Quote:
Originally Posted by Tiny
Well, now I've got a direct pipeline to the Saints of Classical Liberalism. I'll run this by them and see if they've got any suggestions on how to get through to you. Back with you later, stay tuned.
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Thou shalt not covet thy neighbor's house, nor his wife, nor anything that is your neighbor's
-- Exodus 20:17
Whether relative income or absolute income could affect subjective well-being has been a bone of contention for years....Using multilevel analysis, we tested the hypotheses with a dataset of 30,144 individuals from 162 counties in China.
....At a county level, happiness and life satisfaction was only associated with relative income. Without social comparison, income doesn’t improve happiness.
--Zonghuo Yu and Li Chen
Dear WTF,
OK, I asked Saint Milton about this. He said this was a question for Richard Thaler, so I rang him up. Thaler, who's kind of blunt, read some of your posts and says you don't give a rat's ass about the deficit. Rather, your concern is about inequality. If what you cared about was the deficit, you'd want to limit spending. And you don't, except for the military.
He also noted your recent post about how rich people want to get us into wars so they'll make more money, and the only way to keep that from happening was to raise their taxes sky high. We both got a good chuckle out of that one.
Anyway Dick said people don't care so much about how much money they make. What's important to them is how much money they make compared to their neighbors. If you're dragging down $120,000 a year and your neighbors are making $200,000, you won't be as happy as if you were making $70,000 and the neighbors were making $60,000.
He said that's bull shit though. Then he started spouting on about how ancient war parties used to raid villages and kill all the men and bang all their women. He said that's what evolution caused the men to do, to spread their seed. I'm not sure but I think his point is that you should be happier making $120,000 a year than $70,000, REGARDLESS of what your neighbor makes, but human nature makes you think otherwise. I'm not sure though. Dick is a little obtuse.
So anyway, using the "kill the men, bang the women" theory, I think he's saying you want to make everybody poorer if that will make them more equal. And the easiest way to do that is with Bernie Sanders style taxes on wealth, income and dead people's estates. It's harder (but better for all of us IMHO) if you work the problem from the other end -- improve education and the social safety net for disadvantaged children, come up with a program like superannuation in Australia to encourage more people to save, do something about an out of control health system that bankrupts poor people, etc.
I may be confusing you with Chung Tran, but you do want to tax capital gains at ordinary income rates, right? You go beyond about 28% rates and the amount of revenues collected by the government go down. That's one way to decrease inequality, but it makes us all poorer. The government gets less revenues.
And you're a strong proponent of the death tax. The 40% estate and gift tax only accounts for 0.5% of government revenues. Compliance is difficult and it's a GDP destroyer because of all the hoops people jump through to avoid it, thus allocating capital inefficiently.
And this whole tax-the-people-to-make-everyone-equal is just stupid. It makes everyone poorer, as you drag money out of the private sector and put it in the hands of an inefficient federal government, and smacks of Communism.
Hope this helps. I told the Saints of Classical Liberalism about how you used to be a three-quarters Libertarian and now you're a one-quarter Libertarian, and they all thought that was sad. We need more Classical Liberals. It's rough losing a soul, or even three-quarters of a soul.
