Marginal utility of money

Do you accept the fact that that is irrelevant and only proves why the marginal $100 in income should be taxed higher for the billionaire?

It's not? Of course it is. You don't want to minimize utility. Why wouldn't you want to maximize the utility?

Assume the goal is to maximize utility, which I think is the general idea.

So given that goal and given that that $100 in marginal income has far greater utility to the starving man than the billionaire, if you want to maximize utility, would you tax the $100 dollars in marginal income higher on the billionaire, or higher on the starving guy? Why?

Do you accept the fact that that is irrelevant and only proves why the marginal $100 in income should be taxed higher for the billionaire?

 

I accept the fact that $100 is an irrelevant unit to the billionaire. It does not prove anything about what the billionaire should be taxed.

Whose utility? The billionaire? The poor man?

Not in my op its not.

Because it is not relevant.

Nope! It has nothing to do with what anyone should be taxed by.

 

There you go. Making subjective claims about a billionaire again when you've previously said you can't do it.

Why, because you want to minimize overall utility? LOL

Utility overall in the society.

If your goal is to increase misery, then I agree under a MU analysis it makes sense to have higher taxes on the starving guy.

So what? Do you disagree with the proposition that we want to increase overall utility? That is the whole basis for a MU analysis.

I agree if that is not the objective then it is irrelevant whether the starving man or the billionaire gets more MU and the whole discussion is kind of worthless to begin with.

LOL, got anything more profound that just "because"?

1) Why is it not relevant?
2) Whether it is relevant or not, what is your answer?

You talked about the implications of MU on tax policy in you OP and throughout this thread. I'm asking you a direct question about it. Why do you keep dodging?

Other than it proves the fact your entire premise is wrong, I mean.

LOL, it it has nothing to do with what anyone should be taxed, why did you bring it up in your OP and this thread?

But it has a lot to do with an argument for a progressive tax. If the starving man gets much greater MU from a marginal increase of $100 than the billionaire, then logically, if we want to increase overall utility in society, the billionaire should pay a higher rate of tax.

An argument you have not refuted because it is logically irrefutable.

Why are you so determined not acknowledge this obviously logical argument when you pretend that you support a progressive tax?

 

Yep!

Are you talking about objective utility?

So yes, you ARE talking about objective utility. Have at it. I choose not to discuss objective utility in a marginal utility thread.

Misery in not relevant here nor is taxing the poor guy more.

No, that has never been part of the discussion. Why would you want to introduce a new subject?

The whole discussion was your challenge to my op which was discording the idea that Marginal Utility was not an excuse for progressive taxation. So the way you have wishy washy around the discussion became worthless.

More profound than anything you have said.

It is too small for the billionaire to consider as his marginal unit.

To what question?

I have given you many direct answers. You just don't understand the subject well enough to accept them.

The whole premise is, marginal utility is not a reasonable justification for a progressive tax. A progressive tax for which we need no more justification.

Because I had just reread a skewed study by Diamond and Saez who tried to get away with using a constant sized marginal unit to prove the justification for progressive taxation on the rich.

 

Do you understand what a marginal unit is?
In the story about lighting the cigar with a $100 bill, the marginal unit is $100, what else could it be?
It's the amount being dealt with.
The decision to use a $100 bill rather than a match has a cost attached to it of $100, no more, no less.
He has $100 less after the cigar is lit, than before, the marginal change in wealth is $100.

 

It's not that often you see someone admit to blatant inconsistency.

Same exact utility that you conceded to starving guy gets more of from a marginal increase of $100 in income than that billionaire.

You've already conceded that $100 in marginal income has far greater utility to the starving man than the billionaire.

Opposite of utility.

Exactly. That is the whole point of marginal utility and tax policy.

"Wishy washy around the discussion"? LMAO!

Straw man. Never claimed otherwise.

"Because" isn't really an answer. But it illustrates it's the best you can come up with. Not that you'd ever concede you are wrong.

I understand it fine, thanks.

Thanks, but you've already stated your baseless position. And we also know your argument for it. "Because".

I'm sure others are impressed.

You suppose, eh? OK then. I think I'm satisfied.

Let's review the points we've now agreed with.

