As I understand it, you’ve just described the essence of Baumol. Perhaps I misinterpret – is the “dumb thing” to which you refer the idea itself, the fact that it’s not addressed in classical economics, or something else? 
It’s entirely possible my memories of Econ 204 are hazy at this point, I think I’m confusing Baumol with the classical economics bit it explains/refutes.
Baumol is a curiosity to me, and one which I haven’t yet grokked. Clearly, you’re correct that with advances in technology comes increased complexity (and I’m assuming that “advances in technology” serves as a stand-in for “put more capital into” here). But, just as clearly, one element of advancing technology is exactly to make it easier to use. I think that, on the whole and over time, improved interfaces and the like mostly make up for the increased complexity. Now, whether or not the usability experts are actually good at what they do is another question, which too often seems to be answered in the negative. 
But, given that, I don’t understand your “problems”. Is one of them the core idea that labor-intensive activities are not amenable to said increases? Or perhaps my contention that (much) government work is labor-intensive and thus not amenable to productivity increases? Or my other contention that, as time goes by, it’ll be necessary to increase taxes to maintain government operation? Something else?
I still don’t see what any of this has to do with airflow over a wing.
Why shouldn’t income tax be universal? Why should Person A have to spend some number of days working for the government and Person B spend zero days doing so?
Because Person B isn’t very productive. Who would you rather?
Since I brought it up (in relation to productivity, anyway), let me attempt to explain.
The (unstated) underlying thought being that much/most of the service economy (including government operations) is necessarily labor-intensive, as it necessarily deals with human interactions. If true, there can’t be much productivity gain in swaths of the economy, even though productivity in other sectors of the economy will grow by leaps and bounds. Now, Baumol states that labor-intensive work will cost more over time even without having any productivity gains – exactly because of wages being dragged up by productivity gains elsewhere. Which led me to say:
I have to cop to conflating “service oriented economy” and “government operation” in spots. Sorry about that, but it doesn’t change the basic idea, just the scope. I’m not sure if that’s any clearer…let me know if I should try again.
Let’s start with the premise that some functions of government are necessary, and must be paid for. Let’s not quibble for now over what those functions are. There are some, and they do not come to you for free. There’s not a lot of room for cutting these programs.
Let’s then say it costs a person in this country $1000/year to purchase food and a shack to live in. $1000/year is what you need to get by - the bare minimum.
Further, Let’s suppose that there is one guy in the country who makes 100 million a year. He’s doing pretty well for himself. Worked hard. Darn hard. There are 150,000 guys who make $1,100/year. They sort of work hard. But not as hard as the first guy. He’s a real go-getter.
The government needs 30 million/year to keep the programs going.
Do you:
A) Get $30 million from the guy making 100 million a year thus reducing his takehome to $70 million?
B) Get $200 each from the 150,000 guys thus reducing their takehome to $900/year, having them fall behind the minimum needed to live, get kicked out of their shacks and sleep on the street?
C) get 15 million from first guy, and $100 each from the others, thus taking away the $100/year they used for anything “extra” like nicer food.
Perhaps a completely stupid example I know.
But where does the increasing income disparity stop? When 1% of the population has 95% of the wealth? 99%? 99.9999%?
You’d think so, but the number of features inherently makes the interface harder to use, and makes access to features more difficult. I wrote a column on this, and in doing the research discovered that IBM (when they still made laptops) got all sorts of customer requests for features already implemented, but buried under three layers of menus.
Particular features may be easier to use - wireless networks are a lot easier to find today than 10 years ago - but the number of features is growing very quickly. And really, you don’t think Office 2007 Word is easier to use than a typewriter?
I think a lot of cases given as indicating no increase in productivity don’t actually do that. There are certainly some jobs where the salary increase comes from competition from those jobs with productivity improvements, though they don’t show productivity gains themselves. But I’m having a hard time thinking of too many. I delivered mail one summer, a very labor intensive job. In fact they didn’t let me sort the mail for the route I was doing since with my lack of experience it would take all day. Today a lot of the route mail gets presorted. I pushed a little cart around, today they have little trucks which means you can put all the mail in at once. I suspect carriers are more productive even in this job.
As for musicians, I’m sure they beat inflation, but I wonder how they are doing today relative to other equally skilled professions. The sister of a friend of ours plays in a big city symphony, and she is hardly rich.
Because person B spends 8 hours a day making enough money to live on, while person A spends 4 hours a day doing so.
Marginal utility theory, for one. Person A’s dollars are worth less to him than Person B’s on a dollar for dollar basis.
Yeah, OK, so you’re disagreeing with the fundamental idea. I’m not sure one way or the other…I’m still trying to wrap my head around it.
At the same time, I’d note that there’s a difference between no productivity increase in labor-intensive jobs and little. It strikes me, for instance, that your mail carrier scenario did indeed show increased productivity, but that in actuality the increase was minimal. I’d suspect the same for other labor-intensive jobs, particularly those in the service industry. But I don’t have any data/stats to back up that assertion, so I can’t really argue it properly.
I didn’t read the whole thread, but that myth/meme was started by right wingers who are trying to make the argument that ‘federal income taxes’ are ‘all taxes’, when they are only about 1/3 of all taxes collected by federal, state and local governments. I think federal income taxes are about 1 trillion, total gov. tax revenue is 3-4 trillion.
I don’t know if it is individuals or households, but I wouldn’t be surprised if the bottom 50% pay very little in federal income taxes. But they still pay FICA, various state and various local taxes.
