Re: better tax code: no income tax, head tax (&| ppty t)
- From: Lysander <lysander@xxxxxxxxxxx>
- Date: Fri, 7 Mar 2008 10:59:18 -0800 (PST)
On Feb 28, 2:52 pm, ro...@xxxxxxxxx wrote:
On Thu, 28 Feb 2008 08:24:39 -0800 (PST), Lysander
Even if Roy was right about land and he is not there is never a fixed
supply of anything,
The supply of original works of dead artists is fixed, as is the
supply of land. You are simply wrong, and refuse to know all facts
that prove you wrong.
Laughing too hard to respond to the other claptrap. How many people do
you know that will sell a Monet painting for $.01? If you know anyone
please give me their contact information.
The labor supply curve is
very close to perfectly inelastic.
No, of course it isn't. Don't be so stupid.
Again Roy speaks against empirical data. Almost every study done on
the elasticity of labor supply shows labor supply to be HIGHLY
inelastic and close to perfectly inelastic. Roy has no idea of what he
is talking about. The only case he can argue that this is not true is
the labor supply of married women.
When one understands that a supply
curve is the pairing of prices and the corresponding amount that
PEOPLE ARE WILLING TO SELL AT THAT PRICE,
People are willing to sell the same amount of land at whatever the
price is,
Great. I would like to know how much land you would sell if the price
is $.01?
because that is how price is defined: what a thing sells
for.
However, that price must be agreed upon between buyers and sellers. It
does not mean I have to or will sell at the going price. Do you have
land for sell? If you own land and are not selling it you are not
supplying the land at market price.
it is obvious the amount of
land in existence has nothing to do with whether or not the supply
curve is perfectly inelastic.
Yes, it does, if you are willing to know the definition of price: what
a thing sells for. You are not willing to know that definition, so
you are permanently ignorant of economics.
Roy is an idiot. He refuses to learn what quantity supplied is and
that is supply is the collection of quantities supplied at each
potential price.
Just because the land exist does not
mean I will sell it at the market price or any other price for that
matter.
You will sell it at whatever the price is, because that is how price
is defined.
Roy does not understand the difference between market price and price.
In a market, market price is what is important. It does not say trades
will not be made that are not at market price.
We buy land because it has value.
Wrong. We buy it because its utility to us is greater than its price.
Roy does not understand what value means. The fact something gives us
utility means it has value to us.
Different land has different values due to the characteristics of the land.
Wrong. It's mostly due to the characteristics of the surrounding
community.
Geez that makes the characteristics of the land different. If this is
true your efficiency argument is out the window.
We only sell
when the market price exceeds the value we place on the land.
Wrong. "We" do not place value on land. Only the market can
determine value.
No the market determines price not what value an owner places on a
commodity nor what value a buyer places on the commodity. Price is not
value in this context. Value to the individual is what you will pay
for the land or what you will sell it for not the market price.
Although some will have a value = to the market price.
Since
different land has different value, the market price effects how much
land is sold.
No, it doesn't, because different land has different prices to go
along with its different values, and whatever the price for a given
parcel is, the land sells for it.
_GET_IT_??
Which means if market prices change the amount of land sold changes.
NOT PERFECTLY INELASTIC. QED.
Note: This assumes perfect competition in the land market.
There is no competition in the land market, because every land parcel
is unique, just as every original artwork is unique. As with every
monopoly, there are degrees of substitutability;
No. Roy misses basic definitions again. A monopoly is the sole seller
of a good with no close substitutes. Meaning the cross price
elasticity of related goods is close to 0. Roy is describing
MONOPOLISTIC COMPETITION. Either way neither has a supply curve and
therefore there is no elasticity of supply only elasticity of demand.
but there is no
genuine competition as there is in a commodity market where the units
are functionally indistinguishable.
On the contrary. Monopolist competition is defined as a market where
each seller has a monopoly over HIS own good but close substitutes
exist. THIS IS NOT MONOPOLY. Roy is now describing Monopolistic
competition and not Monopoly.
EITHER WAY THERE IS NO SUPPLY CURVE AND NO ELASTICITY OF SUPPLY. Roy
can not argue that supply of land is perfectly inelastic but it is
also a monopoly or monopolistic competition market.