1) You've conceded and we agree that $100 in marginal income has far greater utility to the starving man than the billionaire. The MU of that same $100 decreases as a person gets wealthier. This is the law of diminishing return in marginal utility.

2) And you've conceded and we agree that based on "objective utility" the billionaire should pay a higher rate of tax than the starving guy on a $100 marginal increase in income, because the "objective" MU the billionaire gets from a marginal increase of $100 in income is far less than the MU to the starving guy for that same $100 marginal increase. See point one.

There isn't anything else we need to argue about.

Irrelevant and couldn't care less what you think the billionaire would think.

LOL, this from a guys whose entire argument was "because".

1) A lot of conservatives that you pretend not to be are completely against progressive taxes.
2) Why not have all the arguments you can if your goal

I'm not sure that a billionaires gets a proportionately more benefit from infrastructure. What's your evidence and argument for that?

Sorry. Next time I'll just argue "because".

 

Yes! Obviously you don't if you believe that insignificant $100 bill could ever be the billionaire's marginal unit. The example was to show that the billionaire would never consider it, yet you seem to have a fascination with the figure. Go figure!

Certainly not the billionaire's marginal unit.

No its not. It is the amount the person using it as an example dealt with. Like I said, you don't understand the first thing about marginal units or marginal utility.

Nope! It is an example of what could not be a marginal unit for the billionaire, chosen by Herbert Spencer, the economist. The example shows the symbolic ideal is to be able to afford to use hundred-dollar bills to light one’s cigar—while dealing with mansions, yachts, and private railway cars as the significant marginal units of one’s life. So can you read it? Do you see that they ARE NOT DEALING WITH A $100 BILL, and the very idea that an intelligent person would believe it was the amount being dealt with is ludicrous. Got it yet? So both of you come off that $100 bill schtick. It simply will not play to reason.

 

Ah, so you are finally admitting you are blatantly inconsistent.

Starving guy gets objective and marginal utility from $100. The billionaire gets neither because he will be dealing with "dealing with mansions, yachts, and private railway cars as the significant marginal units of one’s life." And those marginal units give him immense pleasure thus the marginal utility for him has increased. Oh poop, since the billionaire did not have a diminishing marginal utility you can't use it to justify a higher tax for him. Boo hoo hoo! Useless attempt at justification.

Yep, that is why the billionaire would never deal with a $100 marginal unit.

HUH?

Well then, diminishing marginal utility still cannot justify higher taxes on billionaires because their utility did not diminish.

Why are you so wishy washy you bring useless crap to the discussion?

Gee, your argument doesn't even come up to the level of a straw man argument. It is completely useless.

It is a better answer against than your argument is for. But I guess you just aren't smart enough to see it.

Obviously you don't or you wouldn't be making such a stupid argument about something being justification for higher taxes for the rich.

Certainly not about your baseless opinion.

I'm happy for you.

Yep!

If the billionaire would consider or deal with a $100 marginal unit that would be true. But he doesn't. The example put forward by the economist who created it clearly said that the rich man would be dealing with mansions, yachts, and private railway cars as the significant marginal units of one’s life.So that shot your premise to hell and back.

Yep! But certainly not on the phoney skewed information you are putting forth but rather because he gets more value out of our infrastructure than the poor man.

The billionaire doesn't deal with a marginal unit of $100. The starving guy would. Your logic is totally flawed, and you are starting to sound shrill in your frustration.

I agree with that. You have never had anything to argue about right from the start, yet you have managed to make over a hundred fallacious posts.

Then you obviously won't know what his marginal utility would be because only he can perceive it.

That one word is still a better argument than all 100 plus posts you have made.

A lot, if not all conservatives don't want progressive taxes, equal rights, universal medical care, free good public education etc. I do.

Huh?

The mere fact they are making more money from their patents, copy rights, distribution routes, protection by police etc.

It would be a better argument than you have used so far. right back at you.

Gee, but the two of you are getting really easy to beat.

 

Well, you should read Reisman, and try to understand what he actually is saying, because you clearly do not understand what a "marginal unit" is.

