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 FORUMS > Economics Forum < refresh >
 Topic Title: 90% bonus tax Created On Sat Mar 21, 09 06:57 PM Topic View: Branch View Threaded (All Messages) Threaded (Single Messages) Linear

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trackstar
Senior Member

Posts: 19704
Joined: Aug 2008

Wed Mar 25, 09 05:41 PM

Quote

Originally posted by: Fermion
Quote

Originally posted by: ppauper
Most folks I know just want the government to leave them alone

Most folks I know just want capitalism to leave them alone.

If only its embrace were a little warmer and it still respected you in the morning...

-------------------------
The only constant is change.
- Heraclitus

Fermion
Senior Member

Posts: 4488
Joined: Nov 2002

Wed Mar 25, 09 05:46 PM

Quote

Originally posted by: katastrofa
You can't separate economics from ideology.

Of course. But you can separate blind irrational ideology from intelligent behaviour. Or, at least, thinking person, rather than an alpha dog, can.

Fermion
Senior Member

Posts: 4488
Joined: Nov 2002

Wed Mar 25, 09 05:54 PM

Quote

Originally posted by: mackbar
Quote

Originally posted by: Fermion
Quote

Originally posted by: ppauper
Most folks I know just want the government to leave them alone

Most folks I know just want capitalism to leave them alone.

If only its embrace were a little warmer and it still respected you in the morning...

You want warmth and respect from a rapist?

trackstar
Senior Member

Posts: 19704
Joined: Aug 2008

Wed Mar 25, 09 06:04 PM

That's a little strong, but I suppose there might be some hope with an anarcho-syndicalist...

-------------------------
The only constant is change.
- Heraclitus

Edited: Wed Mar 25, 09 at 07:05 PM by trackstar

gardener3
Senior Member

Posts: 1421
Joined: Apr 2004

Wed Mar 25, 09 06:21 PM

Quote

Originally posted by: Fermion
Quote

Originally posted by: Aash
Quote

Originally posted by: Fermion
Quote

Originally posted by: DominicConnor
Consider a government that has no interest other than getting as much tax as possible (not hard is it ?)
If you have zero tax then it gets no income
At 100%, you also get no tax either because no one bothers to earn.

It follows that there exists at least one maximum between those two points.

Uncontentious you may think ?

Taxes are so 20th century! They are an unfair and irrational way of trying to compensate for an unfair, irrational and broken economic system.

To collect the income due to the community/public, one must make an appropriate separation between public interest (and responsibility) and private interest (and responsibility) in the market place. No economic system, to my knowledge has ever addressed this problem rationally rather than ideologically. Isn't it about time we did?

Conceptually, I find this interesting, this idea that you could quantify income due to the public, although I'm not even certain what you're recommending here. Care to elaborate?

The basic principle is that the earth and all of nature's bounty, including the laws of physics and mathematics and all science, are the natural inheritance of the community as a whole. This means that if anyone exploits them for private gain, then they must compensate the community. The way to do this is by the market and it is the responsibility of the community to provide a functioning market place which, again, is a community right. Those who wish to exploit a particular resource compete in the market for the rights to whatever aspects of nature they need. They can then make whatever product they like and sell it on the open market. In essence this requires the separation of resources and other means of production (public interest/responsibility) from production itself (private interest/responsibility). Government regulates markets and collects compensation for the use of the earth/universe and private sector manages production. Each is forbidden from interfering in the other's sector.

I'll just give a very simple (and grossly over-simplified) example that will convey the idea:

There is a tree that could be cut down and used to make furniture. Those who wish to make the furniture bid for the right to the tree. The winning bidder pays the community, cuts down the tree, makes the furniture and sells it to the community. End of story.

What we have now is that those who want the tree, fight wars over it until one triumphs and the others give up or are dead. Then he claims every other tree as his own and pays the hungry crowd to do the work of cutting them down and making the furniture. He then organises the government to defend his rights to the trees and taxes the workers who cut them down in order to pay for the police and armies he needs to enforce his claim. Every now and then he tosses a few twigs to the unemployed crowd who protest in order to keep them quiet.

You may like the writings of Henry George. The problem is for most products/services the value added comes from IP as opposed to natural resources. Google does not make its money because it owns a bunch of office space.

