top 2%. That's what makes it an aristocracy. I'm not saying a visible aristocracy codified in legislation is bad. Also I don't think your concept "full aristocracy" has meaning. All aristocracies exist on a sliding scale somewhere between "Lexus Lanes" and "slavery". Anyway personally I'm not really against a visible aristocracy. I actually think it probably makes sense to recognize power, because at least then there would be accountability. If Bill Gates, Warren Buffet, and George Soros are unofficial Kings due to their enormous wealth, it's probably actually a good thing to make them official Kings because then they become accountable for getting results. Everyone would know who to blame - King Bill III. That puts all the incentives in order. I kind of suspect that our current elected officials are mostly just a trivial front-end for the true deciders who prefer to remain invisible because then they can't get lynched. Making them visible doesn't seem like much of a negative to me.
• kanamekun 16y ago
  The US Government could give out badges for every $1m in taxes you pay... then the rich could level up every April 15th.
  • estel 16y ago
    An achievements system for taxes, you say? Do I get Gamerscore? :D
  • klbarry 16y ago
    This is not bad at all. I feel like the government should use game theory everywhere - for the poor they want to succeed and teach themselves, for the rich paying taxes, etc. It's proven to work in so many situations.
    • philwelch 16y ago
      Quibble: "Game theory" refers to scenarios like prisoner's dilemma and so forth, not to gameplay mechanics.
      • klbarry 16y ago
        Accurate quibble, my apologies.
• KMStraub 16y ago
  My "bad" thought: The rich work hard because they're running out of time. The poor work less because they have too much time to waste.
  • KMStraub 16y ago
    Disclaimer: I am poor.
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• dazzla 16y ago
  Is it just me that sees a very messed up formatting for these WSJ links in Chrome?
• sunsu 16y ago
  "The hole is too big to plug with cost cutting or economic growth alone." Say's who? Take a look at the 2011 budget: http://www.nytimes.com/interactive/2010/02/01/us/budget.html http://www.nytimes.com/interactive/2010/02/01/us/budget.html The biggest pieces of the pie are things we are UNWILLING to cut (not incapable of cutting)! Its time for us to make some difficult decisions about what cuts we should make instead of relying on other peoples' money to solve other peoples' problems.
  • 1010011010 16y ago
    Exactly. If we rolled back overall spending to where it was in 1999 and curtailed the military (stopping the two big wars, closing assorted bases). A decade without real economic growth should be matched with a decade of no government growth.
  • btipling 16y ago
    Democrats will have to be the one to do it too. Republicans don't have the credibility. It's the Nixon in China thing where a Republican can open dialog with a communist leader but a Democrat would appear to be socialist for doing so.
  • 3pt14159 16y ago
    Says the former comptroller-general of the US. http://en.wikipedia.org/wiki/I.O.U.S.A http://en.wikipedia.org/wiki/I.O.U.S.A. Cutting out the military now might fix today's deficit (and it should happen) but that baby boomer time bomb is ticking.
• aj700 16y ago
  Communism sucks, so there's no alternative to the 0.1% (winner) takes all (80%) system that we've got. Of course we have a "vampire squid on our face" (GS) but it seems to be necessary to allow technological progress and the industrialisation of the rest of the world We have scarcity now, but it won't last. Money will be abolished. The question is how do we spend money now to bring about the end of scarcity sooner. Well conspicuous consumption and luxuries are probably no help.
  • scrod 16y ago
    >Communism sucks, so there's no alternative to the 0.1% (winner) takes all (80%) system that we've got. Wow, thanks for making things so clear. I had no idea that the alternative to our emerging world of total corporate feudalism was straight-up dictatorial Stalinism! Who'd-a thunkit?
• mgkimsal 16y ago
  His idea about a 10% cut across the board is so common-sense - I've heard it before - yet we never ever hear this from anyone in Washington (not that I've heard, anyway). Why not? 10% may seem extreme - fair enough - but why not 2%? Could we try one year where every federal department has 2% less to spend than they did the year before? 2% isn't a lot, and would go a long way toward each dept rooting out their own 'waste/fraud/abuse', instead of making govt larger by adding oversight processes and staff. And I do not mean "2% less than what we'd projected to increase our budget by next year". I mean if your department had a budget of $1,000,000, you only get a budget of $980,000 this year. Shaving 2% off a 3.5 trillion budget would be - what? - 70 billion? While that doesn't quite get us out of the mess we're in, it's a good start.
