This week, in Undisc's charity case/hostile takeover, we get some clever observations about soaking-the-rich.
Unfortunately for us Europooreans, the cover story is some irrelevant Putin-Ukraine blah-blah trash so no physical-magazine dice. Instead, we learn that soaking the rich won't work and that, besides, it's wrong "in principle"
Opening sentences set the stage:
"America’s top 1% enjoy a fifth of the economy’s income and pay nearly a third of its federal taxes. Many politicians think they should cough up much more""America’s top 1% enjoy a fifth of the economy’s income and pay nearly a third of its federal taxes. Many politicians think they should cough up much more"
Yes, the rich you want to eat is already bankrolling you (#1043464). Obvious problem being:
The “Robin Hood” state, which takes from the rich to give to the poor, has obvious appeal. Governments across the developed world are strapped for cash. Budgets are burdened by legacy debts, ageing populations and the need to spend more on defence. But few politicians will countenance raising broad-based taxes at a time when voters, scarred by the high inflation of the early 2020s, are worried about affordability
Obvious solution being stop paying the Boomers, cut entitlements and military adventurism etc, but whatever -- schmucks like me are doomed(!) to screaming into the void on this.
"It always sounds good to say someone else will foot the bill""It always sounds good to say someone else will foot the bill"
Taxes are one way governments can redistribute income from the rich to the poor. But that is not their only function: they must also raise revenue without distorting the economy. The system today is failing on all counts. Arguments that high earners do not pay their fair share are mostly empty. And squeezing the rich further will raise trifling sums of money, while causing real economic damage.
- REVENUE: "There are simply not enough fat cats to fund welfare states by themselves"
The limited revenue-raising power of the rich is why European governments have to fund their big spending with broad-based levies, such as taxes on consumption. By contrast, America, with its low overall tax burden, can get by with one of the world’s most progressive tax systems
- DAMAGE TO ECONOMY
(yes, Beckert would cringe in his intellectual grave over this phrasing #1416952 -- and he's right, "the" economy is not a thing that can be damaged).... but this is:
it would take a lot to stop bankers and lawyers turning up for work. Yet in New York they already face a combined federal, state and local top tax rate of 52%. And the cumulative impact of such levies on risk-taking, enterprise and innovation—the lifeblood of economic growth—may cause real harm
"fairness is not just about making incomes equal. A fair system would also respect property rights, be reasonably predictable and allow people to reap the rewards of their efforts and risk-taking.""fairness is not just about making incomes equal. A fair system would also respect property rights, be reasonably predictable and allow people to reap the rewards of their efforts and risk-taking."
PRECISELY:
all the proposals, California’s most dramatically fails these tests. It looks more like the arbitrary seizure of property than progressive taxation. No one should expect the promise that it is a one-off levy to be honoured. It is a safe bet that the left will raid the same billionaires again the next time they have a programme to fund.
Here's another interesting pilot-school-of-thinking observation: Everybody gotta suffer together to keep Leviathan in check,
Today, polls and experiments show that voters pay woefully little attention to the nasty side-effects taxes have on the economy. Without a personal stake in keeping taxes low, they are less likely to keep hare-brained public schemes in check.
At a time of rising public spending, it is dangerous to suppose that the rich can always just pay a little bit more. Yet most left-wing governments would gladly embrace their inner Robin Hood and raid away
If it becomes easy to shelter our money from these ghouls, they’ll have to change their approach.
The problem is that the ghouls don't seem to mind violence. Though bitcoin is very difficult to seize, every other aspect of our lives is vulnerable. Do you think Bitcoin in its current state fixes this (ie gives us a way to shelter our money from these ghouls)?
I’m not sure exactly which margins to evaluate here, so I don’t have a definitive answer.
I am confident that if it becomes significantly harder to get at people’s earnings, they will switch to lower hanging fruit.
I don’t know what that would be, and obviously they will use violence to get it, but I think most tax systems have historically been better than this system of taxing incomes.
hmm. I think bitcoin might fix the steal-our-money-via-printing problem. I'm not sure it will fix the state's predisposition to think they can imprison you if you don't let them take your money. Possibly, the mobility of wealth via bitcoin will put pressure on this. It didn't help Roger Ver, though.
If a large share of earnings becomes p2p, then they lose the surveillance from financial intermediaries and would be heavily reliant on self-incrimination to even know how much to take from you.
Yes, they’ll throw you in jail until the ransom is paid but it’s hard to even get the right amount on the ransom note.
I’d guess we’ll see a relative shift towards taxing things that are hard to hide, like persons and property.
Wouldn't most economists agree that a head tax and a land tax are the most efficient taxes?
Yes, head taxes are the least distortionary in most models.
Land taxes are similarly less distortionary, provided they are on the unimproved value, since they don’t alter the use already owned land is put towards. They may discourage developing new land though.
However, my guess is that politicians will not content themselves with only taxing unimproved land.
hilarious that this is coming from The Economist...a notoriously left rag
I actually hope regimes do implement this, as it just accelerates us faster to where we need to be: bitcoin standard
They weren't always, and on select issues they can be (accidentally?) very good!
How I read this is that any broad tax (perhaps not use-taxes) is always unsustainable -- it is passed and levied with the intent to fund a set of outlays, but in the passing, leaders have a strong incentive to underestimate how large the outlay will be ("it's only going to cost" is much more palatable than "if we don't spend it all, we'll give it back") and people seem to be more willing to vote for taxes that do new things than taxes that fix budgeting mistakes. So taxes seem to me to doomed to chase outlays.
I don't think there is a way to rectify this short of something that looks like making it illegal for governments to fail to adhere to a balanced budget. Unfortunately, I seem to remember the balanced budget conversation of the 90s turning into the debt ceiling conversation of the last decade.
They could just use Kickstarter campaigns for new stuff, rather than theft.
spin off the national parks -- I'd pay a subscription -- and sell most of the gov land. Certainly valuable property in downtown DC that should be on the market
Reducing the federal real estate footprint is actually a big priority for this administration but it’s not getting as much attention as the other stuff.
I wonder what the real subscription cost would be like. Some of the parks are spendy to enter.
The fiat system is designed to make the poor poorer and the rich richer. Don't they also tax ordinary citizens, the average person, who is affected by inflation and the erosion of their purchasing power? The wealthy currently have ways to circumvent the state and pay less in taxes, and one of them, whether we like it or not, is Bitcoin.