I don't think the rich really get anything out of it, but in the Nordic countries, fines increase in proportion to your wealth. I remember reading about a Nokia exec getting pulled over for speeding. His ticket was like $75,000! http://www.npr.org/templates/story/story.php?storyId=1670583
I've often thought some fees should be adjusted for wealth. For example, a quarter a day isn't really enough to get me to take my library books back on time. Maybe for me it should be $2 a day.
In Sweden many fines are defined in "dagsböter" or literally "day fines" as opposed to an actual amount. Basically one "dagsböter" is equivalent to one days wages. So the judge decides that you should pay 60 days wages, without actually have to take any stance to how much you actually pay.
The biggest pieces of the pie are things we are UNWILLING to cut (not incapable of cutting)! Its time for us to make some difficult decisions about what cuts we should make instead of relying on other peoples' money to solve other peoples' problems.
Democrats will have to be the one to do it too. Republicans don't have the credibility. It's the Nixon in China thing where a Republican can open dialog with a communist leader but a Democrat would appear to be socialist for doing so.
Says the former comptroller-general of the US. http://en.wikipedia.org/wiki/I.O.U.S.A. Cutting out the military now might fix today's deficit (and it should happen) but that baby boomer time bomb is ticking.
One thing that at least some rich people will pay for is status symbols (expensive watches, sports cars that will never exceed 100mph, mansions with rooms that are used only a couple of times a year, $500 t-shirts). Status signaling is ultimately a zero-sum positional arms race that can lead to some pretty ridiculous conclusions(1) and doesn't really leave anyone better off (other than, perhaps, luxury goods suppliers).
The bad version of this idea would be a special ID card and/or bumper sticker or t-shirt or watch that was given to top-bracket taxpayers. It would have to be reasonably hard to forge (or at least as hard to forge as, say, a Rolex) and able to be either displayed publicly or flashed discreetly in situations where one wants to assert status.
Another variation could be some kind of property tax where certain sub-neighborhoods would have exceptionally rates, say 100x what the ordinary tax on the land and improvements would be. Then people could signal status by living or staying in those areas. (This is actually not too different than somewhere like Manhattan or San Francisco currently, except the windfall is going to existing property owners rather than the government).
The nice thing about status symbols is that, like fiat currency, they can be rather cheaper to produce than what their value to the status-seeking public is. That is the government could potentially retain a very high seignorage, as it were, on this stuff.
Ultimately it would have to be determined whether the status symbols could be legally transferrable, and what, if any, penalty there would be for forging them.
As an aside, it strikes me that this sort of thing would be extremely similar to fiat currency, maybe identical.
The problem is that it's hard to create a high status item. Say you invent the "US Govt. Certified Top 0.1% Badge" - do you really think Peter Thiel, John Paulson or Alex Rodriguez will really give a crap?
Taxing existing luxury status symbols could work, and is very likely a good idea. Creating new status symbols is likely to fail horribly.
Also, the tax on certain neighborhoods neglects the very large non-status reason why those neighborhoods are valuable: proximity to something cool. Manhattan is expensive not just because it raises your status to live there, but also because if you work at Goldman Sachs, you are willing to pay $3000/month rent + ridiculous NYC income taxes to avoid a 1 hour commute.
I suppose we could also bring back the Sumptuary laws:
sounds like knighthood titles and special last name salutations (I don't speak Polish, but my understanding is that last names ending with a "tzky" indicate some royal/lord designations). Some of these are transferrable.
Scott Adams, like the politicians in Washington DC, is living in a dream world.
Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements. Tax "the rich" at 100%, and we would still be running a deficit. Tax corporations at 100%, and we would still be running a deficit.
On the left, politicians make it sound as though we're just a few tax hikes and some defense cuts away from a sound federal budget. On the right, they make it sound as though all we need are some cuts to programs like the UN or foreign aid and some tax cuts to spur economic growth.
They are both in a DREAM WORLD. Some taxes will have to go up, but most importantly, Social Security and Medicare will have to be substantially reduced. Whether it means privatization, defined contribution, or some combination of solutions, no one in my generation (I am currently 24) will see either of these programs as our parents did. In fact, current retirees and soon-to-be-retirees will also probably need to have their benefits reduced. There is just no way around it.