  • _delirium 16y ago
    For small percentages, I'd say that's actually the most common budget-cutting proposal. Politicians want to save money, but don't want to propose any actual services or programs be cut, so they tend to instead propose that every department should "find waste" equal to 1-3% or something. See: http://news.google.com/archivesearch?q=%22percent+across+the+board%22+budget+cut http://news.google.com/archivesearch?q=%22percent+across+the...
  • steveklabnik 16y ago
    > Why not? You're asking the people who are receiving the money to make the rules that they get less of it. I think it's fairly obvious.
    • mgkimsal 16y ago
      sort of, but not really. the people making the rules - proposing and approving budgets - don't get the money themselves. They do get power by apportioning it out though. BUT... if everyone had their relative power reduced equally by truly 'across-the-board' cuts, there would't be any real change in the 'my budget is bigger than yours' contests that undoubtedly go on.
• jeffreyrusso 16y ago
  The ultra wealthy have done a great job of engineering the system to control how much they pay in - so why do we think incentivizing them would work? It may take time, but every perk that could potentially be offered at a premium would be just one more race to the bottom.
• ubasu 16y ago
  Some of these already exist 1. Time: e.g There are already carpool lanes where you can ride by paying an extra fee. Even otherwise, if you are rich enough, you can just pay the fine, which would be the added tax. 5. Power: Rich people already have power by having access to lobbyists or to the appropriate media. If you are rich enough, you can fund a movement on your own. Others don't make sense in a democracy where everyone is presumably equal, e.g. writing thank you notes to richer people for being kind enough to participate in the functioning of the country. As another comment said, this is like moving toward a visible aristocracy. Also, it is mostly not true that the country doesn't go to war unless the middle class majority is on board.
  • law 16y ago
    "Just paying the fine" undermines the entire argument about saving time. When a cop pulls you over for illegally driving in the carpool lane, he's not going to run out of his car, hand you the ticket, and run back. He's going to keep you there for fifteen minutes, because he wants to waste your time. It's just not worth it. Regarding power, I think you're overestimating how rich these people are. The people in the highest federal income tax brackets aren't making over a million a year. For 2010, the highest federal tax bracket is 35% for above $375k/year. It's 33% for over $170k. Just for reference, if you're married, filing jointly, and you're both engineers making $90k or something, you would be in the 33% tax bracket. Certainly these people don't have access "to lobbyists or to the appropriate media."
• megaman821 16y ago
  I think the best solution would be to get rid of income taxes and just have sales and property taxes. Taxing the rich a higher rate is always going to seem unfair to them because the only way those taxes can be lessened is by making less money. Taxing $2 million house at a special rate is a different story, it seems fair because if you don't want to pay the tax you live in a more modest house. Luxury cars, fur coats, yachts, etc. can all have different sales tax rates and they still become a status symbol many of the rich are willing to pay for but not being forced to pay for.
  • yummyfajitas 16y ago
    This is considered by many to be unfair because consumption inequality is not as large as income inequality. Peter Thiel may be 10,000-100,000x richer than me, but I'd be very surprised if he consumes even 1000x more than I do.
    • megaman821 16y ago
      The consumption tax doesn't have to be a flat tax. You pay more tax for a pack a cigarettes than a pack of paper. Peter Theil makes about 200x more a year than the average person, but he doesn't have to consume 200 times more than the average person if all the items he wants to buy are at a much higher tax rate. They only way to avoid the tax is to not buy luxury items, and if a billionaire wants to live the life of a guy making 50k a year, let him have at it.
      • neilk 16y ago
        You're taxing the wrong thing. Your idea would be great if we wanted billionaires to act like regular joes. But generally, in North America, we don't care about that. The problem was about fixing the deficit. yummyfajitas was right: consumption taxes are generally considered regressive. Also, the rich, or even the professional class, have many more options to disguise their consumption as business expenses.
        • megaman821 16y ago
• te_platt 16y ago
  Eliminate all federal taxes and print the money needed for government operations. Effectively this becomes an inflation tax. Automatically it affects the wealthy in direct proportion to their wealth as opposed to their most recent earnings. No loopholes, no games, no misallocation of resources for tax breaks.
  • 100k 16y ago
    Interesting idea, but already the reason we are so concerned about government debt when inflation is so low and the economy is so bad is that inflation hurts the rich, and they control the discourse. I do not think they would go for a superinflation senario like this.
