snousle

Can you point to a place where this is being done successfully?

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No. That is why I describe it as a "fantasy".

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Isn't Libertarianism per se, at best a fantasy?

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For the most part. The US could get there in theory, and it would almost certainly work very well. But absent some mystical and unprecedented consciousness-raising event that changed the attitude of the whole nation, there is no hope of it actually happening.

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Well, yes... that's nice, in theory, but since these ideas have been bouncing around for 200 years, where are all the societies that are shining examples of the success of this theory.

Cause, you see, to me it just ends up in a feudal state.

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And those are some of the reasons why I am not a libertarian.

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various combinations of paternalism, micromanagement, moralism, corruption, and crony capitalism
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you are simply not bold enough.

More elegant solution is stochastic taxation of the super-wealthy.

There is some statistic that the super wealthy, 1%, own 99% of everything.

The elegant tax: at random intervals, confiscate the wealth of some number of them.

It's good for a dynamic economy filled with opportunity and no one gets harmed.

No complex claims process for millions of people.

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The number is more like 40% of everything. From Mother Jones - In 2008 the best-off one percent will have an estimated average income of almost $1.5 million each.

If this means that the top 3 million Americans earn 1.5 million each, then that's about 4.5 trillion dollars total income. (Less if the "top one percent" doesn't include children and retirees.) Total government revenue is about 3.7 trillion (2009). You'd have to confiscate the total income of about 80% of the top 1% to make up the same revenue.

Doesn't sound like that would work very well.

Edited Date: 2011-01-19 05:46 am (UTC)

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furr-a-bruin.livejournal.com

There's a difference here between "income" and "net worth."

oscarlikesbugsy is talking about confiscating an extremely wealthy person's entire net worth, not the income that net worth generates for a year. I don't know if his numbers are right or if yours are, but it strikes me that the two of you are talking about completely different things.

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True, even though I did deliberately overstate my statistic to highlight the greenfield.

But...as long as we're being bold, why net anything? By that I mean, estate liability holders are s.o.l.

I have some 'extortion taxes' to "recommend", too. :-)

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I did deliberately overstate my statistic

I would suggest not doing that when discussing economics on my journal, as I will tear it to shreds every time.

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Well, if it is any consolation, I didn't do it with the intension of misleading.

Sometimes, you just overstate to signal that you know the weaknesses in your own argument or to show that you really don't know what the statistic is, your just making a sort of directional statement/opinion.

Rigor is sometimes mortis, no? (ha! I crack myself up.)

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Yes, ~~Captain Obvious~~, I understand the difference between income and net worth. But taxing net worth is extremely difficult because many assets are hard to account for and cannot be liquidated at will, so I analyzed the most plausible scheme that could actually be implemented.

[Yes, that was excessively snarky, I could have made the distinction clearer. But wealth necessarily comes from income, or must become income in order to be realized, and the distributions of income and wealth at the top end are reasonably similar, with somewhere 40% assigned to the top 1% in each case. So they are not wholly unrelated.]

Edited Date: 2011-01-19 04:26 pm (UTC)

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Check this out, making the rounds today:

"Abstract:
This paper examines the required tax rate in a national retail sales tax (NRST). I show that recent proposals, such as one to replace virtually all federal revenues with a 23 percent tax inclusive NRST, are based on assumptions that real government spending would decline by $480 billion per year, and that there would be no tax avoidance, evasion or political erosion of the tax base in an NRST. Correct for these assumptions indicates that the required tax-inclusive rate would be over 50 percent and the required tax-exclusive rate would be over 100 percent."

The author's not a complete slouch.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1754663

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That is exactly what I would have guessed; current taxation is about 30-35% of GDP, and I've seen several sources calculate that supporting non-discretionary spending for the next few decades (medicare, social security, other mandates) will require a 50% increase in that rate, which gets us to about 45-50% overall.

Which is another reason left-libertopia remains a fantasy.

The only question in my mind these days is "how will it end"? It's very strange to see the recipients of all this largesse (senior citizen tea partiers) rebelling against taxation when they're the ones who are on the receiving end. One might think they're being played.

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Where will it end? Tears over false hopes, prolly. But, I suspect the Tea Party zeal is good for at least one more election cycle.

I'm not versed in how Value Added is actually calculated.

The $280 one might pay for Microsoft office is probably 85-90% margin for them, unless you do fancy accounting to lard it. In comparison, a new car margin might be 5%-8%, implying one would pay the same tax at about $4,800 in car as for $280 in software.

If a start-up software company is losing money, does that mean that the VA on their products is zero? Does a used car have a "VA"?

Who keeps track of the giant input-output table that makes it all fair? Is an auto company really going to reveal what it's margin is on a luxury vehicle - I think they'd avoid that studiously, no?

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Wikipedia has a good summary of how a VAT works:

http://en.wikipedia.org/wiki/Value_added_tax

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Oh, and, btw, to the point of the article, Tea Party Express hooligan Senator Rand Paul is in the press (WSJ today) advocating for ... wait for it ... about $500 billion in government cuts, vaguely defined.

I guess he was at-the-ready for someone to find the $500 billion dollar tacit assumption in his election campaign...

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furr-a-bruin.livejournal.com

Obviously I'm not a libertarian of any stripe because my visceral reaction to the phrase "fully deregulated" in nearly any context is "FUCK NO!"

My personal opinion is that the income tax we have now is far too flat; it needs to be more progressive, with far more brackets to properly tax extreme wealth. I'd be happy with a structure similar to either pre-Reagan (top marginal rate of about 70%) or pre-Kennedy (top marginal rate 91%).

Or perhaps we need a small tax on net worth over, say $5 million, bumping up a little every $10M thereafter. Wouldn't THAT make the tea party nutjobs it would never apply to scream!

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I certainly don't want to fly on a fully-deregulated airline.

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furr-a-bruin.livejournal.com

That's an excellent example.

If I grew all my own food, I wouldn't need a USDA or the FDA - but I don't, so I do. I can't go personally inspect every facility that makes food I eat; even if those two agencies are imperfect, they're better than nothing. (See Upton Sinclair's The Jungle.) Food can look and smell right, but still be dangerously tainted beyond the ability of an ordinary person to detect so "caveat emptor" is a useless concept here.

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I didn't suggest deregulating either airlines or eliminating the FDA. Medical care is a special case, and is currently so fucked up that radical change may be necessary.

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mellowtigger

Or work for any fully deregulated employer.

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Actually, on second thought, although I don't suggest deregulation of everything, airlines would be an excellent candidate: large scale operations, strong branding, high visibility, and catastrophic consequences for mistakes. If any industry concerned with public safety were motivated to effectively self-regulate, it would be the airlines.

Most regulations are not really aimed at improving safety, but creating barriers to entry that prevent competition and suppress innovation.

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Have you ever noticed that people buy a ticket on a Delta and board a plane that says Delta Connection on it, and when it crashes and kills everyone on board, the news reports that a Comair flight has crashed?

There's your answer. The catastrophic cost of mistakes is disposable airlines.

Edited Date: 2011-01-20 07:16 am (UTC)

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fingertrouble.livejournal.com

20% VAT. Who in their right mind would do THAT?

Oh.

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