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by Forsher » Wed Sep 11, 2013 10:38 pm
by Xerographica » Wed Sep 11, 2013 11:56 pm
Lemanrussland wrote:But instead of saying that goods provided or economic resources managed by government should be passed to markets, he says tax payers should instead choose to allocate their tax money where they wish (tax choice).
Lemanrussland wrote:What I don't understand about his argument is how this system deals with the free rider problem. What if I want to use schools or roads, but not pay any taxes for it? If the OP could flesh out his argument and explain what the system in practice would look like, that would be nice.
Lemanrussland wrote:Do you just get a tax return and fill out what you want? Are you obligated to provide a set amount of taxes to the state, but choose how it is allocated? Are your choices limited to certain things authorized by law?
Forsher wrote:You, I and everyone we know, knows Xero's threads are about one thing and one thing only.
by Forsher » Thu Sep 12, 2013 12:03 am
Xerographica wrote:Lemanrussland wrote:What I don't understand about his argument is how this system deals with the free rider problem. What if I want to use schools or roads, but not pay any taxes for it? If the OP could flesh out his argument and explain what the system in practice would look like, that would be nice.
You can argue that somebody benefits from public education, but you can't know their utility function. If you could then you would be omniscient. Nobody is omniscient so we have to allow people to indicate exactly how much they value public education. If you value public education, but you feel it's adequately funded, then it doesn't make you a free-rider if you give your tax dollars to the EPA instead. If you value public education...and feel it's inadequately funded...but you give your taxes to the EPA instead...then clearly you feel that protecting the environment is a more important priority. You're still not a free-rider given that you're contributing to the common good.
by Xerographica » Thu Sep 12, 2013 12:25 am
Infactum wrote:You still haven't responded to my initial situation (or, to my eyes, even attempted to refute it). So I have to ask, are you debating to seek truth and help others find truth, or are you debating to promote tax choice/pragmatarianism? I realize you likely believe these two things to be equivalent, but if I could prove to you that they weren't, which would you choose?
Infactum wrote:Also, just to confirm, you advocate utilitarian solutions? That is, the best policies are those that create the greatest good for the greatest number (for some suitable summing of goods/value)?
Infactum wrote:Nothing is definitive. Including the market. It is merely the best way we have of allocating resources in many cases. If the market were definitive, you would not see crashes.
Infactum wrote:The military is an excellent example of how nonlinear return messes with market pricing. Lets say I could prove with relatively simple logic that the US pouring 70% of it's tax budget into attacking Syria would lead to 1000+ years of peace and prosperity for not only for the world, but for the US especially.
It is almost a certainty that more than 30% of people would not fund it. We, apparently, cannot be convinced by simple logic (what should be the most convincing argument).
Infactum wrote:Why? Why, in all cases, do we have to let people go there own way? If a person believes that burning down my house is best for everybody, then should I let them? Conversely, if putting one (otherwise innocent) person in jail for 1 day would save 90% of the population from painful deaths, should we let them walk free if they want to? If your answer to this is "property rights," then why are those for sure the best way to allocate resources, and why shouldn't violence be a perfectly valid negotiation tactic?
Forsher wrote:You, I and everyone we know, knows Xero's threads are about one thing and one thing only.
by Xerographica » Thu Sep 12, 2013 1:11 am
Maqo wrote:Your premise is that, if congresspeople know the correct allocation of X then they should also know the correct allocation of Y & Z. Division of labour means that it is their job to know about X, but not to know about Y and Z.
The moral of the story is thatwith contrived examples you can prove anythingthe government didn't know the 'correct' quantity to supply, but still ended up being far more efficient than consumers would have been on their own.
Voting and other democratic procedures can help to produce information about the demand for public goods, but these processes are unlikely to work as well at providing the optimal amounts of public goods as do markets at providing the optimal amounts of private goods. Thus, we have more confidence that the optimal amount of toothpaste is purchased every year ($2.3 billion worth in recent years) than the optimal amount of defense spending ($549 billion) or the optimal amount of asteroid deflection (close to $0). In some cases, we could get too much of the public good with many people being forced riders and in other cases we could get too little of the public good. - Tyler Cowen, Alex Tabarrok, Modern Principles of Economics
Because most public goods and services are financed through a process of taxation involving no choice, optimal levels of expenditure are difficult to establish. The provision of public goods can be easily over-financed or under-financed. Public officials and professionals may have higher preferences for some public goods than the citizens they serve. Thus they may allocate more tax monies to these services than the citizens being served would allocate if they had an effective voice in the process. Under-financing can occur where many of the beneficiaries of a public good are not included in the collective consumption units financing the good. Thus they do not help to finance the provision of that good even though they would be willing to help pay their fair share. - Vincent Ostrom and Elinor Ostrom, Public Goods and Public Choices
Government production of a public good has a main advantage, because a government can impose taxes and fees to pay for the public good. Still, the main problem of deciding the optimal level of public good production remains. To determine it, the government would need to know its citizens' preferences. - Laura Razzolini, Public Goods
Forsher wrote:You, I and everyone we know, knows Xero's threads are about one thing and one thing only.