  • benohear 16y ago
    This would hit people with savings in cash (or bonds), i.e. the middle class. The rich tend to have assets (or foreign holdings) which should be largely inflation-proof.
    • va_coder 16y ago
      ..and old people on fixed income.
      • melling 16y ago
        If you work for the post office or are a teacher, for example, your pension adjusts for inflation. Other govt jobs are similar? So, inflating out of the problem won't help here.
        • forgottenpaswrd 16y ago
          Not true. Your pension adjust for OFFICIAL inflation, I invite you to make a simple shopping cart on Excel with your most important expenses and compare with official figures. Official's is allays less(all govs massage the numbers as there is so much money at stake).
    • 16y ago
• jbooth 16y ago
  Don't we already have this? If you have lawyers, accountants and possibly lobbyists, you have an entirely different relationship with the gov't than normal people.
• jakevoytko 16y ago
  The best ideas in this framework would use sliding rewards. But they will never happen. Take the HOV lane idea. Giving the top 1% access to HOV lanes is political suicide. But awarding hours for a special fast lane, linked to the infrastructure-based taxes you pay, sounds fairer. The family of 4 making $60K a year gets a few hours they can use when they need them, tax-exempt employees get nothing, and a CEO gets more hours than she can realistically use in a year. But opponents would say you're giving advantages to those who are "ahead." Talented-yet-poor people have less time to strike it rich. It's a Catch 22 - you need time to make money, and money to get more time, and you have neither when you start anew. This cuts to the heart of optimizing nations for the individual, versus optimizing for the nation as a whole. I'm not sure the answer is straightforward, or if the two answers are mutually exclusive.
  • gabrielroth 16y ago
    The HOV-lane idea starts out in the wrong place. If you want to raise money from apportioning a scarce resource (in this case space on the road), you use prices, not taxes. Congestion charges have become very popular and successful in London—it's too bad Bloomberg's attempt to install them in New York failed.
    • seabee 16y ago
      > Congestion charges have become very popular and successful in London Popular and successful with who, exactly? I don't know a single person that likes it. Traffic was reduced for a few years but now it's just as bad as ever. And the cost of public transport continually rises above inflation. At least they recently shrank the chargable area. So what has it done, exactly, except raise income for the city and raise prices for businesses on the border and those who need vehicles to function?
      • jarek 16y ago
        > Traffic was reduced for a few years but now it's just as bad as ever. Has the population changed?
• WiseWeasel 16y ago
  A low-hanging fruit would be to retool Social Security to be relevant to the needs of more affluent contributors; they might feel better about paying in if they are assured a payout that might actually support what they would consider to be a reasonably comfortable retirement. As it stands, Social Security is pretty much a total loss for higher income brackets. As for a power incentive, the only one I might envision is to create a public forum where the public and their representatives can debate how their tax money is being spent, and a user's "karma" or default visibility bonus on the site would be based on their tax contribution.
  • jbooth 16y ago
    You only pay SS on your first 105k or so of income (indexed to inflation).
    • WiseWeasel 16y ago
      A cap which would presumably be raised along with the payouts.
• richcollins 16y ago
  In reality, fairness is not so much about the actual distribution of loot as it is about the psychology of how you feel about it. That's important to understand because the rich won't give up their cash unless they feel they are getting something in return. I appreciate his attempt at a nuanced view of the subject, but I can't see taking your possessions under threat of violence as anything other than reprehensible.
• axod 16y ago
  Taxing the rich (even more than they are already which IMHO is a lot) is just punishing success and rewarding failure.
  • benohear 16y ago
    It depends a wee bit on how you got rich. Taxing the financial industries close to 100% wouldn't strike me as punishing success.
    • axod 16y ago
      Why? Are you saying it's easy to make money if you're just providing financial services? :/
      • benohear 16y ago
        No, I'm saying the industry as a whole failed.
        • axod 16y ago
          I don't think that's true at all. Several banks did fantastically, announced record profits etc. The industry as a whole didn't fail, some particular institutions did.
          • benohear 16y ago
            The way the bailout was sold to us was that if these failing institutions were allowed to collapse, they would have brought down the rest with them. I actually hold that to be true and for me that equates to an overall failure of the industry.
            • axod 16y ago
              I know it's how it was sold, but I disagree with it. We should have let the bad companies fail and the good ones succeed.
• benohear 16y ago
  How about land ownership being allocated according to the size of your tax bill?
