There used to be a political philosophy that resembled this. It had a famous thought experiment about somebody wanting to tear down a fence, and somebody else asking them to think carefully about why the fence might be there first, in case tearing it down would cause some unforeseen harm.
Traditionally this school of thought considered itself _opposed_ to the Left, broadly speaking.
On the one hand: much of the contemporary left is temperamentally conservative in this sense, yes. On the other: Burkeanism has from the very beginning been alloyed with a more overt traditionalism. A purely "safetyist" political self-conception is much more characteristic of the technocratic center-left.
There is no way to produce meaningful change that doesn't require 'harming' people in relation to how much they were taking advantage of the unfair system.
The contemporary optimal tax literature is pretty clear in its support for rates north of 70%, and I think 80% is a well-supported guess at an approximate figure.
I will take the opposite tactic to the other commenter. I 100% believe there is a well-supported consensus that 65% to 75% is optimal, but I also think any implementation that wasn't a world government would be a disaster.
I'm a 0.1% taxpayer in my rich Western country, and it's just gone over 50% marginal here which means I spend a crazy amount of time and money on tax planning. If I actually had to pay the 50% I would move East.
I think it's really hampered by the fact the people you're trying to tax are the most agentic people, with lots of international options.
It's been a while since I read in the It is pretty much a truism that the field of optimal taxation as a whole supports very high taxation. As far as I am aware this "sense" that the optimal tax subfield of economics supports *much* *much* higher taxation rates than currently exists just about anywhere.
I note that a lot of the classic results don't factor in that a great portion of the value of income is positional, when this is factored in, optimal tax rates go even higher, hence my own confidence in a figure of >80%. Just to be on the conservative side though, I will modify it in the article down to 75% which is in line with the links I gave.
If you want to agree with the optimal taxation subfield, that's fine- you might even be right, but it is more than fair to say this subfield in general supports, given utilitarian assumptions and in comparison to what currently exists, staggeringly high tax rates.
> If you want to agree with the optimal taxation subfield, that's fine
I’m gonna go ahead and assume you mean “disagree,” and I think this is the right tack. When social scientists show you a model - a model supported by some miscellancy of observational data, not an RCT - that “proves” a 90% marginal tax rate won’t significantly effect behaviour, you have to ask yourself what is more likely: common sense is just plain wrong, and people aren’t motivated by money? Or the model is superficial, and its empirical support is way too far removed from the real counterfactual we are after. It’s basically the Lucas critique.
There are some assumptions require to arrive at such a high number for the socially optimal marginal rate, including having strong enforcement (so people don't engage in evasion), and a simplified system without so many loopholes (so people aren't spending a lot of resources on legal avoidance). It doesn't seem terribly counter-intuitive, though. At some point people clearly aren't just working to accumulate more money, they're working to compete against each other (and the relative positions of the ultrawealthy are unchanged if the tax rate for all of them bumps up or down), and to leverage their money into political power that will let them entrench their position against competition (which is actively bad and should be prevented).
It's worth noting that back when the top tax rate _was_ this high in America (notionally, leaving aside the incredibly elaborate system of exclusions, deductions, preferences, and other loopholes) it did not in any way deter investment. In fact, that period from the late Eisenhower years through the Kennedy and Johnson years had the some of the highest investment rates and fastest productivity growth in history -- much stronger than the burst of productivity growth when the IT revolution finally bore fruit 30-ish years ago. Matt Yglesias has somewhat cheekily suggested that in fact the higher investment rate of that era was _caused by_ the high personal income taxes:
If you basically _can't_ turn corporate profits into personal wealth, because most of it will be taxed away, why not instead plow the money into R&D that will help bring glory to your corporate brand, when you're the first to debut the Next Big Thing.
Piketty, as I assumed. A first very wrong and central error he ignores is that when marginal tax rates were around 70%, no one paid near that, it was extremely easy to avoid. In modern circumstances Norway tried to increase the tax on the rich and they simply moved the capital outside the country (and they often moved themselves too).
Every model will have some imperfections and holes you can poke, but try making a list of 4+ models arguing the alternative that don’t make some even more ridiculous assumptions. (Heritage Foundation propaganda in particular is prone to poorly disguised arithmetic errors, which to me seems obviously worse than just being unable to perfectly measure exactly how faithfully a given tax code would’ve been followed 55 years ago.)
