Society, Holidays etc (split from Ossus tax thread)

[Guardsman Bass]

Do you want to create a system where there are no personal income tax deductions? I think they can play a useful role in driving investment into certain areas if the income tax is high enough. Like if, say, there is a huge deduction for investing in certain forms of energy, or the like.

I'm going to second KrauserKrauser on the outright-seizure-of-wealth-beyond-a-certain-point issue, but for a different reason (I think it will lead to widespread money laundering and various forms of work-arounds).

[Starglider]

The UK minimum holiday allowance is going up from 24 days to 28 days next year. That includes bank holidays, Christmas Day, Easter etc. Most companies were already allowing four weeks off plus about eight standard holiday days so not many people will be affected.

As I understand it the US also has about 8 days of federal holidays, which most companies give you in addition to your 10 days discretionary holiday. There are two obvious arguments against mandatory paid holidays;

1) Individual workers or their unions can always negotiate them with their employers, and the result should be more sensitive to economic conditions and special needs than government regulation.
2) Mandatory paid holiday disadvantages workers who'd actually prefer to work all year, unless the company has a 'convert unused holidays to bonus' scheme (most don't). Mandatory requirements for the amount of unpaid holiday employees may take don't, and would theoretically mean higher base salaries.

IMHO they're both rather weak arguments for normal workers, really for the usual reasons that ultra-libertarian silliness doesn't translate into social wellbeing. If you don't like it you can always be a contractor or start your own company - so on balance I do support fairly generous mandatory paid holiday.

[The Duchess of Zeon]

Here we go, it's not the source I mentioned but it's the second that I used, which deals with Marginal Tax Rate rather than just income tax:

It's about a 17 page .pdf Anyway, the most important part is:

The paper shows that a higher income tax leads to faster growth (emphasis added) The main finding is that increasing the output tax from 10 to 60 percent would increase the growth rate under plausible parameterizations. For marginal tax rates which are higher than 60%, the distortionary impact becomes evidence and the growth rate will decrease.

Marginal tax rates being essentially a sum of all imposed taxes; which from the feds in this case would actually be less than 60%, as for the very richest the 50% income tax, and 10% sales tax (which would apply when they buy things with their money, rather than save or reinvest), won't account for so much of their income as would the Capital Gains Tax, which tops off at 40%, leaving room for local taxation to bring the marginal rate for the rich up to 60% or so (some disincentive to work is acceptable, though obviously not very much or else you get diminishing returns). In short though I don't have the source for my assertion about the income tax, I do have my source for my overall goal of a top marginal tax rate of 60%, and I did indeed try to model the plan around that top marginal rate.

Incidentally, why are confiscations of more than 100 million USD a bad thing? Can you imagine any couple which could ever have any use for 200 million USD, let alone more? With three kids, what use would they have for more than the 500 million they'd then be allowed in total? The wealth cap was intentionally set so high that it would have no impact on a person's ability to live even the most opulent of lives, and note that they can donate the rest of the money to charity to avoid seizure.

[The Grim Squeaker]

Incidentally, why are confiscations of more than 100 million USD a bad thing? Can you imagine any couple which could ever have any use for 200 million USD, let alone more? With three kids, what use would they have for more than the 500 million they'd then be allowed in total? The wealth cap was intentionally set so high that it would have no impact on a person's ability to live even the most opulent of lives, and note that they can donate the rest of the money to charity to avoid seizure.

Apart from the dicincentive to work even more? (Some people work for the work and the competition, not for the money. Limit them, and why the hell should someone work even longer generating billions more in revenue if it doesn't matter? Contrary to public opinion, generating more money does take more work, and more effort, and for some people a far higher tax rate may make it not worth it to work even harder, to risk even more and to generate more stress and effort. Which if course, could never happen, since in Duchess land everyone works for the good of the great communist-.er, socialist ideal, and won't be affected by disincentives ).
And the main reason, is that people with more than that, or who are looking to make more than that will leave the country. There has been a large "Wealth drain" on France's economy from what i've read, and this will just encourage capital, assets and the entrepeneurs capable of generating or managing such massive sums elsewhere.
There are examples of such mobile companies before you harp about how the people and money can be locked in, Google or Microsoft for example. Countries with lower tax rates do attract businesses and people for a reason. Sadly, the world is competitive, as are national taxation rates, and yes, this does limit you from slapping a 99% tax rate on the insanely wealthy as much as you'd like to before nationalizing their firms, lynching them and setting them to work at the bottom. (Sounds like fun, eh?).