• ctdonath 16y ago
  Recall that uber-rich Steve Jobs has an annual salary from Apple of $1, wears black turtlenecks and jeans (ever anything else?), and is building a modest 5000 square foot home on property he owns outright. What to tax?
  • tsycho 16y ago
    In that case, also recall that the "net impact" that he has already had on the world economy in terms of jobs created, sales taxes on products sold etc. is probably much larger than whatever you would tax his income "fairly".
• abrenzel 16y ago
  Scott Adams, like the politicians in Washington DC, is living in a dream world. Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements. Tax "the rich" at 100%, and we would still be running a deficit. Tax corporations at 100%, and we would still be running a deficit. On the left, politicians make it sound as though we're just a few tax hikes and some defense cuts away from a sound federal budget. On the right, they make it sound as though all we need are some cuts to programs like the UN or foreign aid and some tax cuts to spur economic growth. They are both in a DREAM WORLD. Some taxes will have to go up, but most importantly, Social Security and Medicare will have to be substantially reduced. Whether it means privatization, defined contribution, or some combination of solutions, no one in my generation (I am currently 24) will see either of these programs as our parents did. In fact, current retirees and soon-to-be-retirees will also probably need to have their benefits reduced. There is just no way around it.
  • ryanf 16y ago
    > Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements. Tax "the rich" at 100%, and we would still be running a deficit. Tax corporations at 100%, and we would still be running a deficit. Do you have some numbers for this?
    • harryh 16y ago
      http://en.wikipedia.org/wiki/United_States_federal_budget http://en.wikipedia.org/wiki/United_States_federal_budget In 2010 Total income was about 2.1T and total expenses were about 3.5T. Defense was about 23% of spending and discretionary spending was about 12%. 3.5T * (100% - 23% - 12%) = 2.275T So thats still about a 175 Billion dollar deficit. Admittedly 2010 was a below average year in terms of the US economy. In better years things might not look as bleak.
      • abrenzel 16y ago
        Thanks for supplying those numbers harryh!
• law 16y ago
  There's certainly a lot of merit to this article. I think it's important to remember that the "rich" aren't necessarily people as wealthy as Warren Buffet and Bill Gates. Moreover, while there are many people born into wealth, there are many who make their own wealth through earnest work and frugal investments. They're the ones who are likely more outraged than "taxes on the rich," and it's a very valid argument. If we look to how the private sector handles this, we see that airlines have their own VIP status system. You might have "Elite Access" status on Continental Airlines, you might have an American Express Platinum card, you might be an HHonors member at Hilton. These companies offer loyalty incentives to hold onto customers, and I think it's a model that the government could eventually adopt.
• lmkg 16y ago
  I think several of Scott Adam's proposals would be more palatable if we avoid the T-word. Giving high tax payers an express lane at the DMV smacks of elitism and pandering. But, giving an "express process" option for $1k doesn't sound so bad to me. Someone else mentioned auctioning off carpool-lane passes, it's a similar principle. More importantly, it directly ties the cost to the reward. The biggest problem with Adam's system is that if you don't directly tie revenue to entitlements, then the rich would still push for lower taxes, while also wanting to keep the corresponding entitlements. The connection between the two has to be strong enough to resist politics.
• BlazingFrog 16y ago
  I think most of the rich people as described in the article (top 2%) already get most, if not all, of the perks he lists. It may not be in the law, but make no mistake. These people don't go to the DMV (who cares about the express lane), don't read their own mail (so much for gratitude letters), often don't drive their own car (carpool eligible in most places), don't care about social services and how much they cost and already have a large influence on the election process. Scott feels as if he's "on a path toward certain doom" when paying attention to news. In my case it's when I think about how little hope there is to radically change the system considering that the people in charge are the ones who profit the most from that system, by a long shot.
• sambeau 16y ago
  If I could, I would link tax paying to the National Lottery. The more tax you pay the bigger your chance of winning big. It would make a refreshing change to see people queueing up on a Saturday night, desperate to pay their tax.
  • pzxc 16y ago
    I would have an emotional reaction from seeing that sight but I wouldn't call it "refreshing".
  • rick888 16y ago
    "It would make a refreshing change to see people queueing up on a Saturday night, desperate to pay their tax." The poor would be giving all of their income and the rich would just keep theirs.
