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I don't buy this. Trickle down economics is bullshit. Investment happens anywhere there is a chance of positive return. Investing in new technology either as

I don't buy this. Trickle down economics is bullshit. Investment happens anywhere there is a chance of positive return. Investing in new technology either as an inventor/entrepreneur or dumb money still offers returns exponentially higher than anything else, should it work out. There is a point where excessive taxation/regulation hurts innovation, but I don't think we're anywhere near that.

fennecfoxen 5y ago
> Investment happens anywhere there is a chance of positive return. I have a home solar-panel system to sell you. It will pay for itself in a mere 25 years. Now, normally, it'd pay for itself in 8 years, but taxes have raised the price. You will surely invest in this system anyway.
- asdff 5y ago
  I'd honestly be shocked if people with the means and interest to put in a solar panel system would care whether they made their money back in 8 or 25 years.
  - sokoloff 5y ago
    Why wouldn’t many of them care? The alternative investment for many people with means is the stock market. If I can make my money back on solar in 8 years, that’s roughly comparable to the long-run stock market returns, so it costs me little to sell $30K in stocks, buy a PV system, and feel like I’m doing something concrete to get cleaner energy. Cut that return to a third of its previous value and I’ll leave my money in stocks and just buy electricity made from natural gas.
    - asdff 5y ago
      Most people don't try and min max every facet of their life. If it eventually returns on their investment relative to dirty energy, they are happy. There's also people who are given the option on their utility bill today to pay extra for renewably sourced energy, and they do it. People put up solar panels in Cleveland where its sunny for 80 days a year, they aren't getting a great ROI but they do it anyhow.
    - actually_a_dog 5y ago
      There are non-financial benefits to having solar panels, such as the peace of mind in knowing your home largely runs on clean energy.
      - sokoloff 5y ago
        Agreed (and acknowledged above). I just think there are more people willing/able to pay a full lifecycle net price of $0 for that peace of mind than are willing/able to pay $20K for it.
- coralreef 5y ago
  If the alternative energy sources are even more expensive, then yes, it makes complete economic sense for me to invest in this because it yields a positive return. All you've done with this example is try to say that X is better than (X + tax), failing to identify the actual benefits and tradeoffs derived from the tax. Please at least try to be somewhat intellectually honest.
  - sanedigital 5y ago
    Right, but Homo Economicus doesn't really exist, and just because an action is "rational" from a purely economic standpoint, it doesn't mean that action will be taken by an actual living person. Disincentives sometimes have demotivating factors beyond their purely economic impacts.
    - SantalBlush 5y ago
      When people are discussing economics within the framework of economic theory, it's a bit silly to invoke "Homo Economicus doesn't exist" this far down the thread in some apparent attempt to discredit one side.
      - sanedigital 5y ago
        I disagree, painting policy issues with a simple brush of "calculate X & Y and see which is bigger" completely ignores the behavioural components at play. Homo Economicus might respond to financial incentives as expected, but in the real world they can motivate (or demotivate) in ways that aren't captured in those calculations.
        coralreef 5y ago
