Our simplest model of an economy is: supply and demand. This model has many simple implications for policy. Now we know of many much more complicated economic models, which often have quite different policy implications. But often we are not sure which more complex models actually apply well to any given situation. So we have to worry that people favor more complex models mainly to justify their preferred policies. Knowing this pushes me toward weakly recommending the policies implied by supply and demand, unless I see unusually clear evidence to support a different economic model. (FYI, the evidence that fixed costs exists seems plenty clear, so I really mean supply & demand with fixed costs.)
No, I was imagining a case where people are for irrational reasons unwilling to pay for something individually but would prefer if they and everybody else were forced to pay for it. Like "Why should I have to pay money?" I can imagine me thinking this way, but I'm pretty uncertain if this explains some of the unwillingness to pay.
Hm, no, I assume that most people assumed that your costly privacy scenario would be a change from the status quo for everybody at once.
What I thought: Nobody is willing to pay much for privacy as an individual but everybody would agree that we as a society should pay good money for privacy. E.g. I'm not willing to pay 1000$ to get a privacy friendly iPhone, but I'd be inclined to have everybody pay 1% more taxes so that we have solid privacy standards on smartphones.
I guess you are assuming that my respondents assumed that others would not have privacy, when they answered how much they'd pay for it? That scenario requires that people have a much stronger desire to get privacy for themselves when others also actually have privacy. Is that at all plausible?
The unwillingness to individually pay much for privacy sounds like a coordination failure to me, no? Maybe it's better to ask "If taxes have to be increased by X amount to ensure tax privacy, would you vote for it?"
I think your point about inefficiencies is not true. I'm from Finland and I have never heard anyone trying to find out how much their colleagues make. Who would be ready to go through all that hassle?
Newspapers generally publish on their websites the tax info on people making over 100 000 € year, but that would be a fairly high salary and in most workplaces you couldn't find out your colleagues salaries that way. Of course, you could physically go to the tax offices to find out anyone's info using a terminal there, but you can't copy that info electronically (though you can take notes). Most people would not see it worthwhile to go through all that trouble if they're not journalists doing investigation or something.
"Re showing off to mates etc., more visible income would make people try harder to gain higher income, and try less hard to display income via clothes, cars, etc.; that seems a win to me."
But what about when you want to hide money? In Western middle class culture when one sibling gets a lot more money than the parents and the other siblings, the latter usually have too much "pride" to ask for any of it. This is not true in other cultures. Lots of athletes from poor backgrounds wind up going broke because they felt obliged to "loan" money to half their neighborhood.
Perhaps only a subset of tax information should be made public, because a tax return has a lot of information about how you get your money and what you do with it. I'd suggest something that amounts to how much money you made (divided between ordinary income and capital gains, because different tax rates), how much you took off in deductions or received in credits, and how much you actually paid in taxes.
I came here to propose the same: Another alternative we can consider would be to give access to the data for a small fee (say 100$) so that only people that can extract (enough) money from that information get access to it, which would still mostly get the benefits you mention, but reduce the other disadvantages mention in the post.
It is well known that the amount people *say* they'd pay (for anything) is usually very, very different from the amount they'd *actually* pay.
The proposal could be improved by allowing individual taxpayers to choose to pay the social cost of privacy, and keep their tax returns private. Society wouldn't be worse off.
But I'm far from convinced that such transparency would have net positive effects. People, esp. young people seeking mates, are incredibly competitive and focus on relative ranking far more than on absolute living standards.
Just talk to any business owner who's had to deal with staff learning each others wage rates - few people have firm ideas about what their labor is worth in the market, but nearly everyone is sure that their labor is worth more than that of particular colleagues. Wages are kept private as a fudge to reduce such disgruntlement.
To address Tyler's concern about time in prison, difficulties in finding mates, etc, how about publishing returns above a minimum income level, e.g. $200k? That way, it becomes an honor to have your tax returns made public, it means you have made out quite well. Most young folks who are trying to find a mate would fall bellow this threshold, so not having your returns published would not be disqualifying in most circles. You can combine that with a fee per view, as suggested. That would discourage most people/companies from looking you up for marketing purposes.
"Which brings us to recent proposals to make all tax returns public, such is now done in Norway, Finland, Sweden, and Wisconsin"
Interested in the latter - do they publish all tax returns? What I found on the WI Dept of Rev website is this rule requiring publishing information about delinquent taxpayers:https://www.revenue.wi.gov/...
You may ask all the irrelevant questions you want of anyone you wish. Yours was a daft non-response to my comment. You, of course, are not obligated to address any point that is made in opposition to your post, and may make all the daft non-responses you wish. It's your right.
