Wandering the information superhighway, he came upon the last refuge of civilization, PoFo, the only forum on the internet ...
Istanbuller wrote:Is this a real question?
MistyTiger wrote:If you agree with me, why are you so against redistributing the wealth?
Not everyone can save 500 a month. Think about it. If the average male salary is $37K that is around 18 an hour. That is 720 a week. FICA will take out taxes so maybe 670 is the take home pay. Groceries could be 200 a week. So you have 470. You need to get gas, at $3 per gallon times half a tank of gas so maybe $30. You have 440 left. You might need to save the rest for expenses like utilities and rent. So how can a person on this kind of salary possibly save $500 a month? For those who can save 500 a month, they need to be making a lot more than $37K in a year. And this $37k is what men make in the service industry, for women it is more like $30k. I would like to know what you mean by "many people". Because from my calculations, if that is the average, then many are not able to save up very much per month. They have to spend and often go into the red, just to survive.
https://www.thebalancecareers.com/avera ... rs-2060808
People in need deserve a little help. Like when small businesses are starting out, do they need financial help? Yes, so they take out loans from the bank. How many small businesses can get off the ground without loans? My guess is not very many. But if the small businesses do end up thriving for decades, it is thanks to the startup loan they received in the beginning. Small businesses make a difference. If the bank never helped them, they would never have been started in the first place.
You seem to think that those who are given money become "nihilistic". People need help. They are suffering and in pain. I fail to see how they can become "nihilistic."
Istanbuller wrote:Is this a real question?
Julian658 wrote:OK, you make it quite clear that those that earn more should donate their income to others that have less. Should this be done on a voluntary basis or should this be mandated by the state?
If I make more money than my next door neighbor------should I subsidize my neighbor so he has a better lifestyle? I don't think so! Maybe I work harder than my neighbor----or perhaps I am actually smarter or more creative than my neighbor. Why do I have to share with my neighbor?
I don't mind if you voluntarily give up your money to help others. I have no issue with that. However, if the government forces me to share with my neighbor then why would I want to work hard?
Imagine you go to work every day and you earn 50 dollars. Meanwhile your three neighbors only earn 10 dollars a day. When you come home the state says you must give each of the three neighbors 10 dollars. So now you and the other three neighbors have 20 dollars each. WE HAVE EQUITY! Is that what you want? Why would you bother to earn 50 dollars a day if you have to give up 30 every day? What is the point?
WELCOME TO YOUR WORLD!!
MistyTiger wrote:
On the other hand, why should anyone share? You seem to think that none of us has a duty to donate at all. Humanitarians should not exist. If this was the general thinking everywhere, then no one would donate to March for Dimes, United Way, UNICEF or other charities that try to help those in need.
MistyTiger wrote:I would not mandate just anyone giving money to others. By wealthy I mean those who make 300,000 per year, which is not a lot of the population. Do you earn that much? I doubt I will even earn up to 100,000 per year unless I actually do end up working in upper level management as a CFO or Controller.
late wrote:Google Ayn Rand, and hold your nose while you're doing it, stinky.
The centrepiece of Sunday’s announcement is a 6% wealth tax on billionaires. The Greens cite the fact Australian billionaires grew their wealth by a third to $68bn during the pandemic to call for the measure.
The Parliamentary Budget Office estimated the new tax would raise $41bn over the decade, although it warns of a “high degree of uncertainty” as billionaires seek to avoid it.
To stop billionaires shifting assets offshore, the tax would still apply to 90% of their original wealth. The Greens also want a super-profits tax on all companies earning over $100m.
Julian658 wrote:
However, that is not an argument to the concept of the state forcing people to share their income with others.
wat0n wrote:And thus the paper doesn't allow us to have the full picture regarding wealth taxes. Also, it's questionable to assign the latter part of the series as a wealth tax effect when the tax was repealed in 1986 and then a different (lower and easier to enforce) tax was introduced in 1990, and it's also worth wondering if the largest effects are realized in the long run (i.e. after 10 years).
wat0n wrote:That's also why I'd consider adding more countries into the donor pool. He used the WDI database, so it was definitely possible (although the thesis would have taken a lot longer to do).
wat0n wrote:Normally, labor is less mobile than capital, so it would actually be a better policy to tax labor from that point of view. That's particularly true if it's easy to fight informal work. I wonder though if this will change with remote working, but for now at least it seems to be the more efficient option.