        https://www.investopedia.com/terms/c/ceterisparibus.asp https://www.investopedia.com/terms/c/ceterisparibus.asp
        SantalBlush 5y ago
        My point is that you seem to be applying your argument selectively. This whole thread is about "Homo Economicus".
- hellbannedguy 5y ago
  Just have a two tiered system. Those that make over $400,000 a year are taxed more, and all credits are taken away. If Biff just refuses to make more that 400k in order to pay lower taxes, and get a credit for buying a Tesla--fine. (end all tax dodges so that $400,000k is honest.) The under $400,000 Billy will get get the presents. There's a lot more Bill's in the world. I'm sure SolarRoof will still be putting up a ton of systems.
stale2002 5y ago
> Investment happens anywhere there is a chance of positive return. Thats not how it works. Taking a higher percentage of returns, can leave the returns positive, but the expected value of risks negative. EX: To make a simplified example, imagine that you can invest 10$, in an investment that has 50% chance of giving you an additional 11$. That has a positive expected value. But if you put a 20% tax on the winning, now that investment no longer has a positive expected value, even though the returns in the wining case are positive.
- wjossey 5y ago
  Which is why in the USA you write off your losses. If you make 11 on 20 and lose 10 on 20, you pay taxes on 1 dollar.
  - sokoloff 5y ago
    Individual investors’ ability to “write off” capital losses is limited to offsetting any gains plus $3K/ year (in the US).
jollybean 5y ago
"Trickle down economics is bullshit." It's been happening since the dawn of the industrial revolution. The harnessing of fossil fuels and machinery should have put everyone out of work forever. We used to be 85% living and working on farms, and now we're 5%. In short, we found ways to make people way, way more productive, and the standard of living for the average person is astronomically higher today than it was 200 years ago. I think special attention needs to be paid to accumulation of assets, and that this can definitely get out of hand (even as wages and standard of living rise, it can still be a problem), but overall, it's worked out. Paradoxically, I still trust markets and regulation more than I do centralized control and distribution. The current US governments multi trillion dollar budgets come with all sorts of special requirements, usually of the social kind that can be liberally interpreted by institutions receiving the money (i.e. schools have to comply with our social view in order to receive the money, instead of just making sure that it's fairly spent). For example, I think min. wage increases tend to be a better social measure because it's attached to actual production, and, it's generally not encumbered by some kind of employment and hiring ideology. I honestly believe the tools are available to us, and we can make a ton of progress by just doing basic adjustments, closing loopholes, ensuring standards. As an example, Healthcare reform of one way or another, even something that disentangled employment from Health Insurance, and somehow got 'pretty much everyone' covered one way or another, might yield gigantic side benefits with reduction of poverty and individual calamity. 50% of individual bankruptcies are Healthcare related. Imagine how much strife comes from that, and it's most unnecessary using a policy framework that we could apply today. Especially things like offshore tax havens, tax loopholes, bogus charities etc. etc.. So much low hanging fruit, or at least, low-hanging from an ideological perspective.
- seventytwo 5y ago
  > markets *and regulation* The key many Americans seem to forget.