Our revenue is about $2.4T. Entitlements are $2.0T.
Taxing the rich at 100% would generate about $2T in additional revenue each year. Which would pretty much cover entitlements. Of course its absurd to do that -- and its not as if people will continue to generate revenue if all of it is taxed, but lets not spread myths, even in hyperbole.
no one in my generation (I am currently 24) will see either of these programs as our parents did.
You're gonna laugh, but I thought the same thing when I was 24 (twenty years ago) and Social Security is still solvent for the next thirty.
That system ain't broke. It's just that they really, really, really want that money. If they manage to get us to break it for them, your pessimism is - quite literally - a self-fulfilling prophecy.
> Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements. Tax "the rich" at 100%, and we would still be running a deficit. Tax corporations at 100%, and we would still be running a deficit.
Wait, wha? I thought the US was one of the nations that paid the least in social benefits in the western world.
I mean France _really_ need to look at their social spending, but the US? I figured they barely bothered (relatively speaking).
First steps - maybe, but does it really have to be full aristocracy? What if the ideas were just a really simple separate ideas not affecting others in more than 2% of some arbitrary measure for each of them?
If we could offer packages that would be available to everyone but easy to buy at the same time, wouldn't it be good for everyone? For example you can pay $X for the "lexus lane", $X for another privilege, etc. - this way if someone actually wanted the privilege, but wasn't "really rich", they could still get it - not a total aristocracy and noone is forced to do anything.
Private companies have been doing this for a really long time as small benefits. Think about airport/travel if you pay extra: you can get express checkin on the airport, no security queue, better comfort of travel (business class), better quality food, pick-up service on arrival, luggage transport taken care of, complete booking / planning from a third-party. I have never heard of people complaining about "visible aristocracy" when travelling though. Could the taxes work as a payment gateway for small luxury services?
Meanwhile - it doesn't prevent anyone of us from getting the same. Want a better place on the plane? You can still get it without going for the whole "rich person package".
Aristocracy is different from this. Generally, aristocracy is both hereditary and disconnected from actual wealth.
In the UK, JK Rowling, even though she is richer than the Queen, is not an aristocrat. She is, in fact, upper middle class. Someone who's born into the aristocracy, even if they're not especially wealthy, is an aristocrat.
As I was reading the article, I actually had the thought that establishing a House of Lords would be in line with his "extra vote" power incentive. I don't think I'd advocate it (it's really another Bad Idea), but it's interesting to try to predict how the chips would fall on that one. :)
I think several of Scott Adam's proposals would be more palatable if we avoid the T-word. Giving high tax payers an express lane at the DMV smacks of elitism and pandering. But, giving an "express process" option for $1k doesn't sound so bad to me. Someone else mentioned auctioning off carpool-lane passes, it's a similar principle.
More importantly, it directly ties the cost to the reward. The biggest problem with Adam's system is that if you don't directly tie revenue to entitlements, then the rich would still push for lower taxes, while also wanting to keep the corresponding entitlements. The connection between the two has to be strong enough to resist politics.
The best ideas in this framework would use sliding rewards. But they will never happen.
Take the HOV lane idea. Giving the top 1% access to HOV lanes is political suicide. But awarding hours for a special fast lane, linked to the infrastructure-based taxes you pay, sounds fairer. The family of 4 making $60K a year gets a few hours they can use when they need them, tax-exempt employees get nothing, and a CEO gets more hours than she can realistically use in a year.
But opponents would say you're giving advantages to those who are "ahead." Talented-yet-poor people have less time to strike it rich. It's a Catch 22 - you need time to make money, and money to get more time, and you have neither when you start anew.
This cuts to the heart of optimizing nations for the individual, versus optimizing for the nation as a whole. I'm not sure the answer is straightforward, or if the two answers are mutually exclusive.
The HOV-lane idea starts out in the wrong place. If you want to raise money from apportioning a scarce resource (in this case space on the road), you use prices, not taxes.
Congestion charges have become very popular and successful in London—it's too bad Bloomberg's attempt to install them in New York failed.
There's a potentially dangerous line that the US is approaching where, factoring in all the exemptions, credits, and deductions, a majority of the population will not be paying income taxes at all. Thus, a majority of the population will be deciding (via their votes) how much and on what the taxes of the minority will be spent.
