Comments on: Taxes and the little people http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/ Out of the crooked timber of humanity, no straight thing was ever made Sun, 22 Nov 2009 10:39:04 -0800 http://wordpress.org/?v=2.8.6 hourly 1 By: Mikhail http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-232180 Mikhail Wed, 12 Mar 2008 22:14:23 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-232180 Apart from playing the devil's advocate, let me point out a couple of thing to my ardent critics. :) The "trickle down theory" is not wrong, it's called the multiplier effect and you learn it in Economics 101. Any spending gets redistributed either in the form of income and wages for other people and then taxed thereby putting money in the gov. budget, or as investment it fuels the economy, thereby also providing benefit for the country and people. This is why the US weathers any recessions much better than any other country - the population spends! Also, those tax cuts "for the rich" that Bush instituted, actually did stimulate the economy apart from creating a lot of consternation among the public. :) Apart from playing the devil’s advocate, let me point out a couple of thing to my ardent critics. :)

The “trickle down theory” is not wrong, it’s called the multiplier effect and you learn it in Economics 101. Any spending gets redistributed either in the form of income and wages for other people and then taxed thereby putting money in the gov. budget, or as investment it fuels the economy, thereby also providing benefit for the country and people. This is why the US weathers any recessions much better than any other country – the population spends! Also, those tax cuts “for the rich” that Bush instituted, actually did stimulate the economy apart from creating a lot of consternation among the public. :)

]]> By: nick s http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-232021 nick s Wed, 12 Mar 2008 00:11:51 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-232021 <i>we are now supposed to be celebrating huge salaries.</i> I'm sure that's a great comfort to John Hutton's constituents, including my sister, in one of the north-west's least wealthy areas. we are now supposed to be celebrating huge salaries.

I’m sure that’s a great comfort to John Hutton’s constituents, including my sister, in one of the north-west’s least wealthy areas.

]]> By: Jack http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231934 Jack Tue, 11 Mar 2008 19:11:12 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231934 Some <a href="http://blogs.ft.com/maverecon/2008/03/non-doms-move-to-new-york-city-and-pay-more/" rel="nofollow">context</a> . It says even if you went domiciled you'd still be better off than working in New York. Willem Buiter is a non-dom and not complaining. Still becoming even more of a giant Hong Kong style enterprise zone and tax haven had much to be said for it and we are now supposed to be <a href="http://www.guardian.co.uk/politics/2008/mar/10/johnhutton.executivesalaries" rel="nofollow"> celebrating</a> huge salaries. Some context .

It says even if you went domiciled you’d still be better off than working in New York. Willem Buiter is a non-dom and not complaining.

Still becoming even more of a giant Hong Kong style enterprise zone and tax haven had much to be said for it and we are now supposed to be celebrating huge salaries.

]]> By: james http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231813 james Tue, 11 Mar 2008 13:12:41 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231813 Any argument of the form "its good to have rich people because they spend lots and that spending trickles down and benefits everyone.." is (even if its true that rich people <i>do</i> spend proportionately more, which is dubious), of course, open to a simple <i>reduction ad absurdum</i> argument... how do we decide who gets a low burden? I'm a tiny bit above median income, so should I get taxed less as a boon to society? You end up with just the poorest person in society paying all the tax so he (or more likely, she) can bask in the benefit of everyone's spending - lucky her! Any argument of the form “its good to have rich people because they spend lots and that spending trickles down and benefits everyone..” is (even if its true that rich people do spend proportionately more, which is dubious), of course, open to a simple reduction ad absurdum argument… how do we decide who gets a low burden? I’m a tiny bit above median income, so should I get taxed less as a boon to society? You end up with just the poorest person in society paying all the tax so he (or more likely, she) can bask in the benefit of everyone’s spending – lucky her!

]]> By: bad Jim http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231773 bad Jim Tue, 11 Mar 2008 08:27:03 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231773 Values of ß will give rise to <a href="http://cm.bell-labs.com/cm/cs/who/dmr/odd.html" rel="nofollow">dom</a> and then <a href="http://pandagon.blogsome.com/2008/03/10/6879/#more-6879" rel="nofollow">this</a> discussion strongly suggests that "dom" is the sort of term that ought not to be tossed about without disambiguation. Values of ß will give rise to dom

and then this discussion strongly suggests that “dom” is the sort of term that ought not to be tossed about without disambiguation.

