Six Policies Economists Love and Politicians Hate

[Crazed Rabbit]

Interesting I thought most of the action to resolve the GFC was government bailing out private companies not vice a versa.

Corporations are formed to protect shareholder investments. Unfettered there is nothing that stops chemical companies dumping waste in rivers as long as the shareholder profits. So can someone explain to me again how maximized profit for some means better quality of life for all. Because this is the assumption that the free market is a better choice then a regulated one.

Absent regulation (and I do support environmental regulations) there are things that stop dumping toxic chemicals; private agreements between the company and people who live nearby, the shareholders/workers not wanting the dumping of chemicals because they don't want to ingest chemicals, etc. But that's beside the point.

You're arguing a position that no one is taking, and then saying it's what we free market supporters are advocating. It's not.

That's the free market for you, right there.

CR

[Strike For The South]

That example was terrible. Absolutely terrible. You should feel bad Phillip

As far as the suggestions go, grand sweeping changes work well in hypotheticals, but can't be implemented readily in a society where parameters are already set.

[Kralizec]

That example was terrible. Absolutely terrible. You should feel bad Phillip

I agree. If you're going to use some far fetched excuse to post porn in the backroom I expect better than this. Try again.

[a completely inoffensive name]

I think most libertarians would agree that preventing companies from dumping waste in shared natural resources is one place the government SHOULD intervene.

Ajax

That's interesting because I hear calls from libertarians to eliminate the EPA entirely.

[HoreTore]

That example was terrible. Absolutely terrible. You should feel bad Phillip

As far as the suggestions go, grand sweeping changes work well in hypotheticals, but can't be implemented readily in a society where parameters are already set.

Small changes over time is the way to change things.

[Ironside]

I have the worst hangover ever, so my ability to formulate what I want to say is probably not very good today.

I'll try again: Libertarians wants a minimalist state, and to have problems solved in the market. However, when society faces a problem, they don't seem to talk about what the market should do to solve it, but rather discuss how changing the state will fix the problem.

For example, take the problem with rising house prices. The libertarian solution is to change the state a little(remove a tax cut), not one word about how the market can work within its current set of laws and regulations to fix the problem.

That's because the underlying assumption is that the market will fix the problem by default. So simply applying the free market is enough. Unless when it isn't, but that almost never happens does it.

It would be simular to a leftie always saying that taxing and regulating it should work.

[HoreTore]

That's because the underlying assumption is that the market will fix the problem by default. So simply applying the free market is enough. Unless when it isn't, but that almost never happens does it.

It would be simular to a leftie always saying that taxing and regulating it should work.

Yes, but that's the thing, isn't it? In addition to regulation, "lefties" say things like "priate companies should show more restraint with ceo wages", which is an appeal to the market to fix things without the state intervening.

We don't see the same from those who truly believe in the free market. And that puzzles me. Is the market so weak that a single regulation renders it unworkable? Why would we ever want it then?

[Beskar]

I agree. If you're going to use some far fetched excuse to post porn in the backroom I expect better than this. Try again.

I was looking at the list, apparently the evils that PVC are making example of are less popular than "pretty flowers", "shiney sword" and "pretty lights".

From this assumption, I think oblivion players are tree hugging hippies with a crow-like tendencies than depriving in lustful temptations.

[Fragony]

Yes, but that's the thing, isn't it? In addition to regulation, "lefties" say things like "priate companies should show more restraint with ceo wages", which is an appeal to the market to fix things without the state intervening.

We don't see the same from those who truly believe in the free market. And that puzzles me. Is the market so weak that a single regulation renders it unworkable? Why would we ever want it then?

