A different concern, more on the overall population level, might be that tax career agents will increase differences in outcomes, maybe significantly so. Individual that for whatever genetic or environmental reasons are predicted (correctly or not) to be low tax value will necessarily receive proportionally lower investments. This will drive social structures toward being less egalitarian.
Well, there is an alignment problem of that kind, as there is in current private industry as well, but I wouldn't say that governments who administer income tax programs are really aligned with maximizing tax revenue either. The politicians are aligned with getting people to vote for them, which means they often campaign based on playing to the cognitive biases of their voters, and appeasing their corporate donors, rather than to any real goal like "maximizing total revenue." As long a politician can claim that their policy is going to improve everybody's income - and be believed by the uninformed average voter - then the politician can get re-elected, regardless of whether their policy actually does that. If the policy fails, that just creates an opportunity to blame the other side for the failure.
It seems plausible there could be some gain by buying back part of your own cash flow from the agent. The lower marginal rate reduces deadweight loss.
It also seems possible that skilled employees would expect employers to buy shares in the employee cash flow stream to show a commitment to the employee’s long term career development.
There are plenty of careers that involve net harm to others without running into the law. Promoters of the smoking epidemic, the obesity epidemic and the opiod epidemic are examples. The government would not promote such activities to increase income tax revenue - since the overall effect would be negative. Career advice agents that serve a small subset of the population would be less likely to hold back. They could reap the benefits without paying the costs.
Governments who administer income tax programs want everyone to do well. Career agents would want their clients to do well - possibly at the expense of other members of society. So: their incentives are not completely aligned with those of governments. It could still make sense for governments to create career agents if they offered enough benefits - but because of differing incentives, they have an initial hurdle to get over.
Maybe a good place to start would be to set a (high) quota on legal immigration and have the government auction off immigration spots to tax career agents ("relocation sponsors"). Those agents can fill each of those spots with a foreign national of their choosing and hold the right to his/her future US tax payments. The tax agents could also be held partly liable for certain costs that the immigrant creates for the government - for example, if they should become incarcerated or start collecting welfare. I have a feeling that most Americans would strongly prefer an immigration system that worked this way.
This might also be a good way of raising startup funds for newly-forming micronations or charter cities: The city authority would receive the auction's proceeds up front, and it could invest that money into making the city more attractive, functional, and stable, which would lead the bidders in the next round of auctions to place higher bids. If nothing else it might be a neat backdrop for a fictional story, because there is much more potential for human drama when your taxes are paid to a specific individual rather than a government.
I do think it would be a good idea to have a government department whose mission is to collect and publicize economic information so people can make better decisions about what jobs to pursue or whether to start a business. Make some sort of website backed by statistics - "so you've input your education, assets, connections, and background, so here are some things we think you can do and how much money we think you can make doing them, and your chances of failing at each of them."
Target audience would be high school students, college students, or anyone thinking about a career change. Just a form of career counseling, but with lower barriers to entry - no fee, no appointment needed, just a website. With recommendations backed by solid statistics, and funding to advertise the website broadly so most people know about it.
A net taxpayer moving overseas hurts the government a little bit, but would be a much larger percentage of a smaller entities portfolio.
I can imagine a black comedy where an old lady sinks her pension into buying out a high income yuppie, then decides to kidnap him from the airport. Wacky hijinks ensue
It's a somewhat general argument against obscuring the power, payment, and enforcement relationships between government and citizens. I think it's a pretty strong argument on those topics.
It's interesting that you propose that private profit-motivated persons (including corporations, I presume) would be better at this than government employees. Why suggest auctioning off this revenue-stream-optimization function, rather than "just" changing the IRS mission statement?
Every system is going to be abused by powerful people within that system. See Jerry Pournelle's iron law of bureaucracy: "In any bureaucracy, the people devoted to the benefit of the bureaucracy itself always get in control and those dedicated to the goals that the bureaucracy is supposed to accomplish have less and less influence, and sometimes are eliminated entirely."
