"Why do we tax the rich?  If it is just because the rich have lots of money, and we need more money, then we should be pretty eager to take up something like Scott’s suggestions"

We might also be pretty eager to do what we are doing, which is to have levels of taxation set by the non rich majority, and put the rich in jail if they fail to cough up.

Adams's proposals all involve the rich getting something that would otherwise have gone to a non rich person, and that is what seems counterituitive.

Most progressive taxation schemes don't change relative ranking by wealth, and since status is almost entirely about relative ranking, progressive taxation has little to do with status. Moreover, voluntary donations by the wealthy increase their status, and evasion decreases it, so how taxation affects the status of the wealthy depends, if anything, on how they respond to it as individuals.

There's no need for a special explanation of why people think the rich should be taxed: what people actually think is that everyone should pay tax. The only reasonable excuse is being too poor, and taxing the rich more is just the flipside of that.

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And car washes!

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If I had to choose between fake capitalism and fake socialism aka communism ran by dictator governments I'd rather have fake capitalism ran by rich bankers because at leas then you'd have a chance at making a business.

Communist you can only be approved by what you're government leaders tell you and they will assign you jobs based on personality tests they deem is *correct* even if it's not to you.

In fact there is no longer a *You* as a unique individual just a collective worker that contributes to the higher ups in bureaucracy and you will just be a number in the class system so there will be a *classless* unity where there is no *Middle* or *upper* or *Left* or *right* just a stale number buried somewhere in the main computer banks.

I will be something like worker 153876 and told to report to my station for duty for my 37.23 Yan a day and maybe free rent if I am good and don't cause no trouble or to the *Farm*.

Guess how much dollars that is? :)

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If you go to alternate sources and word of mouth by the correct people you will find out that most of the rich people in the last couple years have pulled their stocks out of the US Market real quietly due to excessive taxes and I am not sure if it's still going on but several higher ups in many banks had mysterious deaths attributed to suicide techniques including jumping off a building in the middle of the night but the story was all hush hush.

It's not just income tax they have to pay but all sorts of regulation fees that have little to no bearings to their actual business and I am not defending the rich but they will NOT innovate if they feel scared and it was the rich that spurred a lot of mega projects in America during the last 100 years.

Sorry brainwashed folks but that's just how it is and NO amount of good words will change that trying to rehash something using a *cool* vibe.

Instead of America all the rich investments will now and are going to more friendlier countries which is why all the Islamic states have huge mega projects going on due to being filthy rich off of all their oil and rich investors leaving America for better hunting grounds.

including but not limited to 300 mile per hour magnet levitation trains crossing a vast network.

Why can they do it so fast? Because the ruling is all central and the authorites can almost do what they want while a good chunk of the people live in extreme poverty like America is about to become if it's not already.

China has all sorts of wonderful and funky looking cities that were built in the last couple years by slave labor with hardly anybody living in the buildings because most of the people cannot afford the extreme rent prices except those in favor of the government party line who gets bonuses and special health benefits.

The cities look like complete ghost towns!

China in the early 90s only the rich had cars and you'd have to have special permission to drive anywhere in an approved route but they recently have let small private business run if the individual has free time though the government can take it away at anytime.

Regardless private enterprises as a result have boomed and the standard of living has increased for those who tow the government party line.

There are now MORE cars in China today then all of the USA and Canada combined which the Chinese built thousands of miles worth of freeways and a lot more planned by 2030.

China is going the wrong step actually by becoming more depending on cars.

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It isn't clear to you that $60,000 a year is not rich? What part of America do you live? My wife, daughter, and I live in a moderate cost of living area of the United States and make slightly more than the above income and I can tell you it is in no way rich. We live comfortably, enough but only because we are not extravagent about our expenses. Still living in an apartment, only one car, haven't taken a vacation outside of visiting family in years. So I can tell you that from my experience in talking to those about what would be considered a "rich" lifestyle, we are not living it.

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We tax the rich so they get involved in central government and make it minimal and efficient.

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Except, if the item is saleable, isn't it pretty much strictly worse than a tax cut corresponding to the value of the gift? Gift-giving from people makes sense as signaling, but from the government? Uh...

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That's not the reason I hate the accusations, it's because motives are irrelevant.

E.g. Scientists are often motivated by a desire to prove how smart they are (status). So what? As long as they deliver the goods...

And perhaps Keynesians and Socialists are driven by envy. Again, so what? If their (porposed) policies work, we should adopt them.

Debates among self-confessed utilitarians on whether we should increase taxes on the rich should be framed entirely in terms of whether doing so will increase total utility.

Accusing the other side of being motivated by envy is both an ad hominem and a red herring, and reveals the accuser of being something else than a utilitarian, perhaps a free market fundamentalist.

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This reminds me of the year Bill Gates paid over $1M in taxes and received a personal letter from Reagan thanking him. This didn't fool him and he got tax assistance the next year. While they might be flattered, I don't think the rich are foolish enough to value it as being worthwhile.

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Scott's share the pain idea is flat out political economy genius - it's far easier to gain popular support for tax increases when the government is cutting spending at the same time.

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I don't particularly hate his suggestions.

I don't think we tax the rich to lower their status, I think we do it for revenue reasons and for some other reasons to do with ethics and the right way to organize society. You can get a "tax the rich" result out of simple models of taxation with a dumb utilitarian maximization objective, no status necessary.

this is a very unconvincing post

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I think Scott's analysis is correct, but the rich and the poor see it from different perspectives. The poor don't want to tax the rich to lower the social status of the rich, but to fund the government services that are needed. The rich don't want to keep their money for the material possessions it can purchase (many already have more material possessions than they need, want, or can use. What the rich want from their wealth is higher social status, but ever higher wealth doesn't result in ever higher social status.

The richer the wealthy get, the less increment there is to their social status from their incremental wealth. They are left with a type of Zeno's paradox, where the more wealth they amass, the less status they feel they have.

So they use their wealth to lobby and manipulate the government and taxing authority to reduce the taxes they pay in the attempt to get even more wealth. This doesn't increase their status, in fact, it lowers it by demonstrating how desperate they are for the status they are trying to buy.

Exemplified by Brooke Astor and Leona Helmsley


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Elizabeth Rigby responds at The Monkey Cage.

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Scott's suggestions are far too constrained to suggest we just want to take from the rich to lower their status without compensation. All his suggested rewards are things that people usually feel you shouldn't be able to buy anyway, as far as I can tell. So of course most people don't want to give them away in return for money, the more so when they feel the money should be given anyway. Your theory would be much better tested by asking if people would like those in high tax brackets to be given free flights when there are spare seats, or some other usually saleable item.

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There's actually a well known and obvious way to implement Scott Adam's suggestion. Private charities can provide welfare instead of governments. Private charities typically finance their activities by giving high status to voluntary donors.

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Great article - and how in this context can most people continue to tell their narratives about their own virtues being rewarded when your life output is predetermined mostly by your location?

Continuing the thought - the status and general competition especially in poorer countries is very funny where people differentiate themselves by some percentage of earnings only so that the best (and most predatory) ones can after many years get as rich as the poorest Americans.

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