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Happy to hear it. I think it's time to try a 100% tax rate and see how that goes.

by mhartl 14y ago

ekianjo 14y ago
Agree. Let's ban profits altogether, punish companies daring to fire people by putting their CEOs in jail and then nationalize their assets, redistribute all money around all classes of societies to remove once and for all the inequalities of life, providing government jobs for everyone and we will be closer to a real paradise on Earth. Oh wait. Russia tried that. For more than 65 years. It did not work too well for them.
- Roboprog 14y ago
  Of course, one could look at some of the Northern European countries that are neither purely communist nor purely private property capitalist, and consider the possibility of a happy middle between a communist dictatorship and a banana republic style oligarchy. How do you expect to create a fabulously wealthy startup if you are the child of an "untouchable" caste with 0 initial resources???
- rayiner 14y ago
  > Oh wait. Russia tried that. For more than 65 years. It did not work too well for them. You might want to learn a little bit of history before spouting off the conventional wisdom you learned in 8th grade. Russia for hundreds of years was a total backwater. At the turn of the 20th century it was incredibly far behind the rest of Europe. Under communism Russia became an industrialized superpower that rivaled the US. Ultimately the communist system collapsed, but partially because of its own success. The impoverished denizens of pre-Communist Russia had never been able to force democratic reform, but with the economic growth under communism arose a commercial class that was able to force some level of democratic reform.
  - ekianjo 14y ago
    It is conventional wisdom because it goes against all human instincts that the fruit of your work should your own property. That is why all communist systems ultimately fail, because they kill all incentive to work hard and to innovate since no single individual can get the benefits of their own work. Let me laugh at your "superpower" claim regarding Russia. For dozens of year that "superpower" had to rely on importing wheat from the US to keep feeding its own population. Being able to launch rockets while your people are literally starving (and I am not talking about being "hungry" as we see often nowadays) is not an achievement, it is an utter failure. There was no economic growth under communist Russia: it was simply spoliation of people's property to feed certain sectors of the industry (the ones that were "successful". Like Bastiat said, there are "things that you see and things that you do not see". Focusing only on the achievements of Russia makes it easy to forget the massive failure of its system in all other endeavours.
    - ippisl 14y ago
      >> they kill all incentive to work hard and to innovate At that time, the USSR was pretty advanced technologically. And it's citizens we're and still are pretty advanced academically. One explanation why the soviet system failed was due to inefficiency in investing in oil production(which led to a mini soviet peak oil), because the wrong incentives at the institutional level. But wrong incentives at the institutional levels are pretty common in capitalistic countries: the 2008 crisis is one example.
      - ekianjo 14y ago
        I am not talking about government-sponsored innovation (all countries with enough cash are capable of doing that), I was referring to spontaneous innovation (people setting up businesses by themselves to create new products/services and add value to society). Obviously when you are in a fully state-controlled economy, none of that stuff can be allowed to happen.
melvinram 14y ago
As you likely recognize, that's a completely irrelevant point. To demonstrate: let's try 0% tax and see how that goes. Like other things in economics, there is an elasticity to the impact of reducing taxes. Going from 80% to 50% makes a big difference. Going from 35% to 39%? I'm not sure it packs the same punch.
- mhartl 14y ago
  Of course a 100% tax rate is absurd, but it's not completely irrelevant. In particular, I bet that the current total effective tax rate (including not just income taxes but also FICA, sales tax, property tax, and implicit taxes from market interventions such as farm subsidies and the minimum wage) is already supra-optimal for economic growth. A wise and just sovereign—such as a time-teleported and quickly-brought-up-to-speed Marcus Aurelius—would likely find that he could increase tax revenues by lowering (and streamlining) tax rates across the board.
  - melvinram 14y ago
    This bet that current total effective tax rates are supra-optimal for economic growth is based on what? (I'm not agreeing or disagreeing. I'm genuinely curious on your reasoning.) The gigantic topic of the upcoming US elections is how taxes should change, if at all. A few generic options that being presented: a) Don't change. b) Increase on those making $250k+ c) Lower taxes on everyone, while removing loop holes in aims to increase the overall base of tax payers. The argument against option b is that it'll kill investment and economic recovery. That's what this article is disputing. It's not saying that option a, b or c is good or bad. It's saying that the argument against option b that is most often used isn't true when you look at the 65 year economic history of America.
    - mhartl 14y ago
      This bet that current total effective tax rates are supra-optimal for economic growth is based on what? It's based on intuition. That's why it's a bet, not a concrete claim.