[The Duchess of Zeon]

Well, the British regularly banned the transfer of assets overseas throughout most of the 20th century, so it would be easy to do here as well. I just cannot imagine why having a value of 500 million for a family of five as a wealth cap would be unacceptable. These people would need to keep working then to maintain their levels of wealth, as a matter of fact, as their possessions were devalued and they gave money away or lost it to investment and so on. And who would continue working to obtain another billion in assets after you already have 500 million, for that matter? Most of these people, DEATH, do not work--they sit at home and watch money accumulate from their investments. Well, big deal, now the government's investing it instead.


Anyway, the one modification I realize would be necessary would be an earlier phase-out of the 6,000 USD total (4,800 rent, 1,200 food) allowance, probably over a scale of a 5% drop every 4,000 USD increase in income from 25,000 USD to 105,000 USD, which is essentially a slowly reduced further tax break for the poor and middle class, and support for the very poor.

[Pablo Sanchez]

Apart from the dicincentive to work even more?

When you're talking about someone who already has hundreds of millions of dollars there is already no economic incentive for them to ever earn another dime via actual work. You take your money, pay someone a percentage to put it to work, and you collect a few percentage points after inflation. From a $100 million principal that's several million dollars a year, which can be "earned" without even getting out of bed.

And the main reason, is that people with more than that, or who are looking to make more than that will leave the country. There has been a large "Wealth drain" on France's economy from what i've read,

What exactly did you read, then?

and this will just encourage capital, assets and the entrepeneurs capable of generating or managing such massive sums elsewhere.

With respect to income taxes, this is not a problem for the USA, as the IRS still has tax authority over US citizens living abroad via a system of treaties.

There are examples of such mobile companies before you harp about how the people and money can be locked in, Google or Microsoft for example.

You think Google can just pick up and move operations to the Cayman Islands? Do you have any idea of the resource and infrastructure requirements of Google's server farms? I'm guessing not.

Countries with lower tax rates do attract businesses and people for a reason. Sadly, the world is competitive, as are national taxation rates, and yes, this does limit you from slapping a 99% tax rate on the insanely wealthy as much as you'd like to before nationalizing their firms, lynching them and setting them to work at the bottom. (Sounds like fun, eh?).

I actually do disagree with Marina, because outright confiscation would be bad; bad law, bad precedent, bad economics. However, the current "handjobs for the extremely wealthy" tax regime causes large imbalances in wealth which are detrimental to society.

[lukexcom]

Well, the British regularly banned the transfer of assets overseas throughout most of the 20th century, so it would be easy to do here as well. I just cannot imagine why having a value of 500 million for a family of five as a wealth cap would be unacceptable. These people would need to keep working then to maintain their levels of wealth, as a matter of fact, as their possessions were devalued and they gave money away or lost it to investment and so on. And who would continue working to obtain another billion in assets after you already have 500 million, for that matter? Most of these people, DEATH, do not work--they sit at home and watch money accumulate from their investments. Well, big deal, now the government's investing it instead.

Looking over a few entries in the Forbes 400 richest Americans list like Gates, Buffet, Paul Allen, the Google founders, Bloomberg, Kerkorian, it seems that most of their wealth is locked up in the companies they own. So their wealth is basically being used by the companies they own parts of. In a perfect world this invested wealth would be wisely invested by the companies for greater efficiency and profits, but clearly this isn't always the case, i.e. the financial industry disaster. Then you have those like Gap founders Donald and Doris Fisher, who have an art collection worth 1 billion, according to the same article. I honestly do not see any personal benefits derived from a private art collection that big.

Wouldn't it be a bit more reasonable to limit the wealth that's taken by the government to just the wealth that's not voluntarily invested back into the economy (whether any economic sector or a list of sectors specifically approved by the government on a need basis, i.e. nuclear, aerospace, chemical, shipbuilding industries over financial, fossil-fuel energy industries), government (whether a blank check to the treasury or the ability to let people choose which agency of the government they donate to, i.e. Dept. of Energy), or charities to prevent hoarding? Or should the government be the only entity that decides how *any* wealth above your defined limit is to be invested?