That is why land is a canonical
example of monopoly, a fact that Liesander always refuses to know.
Quite the contrary. Land no where fits the definition of pure
monopoly. It is a best monopolistic competition. Look up the term.
Here are the requirements.
Monopolistically competitive markets have the following
characteristics:
* There are many sellers and many consumers in a given market.
Met many people buy and sell land. They are many sellers and buyers in
the land market. This violates monopoly in that there is no sole
seller.
* Consumers perceive that there are non-price differences among
the competitors' products.
Product differentiation is met. As Roy argues parcels are unique.
* There are few barriers to entry and exit.
No barriers to entry or exit in most cases. With few exceptions anyone
can decide to buy or sell land.
By Roy's argument land is monopolistic competition. It can not be
monopoly because there is no sole seller. In contrast each land owner
has a monopoly over his unique parcel of land. That is product
differentiation and puts us in monopolistic competition.
Again MC has no supply curve and therefore arguments about elasticity
of supply are bunk. Roy flunks again.
Roy is so
dense to argue that the land market is a monopoly market while, his
reasoning for a monopoly actually points to oligopoly.
Wrong again, as usual. See above.
Not the reasoning you use here but the reasoning you HAVE used in the
past.
When we are not in perfect competition there is NO SUPPLY CURVE!
<sigh> So there is no supply curve for patented products??
Exactly. Look up Monopolistic competition. A supply curve says if
market price is X I will sell Z and if it is Y I will sell A.
Imperfect competition means sellers are NOT price takers. A supply
curve assume price taking behavior. Imperfect competition means the
seller has MARKET POWER. In this case they have power to influence
market prices. They do not simply accept the going price. They
influence what the price will be. Monopoly, Oligopoly, and
Monopolistic competition have power to set price and quantity not just
price. Therefore they have one and only one quantity supplied that
determines price.
The
amount supplied will not be related to price?
This is silly to think of that way. In PC it is related to price
because no one seller nor buyer have any control over price. They take
market prices and react to changes. In imperfect competition sellers
control price. They do not react to price.
Roy can not have it
both ways in that land is a monopoly market but it has perfectly
inelastic supply so therefore a tax is efficient.
Wrong again. Like the supply of land, the supply of original works of
dead artists is perfectly inelastic.
Only if it is a PC market. Which is not the case. It is clearly a
monopolistic competitive market. Each painting is unique but close
substitutes exist. As far as I know Picasso never painted the same
painting twice. So painting A is unique but painting B is a close
substitute. Just as a piece of land bordering a river is unique but
another piece of land further down the river is a close substitute.
The market for them is a
monopoly market, like the land market.
No it is monopolistic competition. Either way there is NO SUPPLY CURVE
and that is the point. You can not argue it is a monopoly and supply
is perfectly inelastic. Nor would you want too. It says the tax leads
to the same inefficiency as before.
Any introductory economics
textbook could inform your ignorance of this subject, if you were
willing to be informed.
LOL. Look up the definition of monopoly in any textbook. It will show
it is the SOLE seller of a good with no close substitutes. The
definition I gave for MC comes from Greg Mankiws principles of
economics. Roy proves again he has never picked up an introductory
economics textbook.
There are no supply curves in monopoly and no elasticity of supply.
The manufacturers of patented products will produce more of them if
the price is higher.
Wrong. Producers of patented products SET price they do not react to
it. They will produce more if demand for the product increases. This
will lead to more production and higher prices but the high prices are
THE EFFECT NOT THE CAUSE.
Therefore, the elasticity of supply is positive.
No there is no supply curve. There is no elasticity of supply.
Monopolitistic competitors and Monopolies SET prices they do not react
to them. An elasticity of supply assumes sellers react to prices not
that they set them.
If it is a monopoly you have price makers NOT price takers. A price
maker HAS NO SUPPLY CURVE. A price maker takes into account how price
will change when the amount offered for sale changes. In PC, the
seller reacts only to price and sets production according to prices
given by the market. PC firms have to take the prices the market gives
them. THEY CAN NOT INFLUENCE PRICE. Firms in imperfect competition
influence price when they decide how much to sell. They profit
maximize taking into account how their actions affect price. They do
not have a supply curve because to have a supply curve you have to
assume your decisions will NOT affect market price.