It is a divide and conquer strategy used by right wing plutocrats to intentionally misinform people so they will be at each others throats fighting over scraps long enough for the plutocrats to entrench themselves. Sadly it works. But usually those strategies do. If I were truly smart I’d be benefitting from those lies rather than getting upset that people believe them. But I"m not that smart.
My vote.
Makes me sound like a monster, which is what you intended, but notice that little word “extra.” Sure, some of them buy “nicer” food. But that’s the underlying problem presented in this thread. That “extra” might go towards food, it might also be pissed away at the tracks.
And because I’m not actually a monster, I’m willing to apply tax credits to that $100 so that if they are using the “extra” for stuff like food, education, housing, medical care, it reduces to $80, and might actually get you a refund. But if instead they choose to use it for alcohol, tobacco, and flat screen tvs then fuck’m, let them lose their shack.
No one should be made to suffer. If it costs $1000 a year to live in the bare minimum, no one should be below that, ever. And that bare minimum should NOT be squalor. I have no desire to allow children to grow up in shanty towns without sewage facilities (aka Khayelitsha, South Africa). That also includes education and health care.
And with that said, no one that fails to earn more than $1000 deserves anything nicer than the bare minimum. If you made $1100, that doesn’t mean you get to buy a little tv and put up an antenna. It means you start contributing in the form of taxes. If you use that $100 towards betterment, it comes off your taxes. If you use it for hookers and blow, you’re out of luck.
It’s the perception of that $100 that really bothers me because in reality the ‘bare minimum’ is set at $22,000 and as we’ve seen when you own a house and have a few kids it’s possible to make a lot more and still not pay taxes.
If you only earn $22,000 your standard of living should not be as nice as someone that earns $44,000 or $88,000. Otherwise why bother earning $88,000. There IS marginal benefit to the money earned. The second slice of pizza still provides marginally more pleasure than the first.
This scenario excludes one hell of a lot of middle.
D) let’s apply some progressive taxation here with some and split the middle, call it
$25 from each of the 150,000, and $26.25 from the big guy. That’s pretty close to “everyone loses 25% of their discretionary”. (I am too lazy to get it closer. That does not mean I can’t.)
E) let’s apply some marginal value estimates here, presuming we did the studies, and take $5 from each of the 150,000 and 29.25m from the big guy. Presuming the government sociologist is not stupid, that causes each of them the same amount of relative pain (or close enough for jazz).
Where’s the line, out of curiousity? School supplies? Basic cable (after saving for two-three years to buy a halfway decent TV)?
As a proponent of the marginal value theory of taxation, I don’t understand why the rich guy’s extras are so much more important than the vast majority’s that they get 0 extras and he gets $99,999,000 worth. That seems like a recipe for “150,000 angry guys kill the rich guy and divide up all his stuff”. Immoral? Maybe. Practicalities enter into it though.
So, how does your system account for luck? Supposing there is really only one high-paying job in the entire country, and that’s it–and the one guy happened to be first in line because he lived next door. (it’s a contrived scenario, bear with me). How does your scenario account for the reality of the service worker? In any system, SOMEONE has to do the lowest-ranked jobs on the pay scale–do those someones NEVER deserve any luxuries? If not, then you probably should re-think a bit.
This is backwards: marginal value theory generally implies that the second slice provides marginally less pleasure (unless you were really hungry enough that you NEEDED two slices, but we’re discussing extras).
There are two things I hate in this world, this is the first:
If your country has 99.99% of wage earners bringing in $1100 a year, you don’t get to have a $30million budget. I’m sorry, but that’s how it works, you’re going to have sell some of your aircraft carriers, gold plated helicopters, and hold off on building a multilane underground expressway.
You can have $5million from income tax, that’s $10 from each person plus a $3.5million luxury tax.
If you want or need more you’ll need to come up with another way of earning money, which shouldn’t be shocking, there are other ways for governments to make money. Maybe use some of your $25million military to take over a resource rich country. Or rent it out for parties. Charge tourists $150 for an entrance and exit visa, $300 park entrance fee, 40% hotel surcharge, and $6000 airport improvement fee. And after you take over a resource rich country you can earn income destroying their environment.
If you choose to go with answer [a] you run into one of two problems. First and most obvious is what the fuck are you going to do when he leaves? India blocks money leaving the country, I guess you could seize his assets. Come to think of it, that’s probably a better solution than [a], just nationalize what that guy has, now you’ve got $100million!
The second problem is that at some point his opinion is going to carry more weight than the other 150,000 people. If he wants the new on-ramp near his house, he’ll get it. I believe that’s where some people start crying plutocracy, or it’s it PLUTOCRACY. Governments are going to listen to him, because he’s the one footing the bill. If they want a new space shuttle, they’ll need to clear it with him first. If he wants regulations eased to he can destroy more of the environment they’ll let him.
So the other thing I really hate when people alter and fuck with a simple example or hypothetical in order to twist it to suit their world view, and I hate you for making me do that. I also hate counting to three.
Both. There are 365 days in a year. Each one of those is as important to Person A as it is to Person B.
Each person is entitled to the fruits of their own labor. Each person also has a responsibility to contribute to the public coffers. Each person should be asked to work for the common good equally. Even then, a person ten times more productive than another person contributes ten times more. But at least there is an underlying fairness to it. Other wise, why not just tax those on the Fortune 400 99%?
Fewer than half of Americans have jobs. You figure it out.
It’s more than that, closer to 2/3rds!!!111one
Granted 1/3rd of the population is under 16.