And this is also why the GOP won! It’s nonsensical unmoored theoretical BS. Show me ONE vibrant growing country with such marginal tax rates.
The anomaly of 1950s US does not count for obvious reasons it was the only functional economy in the whole wide world
Scandinavian countries are neither vibrant nor growing and the amount of funky tax avoidance that goes on there makes the US seem like choir boy adherents. It’s just less visible
I kind of wonder if it has to do with the move toward greater care ethics (a la Haidt). You can't bear to throw anyone overboard, which makes the real tradeoffs in any sort of social change impossible...
...but yet you're (or at least your side is) happy to employ an 'intersectional' framework that valorizes people in reverse order of their status in 1950s America, which apparently created enough losers to elect Trump a second time. (They may still live to regret it as inflation rises and the next pandemic spreads, so maybe it won't matter.)
"The left won’t upset anybody in the economic realm, and this comes out in, among other ways, a refusal to make serious plans that tackle the hard questions in advance."
You really think the left never upset anyone in the economic realm, either during Biden's entire administration, or under the worst excesses of COVID?
Isn't what you're saying already built into liberalism? Niebuhr remarked that democracy finds proximate solutions to insoluble problems. Dewey thought of democracy as a process to find answers we don't have by improving the methods and conditions of debate, discussion, and persuasion. Regarding realism, Weber remains the thinker with the most insight.
While many hate (or believe they hate) the professional managerial class today, Weber took the side of the professionals. With a Klingon-like zeal for honor, his analytical view demands absolute honesty, integrity, and sobriety. This means being unflinchingly realistic about how power and economics work, mastering the Devil's ways so one may fully understand his powers and limits. Being supremely clear about one's values, passions, and one's life, and supremely realistic about how the world works -- especially when these are not in harmony and cannot be harmonized -- is the core of Weberian responsibility. It is the essence of free politics.
In contrast, look at the ghouls who admire the Russian state, like Jack Posobiec, Tucker Carlson, or Jackson Hinkle. These people are not liars. They are bullshitters. They don't care whether what they're saying is true or false. Among free men, they are shunned. However, in an autocratic government, they can be rewarded for avoiding unpleasant realities by indulging in magical thinking story time for a leader.
Weber holds together values and realism like identical poles of two magnets. Liberalism paradoxically loses optimism when it believes it can avoid pessimism and tragedy and discard one of the Weberian horns. Either it is unrealistic, which makes it completely ineffective, or it isn't bringing its deepest longings and aspirations to the table, rendering it a stooge of the powerful. Both need to be combined. If the alchemy leads to incommensurable results and one must tragically deprioritize or even sacrifice one value in service of another, that is fine; the point is to take responsibility for the decision and ultimately your life, which is the opposite spirit of an anonymous rightwing shitposter.
My perspective on the left is that they never want to say no to themselves, and the recent cursory peek into the federal books seems to justify my perspective. And my perspective on the right is that they are too dumb or lazy to do anything about the above and the recent cursory peek into the federal books seems to justify my perspective.
I think the tax rate should never be more than 10%. If we have more government than 10% can cover, then we cut that until it is 10%. Levianthan will always grow to the size it is allowed to grow to. Taxation is theft. I don't care what your political philosophy is, if someone can put you in jail, and take away your things because you didn't give them the money they decided they want from you (and if those people often set their own salary, paid by the money they take from you) you are dealing with grand scale theft.
There are only a few things the government does better than the private sector and Bastiat detailed those three. Government education in almost all its many hideous forms (as an example of something that government does not do better than the private sector) is unbearably defective and should be abolished.
The left believes in "do no harm", and in practice, that means "never change anything" because any change anywhere might harm someone.
There used to be a political philosophy that resembled this. It had a famous thought experiment about somebody wanting to tear down a fence, and somebody else asking them to think carefully about why the fence might be there first, in case tearing it down would cause some unforeseen harm.
Traditionally this school of thought considered itself _opposed_ to the Left, broadly speaking.
On the one hand: much of the contemporary left is temperamentally conservative in this sense, yes. On the other: Burkeanism has from the very beginning been alloyed with a more overt traditionalism. A purely "safetyist" political self-conception is much more characteristic of the technocratic center-left.
There is no way to produce meaningful change that doesn't require 'harming' people in relation to how much they were taking advantage of the unfair system.