As a result it's more important to ask how the powerful actors in the bureaucracy can be held accountable for misdeeds - which we can be sure they will attempt - than to ask what the putative purpose of the bureaucracy is. A misdeed is not just breaking the law but more often changing the law or policy, or exploiting loopholes, to favor the powerful actor at the expense of the mission and the public. Powerful actors will also always try to subvert and declaw accountability mechanisms, so an accountability mechanism has to be really good to be effective. In many bureaucracies the answer is, "there is no real accountability." Mickey Mouse might never come out of copyright, corporate tax loopholes get left open for decades.
In your idea of tax career agents, they have no official powers over the taxpayer. You imagine them just giving advice and promoting the taxpayer.
But these tax career agents would have a strong incentive to acquire greater powers over the people whose contracts they hold. It's not supposed to happen in your idea, but it would anyway. And this may justify a big part of why people find it creepy to think of someone they didn't pick trying to influence their life.
Think of what happened with social security numbers. They were originally promised not to be used for identification. Then everyone used them for identification.
Think of employment law. "Originally" (or "ideally") employment is a simple exchange of labor for money. But now there are many laws entrenching the employment relationship and granting extra powers and rights to employers and employees. What was ideally a simple exchange has become deeply entrenched in law. Consider work visas, minimum wage laws, works-for-hire copyright laws, laws about who can be considered an independent contractor, laws about valid reasons for firing an employee, unemployment benefits, the system where health insurance comes through the employer.
The point is, if you set up what's initially a simple system, over time laws are going to get passed to entrench the system and grant extra rights and powers to the participants. The tax career agents may "ideally" just give advice, but laws will get passed so they end up doing more than that. The tax career agents will lobby government to pass laws granting them more power over those whose contracts they hold.
Even without such laws, given the tax career agents' interest in gathering financial information on the people whose contracts they hold, the tax career agents will begin to act as credit rating agencies. Other institutions will (to some extent) trust the tax career agents' word on whether a particular taxpayer is worthy of a loan or a job. This grants the tax career agents a great deal of informal power, because the taxpayer now needs their approval for major life decisions.
A different concern, more on the overall population level, might be that tax career agents will increase differences in outcomes, maybe significantly so. Individual that for whatever genetic or environmental reasons are predicted (correctly or not) to be low tax value will necessarily receive proportionally lower investments. This will drive social structures toward being less egalitarian.
Well, there is an alignment problem of that kind, as there is in current private industry as well, but I wouldn't say that governments who administer income tax programs are really aligned with maximizing tax revenue either. The politicians are aligned with getting people to vote for them, which means they often campaign based on playing to the cognitive biases of their voters, and appeasing their corporate donors, rather than to any real goal like "maximizing total revenue." As long a politician can claim that their policy is going to improve everybody's income - and be believed by the uninformed average voter - then the politician can get re-elected, regardless of whether their policy actually does that. If the policy fails, that just creates an opportunity to blame the other side for the failure.
https://www.overcomingbias....
It seems plausible there could be some gain by buying back part of your own cash flow from the agent. The lower marginal rate reduces deadweight loss.
It also seems possible that skilled employees would expect employers to buy shares in the employee cash flow stream to show a commitment to the employee’s long term career development.
There are plenty of careers that involve net harm to others without running into the law. Promoters of the smoking epidemic, the obesity epidemic and the opiod epidemic are examples. The government would not promote such activities to increase income tax revenue - since the overall effect would be negative. Career advice agents that serve a small subset of the population would be less likely to hold back. They could reap the benefits without paying the costs.
How exactly do you see the agents we now have in acting, music, sports, writing, etc as harming their non-clients?
Governments who administer income tax programs want everyone to do well. Career agents would want their clients to do well - possibly at the expense of other members of society. So: their incentives are not completely aligned with those of governments. It could still make sense for governments to create career agents if they offered enough benefits - but because of differing incentives, they have an initial hurdle to get over.
Governments do offer career guidance, adult education, jobseeker assistance, retraining - and so on. It seems a bit better than "nothing".
Maybe a good place to start would be to set a (high) quota on legal immigration and have the government auction off immigration spots to tax career agents ("relocation sponsors"). Those agents can fill each of those spots with a foreign national of their choosing and hold the right to his/her future US tax payments. The tax agents could also be held partly liable for certain costs that the immigrant creates for the government - for example, if they should become incarcerated or start collecting welfare. I have a feeling that most Americans would strongly prefer an immigration system that worked this way.