The wages at the top are nothing compared to the money that actually flowing, you want the best person on top of it, you just don't get the guy but also his network. Cutting their wages is just false symbolism from politicians. Doesn't mean they shouldn't be held unaccountable, the banks who got government support are on a tight leash, rightfully so imho

[Lemur]

Since this thread is entirely about taxation, seems like the right place to leave this article. American tax system: perfectly flat?

federal income taxes account for just 27% of total government revenue collected in America. And the remaining three-quarters of the tax pie is quite regressive. The middle class may not pay much federal income tax. But they sure pay the payroll tax for Social Security and Medicare, which the rich can mostly skip out on since it only applies to the first $110,000 of wage income. (The Medicare levy, unlike its bigger Social Security counterpart, is not capped). The masses also pay a much greater share of their income in sales and excise taxes than the rich do, because they cannot afford to save.

The fact of the matter is that the American tax code as a whole is almost perfectly flat. The bottom 20% of earners make 3% of the income and pay 2% of the taxes; the middle 20% make 11% and pay 10%; and the top 1% make 21% and pay 22%. Steve Forbes couldn’t have drawn it up any better.

[Fragony]

Since this thread is entirely about taxation, seems like the right place to leave this article. American tax system: perfectly flat?

federal income taxes account for just 27% of total government revenue collected in America. And the remaining three-quarters of the tax pie is quite regressive. The middle class may not pay much federal income tax. But they sure pay the payroll tax for Social Security and Medicare, which the rich can mostly skip out on since it only applies to the first $110,000 of wage income. (The Medicare levy, unlike its bigger Social Security counterpart, is not capped). The masses also pay a much greater share of their income in sales and excise taxes than the rich do, because they cannot afford to save.

The fact of the matter is that the American tax code as a whole is almost perfectly flat. The bottom 20% of earners make 3% of the income and pay 2% of the taxes; the middle 20% make 11% and pay 10%; and the top 1% make 21% and pay 22%. Steve Forbes couldn’t have drawn it up any better.

We are having a discussion on that on a Dutch forum I also frequent, common consensus is that it's ok that the rich pay a little more, but there is a point where taxing the rich more doesn't live up to the returns the government provides. At some point it's no longer fair even with a flat-tax, at that moment there should be cap. Where that cap should be I dunno, wherever it's reasonable should do

[rory_20_uk]

I disagree with a cap as there is no cap on salaries. No one is worth tens of millions. Recent studies have found no link between CEOs' salaries and company performance. If there was, I'd be more agreeable to this idea.

I look at my salary in terms of my take home (Net) pay. I don't care if my gross pay is £10,000,000 a year - if I only get £3,500 a month. when I go for another job I will base the increase in the same way. If taxes were to be cut, Id doubt there would be a corresponding drop in the salaries that are paid.

Finding and stopping schemes to avoid paying should be resourced more. Perhaps if there was less avoidance, those who are not rich enough to do so could have a reduction as well.

[HoreTore]

We are having a discussion on that on a Dutch forum I also frequent, common consensus is that it's ok that the rich pay a little more, but there is a point where taxing the rich more doesn't live up to the returns the government provides. At some point it's no longer fair even with a flat-tax, at that moment there should be cap. Where that cap should be I dunno, wherever it's reasonable should do

Just having them pay the same percentage would be great.

Also, the CEO of the company belonging to the richest man in Norway(Olav Thon) earns around 250.000usd. I don't buy the argument that you have to pay insane amounts for a ceo. Nor the insane increase in wages they've had these last decades. If todays wages are what is needed to get a good ceo, where were all the good ceo's in the 80's? Were all the companies leaderless? Nah, they got on just fine back then too...

[Lemur]

Recent studies have found no link between CEO's salaries and company performance.

Confirmed. But man, what a nice racket if you're on the inside. "I like your haircut." "Well, I like your haircut, too!" "Here's another ten million, great job!" "Thanks! Just wait 'till I review your compensation, since I sit on your board as well!"

Currently, of the largest companies in America (those in the S&P 100), CEO pay has no correlation with either performance or market capitalisation.

[classical_hero]

1,2 & 5 are all done here.

We get a 30% deduction on private health costs. And if you earn over a threshold you get a tax penalty for not having private health. So clearly number 2 does not bring on the apocolapse.