Happy to hear it. I think it's time to try a 100% tax rate and see how that goes.

by mhartl 14y ago

Happy to hear it. I think it's time to try a 100% tax rate and see how that goes.

Agree. Let's ban profits altogether, punish companies daring to fire people by putting their CEOs in jail and then nationalize their assets, redistribute all money around all classes of societies to remove once and for all the inequalities of life, providing government jobs for everyone and we will be closer to a real paradise on Earth. Oh wait. Russia tried that. For more than 65 years. It did not work too well for them.

Roboprog 14y ago
Of course, one could look at some of the Northern European countries that are neither purely communist nor purely private property capitalist, and consider the possibility of a happy middle between a communist dictatorship and a banana republic style oligarchy. How do you expect to create a fabulously wealthy startup if you are the child of an "untouchable" caste with 0 initial resources???
rayiner 14y ago
> Oh wait. Russia tried that. For more than 65 years. It did not work too well for them. You might want to learn a little bit of history before spouting off the conventional wisdom you learned in 8th grade. Russia for hundreds of years was a total backwater. At the turn of the 20th century it was incredibly far behind the rest of Europe. Under communism Russia became an industrialized superpower that rivaled the US. Ultimately the communist system collapsed, but partially because of its own success. The impoverished denizens of pre-Communist Russia had never been able to force democratic reform, but with the economic growth under communism arose a commercial class that was able to force some level of democratic reform.
- ekianjo 14y ago
  It is conventional wisdom because it goes against all human instincts that the fruit of your work should your own property. That is why all communist systems ultimately fail, because they kill all incentive to work hard and to innovate since no single individual can get the benefits of their own work. Let me laugh at your "superpower" claim regarding Russia. For dozens of year that "superpower" had to rely on importing wheat from the US to keep feeding its own population. Being able to launch rockets while your people are literally starving (and I am not talking about being "hungry" as we see often nowadays) is not an achievement, it is an utter failure. There was no economic growth under communist Russia: it was simply spoliation of people's property to feed certain sectors of the industry (the ones that were "successful". Like Bastiat said, there are "things that you see and things that you do not see". Focusing only on the achievements of Russia makes it easy to forget the massive failure of its system in all other endeavours.
  - ippisl 14y ago
    >> they kill all incentive to work hard and to innovate At that time, the USSR was pretty advanced technologically. And it's citizens we're and still are pretty advanced academically. One explanation why the soviet system failed was due to inefficiency in investing in oil production(which led to a mini soviet peak oil), because the wrong incentives at the institutional level. But wrong incentives at the institutional levels are pretty common in capitalistic countries: the 2008 crisis is one example.
    - ekianjo 14y ago
      I am not talking about government-sponsored innovation (all countries with enough cash are capable of doing that), I was referring to spontaneous innovation (people setting up businesses by themselves to create new products/services and add value to society). Obviously when you are in a fully state-controlled economy, none of that stuff can be allowed to happen.

melvinram 14y ago

As you likely recognize, that's a completely irrelevant point. To demonstrate: let's try 0% tax and see how that goes. Like other things in economics, there is an elasticity to the impact of reducing taxes. Going from 80% to 50% makes a big difference. Going from 35% to 39%? I'm not sure it packs the same punch.

mhartl 14y ago
Of course a 100% tax rate is absurd, but it's not completely irrelevant. In particular, I bet that the current total effective tax rate (including not just income taxes but also FICA, sales tax, property tax, and implicit taxes from market interventions such as farm subsidies and the minimum wage) is already supra-optimal for economic growth. A wise and just sovereign—such as a time-teleported and quickly-brought-up-to-speed Marcus Aurelius—would likely find that he could increase tax revenues by lowering (and streamlining) tax rates across the board.
- melvinram 14y ago
  This bet that current total effective tax rates are supra-optimal for economic growth is based on what? (I'm not agreeing or disagreeing. I'm genuinely curious on your reasoning.) The gigantic topic of the upcoming US elections is how taxes should change, if at all. A few generic options that being presented: a) Don't change. b) Increase on those making $250k+ c) Lower taxes on everyone, while removing loop holes in aims to increase the overall base of tax payers. The argument against option b is that it'll kill investment and economic recovery. That's what this article is disputing. It's not saying that option a, b or c is good or bad. It's saying that the argument against option b that is most often used isn't true when you look at the 65 year economic history of America.
  - mhartl 14y ago
    This bet that current total effective tax rates are supra-optimal for economic growth is based on what? It's based on intuition. That's why it's a bet, not a concrete claim.