]]> By: nick s http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231772 nick s Tue, 11 Mar 2008 08:22:55 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231772 <i>I suggest we use the states monopoly of violence to impose slavery on the little people.</i> Or, alternatively, channel it in other ways, by haveing a lottery whereby one unlucky non-dom is chosen to be released to the mob in Holland Park, <i>pour encourager les autres</i>. I suggest we use the states monopoly of violence to impose slavery on the little people.

Or, alternatively, channel it in other ways, by haveing a lottery whereby one unlucky non-dom is chosen to be released to the mob in Holland Park, pour encourager les autres.

]]> By: christian h. http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231688 christian h. Mon, 10 Mar 2008 22:13:16 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231688 Mikhail and Cie. have a point. It's up to us to make sure that it's of absolutely no benefit for the rich to show workers the finger and avoid paying taxes. A nice wave of crippling strikes might do the trick. Some direct action could be involved. Clearly, New Labour is doing the absolute minimum they think they can get away with, and the insanely rich won't even accept this much. Well, they have to be made to accept much more. If they think revolution is around the bend, they'll come around. Mikhail and Cie. have a point. It’s up to us to make sure that it’s of absolutely no benefit for the rich to show workers the finger and avoid paying taxes. A nice wave of crippling strikes might do the trick. Some direct action could be involved.

Clearly, New Labour is doing the absolute minimum they think they can get away with, and the insanely rich won’t even accept this much. Well, they have to be made to accept much more. If they think revolution is around the bend, they’ll come around.

]]> By: gastro george http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231673 gastro george Mon, 10 Mar 2008 21:12:30 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231673 mikhail's trickle-down theory is transparently wrong, as low wage earners spend a higher proportion of their earnings (they have a lower savings ratio) than high wage earners. Further, high earners are less likely to spend a fortune on decorating than spend a fortune on a new house. This just promotes asset inflation which contributes little to the economy. mikhail’s trickle-down theory is transparently wrong, as low wage earners spend a higher proportion of their earnings (they have a lower savings ratio) than high wage earners. Further, high earners are less likely to spend a fortune on decorating than spend a fortune on a new house. This just promotes asset inflation which contributes little to the economy.

]]> By: Uncle Kvetch http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231624 Uncle Kvetch Mon, 10 Mar 2008 17:00:12 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231624 <i>It’s still difficult for me to understand why we would subsidize through tax differentials fabulously wealthy people.</i> You must have an extremely hard time wrapping your head around political debate in the US, then. It’s still difficult for me to understand why we would subsidize through tax differentials fabulously wealthy people.

You must have an extremely hard time wrapping your head around political debate in the US, then.

]]> By: franck http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231621 franck Mon, 10 Mar 2008 16:43:45 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231621 Taxation is meddling in the free market, of course. What you are suggesting is meddling to support the transfer of wealth from everyone else in the UK to non-doms through differential taxation schemes. That's rather a different order of meddling. It's still difficult for me to understand why we would subsidize through tax differentials fabulously wealthy people. Taxation is meddling in the free market, of course. What you are suggesting is meddling to support the transfer of wealth from everyone else in the UK to non-doms through differential taxation schemes. That’s rather a different order of meddling. It’s still difficult for me to understand why we would subsidize through tax differentials fabulously wealthy people.

]]> By: Dave http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231617 Dave Mon, 10 Mar 2008 16:21:25 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231617 And there is the small but significant ethical point that being told we can go f*ck ourselves because we're not rich enough to count isn't nice. If your argument boils down to 'the more money you have, the more power you deserve, and the less responsible to anyone else you have to be', you're just making the argument for socialism, in the same way Marie-Antoinette made the argument for the French Revolution. And on the point of non-dom flight, where are they going to go? Surely if there was a better 'ole they'd already be in it? And there is the small but significant ethical point that being told we can go f*ck ourselves because we’re not rich enough to count isn’t nice. If your argument boils down to ‘the more money you have, the more power you deserve, and the less responsible to anyone else you have to be’, you’re just making the argument for socialism, in the same way Marie-Antoinette made the argument for the French Revolution.

