Re: Taxing Intelligence/Talent

Dan in Philly wrote:

"S. Doo" wrote in message ...


The original idea was to compare intelligence with land, and taxing them.

Well, brains by themselves don't buy a high income for anyone


True, I should have specified *marketable* intelligence (also talent). IOW, something that allows you to earn more money than other people (for a given amount of work time).


And attaining a valuable scarce skill usually means first making a
costly investment in education.


Also true. And (as with the LVT) people should be allowed to deduct this expense from their taxes. But note: two people can get the same education, yet one will be 'smarter' and earn more money. The question is: can we tax away the extra income of that smart person without affecting anything.


But then you have the ones working 70 hours a week to reach the huge
bucks at the top of their fields -- once those bucks are taxed away,
they may well say to hell with it all ...


That's why a tax on intelligence/talent may be unworkable.

It's pretty obvious that that is a lousy policy - taxes tend to
cause there to be less of what is taxed. It's also odious because
it's discriminatory.

I don't see any way to separate earnings due to intelligence from earnings due to effort.

Effort is not a substitute for intelligence. People way on up the scale
in IQ produce much more than people just a standard deviation lower,
in cases where IQ is a necessary component of production.

Of course, at the high end (multi-million $ salaries of CEOs, basketball stars, etc) you could tax all of their income above a certain amount (say one million $) and I doubt that any of them would quit.


You will, however, create tension and a rather large tax-avoidance
industry. We've shown that taxing productivity can result in
defections from the system. And high marginal tax rates drove
Ronald Reagan into politics.

Dan in Philly


--
Les Cargill
.

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