by Purpelia » Thu Sep 12, 2013 1:35 am
by Xerographica » Thu Sep 12, 2013 1:43 am
Purpelia wrote:I see a horrible flaw in that system. It does not represent people equally. Those who are rich would in such a system simply by virtue of being rich and thus paying larger taxes have many times over the "voting" power of others. Thus instead of everyone money being used for everyone good you would have welfare funded by poor, burger flipping, 3 job holding single mothers and corporate subsidies funded by billions of dollars. Can you not see the social suicide in that?
There is a reason why modern states operate on the principle of collect -> divide -> distribute. And that is to ensure that what the people want and not only what they can pay for is satisfied.
Forsher wrote:You, I and everyone we know, knows Xero's threads are about one thing and one thing only.
by Maqo » Thu Sep 12, 2013 1:50 am
Xerographica wrote:Maqo wrote:Your premise is that, if congresspeople know the correct allocation of X then they should also know the correct allocation of Y & Z. Division of labour means that it is their job to know about X, but not to know about Y and Z.
The division of labor concept means that people can only buy things that they know how to produce? Are you kidding me?
Maqo wrote:Your premise is that, if congresspeople know the correct allocation of X then they should also know the correct allocation of Y & Z. Division of labour means that it is their job to know about X, but not to know about Y and Z.
Therefore, the optimal supply of public goods can only follow from the demand for public goods. If we give taxpayers the option to shop for themselves in the public sector...and many people decide to do so, then this would indicate that the allocation as determined by congress was extremely inefficient. It really did not reflect the actual demand for public goods. Good thing we allowed taxpayers to shop for themselves.
by Risottia » Thu Sep 12, 2013 1:53 am
Xerographica wrote:Our current system is based on the assumption that congresspeople are omniscient. (True/False)
The fact of the matter is...as a group, millions and millions of taxpayers have infinitely more insight/foresight than 300 congresspeople do.
by The Batorys » Thu Sep 12, 2013 2:04 am
by New Chalcedon » Thu Sep 12, 2013 2:09 am
Xerographica wrote:Our current system is based on the assumption that congresspeople are omniscient. (True/False)
If congresspeople can know, better than society itself, exactly how much benefit society derives from public education...then it has to be true that congresspeople can know, better than society itself, exactly how much benefit society derives from milk. So if we're better off allowing congresspeople to determine how much public education should be supplied, then we're also better off allowing congresspeople to determine how much milk should be supplied.
The fact of the matter is...as a group, millions and millions of taxpayers have infinitely more insight/foresight than 300 congresspeople do. That's why we'd be infinitely better off by allowing taxpayers to decide for themselves exactly how much positive feedback (tax dollars) they give to government organizations.
by Xerographica » Thu Sep 12, 2013 2:38 am
Maqo wrote:Your 'solution', as I understand it, is to let every government agency itemize their services as much as they feel like, and put the entire itemized list from all government services onto some kind of ballot or fundraising bar. Everyone still pays the same amount of tax they they previously were. They then spread the money around the departments and services they like. Do I have that about right?
Maqo wrote:Seeing as you like shopping analogies so much, isn't that like forcing people into McDonalds and telling them they MUST spend $100? The don't have a choice as to what is on the menu. It doesn't matter if $100 gets them more than they want.
Maqo wrote:None of your quotes say that we the optimum provision of goods would come from people choosing where to spend their taxes. They say that government allocation is probably non-optimal (which I agree with), and that if we allowed people to express their preferences better the allocation would be more optimal (which I agree with). But allocation of money is NOT a direct or even particularly good indicator of people's preferences. Value derived and price of goods does not have a 1 to 1 relationship: price of goods is primarily driven by cost of production, but value derived is intrinsic to the buyer.
