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January 11, 2019

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Or treating all income the same, regardless of whether it's earned or unearned, subject to the same marginal rates.

Definitely my preference. Income is income. If you are going to tax it, tax it all the same.

made it cheaper to fund local government projects.

Thank you.

My point (and I did have one) is not that confiscatory top brackets produce lots of revenue because many of the wealthy will pay at that rate. The data show that such an assertion is simply not true.

My claim is that those brackets are a cudgel that tends to discourage socially-noxious behaviors by corporations and individuals, and channels them into behaviors that increase investment in the common good and tend to slow the growth of wealth inequality.

My claim is that those brackets are a cudgel that tends to discourage socially-noxious behaviors by corporations and individuals, and channels them into behaviors that increase investment in the common good and tend to slow the growth of wealth inequality.

Thank you for making my point, but with gooder words than I make.

"That's not a small point but it's not just rich people who find ways to avoiding tax hikes. For any number of reasons, since the end of World War II, it has proven exceptionally difficult for the federal government to substantially increase overall revenues for any period of time. The entire country, it seems, has an aversion to paying more than about 18 percent of GDP in the form of total government revenues. Despite very different income tax brackets, corporate tax policy, you name it, it's rare when the feds' take tops 18 percent for very long (recall that both Al Gore and George W. Bush campaigned on tax cuts in 2000, after a series of big-revenue years for the federal government)."
Increasing Top Tax Brackets Is Easier Than Increasing Revenue Over Time: Proponents of jacking top marginal income tax rates such as AOC ignore how hard it is to actually boost revenue over the long haul.

First off, it's varied roughly between 15% and 20% of GDP. For a given GDP, that's a difference of a third revenue at 20% than at 15%.

Then there's the fact that GDP isn't fixed. I know Republicans and libertarians and Republican libertarians tend to think lower tax rates make GDP go up, at least partially offsetting the effect of the lower rates on revenue. I don't really dispute that in the shorter term. In the longer term, I'd say productive government spending leads to greater GDP. Think education, R&D, and infrastructure for starters.

third more

In the longer term, I'd say productive government spending leads to greater GDP. Think education, R&D, and infrastructure for starters.

Think of the space program. Think of the Internet. (Just for the R&D part.)

Though I do wish I could, off the top of my head, think of some equally dramatic examples from the last 30-40 years. (I.e. since the huge push to "rein in big government spending.") But maybe someone can help me out there.

Think of the space program. Think of the Internet. (Just for the R&D part.)

Perhaps there would have been greater progress if the government had taken the same approach to space as it did to the Internet. And it's not like something like the Internet wouldn't have existed if the government hadn't supported a particular approach. I was using a globe-spanning data network in 1973 that wasn't part of what became the Internet.

And there's always the question of opportunity cost. Would the resources have been better spent if the government hadn't cooped them?

When the government uses resources, it's coopting. When private companies use resources, it's investment. Got it. Thanks.

If only the government would have coopted collateralized debt obligations and credit default swaps. I guess it did after the fact to prevent a total economic collapse.

there's always the question of opportunity cost. Would the resources have been better spent if the government hadn't cooped them?

Asking the question is easy. How about some evidence that the implied answer (yes) is true in practice.

I will state for the record that I don't want the government to take over the manufacture of iPods.

What's the Libertopian theory of how GPS might have come about, how we'd be paying for it, and who would profit from it?

--TP

Benefits have cost. But, on the whole, the benefits of human endeavors have been much greater than the costs. That's how about 99% of the world's wealth was created over the past 200 or so years. But, even when the benefit is greater than the cost, there may be an opportunity cost wherein the benefit might have been even greater if the resources were used elsewhere.

But opportunity costs can be counterfactuals that can't be proven. For example,

If only the government would have coopted collateralized debt obligations and credit default swaps. I guess it did after the fact to prevent a total economic collapse.

is a counterfactual. We mostly have only the word of the "too big to fail" crowd that there would have been an economic collapse if they hadn't been bailed out. Since then, they've become an even greater too big to fail.

If only there were a mechanism to prevent them from becoming too big to fail.

Also,too, I think this is a sharp enough crowd not to be perplexed by the concept of opportunity costs.

I should probably also mention that my point about CDOs and CDSs wasn't that the government bailout was some wonderful thing, rather that the private sector isn't a perfect engine of resource allocation.

it's not like something like the Internet wouldn't have existed if the government hadn't supported a particular approach

There would have been a handful of 'internets', which would have been mutually non-interoperable. And it would have cost you more to use them.

CharlesWT: ... on the whole, the benefits of human endeavors have been much greater than the costs. That's how about 99% of the world's wealth was created over the past 200 or so years.

Owing to my prejudice that logic is couched in language and weird language underlies weird logic, I have to ask:

WTF is "wealth" that is NOT the result of "human endeavors"?

If a breathable atmosphere counts as "wealth", I can agree it is not the result of "human endeavors". But then it would be insane to count it as only "about" 1% of "the world's wealth" over any period of any number of hundreds of years. If it does NOT count as "wealth", then maybe our friendly neighborhood Libertarian can cite a different example.

Just to forestall a couple of predictable apologias:
1) Potable water does fall from the sky. Potable water coming out of your faucet is the result of "human endeavors".
2) Gold is a useful material in electronics now and in dentistry once upon a time. Gold ore is just dirt, without "human endeavors". Gold bullion would be worthless as "money", like Confederate bank notes or cowrie shells, except for the "human endeavors" required to pretend otherwise.

--TP

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