Fermion
Senior Member

Posts: 4488
Joined: Nov 2002

Wed Mar 25, 09 06:49 PM

Quote

Originally posted by: gardener3
Quote

Originally posted by: Fermion
Quote

Originally posted by: Aash
Quote

Originally posted by: Fermion
Quote

Originally posted by: DominicConnor
Consider a government that has no interest other than getting as much tax as possible (not hard is it ?)
If you have zero tax then it gets no income
At 100%, you also get no tax either because no one bothers to earn.

It follows that there exists at least one maximum between those two points.

Uncontentious you may think ?

Taxes are so 20th century! They are an unfair and irrational way of trying to compensate for an unfair, irrational and broken economic system.

To collect the income due to the community/public, one must make an appropriate separation between public interest (and responsibility) and private interest (and responsibility) in the market place. No economic system, to my knowledge has ever addressed this problem rationally rather than ideologically. Isn't it about time we did?

Conceptually, I find this interesting, this idea that you could quantify income due to the public, although I'm not even certain what you're recommending here. Care to elaborate?

The basic principle is that the earth and all of nature's bounty, including the laws of physics and mathematics and all science, are the natural inheritance of the community as a whole. This means that if anyone exploits them for private gain, then they must compensate the community. The way to do this is by the market and it is the responsibility of the community to provide a functioning market place which, again, is a community right. Those who wish to exploit a particular resource compete in the market for the rights to whatever aspects of nature they need. They can then make whatever product they like and sell it on the open market. In essence this requires the separation of resources and other means of production (public interest/responsibility) from production itself (private interest/responsibility). Government regulates markets and collects compensation for the use of the earth/universe and private sector manages production. Each is forbidden from interfering in the other's sector.

I'll just give a very simple (and grossly over-simplified) example that will convey the idea:

There is a tree that could be cut down and used to make furniture. Those who wish to make the furniture bid for the right to the tree. The winning bidder pays the community, cuts down the tree, makes the furniture and sells it to the community. End of story.

What we have now is that those who want the tree, fight wars over it until one triumphs and the others give up or are dead. Then he claims every other tree as his own and pays the hungry crowd to do the work of cutting them down and making the furniture. He then organises the government to defend his rights to the trees and taxes the workers who cut them down in order to pay for the police and armies he needs to enforce his claim. Every now and then he tosses a few twigs to the unemployed crowd who protest in order to keep them quiet.

You may like the writings of Henry George. The problem is for most products/services the value added comes from IP as opposed to natural resources. Google does not make its money because it owns a bunch of office space.

As I recall, George was interested only in land. And he advocated a land tax. I talk about any "resource", including whatever is discernible from nature (that obviously affects IP, but not trivially, since I would reward the work that goes into discovery and invention but without granting a monopoly on what humans can learn). Otherwise, I agree there are similarities.

ppauper
Senior Member

Posts: 40347
Joined: Nov 2001

Wed Mar 25, 09 07:29 PM

Quote

Originally posted by: mackbar
Quote

Originally posted by: Fermion
Quote

Originally posted by: ppauper
Most folks I know just want the government to leave them alone

Most folks I know just want capitalism to leave them alone.

If only its embrace were a little warmer and it still respected you in the morning...

lol !
Capitalism will leave you alone but the government won't.
Go live in montana, grow your own crops, have solar power and a well, and the like, and you can live off the land.
But you still get a property tax bill

trackstar
Senior Member

Posts: 19704
Joined: Aug 2008

Wed Mar 25, 09 07:42 PM

As long as they plow the roads and protect my Constitutional rights, esp. Amendments 1 and 2, they can have their tithe.

-------------------------
The only constant is change.
- Heraclitus

Edited: Sat Mar 28, 09 at 10:07 PM by trackstar

Fermion
Senior Member

Posts: 4488
Joined: Nov 2002

Wed Mar 25, 09 08:04 PM

Quote

Originally posted by: ppauper
Capitalism will leave you alone but the government won't.

Ideologues love oxymorons like this. Meaninglessness is meaningless to them after all......

gardener3
Senior Member

Posts: 1421
Joined: Apr 2004

Wed Mar 25, 09 10:59 PM

Quote

Originally posted by: Fermion
Quote

Originally posted by: gardener3
Quote

Originally posted by: Fermion
Quote

Originally posted by: Aash
Quote

Originally posted by: Fermion
Quote

Originally posted by: DominicConnor
Consider a government that has no interest other than getting as much tax as possible (not hard is it ?)
If you have zero tax then it gets no income
At 100%, you also get no tax either because no one bothers to earn.

