Re: Taxing Intelligence/Talent (was: 'Waterhole' and land rents)


"S. Doo" <none@xxxxxxxxxxxx> wrote in message
news:7t18r21t35v5lu7qt2g5pt80efslrnu8up@xxxxxxxxxx
On Sun, 21 Jan 2007 14:08:48 GMT, "Dan in Philly" <djr8@xxxxxxx>
wrote:

"Dan in Philly" wrote in message

That's why a tax on intelligence/talent may be unworkable. I don't see
any
way to separate earnings due to intelligence from earnings due to
effort.

Self-correction: effort is easy to measure (just add up hours worked).

Hmmm... You don't know the difference between working hard and
punch-clocking a lot of hours with your feet up on a desk?

The real problem is this: some jobs are cushy whereas some are
dirty/difficult/dangerous. So we need some measure of how yucky a job is
before we can tax the 'rent.'

Not at all, you are forgetting what "rent" is: "payment made to a
factor of production in excess of what is required to elicit the
supply of that factor".

So the measure of the rent to the labor of a worker is simple: It's
the amount he is actually paid minus the minimum pay he would accept
to do the same work.

Determining the amount of that rent is simple too: Just keep telling
him "You're fired unless you take pay cut of $X". As long as he says
"OK, then I'll take it", then you say it again. When he says "Damn,
that's too little, I quit", you give him back the minimum pay he
accepted.

Now you've identified the former rent to his labor and have taken it
away from him.

Whether the job is cushy or dirty/difficult/dangerous has nothing to
do with it.

The whole procedure is simple and accurate.

Though I'm not sure it is a practical way to run a business or
administer tax policy.

In that case there's hardly any labor rent, since a rational employer will
only pay the minimum they have to. There would only be 'rent' if the
employer made a mistake or was unusually generous.


.

Relevant Pages

  • Re: Taxing Intelligence/Talent (was: Waterhole and land rents)
    ... way to separate earnings due to intelligence from earnings due to effort. ... So the measure of the rent to the labor of a worker is simple: ... the amount he is actually paid minus the minimum pay he would accept ... Determining the amount of that rent is simple too: ...
    (sci.econ)
  • Re: "Investment adviser asks if wealthy are necessary"
    ... By definition economic rent is not produced by labor. ... Rent by definition is profit above normal gained from legally granted market advantages or from the characteristics of the land. ... berry from someone who says they would have had picked the berry but did not so I should compensate. ... This is like saying if I buy the last chocolate bar in the store I have to compensate all of those who claim they would have paid the price but did not. ...
    (sci.econ)
  • Re: "Investment adviser asks if wealthy are necessary"
    ... Without state ownership people have to exert labor to extract rent that is why it is property. ... Your argument says because I picked the berry I deprived the berry from someone who says they would have had picked the berry but did not so I should compensate. ... He can go and farm the barren land if he wants but is willing to pay to use the better land so he does. ...
    (sci.econ)
  • Re: "Investment adviser asks if wealthy are necessary"
    ... By definition economic rent is not produced by labor. ... did not so I should compensate. ... Rent arises from competition for sites. ...
    (sci.econ)
  • Re: Income from a tax on land.
    ... > Owning land that yields rent does. ... LEARN WHAT RENT MEANS. ... All wealth is produced by labor. ...
    (sci.econ)