And indeed, normally income is taxed regardless of the source. That is, capital income taxes, capital gains taxes and wealth taxes mean governments are actually taxing capital at a higher rate than labor in practice.
Rugoz wrote:The wealth tax was abolished in 1986 and reimplemented in 1988, but I agree that seems to be an issue. I don't see how they could reasonably look at a period of more than 10 years with this synthetic control method. Personally I think 10 years is already too long, but I have never used it myself.
Rugoz wrote:What countries other than OECD countries could serve as useful donors from 1960 onwards?
Rugoz wrote:As for wealth taxes in general, I found this literature review (and advocacy I suppose), and comments:
https://www.brookings.edu/wp-content/up ... -draft.pdf
Rugoz wrote:Yes, evasion is the big issue*. Not sure capital income is taxed at the higher rate given payroll and consumption taxes, but I guess it depends on the country.
*Ultimately tough the question is what effect it has on GDP.
Julian658 wrote:Holy cow! So you think someone that earns 300K a year is rich? Try buying a nice home in downtown San Francisco, Manhattan NY, or Beacon Hill in Boston on a 300K salary a year?
Do you realize that many that make around 300K a year are working stiffs just like anyone else? They happen to be surgeons, oncologists, great lawyers, engineers, etc, etc. You are talking about smart talented people that are good at what they do and work 80 plus a hours a week to make that high salary. If they do not work hard they do not make that kind of money. Why would anyone think those folks are rich???
You do not understand what you are proposing. It is not about 300K a year or $50 a day. The issue is that if you have to share your income with others that earn less at some point you are going to lose your motivation to work hard.
As I said: Pretend you make $50 a day and by law you have to redistribute your income to three neighbors that earn $10 a day. This causes all four of you to have $20 day and we would call that equity. At some point you decide that it is not worth for you to work so hard for $50 USD. Why not work until you have earn $20 and stop. Why be productive and good at what you do if your income is going to others? That would be logical since you are destined to only have $20 at the end of each day. There is no incentive to work harder and earn more. Do you see how income redistribution (socialism) causes people to work less hard? This has been shown a zillion times in nations that tried socialism. The lack of productivity is staggering!
MistyTiger wrote:So you're saying that doctors or surgeons are not rich? How many doctors will settle for buying a budget Kia? I see doctors buying high-end BMWs or Mercedes. If a person can afford to buy a classy vehicle, then odds are they are financially well off. How many women are willing to chase a doctor to marry him rather than chase after a guy who is working as a city clerk? I bet a lot of women.
Lack of productivity is caused by many factors not just amount of income. Lack of productivity could be caused by personality. Some people just *gasp* hate to work! Shocking, right?
I think it is human nature to just care about getting paid, but not want to work too hard (and break their backs over it).
I understand what I am proposing. Frankly, I am not concerned about those individuals because I am not in that income bracket. If I can get close to 90K a year that will be mighty fine for me. But at best, I might just make around 60-70k a year before I retire.
Julian658 wrote:You are confusing earning a high salary with being rich. A surgeon working 80 hours a week making a high salary has nothing to do with being rich. What happens if the surgeon has an accident and he cannot work anymore? Guess what? He is not earning 300k anymore and now he is unemployed. That is not being rich! In the end he was just a working stiff earning a decent salary. Being rich means that a person has a vast number of assets, investments, and properties that constantly constantly generate income and dividends. That rich person wakes up everyday and does not have to go to work. He is wealthy and his wealth generates an income. Having a nice solid profession and earning a high salary is not being rich.
