6 ms·

Exactly! They should just lower taxes on poor people and increase taxes on rich people. No need to create administration overhead and costs (sucking more value

by itake 3y ago

Exactly! They should just lower taxes on poor people and increase taxes on rich people. No need to create administration overhead and costs (sucking more value from poor people). This seems so obvious, but I am curious why someone thinks this is a good idea? My only guess is the people driving this change don't have the power to do it 'right' so this is the closest they can do?

MostlyStable 3y ago
If it was anywhere other than CA, I'd guess that this was the only way they thought they could pass increased transfer payments. But with the current power balance in CA, I find that hard to believe. Maybe they just think this will be more politically palatable than changing taxes? If so, I'm skeptical it will work out for them. This is pretty blatantly obvious.
- Guvante 3y ago
  Honestly it looks like Power companies trying to get a fixed payment predicting that their costs will go down overtime leading to a net win for them.
  - dragonwriter 3y ago
    It moves part of the rate to a fixed payment, and its still subject to the usual periodic CPUC rate process, which includes cost analysis, so if their costs really were going down, they’d see the rates cut. The point is to deal better with the economics of established widespread distributed generation and to avoid disencentives to displacing existing residential gas use with electricity, and to similarly improve the incentive structure of home-charged BEVs vs. gasoline vehicles. Doing that takes splitting payment for generation (per kW) from connectivity (fixed) rather than inflating per kW costs to capture the average costs of connectivity.
    - Guvante 3y ago
      I do think there is value in a larger fixed payment regardless of this implementation. After all, a lot of the costs aren't in generation but delivery.
shuntress 3y ago
Adjusting taxation to benefit people with less wealth while using public money to help people is too difficult to actually accomplish because people with more wealth use that wealth to game the system in ways that helps them preserve (and grow) their wealth.
- jayd16 3y ago
  We could remove wealth from politics to a much greater degree than we do now but that would need an amendment stating money is not speech.
- deleted 3y ago
  [deleted]
- adventured 3y ago
  If that were true the top 10% income bracket wouldn't be paying the extreme majority of all the income taxes in the US (around 73% of all income taxes). Instead they'd pay very little. The US is a highly progressive taxation country. By comparison, Scandinavian countries are far less progressive on taxation, the burden is spread wider, you're made to pay for eg your healthcare costs in said countries via high taxation. Also compare the typically modest US sales tax levels vs the high VAT taxes across Europe and elsewhere. Here are the facts for the US taxation profile. Top 1% of income earners - share of all income: 22%, share of all income taxes paid: 42%. Average income tax rate: 26%. So you've got the top 1% paying 42% of all income taxes. If they actually controlled taxation (ie if the US system of government worked by bribery as is so often incorrectly claimed), it's very clear that wouldn't be how things work. 5% to 1% bracket - share of all income: 16%, share of all income taxes paid: 20%. Average income tax rate: 17%. 10% to 5% bracket - share of all income: 11%, share of all income taxes paid: 11%. Average income tax rate: 13%. 25% to 10% bracket - share of all income: 21%, share of all income taxes paid: 15%. Average income tax rate: 10%. 50% to 25% bracket - share of all income: 19%, share of all income taxes paid: 9%. Average income tax rate: 7%. Bottom 50% - share of all income: 10%. Share of all income taxes paid: 2%. Taxpayers in the US earning under $42,000 had an average income tax rate of 3%.
  - 3y ago
slater 3y ago
Because rich folk have the means to figure out loopholes to get around that. The old "i'm a philanthropist! (and totally not doing it for the tax breaks)" nonsense, along with the whole "and that's why Warren Buffett pays less taxes than his secretary!"
- lotsofpulp 3y ago
  >along with the whole "and that's why Warren Buffett pays less taxes than his secretary!" This is incorrect. The claim was always pays a lower tax rate (federal), because the tax rate for capital gains is less than earned income.
- pjscott 3y ago
  > The old "i'm a philanthropist! (and totally not doing it for the tax breaks)" nonsense, How does this work? Suppose that someone donates $1 million to charity. They don't pay income tax on that money -- but they no longer have the money. I suppose that they could try to get clever about it by making a "buy yachts for our donors" charity, but that's explicitly illegal under the 501(c)(3) requirements.
  - renlo 3y ago
    often they'll loan out pieces of art to museums, so they get the tax benefit and they get to keep the art pieces. I'm not sure how many of them are giving cash away to non-profits they don't have some controlling interest in (seems it would be rare but maybe I'm wrong)
    - pjscott 3y ago
      You're somewhat misremembering a real thing. It's possible to profit by donating a piece of art to a museum and claiming its value to be much greater than what you'd get on the open market. This is tax fraud, though, and the IRS will probably notice.
  - dragonwriter 3y ago
    Big donors do effectively direct the agenda of charities, and while direct “buy yachts for out donors” things are usually hard to get away with, there are lot of other ways for charities to be used for donor personal benefit, e.g., as a vehicle for social influence operations, political (as long as it isn’t too nakedly and specifically centered on a specific election) and commercial propaganda, and other things rich people would spend money on to benefit themselves and the businesses from which they derive income with or without a tax break for doing it.
hedora 3y ago
California likes to do complicated stuff like this because it provides the appearance of improvement without threatening the status quo. Rent control is a great example. It decreases housing supply, so it increases returns on investment for real estate in California, and increases homelessness. However, the politicians get to claim it does the opposite of those things because basic macroeconomics are too nuanced for campaign slogans.
- vkou 3y ago
  NIMBYs are the reason California doesn't build enough housing, not rent control.
  - Xorakios 3y ago
    Both of those, plus environmental reviews adding years, sometimes decades. https://www.theatlantic.com/ideas/archive/2021/03/signature-environmental-law-hurts-housing/618264/ https://www.theatlantic.com/ideas/archive/2021/03/signature-...
    - vkou 3y ago
      Environmental review is just another way of saying NIMBY. Developers building non-rental housing don't care about rent control. In fact, they benefit from rents being high, and from there being a housing shortage, as it makes non-rental housing more financially attractive. Developers building rental housing shouldn't care much about it, either, as their financing is dependent on what they are going to rent the units out for, not what some grandma who lived in her apartment for 30 years is paying. Grandma's not part of the tenant market for new units, L5 SWEs making 400k/year are. Rent control isn't the reason you can't build.
      - itake 3y ago
        > Rent control isn't the reason you can't build. Can you explain why builders are paying rent control tenants to leave [0]? And where does the payoff money come from? Future rent? Future home buyers? [0] - https://www.nytimes.com/2015/12/25/nyregion/new-york-builders-paying-huge-buyouts-to-tenants-in-their-way.html https://www.nytimes.com/2015/12/25/nyregion/new-york-builder...
dragonwriter 3y ago
> They should just lower taxes on poor people and increase taxes on rich people. CPUC can change utility fees statewide, but any statewide tax change would take legislation, and if it includes an increase of any kind, anywhere, would take a supermajority in both houses of the legislature, and changing that would take a Constitutional amendment. Government can create incentives for the people through taxes, but the people create incentives for government through Constitutional structures. Of course, once CPUC has the proposed set up, and before it goes into effect, nothing stops the legislature (which is above CPUC), if it can find the votes, from eliminating the income gradated fixed fee portion of the rate, funding utilities the average cost of that out of state funds for all hookups, and adopting appropriate additional taxes to cover it (or any of a variety of other ways of moving the income gradation into the tax system), and while that would be a better way to do things, its better to do it the way proposed than not at all, which is the more likely result of relying on a legislative supermajority.

