[extropy-chat] Tax Burden Gap

Kevin Freels megaquark at hotmail.com
Fri Aug 20 15:35:57 UTC 2004

I would like to take a moment to recognize the huge gap in cincome between
the beautiful and the ugly. Attractive people do have higher incomes.
----- Original Message ----- 
From: "Matthew Gingell" <gingell at gnat.com>
To: "ExI chat list" <extropy-chat at lists.extropy.org>
Sent: Friday, August 20, 2004 1:02 AM
Subject: Re: [extropy-chat] Tax Burden Gap

> J. Andrew Rogers writes:
>  > Class mobility, a function of wealth rather than income, matters at
>  > least as much as the distribution, as this is what provides much of the
>  > motivation to dare great things.
>  Social mobility is a function of the ease with which individuals can
>  accumulate wealth - it's the integral of net income with respect to
>  time, plus or minus a constant for what an individual starts off
>  with.
>  We can look at income distribution in terms of how many people have
>  been able to achieve great things, that is take it as the end point
>  of the analysis rather than the initial condition. How many
>  opportunities for advancements exist on various points on the
>  distribution: Do we have a society in which most people find it
>  possible to improve their lot somewhat, or do we have a
>  winner-take-all society in which enormous rewards accrue to a few?
>  If nothing else, I think it should be pretty clear that our extremely
>  steep income distribution curve suggests something peculiar is going
>  on with our allocation of human capital.
>  > Very wealthy people contribute a lot to society by being able to
>  > risk very large sums of capital on things that interest them,
>  > including many things that the government will neither have the
>  > will nor the interest to fund regardless of merit. This money
>  > builds the companies and pays for the research that generates the
>  > majority of the technology we enjoy today.
>  A wealthy society with a healthy economy will find useful ways to
>  employ its wealth, regardless of how it's distributed. My pension
>  fund is every bit as interested in a diverse portfolio of risk /
>  reward tradeoffs as is the Rockefeller family fortune.
>  > The engine of innovation is powered by private capital, and one
>  > thing history has shown is that in hindsight most government funded
>  > "innovations" were either unnecessary, expensive, or economically
>  > irrelevant.
>  I don't see how this assertion relates to the rest of your argument,
>  but it's true as far as it goes. (With lots of qualifiers for the
>  provision of public goods, funding activities with positive
>  externalities, etc.)
>  > If you have nothing but a middle class, who provides the capital
>  > required to have a strong economy?
>  The market provides the capital. In any economy wealth is going to
>  seek a return, and the banking system and financial markets will find
>  ways to offer it. That's true whether "wealth" is million checking
>  accounts or a single trust fund.
>  > The irony is that progressive income taxes destroy class mobility.
>  It would indeed be ironic if it were true, but it's difficult to make
>  a sensible case that it is.
>  Matt
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