Would you accept a tax hike if it meant higher taxes on the rich?

I am not a fan of randomly increasing taxes on anyone. One way you could get me to support it is if you told me ever cent collected by this tax went towards paying down the debt. I think boomers and my gen X generation totally screwed the young by running up this debt. It was the politicians that you and I voted for the ran up all of this debt. It has put unnecessary burdens on the young.

 

No, because one of the two most fundamental and widely accepted principles of correct taxation is "beneficiary pay." If government spends money in a way that benefits A but not B, then A should pay more tax than B. This is fundamental justice, because otherwise, B is being forced to subsidize A.

 

The fraction of income that is devoted to consumption (marginal propensity to consume) is inversely related to income. That means those who have the most income consume the smallest fraction of it, and would therefore pay the least "Fair" Tax relative to their incomes. Moreover, in the case of the "Fair" Tax, the rich can avoid paying any US tax at all by the simple expedient of doing all their consuming in other countries.

I haven't changed anything.

See above. Aren't those facts self-evident? Are you really unaware of them?

 

I would do both.

You have unmitigated gall to tell me what I would do. There are ways to wring out fraud in capital markets.

As I've said, we should change the nature of land title.

You must think we all just fell off the turnip truck. I told you, btw, I've made a bundle off my quite passive investments.

I said we should change the rules to discourage rent seeking, not confiscate assets.

This is rather pointless when I tell you I would reduce taxes on lower income folks and reform capital markets to discourage rent seeking.

I would eliminate income taxes and continue spending on programs we have now.

I would change the nature of land ownership.

 

BS.

 

Taxing is one way.

Boring, tedious crapola.

 

That is not an explanation of how a portion of the burden of a consumption tax is shifted onto production. You are evidently unaware of even the most basic facts of tax incidence. You are therefore not an economist.

The effect of a consumption tax makes producer goods less expensive because the reduced level of consumption reduces demand for producer goods. There is consequently less investment in producer goods because of the tax. See how that works?

Everyone.

Garbage. The marginal propensity to consume is inversely related to income: the less income people have, the more of it they tend to devote to consumption. That is why sales/consumption taxes are inherently regressive.

It doesn't matter how you tweak it, the super-duper uber-rich will continue to devote almost none of their income to consumption, relative to the poor and middle classes.

You think if you shift the burden of taxation onto consumption, people will not try to game the system to avoid the tax? People will put up with a low single-digit sales tax because it is too much trouble to evade it; but when you get into substantial double-digit percentages, compliance nose-dives and collection costs skyrocket.

Flat false. If you raise all public revenue by taxing consumption, those who have the option of doing their consuming in other countries will simply choose to do so, thus avoiding paying any tax at all.

OBVIOUSLY.

You clearly know almost nothing about economics, and are indisputably not an economist.

 

How else would you do it?

That you cannot refute.

 

Why? Why do you hate justice? How does taxing consumption accord with either of the two most fundamental and widely accepted principles of correct taxation policy: ability to pay and beneficiary pay?

No, I am simply taking you at your word -- you said you would tax consumption -- and identifying the inescapable logical implications of that position.

Fraud is not the problem. The problem is that contemporary "capital" markets are largely places where the privileged buy and sell other people's rights to liberty. A market where some people buy and sell other people's rights to liberty is a slave market. The problem with slave markets is not fraud.

And until you specify exactly how you would change it, you haven't said anything relevant or responsive.

No, but it is clear that modern mainstream neoclassical economics is the biggest scientific hoax in history, and that neoclassical economists are the conscious, deliberate perpetrators of that hoax.

So have I. So what? Whether you have made a bundle off of investments is entirely irrelevant, and whether they are quite passive is likewise irrelevant.

The only way to discourage rent seeking is to remove legal entitlements to collect rents. If an asset's value is as a legal entitlement to collect rent, then removing the owner's entitlement to collect rent is effectively confiscation of the asset. You can't discourage rent seeking without removing the value of assets that entitle their owners to collect rents.

By taxing consumption? That is anti-economic nonsense. Lower income folks both have a higher marginal propensity to consume and are the working people whose employment depends on other people consuming what they produce.

You have given no indication that you have any idea how to do that. Quite the contrary: you seem to think the problem is fraud when it patently isn't.

Substituting consumption taxes for the current progressive personal income tax would make matters much worse because at least the higher effective marginal tax rates paid on the highest incomes tend to fall on economic rents.