"believe it or not the economic literature largely supports this" nope
This is a niche stipulation by people like Piketty, pretty much no economic literature supports it.
The contemporary optimal tax literature is pretty clear in its support for rates north of 70%, and I think 80% is a well-supported guess at an approximate figure.
Everyone with more than 10x the average wealth or income needs to be hit with a 100% tax rate.
I will take the opposite tactic to the other commenter. I 100% believe there is a well-supported consensus that 65% to 75% is optimal, but I also think any implementation that wasn't a world government would be a disaster.
I'm a 0.1% taxpayer in my rich Western country, and it's just gone over 50% marginal here which means I spend a crazy amount of time and money on tax planning. If I actually had to pay the 50% I would move East.
I think it's really hampered by the fact the people you're trying to tax are the most agentic people, with lots of international options.
It would also be a disaster _with_ a world government. Contrary to the experience of academics, most people are motivated by money.
This is fiction. Show these numbers and their sources.
Here you go:
https://files.epi.org/2013/raising-income-taxes.pdf
https://www.aeaweb.org/articles?id=10.1257/mac.20150170
https://www.tandfonline.com/doi/abs/10.1080/00036846.2017.1392001
https://eml.berkeley.edu/~saez/diamond-saezJEP11full.pdf
https://www.nber.org/system/files/working_papers/w17616/w17616.pdf
The first paper is an accessible overview.
It's been a while since I read in the It is pretty much a truism that the field of optimal taxation as a whole supports very high taxation. As far as I am aware this "sense" that the optimal tax subfield of economics supports *much* *much* higher taxation rates than currently exists just about anywhere.
I note that a lot of the classic results don't factor in that a great portion of the value of income is positional, when this is factored in, optimal tax rates go even higher, hence my own confidence in a figure of >80%. Just to be on the conservative side though, I will modify it in the article down to 75% which is in line with the links I gave.
If you want to agree with the optimal taxation subfield, that's fine- you might even be right, but it is more than fair to say this subfield in general supports, given utilitarian assumptions and in comparison to what currently exists, staggeringly high tax rates.
> If you want to agree with the optimal taxation subfield, that's fine
I’m gonna go ahead and assume you mean “disagree,” and I think this is the right tack. When social scientists show you a model - a model supported by some miscellancy of observational data, not an RCT - that “proves” a 90% marginal tax rate won’t significantly effect behaviour, you have to ask yourself what is more likely: common sense is just plain wrong, and people aren’t motivated by money? Or the model is superficial, and its empirical support is way too far removed from the real counterfactual we are after. It’s basically the Lucas critique.
Sure, give me a couple of hours till I get home
https://cepr.org/voxeu/columns/taxing-1-why-top-tax-rate-could-be-over-80
There are some assumptions require to arrive at such a high number for the socially optimal marginal rate, including having strong enforcement (so people don't engage in evasion), and a simplified system without so many loopholes (so people aren't spending a lot of resources on legal avoidance). It doesn't seem terribly counter-intuitive, though. At some point people clearly aren't just working to accumulate more money, they're working to compete against each other (and the relative positions of the ultrawealthy are unchanged if the tax rate for all of them bumps up or down), and to leverage their money into political power that will let them entrench their position against competition (which is actively bad and should be prevented).
It's worth noting that back when the top tax rate _was_ this high in America (notionally, leaving aside the incredibly elaborate system of exclusions, deductions, preferences, and other loopholes) it did not in any way deter investment. In fact, that period from the late Eisenhower years through the Kennedy and Johnson years had the some of the highest investment rates and fastest productivity growth in history -- much stronger than the burst of productivity growth when the IT revolution finally bore fruit 30-ish years ago. Matt Yglesias has somewhat cheekily suggested that in fact the higher investment rate of that era was _caused by_ the high personal income taxes:
https://slate.com/business/2012/07/xerox-parc-and-bell-labs-brought-to-you-by-high-taxes.html
If you basically _can't_ turn corporate profits into personal wealth, because most of it will be taxed away, why not instead plow the money into R&D that will help bring glory to your corporate brand, when you're the first to debut the Next Big Thing.
Piketty, as I assumed. A first very wrong and central error he ignores is that when marginal tax rates were around 70%, no one paid near that, it was extremely easy to avoid. In modern circumstances Norway tried to increase the tax on the rich and they simply moved the capital outside the country (and they often moved themselves too).