Individuals express preferences about changes in the state of the world virtually every moment of the day. The medium through which they do this is the market place. A vote for something is revealed by the decision to purchase a good or service. A vote against, or an expression of indifference, is revealed by the absence of a decision to purchase. Thus the market place provides a very powerful indicator of preferences. - David Pearce, Dominic Moran, Dan Biller, Handbook of Biodiversity Valuation A Guide for Policy Makers
Forsher wrote:You, I and everyone we know, knows Xero's threads are about one thing and one thing only.
by Lemanrussland » Thu Sep 12, 2013 2:55 am
New Chalcedon wrote:Xerographica wrote:Our current system is based on the assumption that congresspeople are omniscient. (True/False)
If congresspeople can know, better than society itself, exactly how much benefit society derives from public education...then it has to be true that congresspeople can know, better than society itself, exactly how much benefit society derives from milk. So if we're better off allowing congresspeople to determine how much public education should be supplied, then we're also better off allowing congresspeople to determine how much milk should be supplied.
The fact of the matter is...as a group, millions and millions of taxpayers have infinitely more insight/foresight than 300 congresspeople do. That's why we'd be infinitely better off by allowing taxpayers to decide for themselves exactly how much positive feedback (tax dollars) they give to government organizations.
Fail strawman is fail. What's more, the free rider problem only applies to public goods, where it will automatically kill any effort, such as the one you describe, to "voluntarily" donate to public works.
Milk? Milk is a private good - how much or little you have doesn't affect me in any significant way. Healthcare....now, that's a different matter. If you're diseased as all fuckery, then I have a higher chance of catching diseases despite the fact that I look after my health.
by Terrordome » Thu Sep 12, 2013 3:41 am
by Forsher » Thu Sep 12, 2013 3:46 am
Xerographica wrote:Purpelia wrote:I see a horrible flaw in that system. It does not represent people equally. Those who are rich would in such a system simply by virtue of being rich and thus paying larger taxes have many times over the "voting" power of others. Thus instead of everyone money being used for everyone good you would have welfare funded by poor, burger flipping, 3 job holding single mothers and corporate subsidies funded by billions of dollars. Can you not see the social suicide in that?
There is a reason why modern states operate on the principle of collect -> divide -> distribute. And that is to ensure that what the people want and not only what they can pay for is satisfied.
Is every bakery going to be a success? Obviously not...right? If that were the case then poverty would be eliminated because everybody who lacked money would be guaranteed money simply by starting a bakery. No need for redistribution.
So what factors determine whether a bakery will be successful or not? Maybe it simply boils down to luck? That can't be right. The fact of the matter is that it's a given that some bakers are going to make less mistakes than other bakers. As a result, some bakeries are going to be more successful than others.
It boils down to insight and foresight. A successful baker sees more accurately than an unsuccessful baker. And it's up to consumers to determine which baker sees more accurately.
You want to redistribute wealth from a wealthy baker to a poor baker? You want to give more influence to people who see less accurately? You want to take flour from a successful baker and give it to an unsuccessful baker?
Your intentions are good, but unfortunately, because you're failing to think things through you're simply increasing the severity of the problem you're trying to solve.
If you truly want the poor to have better options in life...then you have to think things through. Better options depend on people doing better things with society's limited resources. Consumers determine who exactly are the people who are doing better things with society's limited resources. The people they give their positive feedback (money) to are the people with the most insight/foresight. Therefore, we all will greatly benefit by allowing taxpayers to choose where their taxes go.
by Forsher » Thu Sep 12, 2013 3:49 am
Terrordome wrote:Hows your freshman economics degree going Xero?
by Xerographica » Thu Sep 12, 2013 5:05 am
Forsher wrote:As you've been told many times, there's no apparent reason for a person in location A to help pay for a bridge in location B. Person A possibly doesn't even know where location B is. The government and Person B, however, are aware that a bridge is needed in Location B. The govt. is probably aware because of people like Person B (this is where that division of labour point comes up, govt. is compartmentalised and ultimately there are far more than 300 people in charge of how money is spent in the US, frankly it's naive to think that's true) that a bridge is needed (what is the point of electing representatives that don't represent your interests?). They take money from persons alphabet and then distribute it so that the bridge gets better. The multiplier effect says that this then benefits even Person A.