 

Nice try, but no brass ring. I quoted Reisman. He gave an example. He clearly said that, "The example shows the symbolic ideal is to be able to afford to use hundred-dollar bills to light one’s cigar—while dealing with mansions, yachts, and private railway cars as the significant marginal units of one’s life." THOSE ARE HIS WORDS. There is nothing left to the imagination. The millionaires marginal unit, that with which he was dealing, were anyone of several things, ( dealing with mansions, yachts, and private railway cars as the significant marginal units of one’s life.) and there is nothing to misunderstand. Learn to understand plain English Goober, before claiming someone else can't figure out what is said. The next marginal unit, the unit the billionaire will deal with is stated with nothing left to the imagination, yet you still fall back on your old BS, that I don't understand what it is. Well Goober, anyone reading your claim above with my post clearly in the quote box knows instantaneously that it is you who has the comprehension problem, and have going back to the old forum. Grow up, get a life, read, study, learn something.

 

You know all through this, both here and the other place, I have found the quotes that destroy your premise, in the very material you provide.
Reisman quotes von Mises saying the marginal unit is the unit is being dealt with, in an example with a $100 bill, the unit being dealt with is $100.
get it?

 

That Goober, is absolute BS. You found quotes you did not understand and Mahasattva and I blew you out of the water every time when we reposted the easy to understand quotes that the world could see did not follow your interpretations. As to the $100 example which the millionaire thinks so little of he uses one to light a cigar, then he says, "while dealing with mansions, yachts, and private railway cars as the significant marginal units." The $100 is not the unit being dealt with, it is a fictitious unit which the rich man will never use. How you came up with the $100 as the unit being dealt with when he says the rich man is dealing with other things. But of course you can't understand what is written and you are not so smart you can figure anything out.

As you said, the unit being dealt with, then Reisman says, "while dealing with" and you still have not figured out what the example means. Your inability to understand simple English is getting to be comical.

 

you know it's pretty comical when you you go on and on about something as simple as the example of a millionaire using a $100 bill to light a cigar.
If you had any idea what marginal utility was, you'd understand that in that example, the marginal unit is $100.
What else could it be?
What good is an economic theory about a marginal unit, if the marginal unit is indeterminable in a very specific example?
In other words, if the marginal unit in the example isn't $100, then what is it?
What's the number and how did you arrive at it?

Ask yourself this, if the millionaire had used a sack of wheat to light his cigar, what would the marginal unit have been?
If the millionaire had used a rare book worth $10,000 to light his cigar, what would have been the marginal unit?
If the millionaire had used a dollar bill to light the cigar, what would the marginal unit have been?

 

I dropped it long ago when it was obvious you did not understand it. I will only address that example when, as usual, you come back and make an issue of your misinterpretation of what it means.

What else but $100 could it be? Are you that dense? It is what the man said it was, ""while dealing with mansions, yachts, and private railway cars as the significant marginal units." Reisman didn't leave it up to the imagination, HE TOLD US WHAT WAS BEING DEALT WITH AS MARGINAL UNITS.

Yet it is very specifically stated, "while dealing with mansions, yachts, and private railway cars as the significant marginal units," so there is no doubt, no guessing, just the ability to read.

This is it, "while dealing with mansions, yachts, and private railway cars as the significant marginal units." How did I arrive at it? I READ THE EXAMPLE, THEN CUT AND PASTED WHAT THE MARGINAL UNIT IS OR CAN BE. It is a shame you can't read well enough to see it.

Fortunately for me, and for everyone else reading this thread we don't have to guess, or do elaborate exercises in interpretation. What the marginal unit is was stated by the writer. So how do we determine what the marginal unit is? WE READ IT WHERE IT IS STATED.

 

In the example, there is a millionaire, a cigar and a $100 bill.
Just because Reisman says something in the same book, even in the same chapter, even on the same page, doesn't make it a part of the example.
There is no private railway car in the example, no yacht, no mansion, the example begins with a millionaire, an unlit cigar and a $100 bill.
At the end of the story there is a millionaire and a lit cigar. What is the marginal unit being dealt with?
Is there a yacht in the example, a mansion? Did the man acquire or dispose of a railway car in the example?
In the example, the man uses a $100 bill to light a cigar, so what changes, does he have a luxury car after he lights the cigar that he didn't have before he lit the cigar?

 

The difference between a match and a one hundred dollar bill.

 

It is PART of the example. And just to embarrass you one more time I will post the entire example which states EXACTLY WHAT THE MARGINAL UNIT BEING DEALT WITH IS.