Okay, here’s some not-Piketty then:
https://www.aeaweb.org/articles?id=10.1257/jep.25.4.165
https://www.brookings.edu/wp-content/uploads/2009/03/2009a_bpea_romer.pdf
https://www.nber.org/system/files/working_papers/w7512/w7512.pdf
Every model will have some imperfections and holes you can poke, but try making a list of 4+ models arguing the alternative that don’t make some even more ridiculous assumptions. (Heritage Foundation propaganda in particular is prone to poorly disguised arithmetic errors, which to me seems obviously worse than just being unable to perfectly measure exactly how faithfully a given tax code would’ve been followed 55 years ago.)
And this is also why the GOP won! It’s nonsensical unmoored theoretical BS. Show me ONE vibrant growing country with such marginal tax rates.
The anomaly of 1950s US does not count for obvious reasons it was the only functional economy in the whole wide world
Scandinavian countries are neither vibrant nor growing and the amount of funky tax avoidance that goes on there makes the US seem like choir boy adherents. It’s just less visible
I kind of wonder if it has to do with the move toward greater care ethics (a la Haidt). You can't bear to throw anyone overboard, which makes the real tradeoffs in any sort of social change impossible...
...but yet you're (or at least your side is) happy to employ an 'intersectional' framework that valorizes people in reverse order of their status in 1950s America, which apparently created enough losers to elect Trump a second time. (They may still live to regret it as inflation rises and the next pandemic spreads, so maybe it won't matter.)
"The left won’t upset anybody in the economic realm, and this comes out in, among other ways, a refusal to make serious plans that tackle the hard questions in advance."
You really think the left never upset anyone in the economic realm, either during Biden's entire administration, or under the worst excesses of COVID?
OK, cooker.
Is that supposed to be an insult?
Yep.
Isn't what you're saying already built into liberalism? Niebuhr remarked that democracy finds proximate solutions to insoluble problems. Dewey thought of democracy as a process to find answers we don't have by improving the methods and conditions of debate, discussion, and persuasion. Regarding realism, Weber remains the thinker with the most insight.
While many hate (or believe they hate) the professional managerial class today, Weber took the side of the professionals. With a Klingon-like zeal for honor, his analytical view demands absolute honesty, integrity, and sobriety. This means being unflinchingly realistic about how power and economics work, mastering the Devil's ways so one may fully understand his powers and limits. Being supremely clear about one's values, passions, and one's life, and supremely realistic about how the world works -- especially when these are not in harmony and cannot be harmonized -- is the core of Weberian responsibility. It is the essence of free politics.
In contrast, look at the ghouls who admire the Russian state, like Jack Posobiec, Tucker Carlson, or Jackson Hinkle. These people are not liars. They are bullshitters. They don't care whether what they're saying is true or false. Among free men, they are shunned. However, in an autocratic government, they can be rewarded for avoiding unpleasant realities by indulging in magical thinking story time for a leader.
Weber holds together values and realism like identical poles of two magnets. Liberalism paradoxically loses optimism when it believes it can avoid pessimism and tragedy and discard one of the Weberian horns. Either it is unrealistic, which makes it completely ineffective, or it isn't bringing its deepest longings and aspirations to the table, rendering it a stooge of the powerful. Both need to be combined. If the alchemy leads to incommensurable results and one must tragically deprioritize or even sacrifice one value in service of another, that is fine; the point is to take responsibility for the decision and ultimately your life, which is the opposite spirit of an anonymous rightwing shitposter.
Yes. And the Left's incapacity to think about hard questions is why we can't have nice things
My perspective on the left is that they never want to say no to themselves, and the recent cursory peek into the federal books seems to justify my perspective. And my perspective on the right is that they are too dumb or lazy to do anything about the above and the recent cursory peek into the federal books seems to justify my perspective.
I think the tax rate should never be more than 10%. If we have more government than 10% can cover, then we cut that until it is 10%. Levianthan will always grow to the size it is allowed to grow to. Taxation is theft. I don't care what your political philosophy is, if someone can put you in jail, and take away your things because you didn't give them the money they decided they want from you (and if those people often set their own salary, paid by the money they take from you) you are dealing with grand scale theft.
There are only a few things the government does better than the private sector and Bastiat detailed those three. Government education in almost all its many hideous forms (as an example of something that government does not do better than the private sector) is unbearably defective and should be abolished.