04-29-2003, 01:04 AM | #41 |
Drow Priestess
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The real problem with trying to tinker with the economy these days is that as soon as you say what you're going to tweak the analysts who know what they're doing predict what effect will happen. That is to say, the long term effect is predicted during the short term and adjustments are made accordingly; this, of course, means that there is no difference between the long and short term.
Did that make sense? Or have I been awake too long? [img]tongue.gif[/img] The only time the rates of inflation and unemployment differ from what is expected is when something truly unexpected occurs, such as a factory explosion or some sort of national emergency. Ah, the beauty of rational expectations.... Getting back to taxes (I got an uncle that lives in taxes...dollars, taxes [img]tongue.gif[/img] )...the current tax system is quite poorly-designed. Although I do believe that people should get to keep the money they earn, the reality of life is that a system that fosters economic prosperity is not free; those who benefit greatly should put up a little ante for that privilege. Believe me, were I so lucky as to make $1M per year I would gladly pay 50% of that in taxes--if I can't live on $500k per year then I am a danger to myself. [img]graemlins/beigesmilewinkgrin.gif[/img] As it is, Belle and I are fortunately able to squeak by without needing to pay too terribly much in tax.
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04-29-2003, 09:36 AM | #42 |
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This is again going badly off-topic. Big surprise, eh?
Timber Loftis, I share your concerns about Congress limiting pain and suffering, though for slightly different reasons. I believe you really have to stretch the commerce clause to justify this one, and it is pure political favoritism to the AMA. People will just have to decide what health care is worth. If the awards get too high, doctors will become lawyers, and we will have a health care system that is the envy of, um, well, Ethiopia. But rest assured, we put much less value on a human life than you are suggesting. We know for a fact that several thousand deaths per year are because cars are whizzing along at 65 instead of 55. So we place the value of human life as some fraction of 10 mph. We know for a fact that we kill over 1000 per year because Corporate Average Fuel Economy standards have placed these people into smaller, lighter, more fuel efficient cars, so we place the value of a human life at a few gallons of gasoline... And why do you presume that no one's decisions are worth $40 million? Take 3M, for instance, which has roughly a $4 billion per year administrative and sales overhead. If Desimone (or whomever is the CEO now) comes up with an idea that trims a mere 1% from those costs, he has saved 3M stockholders $40 million per year. What would be the harm in letting these stockholders, i.e., owners, reward the CEO with the first year's savings? And who are you to supplant their decision with yours as to how much they should pay the CEO? Isn't that something for the owners/shareholders to decide? If not for the mercantilist system the US is rapidly evolving into, new startups would be nipping at the heels of any company who decided to award $40 million in bonuses when a mere $1 million would do the trick... |
04-29-2003, 09:53 AM | #43 |
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Azred, I don't believe it is that expensive to have a system that "encourages" prosperity. At the height of Reagan's military buildup, the budget was 1/4 what it is today. What exactly do we have to show for spending 4x as much? Do we have 4x the prosperity of the '80s?
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04-29-2003, 10:08 AM | #44 |
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Sorry, Thorfinn, I just don't see justifying any human act with a $40 M reward. Not when the basic lawyer's math for a death case is $1 million.