Until you specify how, you have said nothing.

 

Tax or forbid rent seeking activities.

Most of what I earned in the last several decades added nothing to the economy.

I told you I taught American history for more than three decades. Give it up.

Personal consumption was limited during the war with production going into arms and producer goods.

The temperatures recorded in Lytton were extraordinary, especially when Lytton is 50°N.

What's happening now is outside what we would expect without global warning caused by greenhouse gases.

Yes. It's a canyon.

We don't know what the Orange Oaf scored on an IQ test. We don't know what you scored, either.

He may have dyslexia.

 

Enough of your stupid insults.

You forget that removing income taxes makes investments more attractive and investors, ceteris paribus, are prepared to accept a lower gross return. The net cost of producer goods is reduced relative to consumer goods.

But we can set VAT rebates to people.

If they're not consuming, our concern is about an oligarchy controlling business.

Of course not. People in my position—born snd raised in California, naturalized in Canada—would likely consider living in Canada, at least part of the year.

VATs are popular in many countries.

FBAR. You have to work at hiding from the IRS if they choose to nose into your affairs.

You're running a bluff.

I'm bored.

 

I also said I would rebate the tax on a basic level of consumption such that average folks would pay little or no tax.

"Fraud" is not in the strictest legal sense, but instead in manipulating the system. I know how it's done and how to make money off it without getting involved in the fraud.

You probably don't know why MMT won't work despite having every potential to work in theory.

No disagreement with the necessity to moderate rent. The classic method understood by everyone is rent control on apartments.

The rest of your post is of no interest.

 

How? And doesn't that also amount to "confiscating" assets whose value is based on their associated rent collection capacity?

But did it subtract from the economy, as rent seeking typically does? Zero-sum games -- commodity markets, casino gambling, etc. -- add almost nothing to the economy either, but at least they are not harmful to non-participants.

But somehow, you are still not clear that massive consumption of war materiel stimulated massive productive investment in WW II. Check.

The arms were consumption items, not investments, and the producer goods were bought specifically to produce the arms. Consumption stimulated investment.

Not all that extraordinary, and merely local. The world record highest temperature ever recorded anywhere was over 100 years ago.

No it isn't. Anyone can look out their own window and confirm that there is nothing terribly unusual about the climate. Certainly those who claim there is some sort of climate "crisis" or "emergency" are indisputably lying.

And it's hot and dry, and fires are common in the area in summer.

He probably sat the SAT 60-odd years ago. We can be pretty sure his score was well above the mean, but not remarkably so. Maybe one or two sigmas. He is very glib, indicating high verbal ability, and his success in business indicates substantial numerical ability. On the other hand, his speech is markedly juvenile, with grammar and vocabulary both at a modest grade-school level.

Several scores between three and four sigmas above the mean.

 

So why tax consumption at all, when you have to spend immense sums reversing its effects to make it less regressive?

There are lots of ways. I have been peripherally involved in some of them.

I'm not sure what you would count as MMT "not working." MMT in general provides an accurate account of how modern debt money systems work, but their policy prescriptions largely miss the point. Their job guarantee notion makes about as much sense as a marriage guarantee.

OK, so you don't even know that when economists speak of rent, they are not talking about a periodic payment for temporary use of another's property.

FYI, rent control is a foolish policy that has mainly perverse effects. The three least affordable rental markets in North America -- NYC, San Francisco and Vancouver -- have all had fairly draconian rent control for more than 50 years. Hello? It doesn't work.

Like I said: you are not an economist. Likely you have never taken a course in economics beyond the high school level. Possibly you have never actually held an economics textbook in your hands, and are relying on misinformation gleaned from silly, anti-economic websites.

It is of interest if only because you can't answer it.

 

<yawn> You clearly cannot provide an explanation of how a portion of the burden of a consumption tax is shifted onto production, even though it is described at various websites. You are evidently unaware of even the most basic facts of tax incidence. You are therefore not an economist.

Nope. You forget that the returns to investment in producer goods tend to be competed away in any case, and "investors" consequently focus on acquiring rent collection privileges whose returns can't be competed away, not investments in producer goods. While I certainly agree that income taxes should be abolished, replacing them with consumption taxes is a big step in the wrong direction.

Which is an admission that consumption is The Wrong Thing To Tax in the first place.

My concern is that they are getting their income at others' expense, by dint of legalized stealing.