The only saving grace, if you can call it that, is that the people who actually place the votes (senators and reps) are themselves almost exclusively from that well-off minority.
This is pretty disingenuous. I've held low-wage jobs, and so have most of the members of my immediate family, and taxes took a serious bite out our paychecks. You are referring to the federal income tax, as many people do in debates like this, but lower-middle class people pay a much greater percentage of their income in payroll taxes than do wealthy people; the "income tax" debate is misleading.
You realize that many of the exemptions, credits and deductions disproportionately benefit well off people, right? I mean, something like the home mortgage interested deduction is off no use to many homeowners because they don't earn enough to itemize deductions. Plus the deduction saves you more money the bigger and more expensive your house is....
A lot of the decline in lower-end taxpaying has been just due to a decline in how much money they make, though, so it's hard to do much about it without either: figuring out how the lower end can make more money, or actively decreasing the tax system's progressivity.
In the 1970s, the bottom 50% typically earned around 17-20% of total income, and paid around 6-9% of total taxes. Today, they earn around 11% of total income, and pay around 2% of total taxes. With no change in progressivity, sure, that should've been around 3 or 4% rather than 2%, but that's still not much. It's hard to tax income that doesn't exist!
The problems of the world summed up in a thread: the average IQ of hacker news is way above average and yet people feel the need to: comment on issues when they have no idea of the underlying numbers, use terms that they clearly haven't bothered to even look at on wikipedia or a dictionary, repeat fallacies that any undergraduate econ student knows is false, propose vast social engineering schemes with no regard as to their unintended effects.
I mean if we're the smart ones and we're pulling this bullshit what hope does the world have? engineers are supposed to know better. :(
My idea along these lines, which I may have explained in this forum before, is to replace one of the houses of parliament (or congress, or whatever you call your local bicameral legislature) with the "House of Taxpayers", where representatives are elected by taxpayers whose vote counts in proportion to how much tax they pay. The other house remains a "House of Commons" where the one man/one vote rule applies.
The point of this idea is that every new piece of legislation must be approved (in effect) by two groups: the people who are affected by it (everybody) and the people who have to pay for it (disproportionately the rich).
His idea about a 10% cut across the board is so common-sense - I've heard it before - yet we never ever hear this from anyone in Washington (not that I've heard, anyway). Why not?
10% may seem extreme - fair enough - but why not 2%? Could we try one year where every federal department has 2% less to spend than they did the year before? 2% isn't a lot, and would go a long way toward each dept rooting out their own 'waste/fraud/abuse', instead of making govt larger by adding oversight processes and staff.
And I do not mean "2% less than what we'd projected to increase our budget by next year". I mean if your department had a budget of $1,000,000, you only get a budget of $980,000 this year. Shaving 2% off a 3.5 trillion budget would be - what? - 70 billion? While that doesn't quite get us out of the mess we're in, it's a good start.
For small percentages, I'd say that's actually the most common budget-cutting proposal. Politicians want to save money, but don't want to propose any actual services or programs be cut, so they tend to instead propose that every department should "find waste" equal to 1-3% or something. See: http://news.google.com/archivesearch?q=%22percent+across+the...
The best way of taxing the rich is producing luxury goods. The fact that you can buy food, transport, housing, clothing at a magnitude or two (or more) higher cost is a sort of volontary tax. When you buy a $1000 bottle of champagne instead of drinking water, a large part of that money takes a pretty short path to pay the wages of people that never would buy the same bottle themselves. And would maybe be out of a job if they didn't take a small part in producing that bottle of champagne. So the fact that luxury goods exist is a sort of tax that spreads the wealth of the people that choose to afford it.
In reality, fairness is not so much about the actual distribution of loot as it is about the psychology of how you feel about it. That's important to understand because the rich won't give up their cash unless they feel they are getting something in return.
I appreciate his attempt at a nuanced view of the subject, but I can't see taking your possessions under threat of violence as anything other than reprehensible.
I think most of the rich people as described in the article (top 2%) already get most, if not all, of the perks he lists. It may not be in the law, but make no mistake.
These people don't go to the DMV (who cares about the express lane), don't read their own mail (so much for gratitude letters), often don't drive their own car (carpool eligible in most places), don't care about social services and how much they cost and already have a large influence on the election process.