In this case the super-wealthy would never go beyond $100m actual personal wealth per person, but they would have a choice as to where any remaining wealth would be invested, (if they don't make a choice, the government would then make one for them), versus having the government solely determine where all of this wealth should go.

[Terralthra]

A question for lukexcom or Duchess:

Under this "any wealth over $100 million may be confiscated" plan. If J. Random Amateur Art Collector has no appreciable assets besides fifty or so paintings by an unknown author worth $1,000 each. and these are then discovered to be lost works of say, Degas or Picasso, worth millions each. Do you really feel the government action of taking paintings away from this guy with no compensation, because their value has appreciated too much, is really right?

There's an argument to be made that they are great works and should be displayed to the public, but that argument would generally acknowledge that the owner of these discovered works deserves some sort of payment for his possessions, if the state even tries to confiscate them in the first place. That can't work here, because the compensation he'd be given would immediately be seized as well.

[The Duchess of Zeon]

A question for lukexcom or Duchess:

Under this "any wealth over $100 million may be confiscated" plan. If J. Random Amateur Art Collector has no appreciable assets besides fifty or so paintings by an unknown author worth $1,000 each. and these are then discovered to be lost works of say, Degas or Picasso, worth millions each. Do you really feel the government action of taking paintings away from this guy with no compensation, because their value has appreciated too much, is really right?

There's an argument to be made that they are great works and should be displayed to the public, but that argument would generally acknowledge that the owner of these discovered works deserves some sort of payment for his possessions, if the state even tries to confiscate them in the first place. That can't work here, because the compensation he'd be given would immediately be seized as well.

He'd be able to retain artworks worth up to about 100 million USD - his current assets. And more if he had children, or a partner to gift some to. So what's the big deal here? Wouldn't you like to be worth 100 million USD? Why get greedy and want more?

[Terralthra]

He'd be able to retain artworks worth up to about 100 million USD - his current assets. And more if he had children, or a partner to gift some to. So what's the big deal here? Wouldn't you like to be worth 100 million USD? Why get greedy and want more?

I would want to keep the fifty paintings I bought solely because I liked the way they looked, not have them taken away because of an extraordinarily arbitrary limit on the sum value of my property, which has appreciated for reasons beyond my control. Moreover, you haven't answered the question. Do you feel it is justified for the government to seize paintings from a private citizen because they've increased in value beyond a certain point, and if so, why?

[Samuel]

He'd be able to retain artworks worth up to about 100 million USD - his current assets. And more if he had children, or a partner to gift some to. So what's the big deal here? Wouldn't you like to be worth 100 million USD? Why get greedy and want more?

I would want to keep the fifty paintings I bought solely because I liked the way they looked, not have them taken away because of an extraordinarily arbitrary limit on the sum value of my property, which has appreciated for reasons beyond my control. Moreover, you haven't answered the question. Do you feel it is justified for the government to seize paintings from a private citizen because they've increased in value beyond a certain point, and if so, why?

The government does that now. We had a thread were we talked about how people couldn't keep base balls and prize cars because the taxes were too high.

Obviously under Duchess plan we will get some flavor of socialism:
-You are a counter-revolutionary profiter- die!
-Backbone of the working class- no tax
-Bribe the revolutionary cadre in your area to look the other way
-Do the smart thing and DON'T get the paintings appraised.

[The Grim Squeaker]

Well, the British regularly banned the transfer of assets overseas throughout most of the 20th century, so it would be easy to do here as well. I just cannot imagine why having a value of 500 million for a family of five as a wealth cap would be unacceptable. These people would need to keep working then to maintain their levels of wealth, as a matter of fact, as their possessions were devalued and they gave money away or lost it to investment and so on. And who would continue working to obtain another billion in assets after you already have 500 million, for that matter? Most of these people, DEATH, do not work--they sit at home and watch money accumulate from their investments. Well, big deal, now the government's investing it instead.