But no one will ever produce any land, just as they will never produce
any more Rembrandts or Picassos, no matter how high the price.
Therefore, the elasticity of their supply is zero.
Production is ilrevelant here. People will sell more land when demand
for land rises and they gain more profit by doing so. They will hold
land when the value of land to them is below the price. Speculators
will not sell if they expect the price to be higher in the future,
this actually decreases the supply of land on the market. If land were
a competitive market then the elasticity supply would not be zero.
The market price, that we can not influence and must take or not buy
or sell, would influence how much we are willing to sell. The land I
could sell if I subdivided lot exit even though I have no desire to
divide my lot and sell part of it. It is not part of quantity supplied
because I will not sell at the price. If the market increased the
price to $500,000 an acre I would surely lop off an acre or too from
the lot my house is on and sell it. My QS is affected by the Market
price.
A tax that does not
change decisions in monopoly leaves the market AT THE SAME INEFFICIENT
SOLUTION THAT PREVAILED BEFORE THE TAX
Only given your false-by-definition assumption that things can have a
price they don't trade for.
LOL. Actually that is under your assumption that supply is perfectly
inelastic. If that is true then the tax makes no difference in
decisions. If the Monopoly sells an inefficient amount before the tax,
the monopoly will still sell the same amount after the tax AND IS
STILL INEFFICIENT!
just as tax that does not
change decisions leaves the perfectly competitive market at the same
efficient solution that prevailed before the tax.
You permanently refuse to know the fact that the "efficient solution"
is not necessarily a desirable outcome.
Of course it is. You do not understand what an efficient solution is.
Suppose all the land is owned by a man whose fondest wish is to see
everyone else starve to death. The "efficient solution" in such a
land market is also a "final solution."
No it is not efficient. If only one potential seller existed in the
market it is monopoly which is NOT efficient. Roy does not understand
what monopoly is nor that monopolies are inherently inefficient.
Having one one owner is NOT perfect competition. Only one buyer is a
monoposy and is inefficient. Having only one seller is a monopoly and
inefficient.
Roy can not understand that taxes that would impose a deadweight loss
in competition CAN lead us to efficiency in Monopoly.
You assume competition in the land market. That assumption is false.
No you assume perfectly competitive markets when you say that there is
a perfectly inelastic supply curve and therefore the tax is efficient.
Essentially you can not have monopolistic competition and a perfectly
inelastic supply curve. If that were the case, then marginal cost, in
this case the value given up by selling the land, would have to be
vertical. That means that the monopolistic competitor has no influence
over price. Only demand determines price. He is therefore a price
taker and barring a small number of buyers the market is perfectly
competitive.
Roy does not
understand that if as he argues land is allocated inefficiently before
the tax then you DO WANT to change incentives.
I do indeed.
Then quit arguing supply is perfectly inelastic and therefore A TAX
CAN NOT CHANGE INCENTIVES. Your argument of a perfectly inelastic
supply curve says tax will NOT change incentives.
In competition having more land sold on the market is inefficient.
But land is a canonical example of monopoly, not competition.
Under monopoly it leads us closer to efficiency.
Right.
Only if you admit that supply is not perfectly inelastic. You have to
drop that notion to get to monopolistic competition. George had no
clue to this because how to analyze imperfect competition did not
exist in his day. Georgist took an argument using a perfectly
competitive framework, all that was available at the time, to argue
the tax is efficient. As you agree this framework is completely wrong.
Yet, you are muddling this framework and its results with the more
modern analysis of how to analyze imperfect competition. They simply
do not go together. You can not argue and that the market is
inefficient and a perfectly inelastic supply exist. There is
absolutely NO WAY to derive a deadweight loss, the measure of
inefficiency, if demand or supply are perfectly inelastic. If one of
the curves is perfectly inelastic then the market is efficient before
and after the tax. Perfectly inelastic says one side can not react to
price and therefore the efficient quantity prevails on the market and
NO policy can change that.
Do you think that bidding eight hearts can somehow make a bridge hand
yield 14 tricks?