Canada also taxes consumption. If you try to get the same revenue by taxing consumption as is currently obtained by taxing income, the super-duper uber-rich who don't need to live or work in the USA will just move to places where their consumption is not taxed. Your idea will result in them paying even less tax than they already do.

They are popular with governments. Not with the people who have to pay them.

Garbage. If you abolish income tax and tax consumption instead, on what basis is the IRS going to investigate the super-duper uber-rich's consumption in other countries, hmmmm? Think.

No, you are, and I've proved it. See above. You are not an economist, and you know almost nothing of economics.

You're toast.

 

Landlords sure don't like rent control.

The most drastic action is to control the sale price.

But investment decisions in normal times are impacted by the prospective return, ceteris paribus. I'm leaving demand largely intact by rebating the consumption tax for lower- and middle-income groups. The tax is lowest for people with the highest propensity to consume. For higher-income groups with the prospect of discretionary spending occasioning a 20% VAT tax vs. no tax on investments.

A reading problem would hold his score down on the SAT.

We can see the verbal ability, but I'm not sold on his business ability.

Dyslexia.

 

No, I'm not taxing lower- and middle-income groups. Upper income groups will have much of their consumption taxed.

Wrong. The owners of downtown core properties areas are able to charge higher rent for facilities similar to properties in surrounding communities. That's economic rent. The government obliged the property owners by adding and maintaining public facilities—transit, parks, schools, business—that enhance the value of the downtown properties.

It depends upon what you mean by "works," and for whom.

One of us taught high school economics. That's me.

Given your pseudonym, I'll make you a sporting proposition. If you're right and I didn't teach high school economics, you get $5,000. If I did, I get $5,000. We agree upon a third party to decide the question by requesting and judging proof I submit. How about loser pays $2,000 to the arbiter?

Keep digging.

If you have a point you want to make, you shouldn't expect me to help you make it.

Investors focus on where they can make money. It isn't limited to pursuing "rent collection privileges."

You go ahead and explain. Don't forget we need to encourage R&D into technologies to slow climate change. We also need to solve the political problem of the declining return to labor relative to the return to capital. Here's the problem.

Canada has a somewhat different problem.

We can require Americans to disclose goods or services they acquire overseas and pay a tax on those assets.

We've practicing--FBARs. We can expand our focus to the balance sheet.

Don't forget my challenge.

 

There is no such thing as "two ... widely accepted principles" of taxation. Your two principles go back to Adam Smith. There are other more modern views on the matter:

https://www.oecd-ilibrary.org/docserver/9789264218789-5-en.pdf

 

No economically informed person does.

First-year economics explains why controlling the sale price is stupid.

And the more people consume, the greater the return to production.

So you figure you can somehow raise enough revenue to replace income tax by taxing consumption, but leave demand largely intact.

Like I said: you are not an economist. Likely you have never taken an economics class beyond high-school level. Possibly you have never held an economics textbook in your hands.

Then where is the net revenue to replace income tax going to come from?

"Investments" meaning unproductive rent collection privileges like land titles, IP monopolies, bank licenses, etc. That's what I thought.

He doesn't seem to like reading, but I've seen no credible evidence that he can't read. He's not the business genius he claims to be, but his TV show was certainly profitable.

 

Wrong again:

"From the first can be derived some leading views about what is fair in the distribution of tax burdens among taxpayers. These are: (1) the belief that taxes should be based on the individual’s ability to pay, known as the ability-to-pay principle, and (2) the benefit principle, the idea that there should be some equivalence between what the individual pays and the benefits he subsequently receives from governmental activities."

https://www.britannica.com/topic/taxation/Principles-of-taxation

Wrong again. Smith enunciated some additional practical considerations -- equity, certainty, convenience and efficiency -- now called the "Canons of Taxation," which you erroneously think are modern:

See? The fact that you do not know any of this proves you are not an economist.

 

How will you do that in the absence of income tax? How will you know who is in those groups without any income tax returns to look at?

You need to stop typing and start thinking.

If you can tell who they are without any income tax returns (doubtful), then they will just do their consuming elsewhere.

I am of course objectively correct.

Wrong. There is economic rent in the surrounding communities, too. Just not as much of it.

And the ones that aren't downtown, too.

Google "economic rent" and start reading.

Makes rental accommodation affordable for ordinary people. The evidence shows rent control does not do that.

ROFLMAO!!! That doesn't make you an economist, son. It just means the principal of your high school couldn't find anyone on the staff who knew any economics to teach the class, so you got the job.

