Economist here, I want to rant about why I don't tell people

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CarlM
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20 Oct 2022, 9:28 pm

stratozyck wrote:
- Recycling paper is stupid, stop doing it to save trees. It does not save trees. Trees are a farmed product. If we waste more paper, they plant more trees. Again, I'm not saying I like fajitas here - don't waste paper to cause them to plant more trees.

Why are you so against paper recycling? There is much more to it than saving trees.


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24 Oct 2022, 9:18 am

I casually bought Sowell's Basic Economics last year because I thought I should go over the basics with my then second grader, who I had just pulled out of public school (for the second time). I have been reading his books and enjoying his interviews on youtube ever since. I like the get off my lawn style. But I agree, when he was younger he did make a little more sense. He directly interacted with critics more.

I have found economics to be a frustrating subject in which to become more educated. As you said, people tend to have sloppily formed opinions on this type of thing and are all too happy to put in their two cents. In today's world, all thoughts are valid and no proof is needed.

Have you noticed how shockingly ignorant schoolchildren have been with these pandemic years? What are you thoughts on that and the impact this ignorance will have as the kids grow into adults?



kraftiekortie
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25 Oct 2022, 9:15 am

"Economics" to a theorist is very different than "economics" is for a person struggling to live on two jobs (and two jobs for the person's partner, too).



Hollywood_Guy
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31 Oct 2022, 6:37 pm

Mona Pereth wrote:
Hollywood_Guy wrote:
What would be your take if the US hypothetically abolished most other taxes and instituted one based on, say the sale price of buying anything that had a screen on it?

This would be a regressive tax. In today's world, EVERYONE needs to have at least one device with a screen on it.

What we need is to find ways to tax the rich more than anyone else, to keep inequality from spiraling even more out of control.


Why is taxing the income (rich or non-rich) necessary at all? If all other taxes made directly on income and profit were abolished, that would compensate for the indirect and excise taxes being "regressive".



Mona Pereth
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04 Nov 2022, 6:24 am

Hollywood_Guy wrote:
Why is taxing the income (rich or non-rich) necessary at all? If all other taxes made directly on income and profit were abolished, that would compensate for the indirect and excise taxes being "regressive".

The tax you proposed is one for which rich and poor pay a roughly equal amount. Thus the rich pay proportionately less.

We NEED to have taxes for which the rich pay proportionately MORE, not less.

IMO one of the biggest problems our society faces is the ever-increasing economic inequality. Tax policy needs to address this.

Taxing the rich, proportionately MORE than anyone else, is a highly desirable goal in and of itself, however this gets accomplished.


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stratozyck
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04 Nov 2022, 9:56 pm

SocOfAutism wrote:
I casually bought Sowell's Basic Economics last year because I thought I should go over the basics with my then second grader, who I had just pulled out of public school (for the second time). I have been reading his books and enjoying his interviews on youtube ever since. I like the get off my lawn style. But I agree, when he was younger he did make a little more sense. He directly interacted with critics more.

I have found economics to be a frustrating subject in which to become more educated. As you said, people tend to have sloppily formed opinions on this type of thing and are all too happy to put in their two cents. In today's world, all thoughts are valid and no proof is needed.

Have you noticed how shockingly ignorant schoolchildren have been with these pandemic years? What are you thoughts on that and the impact this ignorance will have as the kids grow into adults?


I highly recommend the "Cartoon Guide to Microeconomics" and the "Cartoon guide to Macroeconomics" they are up to date and explain it better than any textbook.



stratozyck
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04 Nov 2022, 9:57 pm

kraftiekortie wrote:
"Economics" to a theorist is very different than "economics" is for a person struggling to live on two jobs (and two jobs for the person's partner, too).


You are confusing finance with economics.



stratozyck
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04 Nov 2022, 9:59 pm

Hollywood_Guy wrote:
What would be your take if the US hypothetically abolished most other taxes and instituted one based on, say the sale price of buying anything that had a screen on it?


Effectively that is a consumption tax and rich people would pay effectively 0% of their income.

Money would pool at the top and they'd buy up land and drive us all into higher debt levels.

If that is your goal, go for it.



stratozyck
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04 Nov 2022, 10:01 pm

CarlM wrote:
stratozyck wrote:
- Recycling paper is stupid, stop doing it to save trees. It does not save trees. Trees are a farmed product. If we waste more paper, they plant more trees. Again, I'm not saying I like fajitas here - don't waste paper to cause them to plant more trees.

Why are you so against paper recycling? There is much more to it than saving trees.


What makes more sense:

1) Letting the paper garbage sit there and decompose or
2) burning yet more carbon to truck the paper over to places to recycle it, also using more carbon

Easiest way is to plant trees to match demand and let the carbon stay in the paper trash.