by itake 3y ago

MostlyStable 3y ago

If it was anywhere other than CA, I'd guess that this was the only way they thought they could pass increased transfer payments. But with the current power balance in CA, I find that hard to believe. Maybe they just think this will be more politically palatable than changing taxes? If so, I'm skeptical it will work out for them. This is pretty blatantly obvious.

Guvante 3y ago
Honestly it looks like Power companies trying to get a fixed payment predicting that their costs will go down overtime leading to a net win for them.
- dragonwriter 3y ago
  It moves part of the rate to a fixed payment, and its still subject to the usual periodic CPUC rate process, which includes cost analysis, so if their costs really were going down, they’d see the rates cut. The point is to deal better with the economics of established widespread distributed generation and to avoid disencentives to displacing existing residential gas use with electricity, and to similarly improve the incentive structure of home-charged BEVs vs. gasoline vehicles. Doing that takes splitting payment for generation (per kW) from connectivity (fixed) rather than inflating per kW costs to capture the average costs of connectivity.
  - Guvante 3y ago
    I do think there is value in a larger fixed payment regardless of this implementation. After all, a lot of the costs aren't in generation but delivery.

shuntress 3y ago

Adjusting taxation to benefit people with less wealth while using public money to help people is too difficult to actually accomplish because people with more wealth use that wealth to game the system in ways that helps them preserve (and grow) their wealth.

jayd16 3y ago
We could remove wealth from politics to a much greater degree than we do now but that would need an amendment stating money is not speech.
deleted 3y ago
[deleted]
adventured 3y ago
If that were true the top 10% income bracket wouldn't be paying the extreme majority of all the income taxes in the US (around 73% of all income taxes). Instead they'd pay very little. The US is a highly progressive taxation country. By comparison, Scandinavian countries are far less progressive on taxation, the burden is spread wider, you're made to pay for eg your healthcare costs in said countries via high taxation. Also compare the typically modest US sales tax levels vs the high VAT taxes across Europe and elsewhere. Here are the facts for the US taxation profile. Top 1% of income earners - share of all income: 22%, share of all income taxes paid: 42%. Average income tax rate: 26%. So you've got the top 1% paying 42% of all income taxes. If they actually controlled taxation (ie if the US system of government worked by bribery as is so often incorrectly claimed), it's very clear that wouldn't be how things work. 5% to 1% bracket - share of all income: 16%, share of all income taxes paid: 20%. Average income tax rate: 17%. 10% to 5% bracket - share of all income: 11%, share of all income taxes paid: 11%. Average income tax rate: 13%. 25% to 10% bracket - share of all income: 21%, share of all income taxes paid: 15%. Average income tax rate: 10%. 50% to 25% bracket - share of all income: 19%, share of all income taxes paid: 9%. Average income tax rate: 7%. Bottom 50% - share of all income: 10%. Share of all income taxes paid: 2%. Taxpayers in the US earning under $42,000 had an average income tax rate of 3%.
- 3y ago