Thus, we rationally want more wealth in order to be able to deal with marginal units of wealth of progressively larger size, and to be less and less concerned with units of wealth of any given size. In the spirit of the welcoming party allegedly once given by American millionaires to the famous nineteenth-century English defender of capitalism Herbert Spencer, the symbolic ideal is to be able to afford to use hundred-dollar bills to light one’s cigar—while dealing with mansions, yachts, and private railway cars as the significant marginal units of one’s life.​

There it is, in black and white, what was written and what was being dealt with. No guess work allowed. Stop embarrassing yourself.

 

Point 1 established.

No, sorry, you've already conceded that $100 in marginal income has far greater utility to the starving man than the billionaire. Whether he would "consider" or "deal" with it or not is irrelevant. We are not asking what he would "consider" or "deal" with. We are asking what utility a marginal $100 in additional income would give him.

And you've already conceded it is insignificant, far lower than the utility derived by the starving man. Thus utility of that marginal $100 has irrefutably diminished for the rich person. You have conceded this and you don't get to go back and change your position as it suits you and now deny it.

I made no such premise.

Point 2 established.

Thanks. Game set match.

I didn't say anything about what they would deal in an don't care. Strawman.

My logic is based on points you've conceded.

1) You've conceded and we agree that $100 in marginal income has far greater utility to the starving man than the billionaire.
2) And you've conceded and we agree that based on "objective utility" the billionaire should pay a higher rate of tax than the starving guy

That is my logic. Because the billionaire gets far less MU than the starving guy on $100 in marginal income he should pay a tax on it. Which you have conceded. For you to claim it is "fatally flawed" means you are saying your own admitted positions are fatally flawed.

The only marginal utility I've used is the MU you've conceded and admitted.

 

So even Reismann has specified the MU of $100 to a rich man. It lights his cigars. Reismann is acknowledging that that $100, which means a starving man can eat and survive, is worth only the relative value of a match to the rich guy.

Even Reismann is showing you how that $100 has diminished in utility to the rich man. How can you deny what Reismann says in black and white?

- - - Updated - - -

How can you argue the rich guy is not dealing with a marginal unit of $100 to light his cigar when even Reismann says he uses it to light his cigar? How can you say that "the $100 is not the unit being dealt with when he deals with it to light his cigar?

Flat contradiction in logic and terms.

Not that it matters what he deals with. What matters is the utility he gets from it.

I don't see you blowing anyone away. Just petty insults and grammar school self serving proclamations.

 

And what does he deal with when he's lighting his cigar?

$100.

Reismann told us what he does with $100. Lights his cigar.

Who says we have to do that and why?

 

Reismann could not be any clearer in explaining to us the marginal utility of $100 to the billionaire.

Which is completely consistent with the law of diminishing returns. The $100 is life or death to the starving man. It's a match to the billionaire.

How much more clearly could Reismann possibly make the point about diminishing returns? How much more persuasively could he make the point about how diminishing returns of MU argue for a progressive tax?

Tax the starving man's $100 at a high rate and he doesn't eat. Tax the billionaire's $100 at a high rate and he loses a match.

Thanks Reismann, for demonstrating to us so poignantly how MU justifies a progressive tax, and how the OP in this thread was completely wrong.

 

Yep! $100 means more to a poor person than a rich person.

I'll say it again. $100 means more to a poor person than a rich person.

That is where you screw up. What the rich man deals with as a marginal unit is the only thing that matters.

You may be asking that irrelevant question. I sure am not, because I know it means so little to him he would as soon use it as a match.

Yep! Several times.

If that was the amount he was dealing with or considers yes, but rich person would ever stoop so low.

I don't deny that $100 means more to a poor person than a rich person, not once, ever. So get on with it Iriemon.

What you choose to make as a premise means nothing, to me, to the rich man or to anyone else for that matter.

OK!

What game are you playing?

Then you are not talking about the same thing I have been over the last 700+ posts. No matter how much I agree, and I do, that the poor man can get more utility from $100 than a rich man would get, it still does not justify anyone believing it is the marginal unit dealt with by the rich man. And that Iriemon is the entire point of the story. At no point can one stretch it that the $100 is marginal unit for the rich man.