It follows that there exists at least one maximum between those two points.

Uncontentious you may think ?

Taxes are so 20th century! They are an unfair and irrational way of trying to compensate for an unfair, irrational and broken economic system.

To collect the income due to the community/public, one must make an appropriate separation between public interest (and responsibility) and private interest (and responsibility) in the market place. No economic system, to my knowledge has ever addressed this problem rationally rather than ideologically. Isn't it about time we did?

Conceptually, I find this interesting, this idea that you could quantify income due to the public, although I'm not even certain what you're recommending here. Care to elaborate?

The basic principle is that the earth and all of nature's bounty, including the laws of physics and mathematics and all science, are the natural inheritance of the community as a whole. This means that if anyone exploits them for private gain, then they must compensate the community. The way to do this is by the market and it is the responsibility of the community to provide a functioning market place which, again, is a community right. Those who wish to exploit a particular resource compete in the market for the rights to whatever aspects of nature they need. They can then make whatever product they like and sell it on the open market. In essence this requires the separation of resources and other means of production (public interest/responsibility) from production itself (private interest/responsibility). Government regulates markets and collects compensation for the use of the earth/universe and private sector manages production. Each is forbidden from interfering in the other's sector.

I'll just give a very simple (and grossly over-simplified) example that will convey the idea:

There is a tree that could be cut down and used to make furniture. Those who wish to make the furniture bid for the right to the tree. The winning bidder pays the community, cuts down the tree, makes the furniture and sells it to the community. End of story.

What we have now is that those who want the tree, fight wars over it until one triumphs and the others give up or are dead. Then he claims every other tree as his own and pays the hungry crowd to do the work of cutting them down and making the furniture. He then organises the government to defend his rights to the trees and taxes the workers who cut them down in order to pay for the police and armies he needs to enforce his claim. Every now and then he tosses a few twigs to the unemployed crowd who protest in order to keep them quiet.

You may like the writings of Henry George. The problem is for most products/services the value added comes from IP as opposed to natural resources. Google does not make its money because it owns a bunch of office space.

As I recall, George was interested only in land. And he advocated a land tax. I talk about any "resource", including whatever is discernible from nature (that obviously affects IP, but not trivially, since I would reward the work that goes into discovery and invention but without granting a monopoly on what humans can learn). Otherwise, I agree there are similarities.

That is trivial since everything (by definition) is discernible from nature. Suppose I develop a new way of measuring credit risk. I contract out the idea for a fee and make millions. What resources have I used and how much should I be taxed?

Fermion
Senior Member

Posts: 4488
Joined: Nov 2002

Thu Mar 26, 09 01:02 AM

Quote

Originally posted by: gardener3
Quote

Originally posted by: Fermion
Quote

Originally posted by: gardener3
Quote

Originally posted by: Fermion
Quote

Originally posted by: Aash
Quote

Originally posted by: Fermion
Quote

Originally posted by: DominicConnor
Consider a government that has no interest other than getting as much tax as possible (not hard is it ?)
If you have zero tax then it gets no income
At 100%, you also get no tax either because no one bothers to earn.

It follows that there exists at least one maximum between those two points.

Uncontentious you may think ?

Taxes are so 20th century! They are an unfair and irrational way of trying to compensate for an unfair, irrational and broken economic system.

To collect the income due to the community/public, one must make an appropriate separation between public interest (and responsibility) and private interest (and responsibility) in the market place. No economic system, to my knowledge has ever addressed this problem rationally rather than ideologically. Isn't it about time we did?

Conceptually, I find this interesting, this idea that you could quantify income due to the public, although I'm not even certain what you're recommending here. Care to elaborate?

The basic principle is that the earth and all of nature's bounty, including the laws of physics and mathematics and all science, are the natural inheritance of the community as a whole. This means that if anyone exploits them for private gain, then they must compensate the community. The way to do this is by the market and it is the responsibility of the community to provide a functioning market place which, again, is a community right. Those who wish to exploit a particular resource compete in the market for the rights to whatever aspects of nature they need. They can then make whatever product they like and sell it on the open market. In essence this requires the separation of resources and other means of production (public interest/responsibility) from production itself (private interest/responsibility). Government regulates markets and collects compensation for the use of the earth/universe and private sector manages production. Each is forbidden from interfering in the other's sector.