Proof? You don't need to bring proof that they don't manage it itself (that's a negative), but proof that they don't work (and wouldn't care about a few millions less and that people wouldn't mind not being able to work more, or having their potential curtailed by the government).
These things are just so mindlessly...communistic optimism. (I cannot believe I'm using such inaccurate wide terming... But I'm about to leave for the weekend and have a rally to attend for social equality based on the Israeli communist party on Saturday, so I won't be able to reply again before Sunday at the earliest)

He'd be able to retain artworks worth up to about 100 million USD - his current assets. And more if he had children, or a partner to gift some to. So what's the big deal here? Wouldn't you like to be worth 100 million USD? Why get greedy and want more?

Because it is human nature. Driven into us by biology and society. Simple as that, anyone who can push at the top will want more. Contrary to revolutionary opinion, managing large companies does involve work and a lot of stress. I can safely say that unless you have a damn good statistical wide scale counter example, then I have more experience with this than anyone else who has posted here so far (as far as I know).

"what did you read then?"

http://www.washingtonpost.com/wp-dyn/co ... 01010.html
Sorry, no time to continue. I conceed everything, etc'. (Unless you have time sunday).

[The Duchess of Zeon]

DEATH, most people who own stock do NOT manage companies. They just occasionally vote at Shareholder's meetings where they elect the CEO, who is actually a salaried employee (!). Sheesh. Bill Gates hasn't run Microsoft in more than a decade, and he's still worth more than ten billion dollars.

[Terralthra]

The government does that now. We had a thread were we talked about how people couldn't keep base balls and prize cars because the taxes were too high.

Obviously under Duchess plan we will get some flavor of socialism:
-You are a counter-revolutionary profiter- die!
-Backbone of the working class- no tax
-Bribe the revolutionary cadre in your area to look the other way
-Do the smart thing and DON'T get the paintings appraised.

False comparison. The baseballs and prizes were presumably quite valuable when acquired. The example paintings are not relatively valuable when purchased, AND presumably the person in question payed any applicable sales tax at that time. What Duchess is talking about is outright forfeiture of property, not "I can't afford to pay the taxes on it." In this case, "the taxes on it" equal the value of the property itself.

[K. A. Pital]

Because it is human nature. Driven into us by biology and society.

So you are saying the greed of humans which pushes them to aquire enormous shares of assets, is also a result of social conditioning, not mere biology. It follows then, that this social conditioning can be likewise used to enforce the opposite traits: modesty and honesty in actions.

You are acknowledging a failure of society to condition itself and protect from a harmful effect, not stating some sort of universal truth. If there is a failure of society, why should we not work to correct it?

Large amounts of people in low-GINI nations are pressured into equalization with the rest, income-wise - by taxes, re-distribution and other measures. Who are you to say this approach is not favourable, but "driving greed into humans by the society" is preferred?

[Broomstick]

First - CAN we split the posts on Marina's Ideal World (version whatever) to a new thread?

Second - rather than confiscate any individual's wealth above 100 million, why not put a ban on handing it down? So... you can accumulate 1 trillion during your lifetime, but you can't pass on more than 100 million in assets total to your heirs? (The may or may not require adjustment for business ownership, where subdividing a successful company may not be in society's interest). If someone works their ass off I don't have a problem with them enjoying their success, but no one needs to inherit a 100 million, do they? Seems to me the problem isn't usually with the ambitious workaholic that accumulates the wealth, the problems seem to be more the heirs who grew up filthy rich and never had to work a day in their life.

[Shroom Man 777]

Those people have a disproportionate amount of wealth in their hands, so they should pay a similarly (dis)proportionate amount back to society. How can there be any argument about this?

[K. A. Pital]

So... you can accumulate 1 trillion during your lifetime, but you can't pass on more than 100 million in assets total to your heirs?

Inheritance laws should be of course strict and immediately crushing any attempts at creating a new inbred aristocratic overclass through un-earned wealth. The problem - such an approach will immediately generate antipathy from the rich person whose child is being denied his full assets (punishing success, communism and government theft would be the standard among the shrill accusations which will flow en mass should such a law be passed).

But then, just about any common sense law aimed to make the rich reinvest into society will cause their ire; it's only a problem as far as the rich wield a greater influence over the government.

[Edi]

First - CAN we split the posts on Marina's Ideal World (version whatever) to a new thread?

Request granted.

Split fromhere

EDIT: Didn't work quite as I intended. I'll fix it.