This might also be a good way of raising startup funds for newly-forming micronations or charter cities: The city authority would receive the auction's proceeds up front, and it could invest that money into making the city more attractive, functional, and stable, which would lead the bidders in the next round of auctions to place higher bids. If nothing else it might be a neat backdrop for a fictional story, because there is much more potential for human drama when your taxes are paid to a specific individual rather than a government.
There is no effective way to limit government stupidity.
I do think it would be a good idea to have a government department whose mission is to collect and publicize economic information so people can make better decisions about what jobs to pursue or whether to start a business. Make some sort of website backed by statistics - "so you've input your education, assets, connections, and background, so here are some things we think you can do and how much money we think you can make doing them, and your chances of failing at each of them."
Target audience would be high school students, college students, or anyone thinking about a career change. Just a form of career counseling, but with lower barriers to entry - no fee, no appointment needed, just a website. With recommendations backed by solid statistics, and funding to advertise the website broadly so most people know about it.
A net taxpayer moving overseas hurts the government a little bit, but would be a much larger percentage of a smaller entities portfolio.
I can imagine a black comedy where an old lady sinks her pension into buying out a high income yuppie, then decides to kidnap him from the airport. Wacky hijinks ensue
It's a somewhat general argument against obscuring the power, payment, and enforcement relationships between government and citizens. I think it's a pretty strong argument on those topics.
It's interesting that you propose that private profit-motivated persons (including corporations, I presume) would be better at this than government employees. Why suggest auctioning off this revenue-stream-optimization function, rather than "just" changing the IRS mission statement?
Every system is going to be abused by powerful people within that system. See Jerry Pournelle's iron law of bureaucracy: "In any bureaucracy, the people devoted to the benefit of the bureaucracy itself always get in control and those dedicated to the goals that the bureaucracy is supposed to accomplish have less and less influence, and sometimes are eliminated entirely."
As a result it's more important to ask how the powerful actors in the bureaucracy can be held accountable for misdeeds - which we can be sure they will attempt - than to ask what the putative purpose of the bureaucracy is. A misdeed is not just breaking the law but more often changing the law or policy, or exploiting loopholes, to favor the powerful actor at the expense of the mission and the public. Powerful actors will also always try to subvert and declaw accountability mechanisms, so an accountability mechanism has to be really good to be effective. In many bureaucracies the answer is, "there is no real accountability." Mickey Mouse might never come out of copyright, corporate tax loopholes get left open for decades.
This seems to work as generic argument against every doing or allowing anything.
In your idea of tax career agents, they have no official powers over the taxpayer. You imagine them just giving advice and promoting the taxpayer.
But these tax career agents would have a strong incentive to acquire greater powers over the people whose contracts they hold. It's not supposed to happen in your idea, but it would anyway. And this may justify a big part of why people find it creepy to think of someone they didn't pick trying to influence their life.
Think of what happened with social security numbers. They were originally promised not to be used for identification. Then everyone used them for identification.
Think of employment law. "Originally" (or "ideally") employment is a simple exchange of labor for money. But now there are many laws entrenching the employment relationship and granting extra powers and rights to employers and employees. What was ideally a simple exchange has become deeply entrenched in law. Consider work visas, minimum wage laws, works-for-hire copyright laws, laws about who can be considered an independent contractor, laws about valid reasons for firing an employee, unemployment benefits, the system where health insurance comes through the employer.
The point is, if you set up what's initially a simple system, over time laws are going to get passed to entrench the system and grant extra rights and powers to the participants. The tax career agents may "ideally" just give advice, but laws will get passed so they end up doing more than that. The tax career agents will lobby government to pass laws granting them more power over those whose contracts they hold.
Even without such laws, given the tax career agents' interest in gathering financial information on the people whose contracts they hold, the tax career agents will begin to act as credit rating agencies. Other institutions will (to some extent) trust the tax career agents' word on whether a particular taxpayer is worthy of a loan or a job. This grants the tax career agents a great deal of informal power, because the taxpayer now needs their approval for major life decisions.