By contrast, I taught post-secondary economics.

<yawn> No, how about you just admit that you are not an economist, have never taken a post-secondary course in economics, and don't know any more about the subject than you picked up from a high-school economics text that you incompetently taught from, but didn't even read all of?

I've already buried you.

I've made my point: you don't know any economics, and can't even be bothered Googling "tax incidence" to minimally inform yourself of why a consumption tax is partially shifted onto production.

In effect, it is, because the returns to productive investment tend to be competed away. The economic rents of privilege can't be competed away.

I have: the ultimate purpose of all economic activity is to enable consumption, and taxing it is therefore anti-economic nonsense.

No we don't. Increased CO2 and warmer climate are both beneficial. Historical periods of warmer climate were called, "optimums" before that term was ruled politically incorrect.

It is the return to privilege that is outstripping the return to labor, not the return to "capital." And the solution is to abolish privilege where possible, and tax its value away where it is not possible to abolish it.

That's not the problem. It's merely one symptom. The problem is privilege.

Goods and services consumed overseas are not assets, and no, you cannot require Americans to disclose goods or services they consume overseas, nor can you tax them, as that would violate treaties with those countries. You clearly are innocent of even the most basic concepts of economics.

The balance sheet has nothing to do with it, as consumption is neither an asset nor a liability.

You are so far out of your depth, you think an anchor is a PFD.

Oh, don't worry: I won't forget that your "challenge" was merely a laughable confession that you are not an economist, just a high school teacher who unfortunately got to fill innocent kids' heads with anti-economic nonsense.

 

You're just running your mouth.

You're misrepresenting what I wrote. Stupid stuff.

I didn't say Trump can't read. Something your speed...

https://kidshealth.org/en/teens/dyslexia.html

 

No, you are: I've shown you have no knowledge of the taxation economics you pretend to be pontificating on.

No I'm not. You have papered over the crucial distinction between investment in producer goods, training, production systems, etc. that contribute to production and "investment" in rent collection privileges that only legally entitle their owners to take a portion of production in return for no contribution thereto.

And unlike me, you still haven't explained how you would change landowning to address landowner privilege and parasitism.

 

You ought to develop some manners.

An FBAR isn't a tax return.

No, right. A good friend rents a 500 sq. ft. one-bedroom apartment in downtown Vancouver for $2500/month. A similar apartment away from transit and amenities added after the apartment was built rent for $1500/month. He gets an extra $1,000/month courtesy of government adding value to his property. Of course, the government wasn't doing all that

Uh huh.

"As another example, the owner of a property in an exclusive shopping mall may be willing to rent it out for $10,000 per month, but a company that is keen to have a retail storefront in the mall may offer $12,000 as monthly rent for the property to secure it and forestall competition. The difference of $2,000, in this case, is the owner’s economic rent.

It can also refer to a situation in which two properties exist with the exact same features except for location. If one location is preferable to another, then the owner of the preferred location receives a higher payment than the other without having to complete any additional work. The lack of additional labor on the part of the owner can also be considered unearned income."​

https://www.investopedia.com/terms/e/economicrent.asp

Backing off, are you?

You're running a bluff. You shouldn't have tried pretending you understand economic rent.

I taught high economics from a first-year university text. Many high school texts are lacking in rigor because some nitwits at the state level wanted to avoid graphing.

As I said, I'm not obliged to help you make your points.

Your claim business isn't interested in productive investment is absurd. If they can flat out compete, they'll do it. A lot I've met would push their mama down the stairs for a buck.

Wait until the permafrost melts and a lot of methane is added to the atmosphere.

It's more than privilege. Wait until quantum computing, artificial intelligence, and high-speed wireless communications put millions out of work.

You're trying to reframe the issue as strictly goods and services entirely consumed. Read about FBARs.

https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

The technical ability to nose into your business is there.

Tax treaties change, although I agree that taxing rich runaway consumers would prove difficult without an income tax. Of course, we could just keep the income tax for American citizens living abroad.

You're babbling again.

You want to claim I have no university training in economics, but taught high school economics? Same offer. $5,000...

Since you think climate change is a hoax, I'll commit to giving $5,000 if I win (and I will) to a nonprofit supporting climate change.

 

No, not wrong, genius. Liberals have serious intention to use the tax system to redistribute income. They have their economists. You might try looking at their views.

No, I'm not a liberal.