And on the point of non-dom flight, where are they going to go? Surely if there was a better ‘ole they’d already be in it?

]]> By: urbell http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231615 urbell Mon, 10 Mar 2008 16:10:14 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231615 mikhail, I'm pretty sure that you are just wrong. Sure, someone making 200k per year might decide to spend a tonne of money redecorating, but on the average the ten people making 20k will spend more. Plus, spending by the wealthy doesn't really percolate down through the economy, spending by <i>anyone</i> provides economic stimulus, and if there is evidence that spending by the very rich provides more bang for the buck than spending by poorer people, I'd love to see it. mikhail,
I’m pretty sure that you are just wrong. Sure, someone making 200k per year might decide to spend a tonne of money redecorating, but on the average the ten people making 20k will spend more. Plus, spending by the wealthy doesn’t really percolate down through the economy, spending by anyone provides economic stimulus, and if there is evidence that spending by the very rich provides more bang for the buck than spending by poorer people, I’d love to see it.

]]> By: Great Zamfir http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231614 Great Zamfir Mon, 10 Mar 2008 16:09:22 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231614 Mikhail, the problem with trickle-down theory is that it relies on the assumption of unused potential in the economy. In that case, a rich guy ordering a Bentley will utilize unused resources and unemployed people. But in a reasonably well functioning economy it will just mean that resources are used on Bentleys that would otherwise be spend on, say, Volkswagens. Mikhail, the problem with trickle-down theory is that it relies on the assumption of unused potential in the economy. In that case, a rich guy ordering a Bentley will utilize unused resources and unemployed people. But in a reasonably well functioning economy it will just mean that resources are used on Bentleys that would otherwise be spend on, say, Volkswagens.

]]> By: Righteous Bubba http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231613 Righteous Bubba Mon, 10 Mar 2008 16:00:08 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231613 <i>Also, keep in mind that spending perculates down the chain</i> I believe the accepted UK version of this is "tinkle down". Also, keep in mind that spending perculates down the chain

I believe the accepted UK version of this is “tinkle down”.

]]> By: Mikhail http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/comment-page-1/#comment-231611 Mikhail Mon, 10 Mar 2008 15:55:36 +0000 http://crookedtimber.org/2008/03/10/taxes-and-the-little-people/#comment-231611 :) It's not better to "have ten people earning £20k than one earning £200k, ceteris paribus". Simply because a rich person would decide to redecorate and just by doing that dwarf the spend of 10 20K people. It's sad, but true... One must remember that we're not looking at % of income, but at absolute benefit/spend in this case. Even if a billionare spends here only 1% of their income a year, that's already 10 million... Also, keep in mind that spending perculates down the chain - you buy an expensive car or yacht, the dealer orders the services of local people to build another one, they in turn spend it on movies and groceries (for example). So, one large spender actually benefits a lot of people, MOST of whom they've never even come in contact with! As for pension funds, obviously, I'm not suggesting they invest in them. But they often provide what the funds invest in - namely shares, property, etc. Also, through their own investments, they drive the value of existing ones up. ETc. etc. Again, it's a cumulative effect. :) It’s not better to “have ten people earning £20k than one earning £200k, ceteris paribus”. Simply because a rich person would decide to redecorate and just by doing that dwarf the spend of 10 20K people. It’s sad, but true… One must remember that we’re not looking at % of income, but at absolute benefit/spend in this case. Even if a billionare spends here only 1% of their income a year, that’s already 10 million… Also, keep in mind that spending perculates down the chain – you buy an expensive car or yacht, the dealer orders the services of local people to build another one, they in turn spend it on movies and groceries (for example). So, one large spender actually benefits a lot of people, MOST of whom they’ve never even come in contact with!

As for pension funds, obviously, I’m not suggesting they invest in them. But they often provide what the funds invest in – namely shares, property, etc. Also, through their own investments, they drive the value of existing ones up. ETc. etc. Again, it’s a cumulative effect.

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