slater 3y ago

Because rich folk have the means to figure out loopholes to get around that. The old "i'm a philanthropist! (and totally not doing it for the tax breaks)" nonsense, along with the whole "and that's why Warren Buffett pays less taxes than his secretary!"

lotsofpulp 3y ago
>along with the whole "and that's why Warren Buffett pays less taxes than his secretary!" This is incorrect. The claim was always pays a lower tax rate (federal), because the tax rate for capital gains is less than earned income.
pjscott 3y ago
> The old "i'm a philanthropist! (and totally not doing it for the tax breaks)" nonsense, How does this work? Suppose that someone donates $1 million to charity. They don't pay income tax on that money -- but they no longer have the money. I suppose that they could try to get clever about it by making a "buy yachts for our donors" charity, but that's explicitly illegal under the 501(c)(3) requirements.
- renlo 3y ago
  often they'll loan out pieces of art to museums, so they get the tax benefit and they get to keep the art pieces. I'm not sure how many of them are giving cash away to non-profits they don't have some controlling interest in (seems it would be rare but maybe I'm wrong)
  - pjscott 3y ago
    You're somewhat misremembering a real thing. It's possible to profit by donating a piece of art to a museum and claiming its value to be much greater than what you'd get on the open market. This is tax fraud, though, and the IRS will probably notice.
- dragonwriter 3y ago
  Big donors do effectively direct the agenda of charities, and while direct “buy yachts for out donors” things are usually hard to get away with, there are lot of other ways for charities to be used for donor personal benefit, e.g., as a vehicle for social influence operations, political (as long as it isn’t too nakedly and specifically centered on a specific election) and commercial propaganda, and other things rich people would spend money on to benefit themselves and the businesses from which they derive income with or without a tax break for doing it.

hedora 3y ago

California likes to do complicated stuff like this because it provides the appearance of improvement without threatening the status quo. Rent control is a great example. It decreases housing supply, so it increases returns on investment for real estate in California, and increases homelessness. However, the politicians get to claim it does the opposite of those things because basic macroeconomics are too nuanced for campaign slogans.

vkou 3y ago
NIMBYs are the reason California doesn't build enough housing, not rent control.
- Xorakios 3y ago
  Both of those, plus environmental reviews adding years, sometimes decades. https://www.theatlantic.com/ideas/archive/2021/03/signature-environmental-law-hurts-housing/618264/ https://www.theatlantic.com/ideas/archive/2021/03/signature-...
  - vkou 3y ago
    Environmental review is just another way of saying NIMBY. Developers building non-rental housing don't care about rent control. In fact, they benefit from rents being high, and from there being a housing shortage, as it makes non-rental housing more financially attractive. Developers building rental housing shouldn't care much about it, either, as their financing is dependent on what they are going to rent the units out for, not what some grandma who lived in her apartment for 30 years is paying. Grandma's not part of the tenant market for new units, L5 SWEs making 400k/year are. Rent control isn't the reason you can't build.
    - itake 3y ago
      > Rent control isn't the reason you can't build. Can you explain why builders are paying rent control tenants to leave [0]? And where does the payoff money come from? Future rent? Future home buyers? [0] - https://www.nytimes.com/2015/12/25/nyregion/new-york-builders-paying-huge-buyouts-to-tenants-in-their-way.html https://www.nytimes.com/2015/12/25/nyregion/new-york-builder...

dragonwriter 3y ago

> They should just lower taxes on poor people and increase taxes on rich people. CPUC can change utility fees statewide, but any statewide tax change would take legislation, and if it includes an increase of any kind, anywhere, would take a supermajority in both houses of the legislature, and changing that would take a Constitutional amendment. Government can create incentives for the people through taxes, but the people create incentives for government through Constitutional structures. Of course, once CPUC has the proposed set up, and before it goes into effect, nothing stops the legislature (which is above CPUC), if it can find the votes, from eliminating the income gradated fixed fee portion of the rate, funding utilities the average cost of that out of state funds for all hookups, and adopting appropriate additional taxes to cover it (or any of a variety of other ways of moving the income gradation into the tax system), and while that would be a better way to do things, its better to do it the way proposed than not at all, which is the more likely result of relying on a legislative supermajority.