Scott feels as if he's "on a path toward certain doom" when paying attention to news. In my case it's when I think about how little hope there is to radically change the system considering that the people in charge are the ones who profit the most from that system, by a long shot.
Eliminate all federal taxes and print the money needed for government operations. Effectively this becomes an inflation tax. Automatically it affects the wealthy in direct proportion to their wealth as opposed to their most recent earnings. No loopholes, no games, no misallocation of resources for tax breaks.
This would hit people with savings in cash (or bonds), i.e. the middle class. The rich tend to have assets (or foreign holdings) which should be largely inflation-proof.
Interesting idea, but already the reason we are so concerned about government debt when inflation is so low and the economy is so bad is that inflation hurts the rich, and they control the discourse. I do not think they would go for a superinflation senario like this.
I like the "rich" driving lane idea - put up X licenses for auction in each city, let people bid up the price, let the market decide how much time is worth.
A low-hanging fruit would be to retool Social Security to be relevant to the needs of more affluent contributors; they might feel better about paying in if they are assured a payout that might actually support what they would consider to be a reasonably comfortable retirement. As it stands, Social Security is pretty much a total loss for higher income brackets.
As for a power incentive, the only one I might envision is to create a public forum where the public and their representatives can debate how their tax money is being spent, and a user's "karma" or default visibility bonus on the site would be based on their tax contribution.
Recall that uber-rich Steve Jobs has an annual salary from Apple of $1, wears black turtlenecks and jeans (ever anything else?), and is building a modest 5000 square foot home on property he owns outright. What to tax?
I think the best solution would be to get rid of income taxes and just have sales and property taxes.
Taxing the rich a higher rate is always going to seem unfair to them because the only way those taxes can be lessened is by making less money. Taxing $2 million house at a special rate is a different story, it seems fair because if you don't want to pay the tax you live in a more modest house. Luxury cars, fur coats, yachts, etc. can all have different sales tax rates and they still become a status symbol many of the rich are willing to pay for but not being forced to pay for.
[+] [-] 100k|15 years ago|reply
I've often thought some fees should be adjusted for wealth. For example, a quarter a day isn't really enough to get me to take my library books back on time. Maybe for me it should be $2 a day.
[+] [-] dagw|15 years ago|reply
[+] [-] wigginus|15 years ago|reply
For example Switzerland: http://www.bbc.co.uk/news/world-europe-10960230
[+] [-] unknown|15 years ago|reply
[deleted]
[+] [-] jasonervin|15 years ago|reply
[+] [-] sunsu|15 years ago|reply
Say's who? Take a look at the 2011 budget: http://www.nytimes.com/interactive/2010/02/01/us/budget.html
The biggest pieces of the pie are things we are UNWILLING to cut (not incapable of cutting)! Its time for us to make some difficult decisions about what cuts we should make instead of relying on other peoples' money to solve other peoples' problems.
[+] [-] 1010011010|15 years ago|reply
A decade without real economic growth should be matched with a decade of no government growth.
[+] [-] btipling|15 years ago|reply
[+] [-] 3pt14159|15 years ago|reply
[+] [-] frankus|15 years ago|reply
The bad version of this idea would be a special ID card and/or bumper sticker or t-shirt or watch that was given to top-bracket taxpayers. It would have to be reasonably hard to forge (or at least as hard to forge as, say, a Rolex) and able to be either displayed publicly or flashed discreetly in situations where one wants to assert status.
Another variation could be some kind of property tax where certain sub-neighborhoods would have exceptionally rates, say 100x what the ordinary tax on the land and improvements would be. Then people could signal status by living or staying in those areas. (This is actually not too different than somewhere like Manhattan or San Francisco currently, except the windfall is going to existing property owners rather than the government).
The nice thing about status symbols is that, like fiat currency, they can be rather cheaper to produce than what their value to the status-seeking public is. That is the government could potentially retain a very high seignorage, as it were, on this stuff.
Ultimately it would have to be determined whether the status symbols could be legally transferrable, and what, if any, penalty there would be for forging them.
As an aside, it strikes me that this sort of thing would be extremely similar to fiat currency, maybe identical.
[1](http://www.google.com/products/catalog?client=safari&rls...)