CAFE standards are a lop-sided comparrison, because the use of less fuel is supposed to have greater short and long-term health effects on the population that the death increases per year. Going 65 Mph rather than 55 Mph is about national efficiency in interstate travel. Which is likely worth gazillions. I know that I look at traffic stopped at a toll both in Chicago, and know that each person tossing in $0.40 is also a representation of roughly between $4 and $100 loss to the local economy (based on their hourly wage and the time they must wait), and wonder how the government can create all that waste for a measley comparable amount in taxes. So, anywho, the economy benefits greatly from reasonably sped-up travel. God, I hate it though when economics and human life valuation come together. It makes me feel dirty even discussing the topic. But, who am I to say you can't pay a CEO $40Mil? Well, if I can get 50.1% of Congress on my side, I'm the one who's right - that's who. And, if you don't like it you can get your friends and their guns and come at me and my friends with our guns and we'll settle it like men. It's called a revolution, see. Sorry for the hyperbole and the angst, but both liberty and equality taken to the furthest extremes are socially untennable. Which is why we can't have "liberty and equality for all," but why we must constantly try to balance them. I followed your statement about "decreasing incentive" btw, but I cannot make the logical connection of how corporate taxes are involved. If it's too off-topic, pm me about it. |
04-29-2003, 10:17 AM | #45 | |
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Quote:
Thorfinn, I'm not saying that it must be expensive to foster prosperity. All I am saying is that if I were to be much more financially well-off then I, personally, would not mind coughing up some money for that privilege. Small price to pay for retiring early and enjoying the world. [img]graemlins/petard.gif[/img]
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Everything may be explained by a conspiracy theory. All conspiracy theories are true. No matter how thinly you slice it, it's still bologna. |
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04-29-2003, 10:48 AM | #46 |
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I would agree that bringing our goods to market a nominal 18% faster is worth a lot in economic terms, since that allows the same capital to be used to transport a nominal 18% more goods per year. BTW, I don't recall CAFE being justified as a health issue -- I'm pretty sure it was a command and control response to OPEC. The health issue is just an ancillary benefit, and makes a value judgement -- we are willing to trade the lives of somewhere around 1000 per year for some unknown number who may be harmed by pollution to nudge the fuel economy average from 31 to 32 mpg. Yes, there may be an offsetting ancillary benefit due to less pollution, but CAFE is not about reducing pollution, but consumption. CAA is about reducing pollution.
And while I agree that our current fascination with democracy gives people the impression that whatever 50%+1 wants is right, that is specifically what the Constitution and Bill of Rights was designed to prevent -- that the rights of the individual should always trump the will of the majority. deToqueville had quite a lot to say about his fear of the almost inevitable incipient tyranny of the majority in his Democracy in America. He saw a growing feeling that, as Oliver Wendell Holmes said, "The first requirement of a sound body of law is, that it should correspond with the actual feelings and demands of the community, whether right or wrong." The cynic in me thinks Holmes said that mostly as a means of keeping the judiciary at least somewhat relevant -- if people did not respect its decisions, they won't bring their greivances before the court, so there is not much sense in making those decisions. As for corporate tax, that is the principal reason that profit/loss statements are so jumbled up. Whiz bang accountants and lawyers implement the tax shelters that they helped draft in the first place. Corporations spend vast amounts of effort and money to avoid paying tax. If the tax were less, it would not be worth as much to try to reduce your tax bill. If there were no corporate tax, there would be no incentive at all to hide income, and owners (stockholders) would demand periodic proof that the statements were valid, i.e., dividends. Now, when you realize that corporations are going to pass their tax bill on in the form of higher prices, we realize the consumer is the one who pays corporate tax anyway. The corporation is just a front-man for the tax collector... |
04-29-2003, 10:58 AM | #47 | |
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04-29-2003, 11:00 AM | #48 |
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Corps can't pass on all their taxes (those that they *cough* pay to begin with) because the S/D curve has a limit and they cannot surpass it. At some point, they must take from their profits, lose market share, or close doors.
The tax issue addresses how they hide *profits.* The Chewco problem was with hiding *loses,* which are actually beneficial tax-wise. While these are related, they are certainly distinct problems. As for the 50% + 1 thing, I am all for it - to the extent allowed by the constitution. I think you and I can likely agree on that. Where we disagree is what that extent is. I will cite some caselaw you do and don't respect, and you will cite some philosophers I do and don't respect. But, in the end it's really a Constitutional interpretation issue. Unlike you, I think the document was made purposefully vague in many areas. |
04-29-2003, 11:04 AM | #49 | |
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However, in any system that I suspect you're talking about, you give up some liberty. Locke's 2nd Treatise proposes a Utopia that is achievable if you will give up only 1 freedom: the right to harm others. Ergo, it is not complete liberty. Liberty and equality are opposite conversing arms of a dialectic that has been going on for most of recorded human social development. [ 04-29-2003, 11:05 AM: Message edited by: Timber Loftis ] |
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04-29-2003, 11:10 AM | #50 |
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Until people choose not to buy the good or service, (and thus have a lower standard of living by the difference of the amount of that foregone good or service and how they actually used those resources,) corps can pass on any amount of tax, as long as all corps have to bear the same tax burden. That is why the US and EU are going gangbusters about putting pressure on tax havens. Corporations based in Caymen have a competitive advantage over those based within the country's borders, which is why legislators are so opposed to those havens -- they limit the amount of tax one might levy.
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