26 Comments

This might sound crazy authoritarian but why don’t we just pay poor women in poor countries money to breed the babies of the smartest and best individuals we can find. Best = most desirable traits, raise them in government child care and have super adults who are really productive later on. Kind of more efficient if you ask me

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This incentivizes parents to prevent their children from moving abroad, avoiding taxes (at least for non-US citizens). Not that this is per se bad, some prevention of emigration mechanisms might actually be necessary for proper stimulation of investment in human capital. In football there is some rule that every time a player transfers, some % goes to the academy that he got trained at, which is actually a cash cow for smaller clubs from Croatia, Portugal, Netherlands, etc.

However, I do think you underestimate, in your calculation of unfunded liabilities, the ability of wealthy, Western countries to attract foreign workers, to (partially) cover these liabilities. Of current US debt + other unfunded liabilities, a significant share will be paid by people who at this moment live abroad.

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This could incentivize parents to raise children to be very career-focused at the expense of having grandkids. Might be advisable to give parents an X% PTA for their kid and an X/4% PTA for each future grandkid when the kid is born.

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Selling PTAs won't work unless future tax rates are fixed; at least, the government must pledge not to *reduce* rates. The present instantiation of the government would not want thus to bind future instantiations: political circumstances might change in a way that made lower/higher tax rates seems desirable, and the government wants continually to tweak the tax code to deal with novel methods of legal tax avoidance. Also, I am not sure, not being a lawyer, that the present government has the legal authority thus to bind future ones.

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Nonexistent people cannot sign contracts or enter into any obligation.

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Do you have a writeup of the basic/fundamental PTA proposal? Specifically, how are PTA prices determined, and how is adverse selection avoided? The claim "PTAs are worth more when held by their target taxpayer than when held by others" seems to be based on the idea that someone could underpay for their PTA in order to free themselves up to be more productive. This would SEEM to just be equivalent to lowering income tax rates in the first place. Revenue is lower, productivity is higher.

I mean, reducing income tax impact is a good thing, but this seems a complicated way to achieve it.

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Can PTAs be applied to corporations?

Initial thoughts:

-trickier to track through time as assets trade

-obviously PTA value is correlated with stock value so it loses benefit of balancing risk

-crafty state governments might want to buy as stationary bandit

-harder to estimate beforehand, but that’s why there’s secondary markets

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Oct 1, 2023·edited Oct 1, 2023

Seems like the key difference is that today governments borrow against all citizens by printing money and buying those bonds while PTAs would be borrowing against specific citizens. This seems like great optionality for the citizen, but it's unclear why gov would want to be on the hook for recruiting individual investors instead of just borrowing against the whole.

Two asides:

1. It may end up looking like a "vote" where citizens can choose to invest in a current government when they feel strongly about the current party's platform.

2. They'd make us be accredited investors to reap any of these benefits, likely making this another way for the richest to avoid taxes!

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