The price you'd pay to keep your tax returns secret is one dimensional. If of course varies across people, which is why one does a poll to see the distribution.
No, I was imagining a case where people are for irrational reasons unwilling to pay for something individually but would prefer if they and everybody else were forced to pay for it. Like "Why should I have to pay money?" I can imagine me thinking this way, but I'm pretty uncertain if this explains some of the unwillingness to pay.
So you don't think people care much about their own privacy, but that they care a lot about the privacy of other people?
Hm, no, I assume that most people assumed that your costly privacy scenario would be a change from the status quo for everybody at once.
What I thought: Nobody is willing to pay much for privacy as an individual but everybody would agree that we as a society should pay good money for privacy. E.g. I'm not willing to pay 1000$ to get a privacy friendly iPhone, but I'd be inclined to have everybody pay 1% more taxes so that we have solid privacy standards on smartphones.
I guess you are assuming that my respondents assumed that others would not have privacy, when they answered how much they'd pay for it? That scenario requires that people have a much stronger desire to get privacy for themselves when others also actually have privacy. Is that at all plausible?
The unwillingness to individually pay much for privacy sounds like a coordination failure to me, no? Maybe it's better to ask "If taxes have to be increased by X amount to ensure tax privacy, would you vote for it?"
I think your point about inefficiencies is not true. I'm from Finland and I have never heard anyone trying to find out how much their colleagues make. Who would be ready to go through all that hassle?
Newspapers generally publish on their websites the tax info on people making over 100 000 € year, but that would be a fairly high salary and in most workplaces you couldn't find out your colleagues salaries that way. Of course, you could physically go to the tax offices to find out anyone's info using a terminal there, but you can't copy that info electronically (though you can take notes). Most people would not see it worthwhile to go through all that trouble if they're not journalists doing investigation or something.
"Re showing off to mates etc., more visible income would make people try harder to gain higher income, and try less hard to display income via clothes, cars, etc.; that seems a win to me."
But what about when you want to hide money? In Western middle class culture when one sibling gets a lot more money than the parents and the other siblings, the latter usually have too much "pride" to ask for any of it. This is not true in other cultures. Lots of athletes from poor backgrounds wind up going broke because they felt obliged to "loan" money to half their neighborhood.
Perhaps only a subset of tax information should be made public, because a tax return has a lot of information about how you get your money and what you do with it. I'd suggest something that amounts to how much money you made (divided between ordinary income and capital gains, because different tax rates), how much you took off in deductions or received in credits, and how much you actually paid in taxes.
I came here to propose the same: Another alternative we can consider would be to give access to the data for a small fee (say 100$) so that only people that can extract (enough) money from that information get access to it, which would still mostly get the benefits you mention, but reduce the other disadvantages mention in the post.
It is well known that the amount people *say* they'd pay (for anything) is usually very, very different from the amount they'd *actually* pay.
The proposal could be improved by allowing individual taxpayers to choose to pay the social cost of privacy, and keep their tax returns private. Society wouldn't be worse off.
But I'm far from convinced that such transparency would have net positive effects. People, esp. young people seeking mates, are incredibly competitive and focus on relative ranking far more than on absolute living standards.
Just talk to any business owner who's had to deal with staff learning each others wage rates - few people have firm ideas about what their labor is worth in the market, but nearly everyone is sure that their labor is worth more than that of particular colleagues. Wages are kept private as a fudge to reduce such disgruntlement.
It would be well worth experimenting with letting decision markets advise on who to audit.
Come on, I think you know that the answer to this is yes. Have you ever heard Robin speak. He’s definitely “on the spectrum”.
To address Tyler's concern about time in prison, difficulties in finding mates, etc, how about publishing returns above a minimum income level, e.g. $200k? That way, it becomes an honor to have your tax returns made public, it means you have made out quite well. Most young folks who are trying to find a mate would fall bellow this threshold, so not having your returns published would not be disqualifying in most circles. You can combine that with a fee per view, as suggested. That would discourage most people/companies from looking you up for marketing purposes.
"Which brings us to recent proposals to make all tax returns public, such is now done in Norway, Finland, Sweden, and Wisconsin"
Interested in the latter - do they publish all tax returns? What I found on the WI Dept of Rev website is this rule requiring publishing information about delinquent taxpayers:https://www.revenue.wi.gov/...
You may ask all the irrelevant questions you want of anyone you wish. Yours was a daft non-response to my comment. You, of course, are not obligated to address any point that is made in opposition to your post, and may make all the daft non-responses you wish. It's your right.
The price you'd pay to keep your tax returns secret is one dimensional. If of course varies across people, which is why one does a poll to see the distribution.