I'll just give a very simple (and grossly over-simplified) example that will convey the idea:

There is a tree that could be cut down and used to make furniture. Those who wish to make the furniture bid for the right to the tree. The winning bidder pays the community, cuts down the tree, makes the furniture and sells it to the community. End of story.

What we have now is that those who want the tree, fight wars over it until one triumphs and the others give up or are dead. Then he claims every other tree as his own and pays the hungry crowd to do the work of cutting them down and making the furniture. He then organises the government to defend his rights to the trees and taxes the workers who cut them down in order to pay for the police and armies he needs to enforce his claim. Every now and then he tosses a few twigs to the unemployed crowd who protest in order to keep them quiet.

You may like the writings of Henry George. The problem is for most products/services the value added comes from IP as opposed to natural resources. Google does not make its money because it owns a bunch of office space.

As I recall, George was interested only in land. And he advocated a land tax. I talk about any "resource", including whatever is discernible from nature (that obviously affects IP, but not trivially, since I would reward the work that goes into discovery and invention but without granting a monopoly on what humans can learn). Otherwise, I agree there are similarities.

That is trivial since everything (by definition) is discernible from nature. Suppose I develop a new way of measuring credit risk. I contract out the idea for a fee and make millions. What resources have I used and how much should I be taxed?

It's far from trivial. Indeed you have hit on a key difficulty that I don't (yet) have an answer for (that satisfies me). Clearly you have created something valuable to the community (your customers), but equally clearly you are using community resources. At the very least these resources include (a) providing a market, (b) providing an economic environment where your method is useful and (c) the laws of nature which include the applicability of the math you have used. What I don't yet know is how to value and collect compensation for the last two (the first could be as simple as a transaction fee) without hindering your ability to market and profit from your IP and continue to make valuable contributions to the community. On the other hand I don't think the problem is so difficult as to be insoluble with some more thought.

Aash
Member

Posts: 74
Joined: Jan 2005

Thu Mar 26, 09 08:46 AM

Quote

Originally posted by: Fermion

It's far from trivial. Indeed you have hit on a key difficulty that I don't (yet) have an answer for (that satisfies me). Clearly you have created something valuable to the community (your customers), but equally clearly you are using community resources. At the very least these resources include (a) providing a market, (b) providing an economic environment where your method is useful and (c) the laws of nature which include the applicability of the math you have used. What I don't yet know is how to value and collect compensation for the last two (the first could be as simple as a transaction fee) without hindering your ability to market and profit from your IP and continue to make valuable contributions to the community. On the other hand I don't think the problem is so difficult as to be insoluble with some more thought.

I liked this idea intuitively, but have similar misgivings about how it extends beyond obvious resource models. Does it have to? I can see how a) and b) rely on the community. As for 3) I feel like this is a grey area. That you have picked an idea from the ether does not mean that there are any fewer ideas (although I guess this could be disputed) out there. And how would one argue that any idea could come under the jurisdiction of any particular country (except perhaps to argue that the environment shapes the idea?)

I guess this becomes less important for a country primarily reliant on it's natural resources for revenue, but then it's never really the trivial case that ends up mattering is it?

DominicConnor
Senior Member

Posts: 11300
Joined: Jul 2002

Thu Mar 26, 09 11:43 AM

But to add more level of nesting, we as people are artefacts of nature, whether by "nature" you mean physical law or some deity.

To answer gardner3's the resources used in developing an idea, are of course the most precious that a society may own.
We live in a society where new ideas have value, OK the distribution of value includes a good amount of zero, both to the individual and the culture it enriches.

Some societies reject new ideas, we sometimes feel guilty about the horrible things that happen to them as a result, but they happen anyway. My own ancestral culture didn't bother to work out some pretty obvious genetics and about a quarter of them died as a result. They did however do some impressive work in theology...

The resources used to produce an idea can thus be measured by opportunity costs. A society has a finite set of people capable of producing ideas, educating them has direct costs not just in teachers but in lost labour. In the next 10 years we are going to get a cure for several types of cancer, possibly photovoltaic cells that are not toys, better batteries and real time synthetic pornography at photo resolution.