What are you talking about, number 1 is not done here, but i wish it was. You obviously have not heard of http://en.wikipedia.org/wiki/Negativ...28Australia%29 since you can get a tax benefit if you make a loss on the interest you pay for the house.

[Beskar]

CEO's basically want to be paid more because they can. Their living standards do not make any significant increases in comparison to people lower down on the payroll. This applies to many other "jobs" such as footballers who are paid 100,000 a week to kick a ball around. Anyway, going back to the proposals in the opening post.

One: Go ahead with that.

Two: I think basic and essential healthcare should be free at point of use anyway. (paid via taxes or some other contribution system). So this doesn't really apply.

Three: I disagree with this. The means of production should pay taxes, after all, they are taking money out of the hands of the people, that should go into improving the quality of life for people. Not simply holding peoples wallets to ransom in overpricing goods in the name of profit and silver-lining the pockets of a few individuals.

Four: Eliminate income tax and institute/increase VAT on consumption? I am perfectly okay with that. As the rich will also buy more luxury items than a poorer person (as more is spent on essentials and vat-exempt items), they would end up paying a higher percentage of tax through their lifestyle choices.

Five: This would work, but I believe this is already implemented to some degree already?

Six: Just slap a big tax on it to cover the expenses of use on society. So if smoking the stuff means you use up more funds on healthcare, the tax on the product should compensate for these things.

[Goofball]

How do you make consumption taxes progressive so that low income people are less affected? Do you have to show your prior year tax return every time you make a purchase in order to pay a lower rate? It doesn't seem practical to me. What am I missing here?

[Beskar]

How do you make consumption taxes progressive so that low income people are less affected? Do you have to show your prior year tax return every time you make a purchase in order to pay a lower rate? It doesn't seem practical to me. What am I missing here?

You don't pay VAT on food. Given basic maths of you would need hypothetical $100 of food per month (per person) to live, and you got $500 and some other guy got $5000, it stands to reason that the poorer person only has £400 to spend, opposed to the $4900. Which means that person will most likely buy far more luxury items which since it is based on consumption, they would be consuming far more resources, therefore, they end up paying far more tax and using the money on things which are not exempt as a per-ratio.

You could argue they would not consume anything extra, which means that surplus money just ends up sitting there in a bank account or underneath the mattress, but the figures are more socio-economical averages.

[Fragony]

Just having them pay the same percentage would be great.

I don't think so, that same percentage is unreasonable as long as their is nothing in return. Quid pro quo, I don't believe in mankind being selfish and economics being predatory. Nobody really wants to wrong anyone, it's a system of benefit.

[rory_20_uk]

I don't believe in mankind being selfish and economics being predatory. Nobody really wants to wrong anyone, it's a system of benefit.

Cobblers. Most thieves steal from others. There is no benefit for anyone else, merely self interest. "Blue collar" thieves who steal cars, break in and take one's possessions, attack and rob people. The concept behind the financial sector is sound, but most of it is not to distribute money to where it can be best utilised, but screw over everyone to make money.

Many companies, industries and individuals do help people. But to say "nobody" is far too broad.

[HoreTore]

I don't think so, that same percentage is unreasonable as long as their is nothing in return. Quid pro quo, I don't believe in mankind being selfish and economics being predatory. Nobody really wants to wrong anyone, it's a system of benefit.

Nothing in return? Rich people get plenty in return. Some examples:

- the infrastructure needed to run a business
- an ordered legal system(see russia for an example of what happens to businesses otherwise)
- a rich supply of well-educated workers
- low crime, meaning they get to keep their stuff

Etc, etc.

[Ironside]

I don't think so, that same percentage is unreasonable as long as their is nothing in return. Quid pro quo, I don't believe in mankind being selfish and economics being predatory. Nobody really wants to wrong anyone, it's a system of benefit.

There's 3 ways to come on top. Playing fair, "positive" cheating and "negative" cheating.

