3 ms·

There was a statistic saying that top 10% of income earners pay something like 80% of all income taxes (not exact numbers but you get the gist).

by nickpp 3y ago

PaulDavisThe1st 3y ago
Which is a reflection of an intensely unequal distribution of income. In a society where few people earned more than Nx the lowest (pick your own N), this distribution of tax origin would look very different. Think of it a different way: suppose a government explicitly targets being able to spend 23% of GDP on government (i.e. publically) chosen goals. How does it collect 23% of GDP? Well, if everyone earned precisely the same, it would collect it equally from each person. On the other hand, if one person earned 99% of GDP and everyone else combined collectively earned the remaining 1%, then obviously the super rich person will be be paying almost all of the tax revenue themselves. The current situation in the US is obviously not this extreme, but the thought experiment shows why it works the way it does. Also important is the concept of marginal utility of income, which describes how each additional currency-unit of income becomes less and less significant as your total income grows. In short, 10%-pay-80% reflects the other decisions that have been made about how the US economy works (or doesn't work), and don't have much to do with taxation in general, or the provision of public services.
- throwawaysalome 3y ago
  You managed to burn another 212 words that added nothing to the statistic you were replying to.
- nickpp 3y ago
  > Which is a reflection of an intensely unequal distribution of income. Which is a reflection of an intensely unequal distribution of productivity and value creation. I've also lived under communism, where they ignored this uneven contribution and tried to squash the incomes uniformly. The result was quite predictable: we were equally starving, of course. Except the nomenklatura, but that's another story.
  - PaulDavisThe1st 3y ago
    > Which is a reflection of an intensely unequal distribution of productivity and value creation. Well, I can't disagree with that claim. But it's not really all that interesting, in and of itself. The question is: to what extent, and with sort of multiples, should differences in wealth/income reflect the distribution of productivity/value creation? There are a wide range of answers to that question, all the way from pure commune-style uniformity to contemporary US "capitalism". The only thing that is abundantly clear is that neither of these extremes work all that well for the majority of the people who live under them.
    - nickpp 3y ago
      The only one who can answer that question is the free market. And while not satisfying for everybody, it certainly is the best answer we found so far while trying various forms of organisations with this humankind of ours. The best answer in that not only was the only one that got us fed unlike the alternatives that only brought suffering, death and starvation but also got us such an amazing wealth that we have the luxury to sit and debate such issues from opposite corners of the earth, in real time, on magic devices connected to the freaking cloud. As an Eastern European, I lived through the transition from the horrors of communism to the benefits of capitalism and while it wasn't easy I am a living testament to the immense success story this change brought to these lands. And you can also plainly see the reverse transformation from wealth to misery brought by switching away from free markets in countries such as Argentina or Venezuela.
      - PaulDavisThe1st 3y ago
        > The only one who can answer that question is the free market. And while not satisfying for everybody, it certainly is the best answer we found so far while trying various forms of organisations with this humankind of ours. I do not agree with you. First of all because "the free market" is so vague as to be capable of encompassing a huge variety of economic arrangements with wildly different outcomes. Secondly because it absolutely was not "the only one that got us fed" - any sufficiently long read of history will make that clear. Thirdly, because it is far from clear what the role of the ill-defined "free market" has been in the development of magic devices connected to the freaking cloud. Involved? Probably? Responsible? I'd say probably not. But it's fine, I'm not trying to convince you. We just don't see the world in the same way.

There was a statistic saying that top 10% of income earners pay something like 80% of all income taxes (not exact numbers but you get the gist).

by nickpp 3y ago

There was a statistic saying that top 10% of income earners pay something like 80% of all income taxes (not exact numbers but you get the gist).

PaulDavisThe1st 3y ago

Which is a reflection of an intensely unequal distribution of income. In a society where few people earned more than Nx the lowest (pick your own N), this distribution of tax origin would look very different. Think of it a different way: suppose a government explicitly targets being able to spend 23% of GDP on government (i.e. publically) chosen goals. How does it collect 23% of GDP? Well, if everyone earned precisely the same, it would collect it equally from each person. On the other hand, if one person earned 99% of GDP and everyone else combined collectively earned the remaining 1%, then obviously the super rich person will be be paying almost all of the tax revenue themselves. The current situation in the US is obviously not this extreme, but the thought experiment shows why it works the way it does. Also important is the concept of marginal utility of income, which describes how each additional currency-unit of income becomes less and less significant as your total income grows. In short, 10%-pay-80% reflects the other decisions that have been made about how the US economy works (or doesn't work), and don't have much to do with taxation in general, or the provision of public services.

throwawaysalome 3y ago
You managed to burn another 212 words that added nothing to the statistic you were replying to.
nickpp 3y ago
> Which is a reflection of an intensely unequal distribution of income. Which is a reflection of an intensely unequal distribution of productivity and value creation. I've also lived under communism, where they ignored this uneven contribution and tried to squash the incomes uniformly. The result was quite predictable: we were equally starving, of course. Except the nomenklatura, but that's another story.
- PaulDavisThe1st 3y ago
  > Which is a reflection of an intensely unequal distribution of productivity and value creation. Well, I can't disagree with that claim. But it's not really all that interesting, in and of itself. The question is: to what extent, and with sort of multiples, should differences in wealth/income reflect the distribution of productivity/value creation? There are a wide range of answers to that question, all the way from pure commune-style uniformity to contemporary US "capitalism". The only thing that is abundantly clear is that neither of these extremes work all that well for the majority of the people who live under them.
  - nickpp 3y ago
    The only one who can answer that question is the free market. And while not satisfying for everybody, it certainly is the best answer we found so far while trying various forms of organisations with this humankind of ours. The best answer in that not only was the only one that got us fed unlike the alternatives that only brought suffering, death and starvation but also got us such an amazing wealth that we have the luxury to sit and debate such issues from opposite corners of the earth, in real time, on magic devices connected to the freaking cloud. As an Eastern European, I lived through the transition from the horrors of communism to the benefits of capitalism and while it wasn't easy I am a living testament to the immense success story this change brought to these lands. And you can also plainly see the reverse transformation from wealth to misery brought by switching away from free markets in countries such as Argentina or Venezuela.
    - PaulDavisThe1st 3y ago
      > The only one who can answer that question is the free market. And while not satisfying for everybody, it certainly is the best answer we found so far while trying various forms of organisations with this humankind of ours. I do not agree with you. First of all because "the free market" is so vague as to be capable of encompassing a huge variety of economic arrangements with wildly different outcomes. Secondly because it absolutely was not "the only one that got us fed" - any sufficiently long read of history will make that clear. Thirdly, because it is far from clear what the role of the ill-defined "free market" has been in the development of magic devices connected to the freaking cloud. Involved? Probably? Responsible? I'd say probably not. But it's fine, I'm not trying to convince you. We just don't see the world in the same way.