Are the rich paying their 'fair' share?

[Al B. Sure!]

Sure they do... their situation is still a lot worse than someone who is simply poor in the US.

Not really. How many convicts have you known?

It's pretty sweet in there. They have cable tv in the cells, air conditioning and heat, 3 hot meals, commissary store where they can buy whatever, exercise equipment, library, etc.

If you value necessities more than freedom (and have no aversion to butt rape), it's not a bad setup.

People get this idea of prisons from tv and movies that just isn't true.

[Fake Boris]

There is no such thing as utility calculus; as such any utility discussion relies on the debaters' intellectual honesty. For any utilitarian principle, a challenging instance can be found, which in turn requires an infinite chain of explanations.

This is the first and last of any such explanation I will provide wrt to this topic: given a fair justice system, minimum utility is respected if everyone is investigated and trialed in the same way.

[giblets]

Sure they do... their situation is still a lot worse than someone who is simply poor in the US.

[Fake Boris]

Even criminals have rights... what a pitiful troll.

[giblets]

So... we should be nicer to the criminals we put in prison so they can meet the minimum standard of per capita utility?

[Fake Boris]

Re: HC's utility argument, it's retarded.

Any half-serious utilitarian will tell you that there is a minimum utility per capita for utilitarianism to make sense.

[Fake Boris]

That's adorable!

Obviously everyone who works hard is entitled to gobs of cash

From each according to his ability...

Sorry HC, your "rebuttal" was miserable.

[Al B. Sure!]

So yeah, why doesn't the supply curve shift instead of the demand curve? Or could they both shift a certain amount relative to the taxation levels and consequently reduce the quantity even more but have a more or less same interest rate, depending on the disparity between the tax rates?

[regexcellent]

Archer

I just started watching it and that show is so ****ing awesome.

[Aeson]

But people don't do it for free. They volunteer at significant cost to themselves in time, effort, and risk exposure. Why is this?

Community spirit. Or chicks dig it.

"No, no no no... Like, a big sweaty fireman carries you out of a burning building, lays you on the sidewalk, and you think, "Yeah, okay, he's gonna give me mouth to mouth." But instead, he just starts choking the **** out of you, and the last sensation that you feel before you die is he is squeezing your throat so hard that a big, wet, blob of drool drips off his teeth and just "flurr", falls right onto your popped out eyeball..."

[Al B. Sure!]

The results become different if you apply that tax across the board, which is why I specified "on that company alone." Here's what happens if you do it on the whole economy.



Supply and Demand curve for loanable funds. We'll hold consumer borrowing constant for now and just talk about corporate investment. The green line is the amount lenders are willing to give out, given the risk-free rate of interest. The orange lines is the number of businesses that are capable of making investments that give you that risk-weighted return.

We start with the equilibrium implied by orange line 1. Since the investment you described is $100 a share and continuously pays $5 risk-free dividends, we know the equilibrium is at 5% interest.

Once you add in the 20% tax on all profits, the firms that could previously give you 5% return on capital now can only give you a 4% return on capital at best, etc. So we move to orange line 2. Note that it has 4/5 of the (negative) slope of line 1, because returns are scaled down to 4/5 of what they were previously.

The new interest rate doesn't become 4%, though - because some people, instead of accepting the lower interest rate, devote more of their resoures to consuming things now. To get the market to equilibrium, things move from the blue dot to the purple dot. The purple dot is higher than 4% - so investors don't take a full 20% hit on their returns - but there are fewer investments being made.

The net result has a benefit in that people get more to consume now, but the downsides are that savers get a lower return and fewer investments are made, resulting in lower future income for society.

This is a really good explanation. I'm going to use your post elsewhere but add some further explanations for those who have difficulty understanding supply and demand curves.

My question is why does this change the demand curve and not the supply one? I would think the reduction in returns would make the supply curve shift to the left because investors would be discouraged from lending and would require higher returns for the same quantity supplied. Interest rates would therefore go up while quantity of loans will decrease.

