From a comment for this post [h/t Instapundit]:
This is also fun and educational for your kids:
Play Monopoly. Wait until some of the kids start to amass a nice pile of money. As they collect rent, take 36% and distribute it to the kids that aren’t doing as well.
If you’re a parent, you know that screams of “That’s not fair!!” are guaranteed.
Use this opportunity to explain the Democratic (mis)definition of the word “fair.”
I think I’ve just found my next computer game to program. I wonder how such rules would affect how many hotels get built on Baltic Avenue?
Frack, Shannon. No one likes a game where everyone wins. That’s not fun. I won’t play.
That’s pretty funny
but you need to take about 20% off the top as waste in the redistribution process
Make sure that you replace some of the property with some updates. Remove FreeParking and replace it with Nationalize Healthcare, Boardwalk should be renamed Obama’s Palace, Railroads need to be replaced with the illuminati media ABC, NBC, CNN, and MSNBC. Oh, almost forgot Jail should be renamed as re-education camps.
LOL, you all DO know that the history of Monopoly is that it was originally a game about the EVILS of Capitalism, right?
It was originally called “The Landlord’s Game”:
In 1903, the Georgist Lizzie Magie applied for a patent on a game called The Landlord’s Game with the object of showing that rents enriched property owners and impoverished tenants. She knew that some people would find it hard to understand the logic behind the idea, and she thought that if the rent problem and the Georgist solution to it were put into the concrete form of a game, it might be easier to demonstrate.
“Georgism” (see the link) is a somewhat whack form of communism that, in simple terms, thinks that what is a creation of personal labor is yours, but all resources, including land, belong to the public. Apparently housing isn’t yours unless you built it all yourself… or something like that.
And I do think it might be fun to produce a variant of it — you’d need to be careful about the look and feel, since Parker Bros would sue your butt off if it was too close.
Obloodyhell,
Yes, I’m familiar with the origins of the game. The game is hardwired to produce a monopoly as the end point of the game. It’s a propaganda tool for redistributionist ideology.
As it happens, Robert Bluey actually got to do this with real dollars and a real redistributionist fan.
I’m a software engineer, so if anyone wants to really program this, let me know! (I saw someone mention that)
Also a good chance to teach about social democracy, trusts, and risk management… at the beginning the best bet is for all players for form a trust and split their increasing net worth eveningly.
You all forgot. Iy is a lot cheaper to be rich. That is why I am for progessive taxation.
Silly people. Lets not tax anything and then we can pay to use roads, parks, more for healthcare because the overhead is a lot more with private companies.
And it does not seem like anyone here is in the 36% bracket, but if you are and you are paying the full 36%, and stupid enough to not hire a good to attorney….
Bradley,
You’re last comment is incoherent. Try again, this time more slowly.
“…..Lets not tax anything and then we can pay to use roads, parks, more for healthcare because the overhead is a lot more with private companies…”
Yeah..government managed programs and operations are always much more efficient and have less waste than privately run ones!!
Also, your views on taxation make no sense. You are for progressive taxation because you feel that it’s good to have people with higher incomes paying more and in the same breath claim that everyone should try to avoid paying that higher amount? Ok..whatever…
You are probably like alot of people that share your view..you are for progressive taxation because you feel that it is much easier and more likely that you will get some of the “shared wealth” than it is that you will achieve ever being in those higher tax brackets. Whether a lack of confidence or a stark realization about the lot you’ve created for yourself in life I cannot say. Fortunately half of you change your tune if/when you do end up in successful enterprise.
Chris,
Are you in the upper bracket?
Ok, Maybe somebody here can explain this to me. Do you invest because you get a tax break?
Our family, (this is our third generation), does not build anything unless we willl see a significant return in our investment. When we have a project, a 3% difference in taxation does not come up on our radar when we are looking at a 25% return. We cannot start any projects right now because of the current economy–we have lost one building to the bank this year. But difference in taxation does not mean much.
Unless you are self employed and / or own your own business there is little that you can do to avoid taxation. The “loopholes” that the incoherent poster referred to don’t apply on regular salary income.
I’d bet that there are a lot of people paying the 36% tax rate… actually higher than 36% on the margin as exemptions are phased out as well as itemized deductions. Don’t forget that social security (also unavoidable) is on top of that up to a higher minimum every year and medicare goes up indefinitely. And then there are sales taxes, at 10+% here in cook county.
My marginal rate on total income earned is definitely higher than 36%, as are many people in big cities like Chicago, NY and LA. About the only thing we don’t have here in Illinois is a high state income tax rate like CA or NY… NYC also has a city tax, to boot.
Oh and don’t forget about property taxes, which are increasing rapidly and won’t go down with the property crash.
Don’t forget corporate income taxes, taxes on dividends and interest, capital-gains taxes and death taxes. When you add it up it can amount to a cumulative average tax rate that’s a multiple of the nominal highest-marginal tax rate on income.
Also, the real rate of Social Security tax is double the nominal rate, since it’s an accounting fiction that employee and employer each pays 50% of it. The employee really pays all of it, since it comes out of the total amount that the employer must budget as a cost of hiring.
Bardley,
Do you invest because you get a tax break?
High taxes penalize risk taking. When taxes are high, investment income needs to be more certain because you’re going to loss so much of your profit. People won’t invest in high risk projects because the taxes destroy the gains that would offset losses due to failure.