Thus, we rationally want more wealth in order to be able to deal with marginal units of wealth of progressively larger size, and to be less and less concerned with units of wealth of any given size. In the spirit of the welcoming party allegedly once given by American millionaires to the famous nineteenth-century English defender of capitalism Herbert Spencer, the symbolic ideal is to be able to afford to use hundred-dollar bills to light one’s cigar—SIZE=3]while dealing with mansions, yachts, and private railway cars as the significant marginal units [/SIZE] (those are the rich man's marginal units.)of one’s life.​

What logic? You have yet to express anything logically.

Yep!
2) And you've conceded and we agree that based on "objective utility" the billionaire should pay a higher rate of tax than the starving guy.[/quote]That I have not conceded. Especially since the rich man will never use $100 in marginal income to determine his marginal utility.

Then you have no logic.

Since the rich man did not use the $100 as a marginal unit, and since he would deal with much larger marginal units, his marginal utility has increased.

BS Iriemon. the whole OP was that there is no excuse to use diminishing marginal utility as a justification for increased tax on the rich man, BECAUSE HIS MARGINAL UTILITY DOES NOT DIMINISH BECAUSE HE DEALS WITH MUCH LARGER MARGINAL UNITS SUCH THAT HIS MARGINAL UTILITY INCREASES. Poof, there goes your whole theory.

Wrong. You are trying to use $100 as the marginal unit for the rich man, and I have never and will never concede to that. I conceded that $100 would be more utility to the poor man than the rich man. But that is a far cry from conceding that the $100 could ever be the marginal unit for the rich man. No way Jose!

You are getting to the point that you don't understand any more than the other guy who has been trolling my posts.

 

How can I say it? Because Reisman said it. The rich man did not consider the $100 as his marginal unit. It is too insignificant to him, and that is why Reisman clearly says the rich man is "dealing with mansions, yachts, and private railway cars as the significant marginal units."You really need to read the entire paragraph before going off on a tangent about which nothing was ever said or implied that the $100 was the rich man's marginal unit.

Right, your post is a contradiction in logic.

That is because you have a hard time understanding what is going on with marginal utility. You could say it matters what utility he gets from the marginal unit, but ONLY if you use the proper sized marginal unit; and in that example you and goober so completely misunderstood the economist clearly TELLS US WHAT THE RICH MAN'S MARGINAL UTILITY WOULD BE.

 

Clearly wrong. The rich man is also using the $100 as a marginal unit. To light his cigar. Reisman says so: "The example shows the symbolic ideal is to be able to afford to use hundred-dollar bills to light one’s cigar ..."

There it is, in black and white, what was written and what was being dealt with. No guess work allowed. Stop embarrassing yourself.

How so?

What is it you think I do not understand?

We are using an appropriate sized marginal unit to consider for tax policy. $100.

 

Then it is irrelevant whether the "billionaire would consider or deal with a $100 marginal unit" because you've already agreed that $100 means less to him than the poor person.

Why does that matter at all?

If we want to consider what rate of tax to apply to that marginal $100 in additional income, my question is not irrelevant at all.

Which is why, as you've conceded, it makes sense to tax it at a higher rate. QED.

We are not considering what he deals with. We are considering tax policy.

It would matter to anyone considering tax policy, the issue raised in the OP.

Whether your proposition that MU does not support a progressive tax is logically accurate.

I'm talking about tax policy since you brought it up in your OP. I couldn't care less what the billionaire thinks is a marginal unit, but even Reisman proves that $100 are the marginal unit to light cigars.

Sure I have. You've already conceded that $100 in marginal income has far greater utility to the starving man than the billionaire. Logically, then, if we want to maximize overall utility, we tax the $100 in marginal income at a higher rate the wealthier the person.

You have yet to refute that logic, and to the contrary, conceded it was accurate, as you agreed that based on "objective utility" the billionaire should pay a higher rate of tax than the starving guy.

Illogical.

Reismann proves you are completely wrong. The rich many does use a $100 as a marginal unit. To light his cigar. Shall I quote his statement again? It's black and white:

"The example shows the symbolic ideal is to be able to afford to use hundred-dollar bills to light one’s cigar." Stop embarrassing yourself.

Not that it matters what a rich man uses.

It's very clear you are the one who doesn't understand. Or has some ulterior motive why you cannot admit the obvious.