[Jaguar]

Here's another example. Let's say a farmer farms corn, and he takes ten barrels of it and eats it (who knows, maybe he really ****ing likes corn). He's consuming his corn but not paying taxes on it. Oh, how unfair!

This is actually a legitimate problem. All taxation systems favor non-market labor over market labor. There is no known solution to this.

[Jaguar]

So, assume I am a prospective investor with $400. In scenario 1, I would get an $80 dividend. In scenario 2, I would look to get a $100 dividend and pay $20 tax, and end up with $80. If my income was only/mostly from dividends, it'd look like I am contributing more in taxes in scenario 2 (20% burden vs 0% burden) when in fact the tax burden is not really falling on me as I am getting the same return on investment.

This is simplistic, but the point I was getting at....

Moreover, there are other issues to consider.

The results become different if you apply that tax across the board, which is why I specified "on that company alone." Here's what happens if you do it on the whole economy.



Supply and Demand curve for loanable funds. We'll hold consumer borrowing constant for now and just talk about corporate investment. The green line is the amount lenders are willing to give out, given the risk-free rate of interest. The orange lines is the number of businesses that are capable of making investments that give you that risk-weighted return.

We start with the equilibrium implied by orange line 1. Since the investment you described is $100 a share and continuously pays $5 risk-free dividends, we know the equilibrium is at 5% interest.

Once you add in the 20% tax on all profits, the firms that could previously give you 5% return on capital now can only give you a 4% return on capital at best, etc. So we move to orange line 2. Note that it has 4/5 of the (negative) slope of line 1, because returns are scaled down to 4/5 of what they were previously.

The new interest rate doesn't become 4%, though - because some people, instead of accepting the lower interest rate, devote more of their resoures to consuming things now. To get the market to equilibrium, things move from the blue dot to the purple dot. The purple dot is higher than 4% - so investors don't take a full 20% hit on their returns - but there are fewer investments being made.

The net result has a benefit in that people get more to consume now, but the downsides are that savers get a lower return and fewer investments are made, resulting in lower future income for society.

[Hauldren Collider]

Are you incapable of considering my model?

And it is reality, in the housing market for example. They are not wrong. The housing market is just the clearest example.

If you worry so much about the language you can modify my previous post with:
He buys a place for 100$ (+10$ taxes), this is an asset, and not consumption. He then lives in the house and forgoes rent, however, he does not pay taxes on this consumption and hence gains an advantage due to his wealth (as he is not being taxed on his consumption). He still pays a small portion of the tax that the poorer person pays despite having the same level of consumption.

Your 'fairness' ignores that the vast majority of people due not have equivalent levels of lifetime purchasing power (anywhere near equivalent levels) because of the benefits of wealth that are not accounted for in your reasoning. Therefore consumption taxes unfairly penalize the poor.

JM

Explain what benefits are conferred upon rich people that isn't directly related to their consumption of goods with money. Let's say I had 10 million dollars in the bank. I never touched it, spent it, used it for anything--it just SAT there, making me rich without me consuming anything at all with it. What benefits am I getting?

EDIT: Here's another example. Let's say a farmer farms corn, and he takes ten barrels of it and eats it (who knows, maybe he really ****ing likes corn). He's consuming his corn but not paying taxes on it. Oh, how unfair!

By the way, the homeowner does pay in terms of risk to the property and property taxes and is responsible for the maintenance and upkeep of the property in question. A renter does not have such concerns, so it makes sense that an owner should be able to get such benefits. This is all totally reasonable.

[Hauldren Collider]

I spend a lot of money on gas to get to work, and back home as my job is a half hour from where I live. My own bills that I pay:

car insurance
Internet service
smartphone service plan
renter's insurance

And of course, I buy my own groceries, and gas for my car. Except maybe for new package of socks, underwear, or shoes, there are some years I go through an entire year without buying any new clothes. Rest is leisurely spent and I try to put some into my savings.

But are you starving or malnourished? Look, your situation sucks a lot, and you still have food, shelter, internet, smartphones, and a CAR. I'm not saying you should be content but JM going all chicken little with starving children is horse****.