MistyTiger wrote:A doctor can create a nice stock portfolio if he has a savvy stockbroker. Rich people still work. It can be boring to just lounge at home every day and troll Netflix for stuff to watch. Money is not unlimited. Any doctor can purchase assets and investments.
Some cannot be generalized to be a significant percentage of the population. Working is not necessarily pleasant or fun. People tend to like what is pleasant and fun.
I choose not to set my sights on high pay. I could be very disappointed. A minority like myself should not expect too much. I can be happy with a decent amount, need not be 300k. The intent is to tax the wealthy to help the government fund social programs for those who need it. A tax will not bankrupt the wealthy. If they get dividends from investments, they should be fine. Dividends are usually very good the more stocks you own and the more diverse your portfolio is.
You seem to be making the rich out to be the victims. But a tax on them is peanuts. They have plenty of dough. They are capable of earning a lot more. If they are clever, their earnings increase exponentially. But for us non-rich, we are lucky if we can hold onto our jobs and earn enough to keep ourselves sheltered and fed. Most of us do not have spare change to sink into a mutual fund.
wat0n wrote:I don't see why not. Abadie et. al. (2010 and 2003) project beyond 10 years. Abadie's the guy who came up with the method.
wat0n wrote:All the ones that are selected by the optimizer.
wat0n wrote:Synth controls are really cool but it seems like a waste to limit the donor pool this much. One may also wonder the same about the donor variables, save for those that are related to the outcome by construction (e.g. including nominal GDP per adult as a predictor for real GDP per adult). The only real reason to do it, if I were him, is to get done with my undergrad thesis ASAP - because a high-dimensional matrix would take forever to optimize and he's also supposed to do all the placebo tests, which would take even longer. But I'd then be more skeptical about it.
wat0n wrote:Yeah, Saez and Zucman have been pushing for this since forever. I'll check it out later, but quite frankly even the literature on wealth inequality is rather... Unclear. Depending on how you define wealth - and there are many valid ways to do it - you can conclude anything about it's evolution in the US. The key issue is to decide whether Social Security should be counted as being a form of wealth or not - the money is taxed from you (so from that point of view it's not yours, since you don't have an individual account), yet the law does mandate that people who contribute are to be paid (usually the money others owe as counts as an asset - why wouldn't the same hold for Social Security? Isn't that a Government liability? If so, then it's someone else's asset). And this is important because a big motivation is to address the "disproportionate increase in wealth inequality".
wat0n wrote:This also raises issues on how would "wealth" be defined for taxation purposes.
wat0n wrote:I wouldn't count consumption taxes as a tax on labor. But I agree, there are also payroll taxes but those are generally following the "broad base and low rate" principle (usually the opposite is done with capital, too).
Rugoz wrote:The intervention period in Abadie's paper is 1989-2000. They directly quote Abadie for justifying the 10-year period:
"Moreover, a decade-long period after the passage of Proposition 99 seems like a reasonable limit on the span of plausible prediction of the effect of this intervention."
I personally find it quite generous given the pre-treatment period is only 22 years.
Rugoz wrote:Abadie (2004) gives a reason for restricting the donor pool:
"Even if there is a synthetic control that provides a good fit
for the treated units, interpolation biases may be large if the
simple linear model presented in this section does not hold over
the entire set of regions in any particular sample. Researchers
trying to minimize biases caused by interpolating across regions
with very different characteristics may restrict the donor pool to
regions with similar characteristics to the region exposed to the
event or intervention of interest."
It's clearly motivated by Abadie (2014) using OECD countries with the same variables though. There's a more detailed discussion in that paper: https://onlinelibrary.wiley.com/doi/epd ... ajps.12116
Rugoz wrote:The problem doesn't seem large enough for computing power to be an issue. As mentioned, they use the growth predictors recommended by Abadie (2014).
Rugoz wrote:Um...I don't see how social security is relevant for wealth taxes.
Rugoz wrote:There might be practical issues with measuring all types of wealth. But isn't a capital income or gains tax incomplete in that regard as well?
Rugoz wrote:I think in Europe labor is effectively taxed at a higher rate than capital, can't find the source at the moment.
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