RE: POLITICS: Tax reality

From: Jeff Davis (jrd1415@yahoo.com)
Date: Mon Sep 15 2003 - 14:46:46 MDT

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    Thanks to Robert and to Reason for their submissions.
    As Robert's cautionary note cautions, this is a
    volatile subject, so all and sundry should be
    respectful and wary and practice safe sects. Reason
    as ever is the soul of, er, reason, ...and moderate
    discourse. Love youse guys.

    Two comments if I may.

    From Krugman's piece we have the following:

    "The starting point of supply-side economics is an
    assertion that no economist would dispute: taxes
    reduce the incentive to work, save and invest."

    to which I direct your particular attention. In
    support of the above, the paragraph finishes with:

    "A businessman who knows that 70 cents of every extra
    dollar he makes will go to the I.R.S. is less willing
    to make the effort to earn that extra dollar than if
    he knows that the I.R.S. will take only 35 cents. So
    reducing tax rates will, other things being the same,
    spur the economy."

    If this is something "that no economist would
    dispute", (I would suppose because the data in support
    of this assertion is rock solid, unrelenting, and
    without flaw, though I've not seen this data
    personally) nevertheless, allow me, for the sake of
    balance, to take the opposing view.

    If you tax an (over)achiever, and thus reduce his
    income--take him down a notch from that to which he
    has become accustomed--shall he not then, in
    conformity with his nature, resolve to redouble his
    efforts, work harder, recover that which he has lost,
    and strive as before for ever greater glory, and still
    ever greater glory after that? Camels and capitalists
    aren't quitters. Rather they persevere right up to
    the moment when their back snaps. No?

    Thus, it follows that more taxes on the rich, and more
    taxes after that, and after that, motivates
    achievement and drives the engine of productivity.
    (and if there are no economists to support this view,
    perhaps that reflects a uniformity of obeisance to the
    swinishly over-rich, would that I were one.)

    In support of this theory of high taxes to optimize
    productivity, I give you two examples: Alabama, with
    low taxes and low everything else (as cited in the
    Krugman piece) and California--or as Spike is wont to
    call it, "Taxifornia"--which is a virtual utopia of
    prosperity arising from hyper-achievement, despite (or
    perhaps in consequence of) a near-crushing tax burden
    (and traffic hell/road rage/fremen training regimen to
    make international terrorism seem a case of hiccups by
    comparison).

    PS: I'm not arguing in favor of taxation or other
    Arrakis-style hardening, but rather for a balanced
    view on the theoretical front.

    Best, Jeff Davis

    "Believe nothing, no matter where you read it, or who
    said it--no matter if I have said it--unless it agrees
    with your own reason and your common sense."
                             Buddha

    --- Reason <reason@exratio.com> wrote:
    > I suppose I should post the obligatory warning about
    > Krugman; anything he
    > writes should be viewed with extreme suspicion from
    > an economic point of
    > view. Have a look at:
    >
    > http://www.mises.org/fullstory.asp?control=1318
    >
    > Reason
    > http://www.exratio.com
    >
    > > -----Original Message-----
    > > From: owner-extropians@extropy.org
    > > [mailto:owner-extropians@extropy.org]On Behalf Of
    > Robert J. Bradbury
    > > Sent: Monday, September 15, 2003 4:12 AM
    > > To: Extropy List
    > > Subject: POLITICS: Tax reality
    > >
    > >
    > >
    > > I know it is probably unwise for me to post this.
    > But it may
    > > be useful for people in the U.S. as well as
    > foreign observers
    > > of U.S. politics to understand one aspect of the
    > U.S. political
    > > arena.
    > >
    > > Why is this important? Because the politics are
    > driving decisions
    > > that may seriously impact the funds available in
    > the future for
    > > everything from the National Nanotechnology
    > Initiative to DARPA
    > > funding of AI research to biotech and health
    > related research.
    > >
    > > So, save a copy of:
    > >
    > > September 14, 2003
    > > The Tax-Cut Con
    > > By PAUL KRUGMAN
    > >
    >
    http://www.nytimes.com/2003/09/14/magazine/14TAXES.html?pagewanted=print
    > >
    > > It is long, but perhaps one can sit down, read it
    > and think about
    > > some points it makes and some potential
    > consequences.
    > >
    > > Mind you, I am not as opposed to deficit funding
    > as I once was --
    > > but I want to see clear evidence that the funds
    > will primarily
    > > be being used to accelerate technology development
    > that will bail
    > > us out. I'm not sure that I see that at this
    > time.
    > >
    > > Interestingly, if one looks at the U.S. "war on
    > terrorism" as well
    > > as the Columbia disaster -- both appear to be
    > costing out at a rate
    > > slightly in excess of $50 million per human life
    > lost. It would be
    > > interesting to compare that with "standard" values
    > of human life
    > > that courts use for wrongful death suits which I
    > would guess are
    > > typically an order of magnitude less.
    > >
    > > Robert
    > >
    >

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