• motters 16y ago
  The rich and their tax situation is really only part of the wider picture of how to govern an economy in a sustainable manner. It's my opinion that we need to take more of a systems approach, making use of lessons from cybernetics. It's pretty obvious now that the economy is not like an ecosystem with multiple more or less autonomous agents acting independently, but is instead more like a machine where information flows are centralised and significant components of the system can act in concert.
• martinkallstrom 16y ago
  The best way of taxing the rich is producing luxury goods. The fact that you can buy food, transport, housing, clothing at a magnitude or two (or more) higher cost is a sort of volontary tax. When you buy a $1000 bottle of champagne instead of drinking water, a large part of that money takes a pretty short path to pay the wages of people that never would buy the same bottle themselves. And would maybe be out of a job if they didn't take a small part in producing that bottle of champagne. So the fact that luxury goods exist is a sort of tax that spreads the wealth of the people that choose to afford it.
  • martinkallstrom 16y ago
    It follows that whenever you see someone in driving a car you couldn't afford or eating in a restaurant that you would consider too expensive, don't think "ahole", think "thanks for distributing your wealth".
  • khafra 16y ago
    Yes, luxury goods amount to a tax on the status-conscious who can afford them--but the problem is that they send a price signal that more luxury goods are needed, when what we really need is investment in infrastructure, basic and applied research, etc.
    • martinkallstrom 16y ago
      That's a really good point. As always, balance is called for.
• JeffL 16y ago
  I reject the premise of the entire article that "The hole is too big to plug with cost cutting or economic growth alone." The hole was created by increasing spending, it can be closed by reducing spending.
• grego 16y ago
  How about just let the rich be rich and get richer, but making it very hard to pass on inheritance. So their kids would be on equal playing field with everybody else. That would make it their vested interest to improve conditions in that field for all.
  • orijing 16y ago
    What would stop them from just giving their money away before they die?
  • ams6110 16y ago
    Except why is it any business of anyone else's whether one wants to spend one's money or save it and pass it to one's children?
• daimyoyo 16y ago
  We live in a society that uses fiat currency so why does it matter how much we're in debt? Why can't we simply say "that $12,000,000,000,000 we owed? We just hit a triple word score and we have it in the bank now." The USA has carried a debt for the last 190 years and we haven't gone bankrupt yet.
  • josh33 16y ago
    Because Fiat currency is a representation of a promise that is paid for with human life, rather than a precious resource. Our debt is a guarantee that american tax payers have to pay OR the government will need to declare bankruptcy of sorts.
• joshwa 16y ago
  1. Fix healthcare costs: single-payer. Really. That's it. $600B in administrative savings alone, which doesn't take into account the cost reductions that the system will achieve by negotiating rates downward.
• hugh3 16y ago
  My idea along these lines, which I may have explained in this forum before, is to replace one of the houses of parliament (or congress, or whatever you call your local bicameral legislature) with the "House of Taxpayers", where representatives are elected by taxpayers whose vote counts in proportion to how much tax they pay. The other house remains a "House of Commons" where the one man/one vote rule applies. The point of this idea is that every new piece of legislation must be approved (in effect) by two groups: the people who are affected by it (everybody) and the people who have to pay for it (disproportionately the rich).
• teyc 16y ago
  Actually, every rich tax payer should be given a free trip to developing countries where poverty and crime is rampant, and the rich are forced to live in gilded prisons because it is so unsafe outside.
• RobertL 16y ago
  Pol Pot and Ho Chi Minh knew how to take care of the rich. They just killed them and took all the money. The totally uneducated and illiterate Chingis Khan took a different tact. He conquered territories and then collected taxes from and "protected" the commercial caravans that traversed his extensive real estate holdings. Chingis had his problems but his dynasty lasted longer than the others for sure.