But, no matter whether a particular society has a capitalist price system or a socialist economy or a feudal or other system, the real cost of anything is still its value in alternative uses. The real costs of building a bridge are the other things that could have been built with the same labor and material. This is also true at the level of a given individual, even when no money is involved. The cost of watching a television sitcom or soap opera is the value of the other things that could have been done with that same time. - Thomas Sowell , Basic Economics 4th Ed: A Common Sense Guide to the Economy
Forsher wrote:You, I and everyone we know, knows Xero's threads are about one thing and one thing only.
by Xerographica » Thu Sep 12, 2013 5:09 am
Essential though the efficiency model of public goods [Samuelson] is as a theoretical construct, standing by itself it has little practical use. The omniscient referee does not exist and the problem of preference revelation must be addressed. - Richard A. Musgrave, The Nature of the Fiscal State
Determining the efficient level of public goods requires knowing consumer preferences. That knowledge is often assumed as given in theoretical models of optimal provision [Samuelson], but obtaining it is a major challenge when it comes to actual policy. - Richard A. Musgrave, Peggy Musgrave, Providing Global Public Goods
Forsher wrote:You, I and everyone we know, knows Xero's threads are about one thing and one thing only.
by Alien Space Bats » Thu Sep 12, 2013 5:18 am
Xerographica wrote:The US system has to be based on some theory. Right? We don't just take people's money without having a reasonably good explanation. Samuelson is the guy that provided the theory that our current system is based on.
Xerographica wrote:Again, I can't show you an economic explanation for our current system that has been cited more than 5,000 times. This doesn't mean that one doesn't exist...it just means that I haven't found it. But I have studied public finance enough that if a more widely recognized theory existed, then chances are extremely good that I would already have run across some mention of it.
by Terrordome » Thu Sep 12, 2013 5:19 am
Forsher wrote:Terrordome wrote:Hows your freshman economics degree going Xero?
Degree? I have large degree of difficulty believing that the OP has had any formal education in the subject given that he's disagreed with very basic definitions/concepts such as (but not limited to) opportunity cost and the market itself. However, I've never seen him claim to have had either. As far as I can tell from his post "economics" is his hobby.
by Xerographica » Thu Sep 12, 2013 5:23 am
Alien Space Bats wrote:Xerographica wrote:The US system has to be based on some theory. Right? We don't just take people's money without having a reasonably good explanation. Samuelson is the guy that provided the theory that our current system is based on.
That's funny... I don't see Paul Samuelson's name on the list of people who helped write the Constitution.
<pause>
Are you laboring under the delusion that Congress is a recent addition to our system of government?
Forsher wrote:You, I and everyone we know, knows Xero's threads are about one thing and one thing only.
by Alien Space Bats » Thu Sep 12, 2013 5:25 am
Xerographica wrote:Elected representatives aren't omniscient, therefore we need a way to determine exactly how much the public values a military strike against Syria, the war on drugs, environmental protection, a wall between the US and Mexico, public healthcare and so on. We can easily determine the public's values simply by creating a market in the public sector and giving taxpayers the freedom to shop for themselves. Their spending decisions will reflect their values. As a result, we'll maximize the amount of value we derive from society's limited resources.
Xerographica wrote:The theory used to be that the king should have the power of the purse because he had divine authority. That theory was trashed. Now the theory is that congresspeople should have the power of the purse because they are omniscient. If you think there's a better public finance explanation for our current system then feel free to share it.
by Ashmoria » Thu Sep 12, 2013 5:26 am
Xerographica wrote:Our current system is based on the assumption that congresspeople are omniscient. (True/False)
If congresspeople can know, better than society itself, exactly how much benefit society derives from public education...then it has to be true that congresspeople can know, better than society itself, exactly how much benefit society derives from milk. So if we're better off allowing congresspeople to determine how much public education should be supplied, then we're also better off allowing congresspeople to determine how much milk should be supplied.
The fact of the matter is...as a group, millions and millions of taxpayers have infinitely more insight/foresight than 300 congresspeople do. That's why we'd be infinitely better off by allowing taxpayers to decide for themselves exactly how much positive feedback (tax dollars) they give to government organizations.
by Xerographica » Thu Sep 12, 2013 5:27 am
Alien Space Bats wrote:Shouldn't the task of explaining our system of government fall into the laps of political scientists rather than economics?
Or would that be a problem, given that you haven't yet taken a Political Science course?
Forsher wrote:You, I and everyone we know, knows Xero's threads are about one thing and one thing only.
by Alien Space Bats » Thu Sep 12, 2013 5:30 am
Xerographica wrote:Alien Space Bats wrote:Shouldn't the task of explaining our system of government fall into the laps of political scientists rather than economics?
Or would that be a problem, given that you haven't yet taken a Political Science course?
Taxation falls under the purview of public finance. What do you know about public finance?
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