For runners, the positive cheater is strapping on a rocket+rollerblades. The negative cheater shots off the others' kneecaps (well the actual test was: are willing to spend money to sabotage for the others). While all types do exist in a society, the last type is unusally common in proffessions like stock brokers. Also worth remembering is that people are adaptable. In all directions.

[Fragony]

Nothing in return? Rich people get plenty in return. Some examples:

- the infrastructure needed to run a business
- an ordered legal system(see russia for an example of what happens to businesses otherwise)
- a rich supply of well-educated workers
- low crime, meaning they get to keep their stuff

Etc, etc.

So do all, needs a cap. It's unreasonable to think in percentages at a certain point, the point being the point where they have payed enough. They won't have to store their money abroad if you don't steal it.

[HoreTore]

So do all, needs a cap. It's unreasonable to think in percentages at a certain point, the point being the point where they have payed enough. They won't have to store their money abroad if you don't steal it.

"Steal it"?

Let's take "random rich guy #1"s rise to wealth.

When he was born, his parents got free healthcare for the birth and subsequent medical care. His parents also got child welfare money to raise him. Then he got subsidized child care, allowing his parents to keep working so they could afford a proper standad of living. Then he got to go to a school without paying. He got higher education for free, he even got money from the state for doing it. Then when he started his business, it was subsidized by the government. His access to a safety net allowed him to take on the risk of starting up.

Yeah, taxation is sooooo like stealing.

The simple fat is that social mobility is higher in countries with higher taxation(and higher average wages). Which means that you have a higher chance of becoming rich if you pay lots of taxes. It's not the other way around.

And introducing a cap to avoid people taking their money to other countries is rather irrelevant, since with a cap there's no reason for us to have their money here.

[Fragony]

"Steal it"?

Let's take "random rich guy #1"s rise to wealth.

When he was born, his parents got free healthcare for the birth and subsequent medical care. His parents also got child welfare money to raise him. Then he got subsidized child care, allowing his parents to keep working so they could afford a proper standad of living. Then he got to go to a school without paying. He got higher education for free, he even got money from the state for doing it. Then when he started his business, it was subsidized by the government. His access to a safety net allowed him to take on the risk of starting up.

Yeah, taxation is sooooo like stealing.

The simple fat is that social mobility is higher in countries with higher taxation(and higher average wages). Which means that you have a higher chance of becoming rich if you pay lots of taxes. It's not the other way around.

And introducing a cap to avoid people taking their money to other countries is rather irrelevant, since with a cap there's no reason for us to have their money here.

Yes stealing it, with the police as hired guns when the socialism can't hold up it's own pants

[gaelic cowboy]

Yes stealing it, with the police as hired guns when the socialism can't hold up it's own pants

I think you will find Horetore's point is that this fictional rich person has greatly benfitted from various subsidies and common goods due simply to the fact they were born in a western society.

Naturally these people become obssesed with denying others the same chance, which is essentially about ensuring there potential to make greater wealth. If more people rise to a certain level of income they are obviously required to increase there effort at wealth generation as opposed to relying purely on capital.

It's a sound strategy for the already wealthy as reducing the incomes of the less wealthy, middle class and working poor will result in a cheaper labour force which eventually feeds into asset prices. This allows them to control more assets easily and effectively force people to rent these assets from them.

Thats why no matter what country you go to from the USA to Sweden from Ireland to Argentina and any compass point in between the rich constantly complain about regulation, red tape and the lazy poor people.

Of course very few rich people want to live in an actual place that follows there creedo as that would effectively be Somalia.

[Fragony]

I am not into jealously. Some people are better of then me, I don't care. Good for them they are doing well. I don't feel I have any right on their money just because they have it and I don't

[HoreTore]

I am not into jealously. Some people are better of then me, I don't care. Good for them they are doing well. I don't feel I have any right on their money just because they have it and I don't

Where on earth did I advocate giving some of their money to me...?

[Fragony]

Where on earth did I advocate giving some of their money to me...?

Isn't that what taxation really is

[a completely inoffensive name]

Isn't that what taxation really is

Nope.