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


"S. Doo" <none@xxxxxxxxxxxx> wrote in message
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On Tue, 23 Jan 2007 14:01:08 -0000, "Andy F." <never.mind@xxxxxxxxx>
wrote:


"S. Doo" <none@xxxxxxxxxxxx> wrote in message
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On Tue, 23 Jan 2007 02:06:53 -0000, "Andy F." <never.mind@xxxxxxxxx>
wrote:


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

"Dan in Philly" wrote in message


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.

Not at all -- there's plenty of such rent collecting all over the
place.

You are assuming that it isn't rational for an employer to pay a high
price that includes a huge amount of rent -- but it can be entirely
rational, profit maximizing and unavoidable.

Keep the definition in mind: "payment made to a
factor of production in excess of what is required to elicit the
supply of that factor".


A MLB backup utility infielder might happily play pro ball for $100k
or less a year just as his kind did for generations before -- but to a
team like the Yankees, the *one* game he might win (or lose) for them
over a season could be worth literally millions of dollars if it makes
the difference between making the playoffs or not, or winning in the
playoffs or not. So if he's the best utility infielder available, it
can be entirely rational for the Yankees to pay him a couple million
dollars, as the result of rational bidding for his services against
other teams like the Red Sox to whom that game is worth almost as
much.

But then your method of finding out the rent wouldn't work. If you offer
the
Yankees player a pay cut, he refuses and goes to work for the Red Sox.

My method....?? Of course it wouldn't work.


So what did you mean when you said 'The whole procedure is simple and
accurate'?


.

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