[+] [-] yummyfajitas|15 years ago|reply
Taxing existing luxury status symbols could work, and is very likely a good idea. Creating new status symbols is likely to fail horribly.
Also, the tax on certain neighborhoods neglects the very large non-status reason why those neighborhoods are valuable: proximity to something cool. Manhattan is expensive not just because it raises your status to live there, but also because if you work at Goldman Sachs, you are willing to pay $3000/month rent + ridiculous NYC income taxes to avoid a 1 hour commute.
I suppose we could also bring back the Sumptuary laws:
http://en.wikipedia.org/wiki/Sumptuary_law
[+] [-] TomOfTTB|15 years ago|reply
[+] [-] draz|15 years ago|reply
[+] [-] abrenzel|15 years ago|reply
Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements. Tax "the rich" at 100%, and we would still be running a deficit. Tax corporations at 100%, and we would still be running a deficit.
On the left, politicians make it sound as though we're just a few tax hikes and some defense cuts away from a sound federal budget. On the right, they make it sound as though all we need are some cuts to programs like the UN or foreign aid and some tax cuts to spur economic growth.
They are both in a DREAM WORLD. Some taxes will have to go up, but most importantly, Social Security and Medicare will have to be substantially reduced. Whether it means privatization, defined contribution, or some combination of solutions, no one in my generation (I am currently 24) will see either of these programs as our parents did. In fact, current retirees and soon-to-be-retirees will also probably need to have their benefits reduced. There is just no way around it.
[+] [-] kenjackson|15 years ago|reply
That's not true. See: http://en.wikipedia.org/wiki/2010_United_States_federal_budg...
Our revenue is about $2.4T. Entitlements are $2.0T.
Taxing the rich at 100% would generate about $2T in additional revenue each year. Which would pretty much cover entitlements. Of course its absurd to do that -- and its not as if people will continue to generate revenue if all of it is taxed, but lets not spread myths, even in hyperbole.
[+] [-] Vivtek|15 years ago|reply
You're gonna laugh, but I thought the same thing when I was 24 (twenty years ago) and Social Security is still solvent for the next thirty.
That system ain't broke. It's just that they really, really, really want that money. If they manage to get us to break it for them, your pessimism is - quite literally - a self-fulfilling prophecy.
[+] [-] ryanf|15 years ago|reply
Do you have some numbers for this?
[+] [-] Quarrelsome|15 years ago|reply
[+] [-] derleth|15 years ago|reply
Defense spending is an entitlement program for weapons makers.
[+] [-] forensic|15 years ago|reply
Soon the rich will have special privileges just like the old days.
[+] [-] viraptor|15 years ago|reply
If we could offer packages that would be available to everyone but easy to buy at the same time, wouldn't it be good for everyone? For example you can pay $X for the "lexus lane", $X for another privilege, etc. - this way if someone actually wanted the privilege, but wasn't "really rich", they could still get it - not a total aristocracy and noone is forced to do anything.
Private companies have been doing this for a really long time as small benefits. Think about airport/travel if you pay extra: you can get express checkin on the airport, no security queue, better comfort of travel (business class), better quality food, pick-up service on arrival, luggage transport taken care of, complete booking / planning from a third-party. I have never heard of people complaining about "visible aristocracy" when travelling though. Could the taxes work as a payment gateway for small luxury services?
Meanwhile - it doesn't prevent anyone of us from getting the same. Want a better place on the plane? You can still get it without going for the whole "rich person package".
[+] [-] philwelch|15 years ago|reply
In the UK, JK Rowling, even though she is richer than the Queen, is not an aristocrat. She is, in fact, upper middle class. Someone who's born into the aristocracy, even if they're not especially wealthy, is an aristocrat.
[+] [-] blahedo|15 years ago|reply
[+] [-] sliverstorm|15 years ago|reply
[+] [-] lmkg|15 years ago|reply
More importantly, it directly ties the cost to the reward. The biggest problem with Adam's system is that if you don't directly tie revenue to entitlements, then the rich would still push for lower taxes, while also wanting to keep the corresponding entitlements. The connection between the two has to be strong enough to resist politics.
[+] [-] jakevoytko|15 years ago|reply
Take the HOV lane idea. Giving the top 1% access to HOV lanes is political suicide. But awarding hours for a special fast lane, linked to the infrastructure-based taxes you pay, sounds fairer. The family of 4 making $60K a year gets a few hours they can use when they need them, tax-exempt employees get nothing, and a CEO gets more hours than she can realistically use in a year.
