Are the rich paying their 'fair' share?

[Hauldren Collider]

No, because that would be evil.

When you consider that for the rich person, because they gain wealth from consumption (which only they can consume), they do get more bang for the buck. Because it is so cheap for them (better than free!).

JM

Jon, it wouldn't be evil if it were true! If the money actually had more use in the hands of rich people than poor people, then it would be evil NOT to give it to the rich people. If you don't agree, then you probably are misunderstanding something crucial about "utility".

[Jon Miller]

Just because Warren Buffet could turn the money I gave him around and make it be 2x as much in 10 years doesn't mean that it is better for me to have that money taken from me and be miserable for 10 years so that the overall utility is greater.

JM

[Jon Miller]

QFT, if rich people actually got more utility from an additional 200 dollars than poor people, we should redistribute from poor people to rich people. Reductio ad absurdam.

No, because that would be evil.

When you consider that for the rich person, because they gain wealth from consumption (which only they can consume), they do get more bang for the buck. Because it is so cheap for them (better than free!).

JM

[Jon Miller]

That effect can be accounted for, with minimal change to the model by introducing:
1. Someone can fall sick for 1 turn, while sick they are entirely unproductive
2. If someone doesn't have a place to live, they are unhappy and are 1/10 as productive

Probably then type A people should be re-labeled working class and the in poverty people would be those without a place to live (type E/F).

You complaint about the first 10 turns being unreasonable can be fixed by setting the model some XX turns in the future (but not so far in the future where type C people all own their own homes).

The model could be made dynamic for allowing:
1. Someone who doesn't work and lives in a home is very satisfied for that turn
2. After YY turns, a person is replaced by their progeny (who might have a different ability than them). All wealth is given to the progeny, the new persons valuation of being 'very satisfied' is pulled again from the theoretical distribution.

Consider the taxes paid and amount of turns spent satisfied/very satisfied as a function of inherited wealth.

How is not taxing capital gains 'fair'?

I can understand how it isn't economically advantageous. That is why I have been saying all along that in a capitalistic society, the 'best' solution might be to tax consumption and put in transfers.

JM
(would be even better if 'ability' was a distribution)

[Hauldren Collider]

Jon, if you're just trying to argue for some amount of wealth redistribution in general, that should be an easy position - yet you keep migrating from one bizarre, incorrect argument to another - some of which are actually the exact reverse of the actual strong arguments for wealth redistribution.

QFT, if rich people actually got more utility from an additional 200 dollars than poor people, we should redistribute from poor people to rich people. Reductio ad absurdam.

[Jon Miller]

Of course, if you think that is 'fair', we can consider a slight change (and introduce person C, who with 0 to start but a more able 24$ per month, let's also increase person A and person B to 13$ per month and consider what happens after 100 'turns').

Person B has received 1000$ in consumption, has paid 100$ in taxes, and has 'future consumption' of 200$.
Person A has the option of leaving the wealthy class and joining the capitalist class. He has received 1000$ in consumption, paid 10$ in taxes, and has 'future consumption' of 1300. His asset is worth 1100$. He can purchase another house at 1100$ (with 110$ more in taxes) to increase his income to 23$ per month.
Person C has the option of leaving the poor class and joining the wealthy class. She has received 1000$ in consumption, has paid 100$ in taxes, and has 'future consumption' of 1300$. She can purchase a house at 1100$ (with 110$ more in taxes).

Does this seem fair, tax wise?

JM

[Jaguar]

That is the only incentive, and it is true. Especially since they hold the power (due to having the wealth).
Person A has 100$ + has gotten 100$ in value from his purchase + has an asset that is valued at 200$ = 400$ total of 'present' + 'future' goods and has paid a total of $10 in taxes
Person B has 0$ (he had to consume it all) + 100$ in value from his purchases = 100$ total of 'present' + 'future' goods and has paid a total of $10 in taxes

Not at all. Person A's assets - a house and a cash reserve, would not be exchangeable for $300 worth of goods without paying taxes. You've also decided to have a house give you a 200% ROI in ten years, which is absurd. If houses were really a sure thing to get you a 200% ROI, then no-money-down subprime mortgages were a great idea.

Jon, if you're just trying to argue for some amount of wealth redistribution in general, that should be an easy position - yet you keep migrating from one bizarre, incorrect argument to another - some of which are actually the exact reverse of the actual strong arguments for wealth redistribution.

Wealth should be redistributed from me to Albie because he gets more bang for his buck, not less. He lives a reasonably decent life on a fraction of what I live on, but his life can be improved substantially for small amounts of money, while mine can't.

[Jon Miller]

I am amazed that he can have a place to live, pay utilities, and get food at 400$ per month.

Most cities I have lived, the minimum rent was about that high.

JM

[giblets]

To be fair, I only made $5000 last year and my lifestyle is cool except for the risk of crime. I have cable internet, hot water, xbox live subscription, I eat well... And I lived on less than $14 a day.

So you could earn minimum wage and save over half of your income? Weren't you claiming earlier that people on $15,000 have very little ability to save their money?

[Jon Miller]

That is the only incentive, and it is true. Especially since they hold the power (due to having the wealth).

But let's talk about what is fair here.

Person A has 110$ and makes 11$ per year.
Person B has 0$ and makes 11$ per year.
Having a place to live costs 10$ per year, or you can buy a place for 100$ a year. It is a nicer place (we ignore), and it increases in value. Let's assign this value, and say that buying a place gives you an additional 10$ in value per year. Let's also consider a 10% consumption tax.

They both make the same, simple world, just one person is wealthy and the other person is not.

In 10 years:
Person A has 110$ + has gotten 100$ in value from his purchase + has an asset that is valued at 200$ = 400$ total of 'present' + 'future' goods and has paid a total of $10 in taxes
Person B has 0$ (he had to consume it all) + 100$ in value from his purchases = 100$ total of 'present' + 'future' goods and has paid a total of $10 in taxes

Does it seem like taxing only consumption fairly taxes the person A relative to person B? And I am even being nice to person A, his investment isn't increasing in value produced in time like is generally the case. This is also ignoring that person A has a nicer place, which person B will never be able to have (for person B to live there per year, it would cost 20$, say, but that would just change it from 4:1 to 5:1).

Your delayed consumption versus non-delayed consumption only works when people start equal. People very much do not do so.

JM

[rah]

The only incentive for the 1% to pay more in taxes is so the other 99% don't get so pissed that they revolt and take away all their money.

[Jaguar]

You've given a bunch of examples of how you can get advantages once you purchase a seven-figure home.

[Jon Miller]

Wrong.

Prices are cheaper for you than they are for people who have less money.

We have given many examples of that in this thread.

If you are wealthy enough, often times things are priced so cheaply that you actually make money on your consumption.

JM

[Jaguar]

But you get a better exchange rate when you exchange money for goods.

Prices are exactly the same to me as they are to any other person. Any advantages I have come from things that I purchased previously, or my greater ability to purchase things in the future.

[Jon Miller]

But you get a better exchange rate when you exchange money for goods.

Therefore you should be taxed at a higher rate. In other words, you should get a higher exchange rate when you receive public goods.

JM