Unless I’m mistaken, anything “that taxes higher wealth or income” at a higher rate “than lower wealth or income” is redistributionist. A flat tax is redistributionist only if part of your income is not subject to tax, e.g. if the first $10,000 is non-taxable then 10% of 10m – 10k = $99,000 while 10% of 10k – 10k = 0.

This is the kind of flat tax that flat-taxers propose and that Obama was no doubt thinking of.

[somebody] “Of course Obama favors redistribution. He isn’t a flat-taxer”

It’s interesting that when Joe the Plumber brought up the flat tax as one possible logical conclusion of Obama’s tax philosophy, Obama wasn’t dismissive at all, but took it up gently and half-cogently, even threw some numbers around like he knew what he was talking about (and maybe he did—i’d like to see the analysis that he was quoting so fragmentarily.) The flat tax has been promoted by at least one Democratic presidential hopeful: Jerry Brown.

[flubber, here and below] I’m sure even a flat tax could be argued as being redistibutionist.

Anything that taxes higher wealth or income more than lower wealth or income is easily redistributionist, so yeah, taxing income at a single rate qualifies: 10% of a million dollars is a lot more than 10% of $100K which is a lot more than 10% of $10K. Obama admitted to Joe the Plumber that the flat tax would be redistributionist in principle, but then argued that it isn’t quite enough, or not quite fair enough, or inefficient—or maybe all of those (half-cogently, as I said) and was therefore not ideal in practice.

A perfect pay-for-use system might not be – tho impossible to calculate and implement, shurly.

Impossible now, perhaps, but maybe it won’t always be. I can envision how, with continuous real-time location-based services, comprehensive public exposure of the supply chain public for government services, and ubiquitous wireless internet to intermediate between the two, a person could be driving down the highway and check a readout on their mobile phone that tells them just how much government they’ve consumed (in cost terms) over the last minute, with a breakdown of the costs available by clicking on a link. It’s not a stretch from that vision to one where you have “consumers of government” being billed on that basis as well—in real time. A rich person driving down that highway might decide that, in order to get to a very important meeting, it would be better to consume the highway component of government more rapidly, and would be billed that much more when he moves into the fast lane, after a largely automated bidding process concluded over a period of seconds or less. Indeed, this is very much in line with the various congestion pricing proposals.

This kind of thing (modulo privacy chilling effects— don’t get me started, but also solvable in principle) is what computers and networking are good for. Any society that can pull it off with adequate respect for civil liberties and an arguably fairer taxation regime might even reasonably claim that this is what computers and networking were made for.

Does a rich person benefit more than a poor person from defense spending, the SEC, jails and the police?

I believe none other that Teddy Roosevelt argued thus. It’s not hard to work out. A burglar hitting a rich person’s home makes off with a lot more than when hitting homes of the middle class, or the poor. So the rich are getting a better deal from any policing that makes their homes less of a target for burglars, at least to the extent that they spend on expensive stuff that could be ripped off. The sales tax on luxuries might be calibrated against this plain reality. Unlike congestion pricing on roads, however, this one lend itself less easily to marketizations, and more to the classic free-rider problem: if I’m rich and my house is smack between the houses of two rich families (or even two middle-class families), why should I pay what they’ve bid for police services? Why wouldn’t I just pay nothing? Perhaps more transparency would help in this case—I’d get peer pressure from my neighbors, who could see I was slacking on community property-protection taxes, and if I still did nothing, eventually the criminals would notice I was slacking. The cops could just respond to my alarm and sit around, pointedly doing nothing as the burglars loaded up the truck with my vintage record collection and my wife’s diamond earrings. But in general, I think it doesn’t make sense to try to have pay-as-you-go (with progressive taxation through price discrimination or higher taxes from higher bids) all across the board. At least, I can’t see it all the way through.

In any case, it’s interesting to think about what might happen if we had pay-as-you-go taxation in an environment where individual transaction transparency is very high and transaction costs are negligible. It’s even more interesting to think about price discrimination for typical government services being significantly democratized. After all, price transparency and price discrimination are mutually antagonistic, so wherever the rich would otherwise tend to pay what everyone else pays but with greater relative benefit (i.e., free-riding), you’d want the discriminatory price/tax schedules agreed upon with some democratic legitimacy. One might even imagine a multi-millionaire (not to speak of a billionaire), about to embark on a stroll through the picturesque poverty (relatively speaking) of some vibrant BoHo city district, then checking his cellphone to see what the local strolling charges are, wincing, but then deciding, “Ah, what the hell—yes, continuing on foot here is better than backtracking to leave my cell in my car, in a parking lot three blocks away now—”

It’s not basing a transit system on automobiles that will save you from authoritarianism.

Or freeways.

It wouldn’t be hard to require stringent identity checks for intercity buses and trains, if our government chose to do that.

Or you could have buses and trains, like normal people everywhere else…

It looks to me like there was a discontinuity between the society we had before WWII and what we had after WWII.

Before WWII there was not enough work to go around. A lot of people were poor and had no particular hope of anything else. The society was pretty stratified.

Immediately after WWII there was a backlog of work, more to do than people to do it. Lots to invest, lots of changes. Lots of new technology. Mechanization of agriculture in the south eventually dumped a whole lot of former sharecroppers into yankee cities. Baby boom. If before there had been capitalists who had the best of everything and who delayed new investment because it wasn’t practical and the old capital stock wasn’t fully amortized yet, after the war those people had become irrelevant. The southern USA developed a middle class. Lots of changes.

I think we can expect changes at least as big after the dislocations that are starting now. I expect we’ll keep something we’d call a capitalist system. We’ll even keep the banks—for some unknown reason, despite hundreds of years of experience, the US public seems to trust banks and would probably have less trust for an alternative approach. But great big changes.

I don’t know which changes to expect. We could get a lot of growth, lots of investment in worthwhile new stuff, lots of work for people who’re willing to work hard to get ahead.

On the other hand we could get a new feudalism. The automobile opened things up, you could get in your car and drive off and go anywhere. (My uncle who died last year at 94 told me about Hoover’s dream to have a paved road across the whole USA. In those days you couldn’t drive across the country on pavement.) As the auto declines we could be limited to things that let the government register and restrict travel. You don’t leave your district without prior permission.

It could go lots of ways but the status quo is probably not one of them.

The big argument, just after Obama’s election, is going to be between the neo-Hooverites and the sane people. Beyond that no one can predict.

The implementation mechanisms that currently exists are unfit to bring to force what both you and I desire.

The problem with 8 years of GWB was not his quasi-successful attempts towrads usurpation of control and power. It was his agenda.

Policy wise Obama is “Teh Shitz!”. Executive competence, he lacks and so will McCain.