[Beowulf]

He'd be able to retain artworks worth up to about 100 million USD - his current assets. And more if he had children, or a partner to gift some to. So what's the big deal here? Wouldn't you like to be worth 100 million USD? Why get greedy and want more?

Because he wants his pretty paintings? You may have an argument if he sold the painting, and kept the money, but he did not know that they were anything more than pretty paintings when he bought them. It's not greed, it's wanting to keep what he paid money for. Our creator given right to Pursuit of Happiness!

For an even more absurd example: single painter gets discovered, turns out people are willing to pay more than $50 million for one of his paintings. He'd be unable to keep any of his own paintings if he wanted to continue doing what he loves. The instant he finishes a painting, it's obviously worth $50 million, which, if he had another he kept for whatever reason, would mean that his wealth would increase beyond that magic limit point.

The government does that now. We had a thread were we talked about how people couldn't keep base balls and prize cars because the taxes were too high.

That's because it's income when they get it. They get it, then have to sell it to pay the taxes on it. It's windfall. The situation listed above is not a windfall, because it's already in the owner's hands when the value increases. If somehow someone could arrange to have a baseball that they already own end up being used in a record breaking homerun, and could prove that it was their's, then they wouldn't have to pay any taxes on it until it was sold.

[Bilbo]

I just cannot imagine why having a value of 500 million for a family of five as a wealth cap would be unacceptable.

How very generous of you. Socialist much? Its not your money and to have the arrogance to think you can tell other people how much they can own and take the rest is just pathetic.

Do tell. When someone is worth 500 million and their investments are doing well are you just going to skim every penny off the top of their value?

How are you going to deal with non-citizens who own businesses in the USA? What if Bill Gates decides to move to Mexico and renounces his US citizenship to avoid your little commie routine? You going to still steal from him? You do that and you dry up billions and billions of dollars in foreign investment. Who would want to invest in the USA if there is a chance that any money over 500 million will get stolen by your wonderful little idea.

While I dont support their ideas people like you give lots of credance to the idea that people who have nothing should not be allowed to vote because it merely results in them stealing from those who do have.

[Edi]

Okay, now it's done. Sorry about the mix-up there.

[Bilbo]

He'd be able to retain artworks worth up to about 100 million USD - his current assets. And more if he had children, or a partner to gift some to. So what's the big deal here? Wouldn't you like to be worth 100 million USD? Why get greedy and want more?

So wanting to own what you worked to possess is now being greedy? How very self righteous of you.

[The Duchess of Zeon]

I find it interesting, and speaking strongly to the propaganda of the capitalist system, that the point that people find most objectionable is the idea that there should be an absolute cap on wealth... Have you all really been convinced that you, too, can one day be a multi-billionaire? I don't find anything plausible about that. Notice that there wouldn't be a gift tax anymore, so you could freely distribute wealth around within the cap to those you thought deserving of it. Which is the goal of the limit. Bill Gates would still control most of his money--he'd just have transferred his shares of Microsoft over to the Bill and Melinda Gates Foundation, and would use it there as he saw fit, since they meet all standards for a registered charity. Nonetheless, I do not think it completely unfair for the original creator and his/her direct heirs of works to be exempted from the levy for those works, within reason.

[Bilbo]

I find it interesting, and speaking strongly to the propaganda of the capitalist system, that the point that people find most objectionable is the idea that there should be an absolute cap on wealth... Have you all really been convinced that you, too, can one day be a multi-billionaire? I don't find anything plausible about that. Notice that there wouldn't be a gift tax anymore, so you could freely distribute wealth around within the cap to those you thought deserving of it. Which is the goal of the limit. Bill Gates would still control most of his money--he'd just have transferred his shares of Microsoft over to the Bill and Melinda Gates Foundation, and would use it there as he saw fit, since they meet all standards for a registered charity. Nonetheless, I do not think it completely unfair for the original creator and his/her direct heirs of works to be exempted from the levy for those works, within reason.

People object because it is not your place or the governments place to tell people what they can and cannot have. Once you step down that path what is to say that after a while you change the max to 50 million? 10 million? 1 million? You create a slippery slope where you have completely placed the government over the people which in America at least is not what was intended. Government exists at the sufferance of the people, NOT the other way around which is what you are implying.