Its negligible. Its part of the industry's attempt to blame consumers for global pollution when something like 87% of greenhouse gasses are made in non residental areas of our society. So we can replace all the light bulbs we want with efficient ones and it will have next to no benefit.



stratozyck
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04 Nov 2022, 10:13 pm

Hollywood_Guy wrote:
Mona Pereth wrote:
Hollywood_Guy wrote:
What would be your take if the US hypothetically abolished most other taxes and instituted one based on, say the sale price of buying anything that had a screen on it?

This would be a regressive tax. In today's world, EVERYONE needs to have at least one device with a screen on it.

What we need is to find ways to tax the rich more than anyone else, to keep inequality from spiraling even more out of control.


Why is taxing the income (rich or non-rich) necessary at all? If all other taxes made directly on income and profit were abolished, that would compensate for the indirect and excise taxes being "regressive".


Taxes are the cost to running society.

If you abolish corporate taxes, people owning US companies in other countries will avoid paying for the infrastructure upkeep of US companies.

There isn't enough excise taxes to pay for the cost of running society. With sales taxes only, the rich get away without paying for society. With income taxes - and even better, higher capital gains/inheritance taxes, you can better match payments to the people benefiting most from society.

Your surgeon at a local hospital makes a lot of money mainly because the US government enforces market protection of surgeons. You will find that the economy has a lot of people making a lot of money who benefit from some sort of societal protection.

Bill Gates is a billionaire because the US government will arrest you for copying Microsoft software and selling it as your own. They will also send diplomats to negotiate with foreign countries so they don't copy their software. This negotiating power is derived from the power of the US military. Your common laborer requires no such enforcement.

Above most income ranges, say 0- 100k/year or so, you don't really benefit from government enforcing your intellectual property. But the US military will help enforce Bill Gates', and therefore it makes sense he should pay more as a percentage than common laborers. Of course, he does not. They used their windfalls to pay lobbyists to buy politicians.

Patents and intellectual property are selectively enforced as well. The creator of the C programming language did not get any revenue from every program made with C - he'd have died a billionaire. But you so much as accidentally plant a genetically modified seed from Monsanto (look them up, evil company) and there will be hell to pay.

What the rich want to do is two fold: 1) they want to keep their money and 2) they want to buy political influence

Their goal is to turn things that used to be government benefits into debt assets for themselves.

Thats why in 1970s college was funded a lot higher - and then it turned into a debt asset for the wealthy.

If they get what they want completely, they will buy all the real estate assets they can get their hands on and drive more people into rental treadmills where you never gain equity.

Taxes on income and wealthy are necessary thus for two reasons - one is to fund society, and the second is to lessen the political power of the wealthy. For reference, I define the wealthy as people with 10+ million in net assets. The only way you can reach that on a salary is a lifetime of being a surgeon or something similar - and as I mentioned even then you only make it there because you were protected from competition by the US government.



stratozyck
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04 Nov 2022, 10:21 pm

Mona Pereth wrote:
Hollywood_Guy wrote:
Why is taxing the income (rich or non-rich) necessary at all? If all other taxes made directly on income and profit were abolished, that would compensate for the indirect and excise taxes being "regressive".

The tax you proposed is one for which rich and poor pay a roughly equal amount. Thus the rich pay proportionately less.

We NEED to have taxes for which the rich pay proportionately MORE, not less.

IMO one of the biggest problems our society faces is the ever-increasing economic inequality. Tax policy needs to address this.

Taxing the rich, proportionately MORE than anyone else, is a highly desirable goal in and of itself, however this gets accomplished.


Yes, exactly. Here is another weird thing about rich people:

Because there are so few of them - but they have so much wealth - if you tax them it barely impacts their purchases. What we say in economics is that the things they spend their money on are "very inelastic in supply."

For example, they buy high end art. New production of high end art is very slow, so the supply is effectively fixed. Give the rich more money and they buy the same amount of art, but bid higher. Tax them more and - they buy the same art but at a lower price!

Replace art with land and the example mostly follows. Except, we all buy land when we buy houses! While land is fairly fixed, it is less so than art. It still is a similar impact - tax them and we can actually end up paying less in rent/mortgage costs because they will buy up less land.

The rich have this mindset that "anyone can be a millionaire!" and that justifies their lack of compassion for everyone else. The reality is if we all became millionaires tomorrow we'd have to import poor people to do the jobs we don't want to do anymore. Society needs people who aren't rich to... you know run society and do things like pick up garbage.

We have to make them invest in society because they have no loyalty to anyone other than their own egos. Elon Musk won't defend the US if we get invaded - he will leave. It is vitally important that those of us who would get drafted to defend the US or its interests make the jerks pay for our health care and education.