But opponents would say you're giving advantages to those who are "ahead." Talented-yet-poor people have less time to strike it rich. It's a Catch 22 - you need time to make money, and money to get more time, and you have neither when you start anew.
This cuts to the heart of optimizing nations for the individual, versus optimizing for the nation as a whole. I'm not sure the answer is straightforward, or if the two answers are mutually exclusive.
[+] [-] gabrielroth|15 years ago|reply
Congestion charges have become very popular and successful in London—it's too bad Bloomberg's attempt to install them in New York failed.
[+] [-] bluedevil2k|15 years ago|reply
The only saving grace, if you can call it that, is that the people who actually place the votes (senators and reps) are themselves almost exclusively from that well-off minority.
[+] [-] tptacek|15 years ago|reply
[+] [-] pnathan|15 years ago|reply
It's a terrible idea, but it is also, by definition, perfectly equitable.
[+] [-] MichaelSalib|15 years ago|reply
[+] [-] _delirium|15 years ago|reply
In the 1970s, the bottom 50% typically earned around 17-20% of total income, and paid around 6-9% of total taxes. Today, they earn around 11% of total income, and pay around 2% of total taxes. With no change in progressivity, sure, that should've been around 3 or 4% rather than 2%, but that's still not much. It's hard to tax income that doesn't exist!
[+] [-] nazgulnarsil|15 years ago|reply
I mean if we're the smart ones and we're pulling this bullshit what hope does the world have? engineers are supposed to know better. :(
[+] [-] hugh3|15 years ago|reply
The point of this idea is that every new piece of legislation must be approved (in effect) by two groups: the people who are affected by it (everybody) and the people who have to pay for it (disproportionately the rich).
[+] [-] mgkimsal|15 years ago|reply
10% may seem extreme - fair enough - but why not 2%? Could we try one year where every federal department has 2% less to spend than they did the year before? 2% isn't a lot, and would go a long way toward each dept rooting out their own 'waste/fraud/abuse', instead of making govt larger by adding oversight processes and staff.
And I do not mean "2% less than what we'd projected to increase our budget by next year". I mean if your department had a budget of $1,000,000, you only get a budget of $980,000 this year. Shaving 2% off a 3.5 trillion budget would be - what? - 70 billion? While that doesn't quite get us out of the mess we're in, it's a good start.
[+] [-] _delirium|15 years ago|reply
[+] [-] steveklabnik|15 years ago|reply
You're asking the people who are receiving the money to make the rules that they get less of it.
I think it's fairly obvious.
[+] [-] axod|15 years ago|reply
[+] [-] martinkallstrom|15 years ago|reply
[+] [-] richcollins|15 years ago|reply
I appreciate his attempt at a nuanced view of the subject, but I can't see taking your possessions under threat of violence as anything other than reprehensible.
[+] [-] BlazingFrog|15 years ago|reply
Scott feels as if he's "on a path toward certain doom" when paying attention to news. In my case it's when I think about how little hope there is to radically change the system considering that the people in charge are the ones who profit the most from that system, by a long shot.
[+] [-] te_platt|15 years ago|reply
[+] [-] benohear|15 years ago|reply
[+] [-] dantheman|15 years ago|reply
[+] [-] 100k|15 years ago|reply
[+] [-] bluedevil2k|15 years ago|reply
[+] [-] WiseWeasel|15 years ago|reply
As for a power incentive, the only one I might envision is to create a public forum where the public and their representatives can debate how their tax money is being spent, and a user's "karma" or default visibility bonus on the site would be based on their tax contribution.
[+] [-] jbooth|15 years ago|reply
[+] [-] ctdonath|15 years ago|reply
[+] [-] megaman821|15 years ago|reply
Taxing the rich a higher rate is always going to seem unfair to them because the only way those taxes can be lessened is by making less money. Taxing $2 million house at a special rate is a different story, it seems fair because if you don't want to pay the tax you live in a more modest house. Luxury cars, fur coats, yachts, etc. can all have different sales tax rates and they still become a status symbol many of the rich are willing to pay for but not being forced to pay for.