Indeed, Shannon, even Paul Krugman says taxes are a drag on investment. However, isn’t simplistic to makes this a “higher tax” vs. “lower tax” argument? Wouldn’t it be more productive to ask at what taxation rate does the gov’t maximize revenue.
Before you sight the cut in capital gains taxes as an example, several studies show a cut in capital gains taxes increases revenue in the short-term but revenue drops and is a net loss over time.
Again, does anyone here base there investment decisions based on their tax burden?
Bradley,
Again, does anyone here base there investment decisions based on their tax burden?
Yes, although I am not a large investor I do make my savings and retirement plans based on tax policy. I know from first hand experience that venture capitalist in the computer industry pay close attention to capital gains taxes because they make high risk investments i.e. they expect to lose their shirts on most investments but make it all back on the one that hits big. If you take more of their big hit, they will be less likely to make investments in more marginal projects like, say, Apple circa 1976 or Goggle circa 1999.
… several studies show a cut in capital gains taxes increases revenue in the short-term but revenue drops and is a net loss over time.
I think your reading the studies wrong. Sudden drops in the capital gains taxes causes a sudden influx of revenues because people cash out to take advantage of the lower taxes. Longer term the revenues decrease from the peak but they do not fall below where they were before the tax cut.
More to the point, government revenues are really not what we need to maximize. We need to maximize productivity and innovation. Its better to be a poor person in America now than it was to be Neslon Rockerfeller a hundred years ago. Even poor Americans have access to miracles that Rockerfeller could not image. No poor American has to watch their children die as Rockerfeller did when a common case of strep throat evolves into scarlet fever.
Capital gains taxes are taxes on making the world better. They are taxes on hiring people, building factories, creating innovative technology, building houses etc. If I hire an employee that makes my company more productive, I have to pay taxes for doing so.
We only tax capital gains due to our atavistic genetic compulsion to take from those who have more than we do. The experiment with the waiters shows this to be true. People want to take form those who have more than they but they grow angry when you try to take from them to give to those less fortunate.
There is a very strong correlation between low capital gains taxes and economic growth across the world and throughout history. Obama tax policies will take us back to the 70’s with low investment, bizarre tax shelters and the very wealthiest paying no taxes at all.
This is a good summary. Pretty clear to me. Can you show me data that refutes this?
http://www.cbpp.org/policy-points4-18-08.htm
Bradley,
There isn’t actually any data to refute in your link. It’s actually just a collection of untested supposition. The article does point out that capital gains revenues do not rise when tax breaks are temporary. The article also points out that capital gains tax revenues did rise following Bush’s tax cuts but then it explains them away in a non-testable manner. Theory aside, the article shows that capital gains revenues did increase following the Bush rate cut.
As this chart shows [article], historically, capital gains revenues were higher absolute with lower rates.
If capital gains taxes do not inhibit investment then why not set the tax at a 100%. According to you, people do not factor in taxes when making investments so they will robotically keep investing even though they get zero return. ;-)
We’re talking about the classic Laffer curve here wherein both a 100% tax and a zero% tax produce zero revenues. The theoretically, there exist a tax rate between the extremes that produces the optimum revenues i.e. increasing of decreasing the tax rate decreases revenues. However, nobody has the foggiest idea where that optimum rate is at any given time.
The capital gains tax is doubly problematic because the tax punishes productivity and suppresses economic growth over the long term. So, even it a higher rate brings in more revenue for a given GNP, a lower rate might bring in more revenue absolute by increasing the over all size of the GNP. For example, a rate of 20% on 100 dollars worth of gain and a tax of 10% on 200 worth of gain, bring in the same revenue. The lower rate has the additional bonus of producing more jobs, housing, technology etc than the higher rate.
Just to reiterate, tax revenues are not the highest good. The real work done by capital raises standards of living far more than any government programs. The greatest increase in standards of living in human history occurred during the era of tax free capitalism of the 1800’s. So, to be justified, the benefits for any particular capital gains tax increase must not only offset the loss of revenues but the spending of the revenues collected must produce more benefit than the money would have if it remained in private hands.
I find that unlikely.
Shannon,
I only briefly read your comment. But just quickly, are the any economists (outside of conservative think tanks) take the Laffer Curver seriously?
Bradley,
But just quickly, are the any economists (outside of conservative think tanks) take the Laffer Curver seriously?
Everybody takes the Laffer curve seriously, unless they believe that a 100% tax rate will produce any revenue at all. All economist, history and common sense, say that at some point increasing the tax rate will produce less income. They only disagreement is where that point is for any given tax and circumstances. So, unless you want to argue that a 100% capital gains tax would generate as much revenue as a 10% tax rate, you have to recognize the basic principle of the Laffer curve.
Capital gains taxes are special in that: (1) investment ultimately creates all the material benefits of modern life, (2) investment creates more wealth by creating the physical technology that creates those benefits. (3) Taxing investment slows wealth creation to some extent. (4) It is easy to see that taxing investment to much will produce substantial harm by reducing the benefits of investment. (5) High taxes today can reduce the total wealth tomorrow by reducing investment that creates new wealth. (In other words, if we’d had a 80% capital gains tax throughout the 20th century we might now have a standard of living on par with the 1950’s).
History suggest we’re all better off having capital gains reinvested than we are having a big chunk turned over to politicians to buy votes with.