fennecfoxen 5y ago

> Investment happens anywhere there is a chance of positive return. I have a home solar-panel system to sell you. It will pay for itself in a mere 25 years. Now, normally, it'd pay for itself in 8 years, but taxes have raised the price. You will surely invest in this system anyway.

asdff 5y ago
I'd honestly be shocked if people with the means and interest to put in a solar panel system would care whether they made their money back in 8 or 25 years.
- sokoloff 5y ago
  Why wouldn’t many of them care? The alternative investment for many people with means is the stock market. If I can make my money back on solar in 8 years, that’s roughly comparable to the long-run stock market returns, so it costs me little to sell $30K in stocks, buy a PV system, and feel like I’m doing something concrete to get cleaner energy. Cut that return to a third of its previous value and I’ll leave my money in stocks and just buy electricity made from natural gas.
  - asdff 5y ago
    Most people don't try and min max every facet of their life. If it eventually returns on their investment relative to dirty energy, they are happy. There's also people who are given the option on their utility bill today to pay extra for renewably sourced energy, and they do it. People put up solar panels in Cleveland where its sunny for 80 days a year, they aren't getting a great ROI but they do it anyhow.
  - actually_a_dog 5y ago
    There are non-financial benefits to having solar panels, such as the peace of mind in knowing your home largely runs on clean energy.
    - sokoloff 5y ago
      Agreed (and acknowledged above). I just think there are more people willing/able to pay a full lifecycle net price of $0 for that peace of mind than are willing/able to pay $20K for it.
coralreef 5y ago
If the alternative energy sources are even more expensive, then yes, it makes complete economic sense for me to invest in this because it yields a positive return. All you've done with this example is try to say that X is better than (X + tax), failing to identify the actual benefits and tradeoffs derived from the tax. Please at least try to be somewhat intellectually honest.
- sanedigital 5y ago
  Right, but Homo Economicus doesn't really exist, and just because an action is "rational" from a purely economic standpoint, it doesn't mean that action will be taken by an actual living person. Disincentives sometimes have demotivating factors beyond their purely economic impacts.
  - SantalBlush 5y ago
    When people are discussing economics within the framework of economic theory, it's a bit silly to invoke "Homo Economicus doesn't exist" this far down the thread in some apparent attempt to discredit one side.
    - sanedigital 5y ago
      I disagree, painting policy issues with a simple brush of "calculate X & Y and see which is bigger" completely ignores the behavioural components at play. Homo Economicus might respond to financial incentives as expected, but in the real world they can motivate (or demotivate) in ways that aren't captured in those calculations.
      - coralreef 5y ago
        https://www.investopedia.com/terms/c/ceterisparibus.asp https://www.investopedia.com/terms/c/ceterisparibus.asp
      - SantalBlush 5y ago
        My point is that you seem to be applying your argument selectively. This whole thread is about "Homo Economicus".
hellbannedguy 5y ago
Just have a two tiered system. Those that make over $400,000 a year are taxed more, and all credits are taken away. If Biff just refuses to make more that 400k in order to pay lower taxes, and get a credit for buying a Tesla--fine. (end all tax dodges so that $400,000k is honest.) The under $400,000 Billy will get get the presents. There's a lot more Bill's in the world. I'm sure SolarRoof will still be putting up a ton of systems.

stale2002 5y ago

> Investment happens anywhere there is a chance of positive return. Thats not how it works. Taking a higher percentage of returns, can leave the returns positive, but the expected value of risks negative. EX: To make a simplified example, imagine that you can invest 10$, in an investment that has 50% chance of giving you an additional 11$. That has a positive expected value. But if you put a 20% tax on the winning, now that investment no longer has a positive expected value, even though the returns in the wining case are positive.

wjossey 5y ago
Which is why in the USA you write off your losses. If you make 11 on 20 and lose 10 on 20, you pay taxes on 1 dollar.
- sokoloff 5y ago
  Individual investors’ ability to “write off” capital losses is limited to offsetting any gains plus $3K/ year (in the US).

jollybean 5y ago

"Trickle down economics is bullshit." It's been happening since the dawn of the industrial revolution. The harnessing of fossil fuels and machinery should have put everyone out of work forever. We used to be 85% living and working on farms, and now we're 5%. In short, we found ways to make people way, way more productive, and the standard of living for the average person is astronomically higher today than it was 200 years ago. I think special attention needs to be paid to accumulation of assets, and that this can definitely get out of hand (even as wages and standard of living rise, it can still be a problem), but overall, it's worked out. Paradoxically, I still trust markets and regulation more than I do centralized control and distribution. The current US governments multi trillion dollar budgets come with all sorts of special requirements, usually of the social kind that can be liberally interpreted by institutions receiving the money (i.e. schools have to comply with our social view in order to receive the money, instead of just making sure that it's fairly spent). For example, I think min. wage increases tend to be a better social measure because it's attached to actual production, and, it's generally not encumbered by some kind of employment and hiring ideology. I honestly believe the tools are available to us, and we can make a ton of progress by just doing basic adjustments, closing loopholes, ensuring standards. As an example, Healthcare reform of one way or another, even something that disentangled employment from Health Insurance, and somehow got 'pretty much everyone' covered one way or another, might yield gigantic side benefits with reduction of poverty and individual calamity. 50% of individual bankruptcies are Healthcare related. Imagine how much strife comes from that, and it's most unnecessary using a policy framework that we could apply today. Especially things like offshore tax havens, tax loopholes, bogus charities etc. etc.. So much low hanging fruit, or at least, low-hanging from an ideological perspective.

seventytwo 5y ago
> markets *and regulation* The key many Americans seem to forget.