RTSP is not something that most people would see as a triumph of our society, but you can't have a framework that excludes RTSP, because it comes from advances in computer hardware, maths, physiology and physics. As Microsoft has found with the commercial failure of Windows Vista, if you try and prescribe technology use too tightly, you will be bypassed.

katastrofa
Senior Member

Posts: 1477
Joined: Aug 2007

Thu Mar 26, 09 02:01 PM

Quote

Originally posted by: Fermion
Quote

Originally posted by: katastrofa
You can't separate economics from ideology.

Of course. But you can separate blind irrational ideology from intelligent behaviour. Or, at least, thinking person, rather than an alpha dog, can.

Ideology, by necessity, cannot be rational.

scholar
Senior Member

Posts: 831
Joined: Oct 2001

Thu Mar 26, 09 04:47 PM

Dear AIG, I quit!

A nice article in NYT. A quote:

"As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house. "

Cuchulainn
Senior Member

Posts: 29324
Joined: Jul 2004

Thu Mar 26, 09 05:03 PM

Quote

Originally posted by: scholar
Dear AIG, I quit!

A nice article in NYT. A quote:

"As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house. "

True. Maybe read the small print.

-------------------------
www.datasimfinancial.com

Fermion
Senior Member

Posts: 4488
Joined: Nov 2002

Thu Mar 26, 09 05:04 PM

Quote

Originally posted by: katastrofa
Quote

Originally posted by: Fermion
Quote

Originally posted by: katastrofa
You can't separate economics from ideology.

Of course. But you can separate blind irrational ideology from intelligent behaviour. Or, at least, thinking person, rather than an alpha dog, can.

Ideology, by necessity, cannot be rational.

Again, of course. Ideology is essentially non-rational in that it involves assumptions. It is when when it is inherently irrational (e.g. self-contradictory when all assumptions are made clear) that it can be dismissed. But the ideologue will ignore the contradiction and insist on the ideology. My point is that economics is dominated by such ideologues.

Fermion
Senior Member

Posts: 4488
Joined: Nov 2002

Thu Mar 26, 09 05:06 PM

Quote

Originally posted by: scholar
Dear AIG, I quit!

A nice article in NYT. A quote:

"As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house. "

Do you mean like workers who lost their pensions when Wall St burned down the markets?

gardener3
Senior Member

Posts: 1421
Joined: Apr 2004

Thu Mar 26, 09 07:27 PM

Quote

Originally posted by: scholar
Dear AIG, I quit!

A nice article in NYT. A quote:

"As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house. "

"On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes...." I feel really sorry for this guy. He worked 12 long monthes for only$1M+. Contracts get renogiated all the time and promises are broken and employees get screwed when a company goes bankrupt. Why does this guy who made a 1M deserve special treatment?

AIG is for all purposes bankrupt and exists at the pleasure of US taxpayers. It should not be the congress but the trutees who should be putting on the pressure and actively pursuing Cassano and his coworkers for professional misconduct and gross negligence.

Fermion
Senior Member

Posts: 4488
Joined: Nov 2002

Thu Mar 26, 09 08:42 PM

Quote

Originally posted by: Aash
Quote

Originally posted by: Fermion

It's far from trivial. Indeed you have hit on a key difficulty that I don't (yet) have an answer for (that satisfies me). Clearly you have created something valuable to the community (your customers), but equally clearly you are using community resources. At the very least these resources include (a) providing a market, (b) providing an economic environment where your method is useful and (c) the laws of nature which include the applicability of the math you have used. What I don't yet know is how to value and collect compensation for the last two (the first could be as simple as a transaction fee) without hindering your ability to market and profit from your IP and continue to make valuable contributions to the community. On the other hand I don't think the problem is so difficult as to be insoluble with some more thought.

I liked this idea intuitively, but have similar misgivings about how it extends beyond obvious resource models. Does it have to? I can see how a) and b) rely on the community. As for 3) I feel like this is a grey area. That you have picked an idea from the ether does not mean that there are any fewer ideas (although I guess this could be disputed) out there.

I tried to distinguish between the idea itself and the environment and laws of nature that make the idea useful. Having an idea does not make a significant dent in the number of undiscovered ideas. Although monopolising the idea, once you have it, does indeed make a dent in the universe of ideas available to others, that still doesn't tell us anything about how to value the community's resources that make the idea valuable. Those derive from its applicability to the environment in which it exists -- given the laws of nature and the laws of mankind. Profiting from those laws is the birthright of all of us -- not just the person who has the idea (although their creativity naturally entitles them to a premium).

Edited: Thu Mar 26, 09 at 08:46 PM by Fermion