• sayemm 16y ago
  Here's a good video on the topic: "Warren Buffett's Tax Rate is Lower than His Secretary's" - http://www.youtube.com/watch?v=Cu5B-2LoC4s http://www.youtube.com/watch?v=Cu5B-2LoC4s
• nazgulnarsil 16y ago
  The problems of the world summed up in a thread: the average IQ of hacker news is way above average and yet people feel the need to: comment on issues when they have no idea of the underlying numbers, use terms that they clearly haven't bothered to even look at on wikipedia or a dictionary, repeat fallacies that any undergraduate econ student knows is false, propose vast social engineering schemes with no regard as to their unintended effects. I mean if we're the smart ones and we're pulling this bullshit what hope does the world have? engineers are supposed to know better. :(
• jff 16y ago
  A salient note about how government austerity works: the Department of Energy labs have decided that as a cost-cutting measure, they will enact a 2-year pay freeze for all employees (except the top-level managers who work for Lockheed, not DoE). Hail the great cost-cutting measures! Except the government will still be putting the same amount of money into the labs andyway; we've been getting emails talking about how they're now trying to come up with ways to spend this windfall of excess cash. So far it sounds like they're going to go for some pseudo-green initiative; maybe we'll just get a new Greenification Department, which inspects all of our workspaces and penalizes us when we're not green enough. (This particular pay freeze is because Dr. Chu wants to make Obama look good. Good policy for a Democrat, screw the researchers but keep the $2 million salary for the head of the lab... wait isn't that what Republicans are expected to do?) The talk about an across-the-board 10% cut made me think of that--unless it's specified that employee wages and benefits must not suffer, such a cut will probably just end up boning the minions.
• Create 16y ago
  The bad version is that anyone who pays taxes at a rate above some set amount gets to use the car pool lane without a passenger. Or perhaps the rich are allowed to park in handicapped-only spaces. This is all over the place: e.g. London congestion fee (rich have no trouble paying, and it clears the lanes for them as an added bonus). Same for all other: parked in the wrong place? The secretary will send off the fine. IKEA: Kamprad insists, that he and his family have no control over Ikea, which went entirely to Stichting Ingka Foundation and its subsidiary Inka Holdings, based in Liechtenstein. Billions are spread through Belgium, Luxembourg, Switzerland, Virgin Islands (travel Branson :) and Cyprus. When confronted, Kampard has declared, that Ikea respects the law and pays its taxes, but he added that it doesn't want to pay too much (GOOG comes to mind with Irish-Dutch-Bermuda triangle money laundering scheme). It is just a structure optimisation, which gives the possibility and flexibility to use capital towards new markets to develop business without the burden of double taxation ...declared Kamprad. [src: SVT]
• kree10 16y ago
  Deliberately proposing bad solutions sounds fun, but wow could that backfire. Applied to software projects, the "bad" version will get the go-ahead, and we'll be stuck maintaining it forever. You could argue that this is already happening, but the difference is I think the people proposing bad solutions are usually not aware their ideas are bad. I'm sure I've been guilty of proposing and implementing bad ideas in software myself.
• known 16y ago
  In India Govt is auctioning street names. You can grab one.
• joshuagamen 16y ago
  He(Pres Obama) said that it doesn't make any sense that people who have accountants and attorneys can get away with not paying taxes, while the rest of the ppl get stuck with the bill. This translates to, “bye bye middle class.” The Pres was put in offc by the richest men in the world, he is not going 2 make them pay more taxes, hell, they benefit from taxes, especially the biggest of all(inflation). The way to level the playing field is not by stopping tax cuts to the top 2% in income, the way to level the playing field would be to extend tax cuts to the bottom 98% in terms of income. Bigger government won't solve anything. If you look at world history, you will notice that any government that tries to do too much, does not do anything well enough..
• Ntagg 16y ago
  Let's say there are ten people in a room and they each give five dollars to an "elected" member who gets to redistribute that money, after which all the members re-vote on the next elected member. A savvy elected member would redistribute the money to five members, plus himself, thus perpetually stay in power and continue to receive the majority of votes. I use this illustration to show that as long as one official or group gets to continue in power, they don't have incentive to do right by everyone; rather, they are incentivized to do well to only a slim majority. The short-term problem this article presents is that our country's budget crisis demands a surplus contribution from the wealthy. For argument's sake, I'll admit it does. The understated, long-term problem is that elected officials are personally motivated to spend their political power on getting re-elected, which only requires making a little more than half of their constituents satisfied. My suggestion would be to stop allowing anyone to be re-elected. Once they know that their decisions don't have to be popular, they're free to make decisions that help long-term, even at short-term discomfort or dissatisfaction. There are obvious problems (how this reflects on their party, for example), but I think that there's a solution embedded in this line of reasoning.
• csbartus 16y ago
  (after reading through that 340 comments) So no hope for America! At least not from hackers. Thanks God! Solving the tax problem by hackers has a probability like RIAA solving the ilegal file sharing problem. Instead, as engineers and people thinking is systems and infrastructures hackers should reverse-engineer the problem. That would be a success! Hint: Ask yourself: "How Rich Are Looking At Taxpayers?"