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Once again, the solution to high inflation isn't Fed monetary policy, it's taxation. Corporate profits windflal tax at a punitive rate and income distribution t

by jmyeet 4y ago

Once again, the solution to high inflation isn't Fed monetary policy, it's taxation. Corporate profits windflal tax at a punitive rate and income distribution to those worst affected. Additionally taxes on resource extraction (eg oil and gas, mining) should permanently be high a la Norway.

gruez 4y ago
> Once again, the solution to high inflation isn't Fed monetary policy, it's taxation. Corporate profits windflal tax at a punitive rate and income distribution to those worst affected. That sounds like a great way to push companies to invest even less into disaster preparedness. Why bother pay extra money into supplying your supply chain for the next supply disruption, when you know that you'll get painted as profiteers by the government and slapped with a windfall tax? It's far better to run your business as lean as possible during the good times and extract all the money you can without the risk of being villanized.
- jmyeet 4y ago
  You have it backwards. Companies aren't investing in their business in any way. They're simply funennling huge profits to shareholders in the forms of share buybacks. That's it. A high profit tax would actually encourage them to invest in their business. > It's far better to run your business as lean as possible during the good times and extract all the money you can without the risk of being villanized. Wow. This is textbook capitalist propaganda. "Villainized"? When profiteering is responsible for the majority of inflation, you should be villainized. You shouldn't necessarily be expected to do the right thing altruistically. That's what the windfall profits tax is for.
  - gruez 4y ago
    >Companies aren't investing in their business in any way. They're simply funennling huge profits to shareholders in the forms of share buybacks. That's it. >A high profit tax would actually encourage them to invest in their business. Time is a factor here. Just because you made $10M in excess profits this year because of avian flu, doesn't mean it makes sense to dump all of that into chicken farm in the same year. Even if we ignore the time factor, we have to consider that there might be better uses of the money, for instance shoring up investment in other sectors like semiconductors. Returning money to shareholders allows this to happen. >Wow. This is textbook capitalist propaganda. "Villainized"? When profiteering is responsible for the majority of inflation, you should be villainized. You shouldn't necessarily be expected to do the right thing altruistically. That's what the windfall profits tax is for. And what you're saying is textbook Marxist propaganda, so can we skip the ad hominems and stay on topic? By this construction you'll always have a villain, because there's always going to be sectors that have higher inflation than normal. If your construction of a villain one to always exist by definition and without regard for actions or motivation, then I argue that your definition is seriously flawed. Also, you seemed to have missed the point in my previous comment entirely. Let me rephrase it with an example: Suppose we have two egg farmers, Alice and Bob. Alice tries to do The Right Thing by having proper biosecurity practices (eg. smaller/isolated hen houses, proper training for staff, frequent monitoring for infection). Bob on the other hand does the bare minimum and cuts corners where he can. During normal times, all the extra precautions costs Alice money and either makes her offerings less competitive or eats into her profits, and meanwhile Bob gets to rake in all the extra money. Now suppose the avian flu rolls around, and Bob's flock is decimated while Alice's flock is unscathed due to the investments she had in the years prior. The shortage combined with Alice's flock being unscathed allows her to charge make more profits during the disaster, and for her to recoup her losses in the years prior. However, because she's making extra profits, she gets branded as the villain for hiking practices for no good reason. She didn't even lose any hens! How dare she raise prices! Meanwhile Bob avoids all of this, and maybe is even able to play the victim card and get the government to bail him out. So much for incentivizing long term thinking.

by jmyeet 4y ago

gruez 4y ago

> Once again, the solution to high inflation isn't Fed monetary policy, it's taxation. Corporate profits windflal tax at a punitive rate and income distribution to those worst affected. That sounds like a great way to push companies to invest even less into disaster preparedness. Why bother pay extra money into supplying your supply chain for the next supply disruption, when you know that you'll get painted as profiteers by the government and slapped with a windfall tax? It's far better to run your business as lean as possible during the good times and extract all the money you can without the risk of being villanized.

jmyeet 4y ago
You have it backwards. Companies aren't investing in their business in any way. They're simply funennling huge profits to shareholders in the forms of share buybacks. That's it. A high profit tax would actually encourage them to invest in their business. > It's far better to run your business as lean as possible during the good times and extract all the money you can without the risk of being villanized. Wow. This is textbook capitalist propaganda. "Villainized"? When profiteering is responsible for the majority of inflation, you should be villainized. You shouldn't necessarily be expected to do the right thing altruistically. That's what the windfall profits tax is for.
- gruez 4y ago
  >Companies aren't investing in their business in any way. They're simply funennling huge profits to shareholders in the forms of share buybacks. That's it. >A high profit tax would actually encourage them to invest in their business. Time is a factor here. Just because you made $10M in excess profits this year because of avian flu, doesn't mean it makes sense to dump all of that into chicken farm in the same year. Even if we ignore the time factor, we have to consider that there might be better uses of the money, for instance shoring up investment in other sectors like semiconductors. Returning money to shareholders allows this to happen. >Wow. This is textbook capitalist propaganda. "Villainized"? When profiteering is responsible for the majority of inflation, you should be villainized. You shouldn't necessarily be expected to do the right thing altruistically. That's what the windfall profits tax is for. And what you're saying is textbook Marxist propaganda, so can we skip the ad hominems and stay on topic? By this construction you'll always have a villain, because there's always going to be sectors that have higher inflation than normal. If your construction of a villain one to always exist by definition and without regard for actions or motivation, then I argue that your definition is seriously flawed. Also, you seemed to have missed the point in my previous comment entirely. Let me rephrase it with an example: Suppose we have two egg farmers, Alice and Bob. Alice tries to do The Right Thing by having proper biosecurity practices (eg. smaller/isolated hen houses, proper training for staff, frequent monitoring for infection). Bob on the other hand does the bare minimum and cuts corners where he can. During normal times, all the extra precautions costs Alice money and either makes her offerings less competitive or eats into her profits, and meanwhile Bob gets to rake in all the extra money. Now suppose the avian flu rolls around, and Bob's flock is decimated while Alice's flock is unscathed due to the investments she had in the years prior. The shortage combined with Alice's flock being unscathed allows her to charge make more profits during the disaster, and for her to recoup her losses in the years prior. However, because she's making extra profits, she gets branded as the villain for hiking practices for no good reason. She didn't even lose any hens! How dare she raise prices! Meanwhile Bob avoids all of this, and maybe is even able to play the victim card and get the government to bail him out. So much for incentivizing long term thinking.