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05 Nov 2022, 2:30 am

There are good illustrations in some of stratozyck's posts as to why the rich actually draw far more benefit from government than the average citizen. The fact that they should pay more in tax is not just because they have the resources to do so, but because creating and maintaining their wealth does, in fact, rely heavily on the resources and efforts of government.


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05 Nov 2022, 3:08 am

Tax is quite interesting in a world run on MMT. Laymen like myself often find themselves asking at some point "why bother with tax at all if you can just print money to pay for government projects?"

There are some answers here:

https://www.taxresearch.org.uk/Blog/202 ... ry-theory/


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stratozyck
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05 Nov 2022, 11:00 am

DW_a_mom wrote:
There are good illustrations in some of stratozyck's posts as to why the rich actually draw far more benefit from government than the average citizen. The fact that they should pay more in tax is not just because they have the resources to do so, but because creating and maintaining their wealth does, in fact, rely heavily on the resources and efforts of government.


Thank you! I would also like to add that the rely on working class citizens to use force to defend their interests. Working class citizens don't get the US Marine corps invading a country to expand your interests. I would argue that the military budget by and large benefits the rich because the US military definitely springs into action anytime oil supplies are threatened. We pay the taxes for the military, Exxon gets the profits. In any sane country you'd tax them more, but instead we give them tax breaks.

100 years ago it was other industries the US military invaded to support. If you look at the history of military invasions worldwide, they almost always are for the benefit of the top class.

The British Empire didn't go into India to get better living standards for its lower classes. They used the lower classes to whack countries like India over the head so the upper class could get monopoly trading rights. It wasn't even cost effective for the country as a whole, but because these things benefit the rich (who are always closer to political power than normal people) they do them.

If you go back even further to the Roman Empire, the Roman empire grew like this:

1 Raise an army by promising land from conquered areas
2 Invade an area, kill most locals - something like 2/3rds of modern day France was wiped out when the Julius Caesar invaded.
3 Take most of the land for the top, you run the land by slaves and you grow for export crops.
4 The soldiers get their land, but its just land to grow some food crops and support a family.
5 Soldiers descendants typically sold it to the rich rather than divide it, and they moved to Rome

This process repeated for centuries, the Roman Empire was like this evil slave empire run for the benefit of the rich. It wasn't even good for society as a whole. The theory is because they relied on slaves, they didn't care about innovation. Thats the argument as to why 18th Century England industrialized while ancient Rome had centuries of fairly stagnant tech innovation. If they did innovate/discover something, there was little reason to adopt it because slaves were cheaper.

I'm not saying the US will go full slave empire, but what I am saying is that the US government expenditures to tend to be put into the service of those who have influence and wealth. The main program that benefits working class people are things like social security, disability, and unemployment. But even those are mainly paid by taxes on working class people!

We could fix our social security problem in the US easily by simply eliminating the income threshold for social security taxes or adding a capital gains tax. But they don't want to do it.



stratozyck
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05 Nov 2022, 11:13 am

Mikah wrote:
Tax is quite interesting in a world run on MMT. Laymen like myself often find themselves asking at some point "why bother with tax at all if you can just print money to pay for government projects?"

There are some answers here:

https://www.taxresearch.org.uk/Blog/202 ... ry-theory/


I did not go to the blog but its easy to explain.

The only things that are real are unemployment and inflation. The rest is not real if you borrow in money you print.

We could pay off entire national debt by raising taxes a ton. But that would cause unemployment.

We could pay off entire national debt by printing the money. But that would cause inflation.

Instead we seek to manage the balance. Some inflation is actually a good thing because a baseline 2% or so allows workers in industries that are becoming less productive get real pay decreases but they think its a pay increase if they get 1% annual raises.

Deflation is bad as well, 2% deflation is much, much worse than 2% inflation and is usually a sign of a severe economic downturn. Debts become more burdensome in deflation and defaults pile up.



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07 Nov 2022, 7:09 pm

stratozyck wrote:
We could fix our social security problem in the US easily by simply eliminating the income threshold for social security taxes or adding a capital gains tax. But they don't want to do it.


At least the cap on Medicare taxes is gone. Technically it is still there, but effectively it isn't, because the ACA added taxes that are basically the medicare tax expanded across more income categories with no cap.

Social security is more complicated because in the current political climate I worry about what would happen politically if we allow the illusion that social security is your personal savings account to fall. I used to feel it was better to drop that illusion and call it what it is, but now I think it would backfire. Tough call; psychology has so much to do with voting and politics. I am going to need my social security to supplement what we've saved, even though I've tried all my life not to count on it. My social-economic class has done some back sliding since I entered adulthood; it is what it is; could be a whole lot worse.


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