That is what you are arguing. You are trying to argue that the
allocation of land is inefficient and that all the land in the world
will be sold at any price. However, policy can change that allocation
to a better allocation. How can this happen if the policy can not
influence the amount of land traded and who gets the land?
Then he adds that in some countries the amount of land
sold decreases when the price is rising due to specualtion. Sorry Roy
that means the supply curve IS NOT vertical.
Wrong. It just means that the unsold land has no price.
Roy's ignorance abounds. Of course it has a price the market has put
the going price below the price that will sell the land. Roy is
essentially arguing here people will not supply the land until a
certain reservation price is met and that different land has different
reservation prices. Therefore the elasticity of supply is not 0.
Unfortunately, you have decided to keep yourself permanently ignorant
of the fact that price requires a transaction by definition.
No a transaction requires the correct price. Supply and Demand curves
plot hypothetical prices against what someone would hypothetical buy
or sell if the market price were that price. The price at which
quantity supplied = quantity demanded is the prevailing market prices.
That is the price at which everyone in the market who wishes to buy
can buy and everyone who wishes to sell can sell.
There is by definition no market price for it, as it has not sold. It
has a market VALUE, but not a market PRICE.
Clear?
Roy seriously needs to read an economics textbook for chapter 1.
Perhaps you can start with Cliff's notes or Economics for dummies.
And again I give you the answer: if I don't sell it for $400, the
price _can't_ be $400,
Roy still does not understand market price. Everyone else selling at
$400 and me not selling means the price is $400 and I am not selling.
Roy does not understand how supply curves imply price taking
behavior.
Assets are illiquid
Flat false. Liquidity of assets depends on the type of asset. Cash
is a highly liquid asset.
So are you advocating taxing cash holdings now?
Taxing capital and land redistributes the assets.
To those who will use them most productively. Right.
In Roy's belief. However, if supply curves are perfectly inelastic
then we have PC and those who value the land most will have the land.
The majority of the data
show the majority of the people do not adjust work habits to tax
changes.
Maybe because the majority of people have normal 9-5 jobs, and it
would be rather inconvenient for their employers if some people wanted
to work late and others didn't? Hello?
Roy does not realize he is arguing that labor supply for most people
is PERFECTLY INELASTIC. Something he has denied.
Obviously if we tax labor too high no one works. No one works
if the government taxes labor at 100%.
Actually, they do, as many people work at jobs they would do for free.
Playboy photographer might be one of them.
Who would hire Playboy photographers if Hugh Hefner had to publish
playboy and have the government take all his profits (income) away
from him?
So there are rates where all
incomes will work less if labor taxes get too high. In the past this
did happen with the high income group. However, at current tax rates a
small decrease in taxes in unlikely to encourage more or a small
increase in taxes is unlikely to discourage work.
I agree that at current US income tax rates, the incentive effects of
any small change in the top rates would be vanishingly small. The
effect at the bottom, where a small difference in take-home pay can
make a substantial difference in quality of life (vide Mr. Micawber),
could be larger.
Quality of life? This is not what was argued. It is how they adjust
work habits.
The Clinton and Bush
tax increases where small. We went from 28% on the top to 32% to 35%.
This is still half the rate under Carter. Incentive to work hardly
changed. Now at high tax rates it was very discouraging to work. A lot
of the increasing disparity under Reagan was because the rich worked
and invested more due to lower tax rates.
Garbage. The rich didn't work any more. They just crystallized more
capital gains, took more stock options, etc.
Check the data. Many leading economist disagree with you and cite the
lower progressiveness of the tax code leading to higher inequality
because the upper incomes did work more. Married women and high
incomes are about the only ones who respond to changes in taxes by
changing hours worked. We see attorneys taking the extra case they did
not before. CPAs taking on an extra client because the profit is now
high enough. That is what this is referring to.
You still do not understand that if the land market is a monopoly the
tax will change incentives.
?? I have explained to you repeatedly how it will change incentives.
It can not be a monopoly if the supply curve is perfectly inelastic.
That would mean they are price takers. POLICY CAN NOT CHANGE
INCENTIVES IF SUPPLY OR DEMAND IS PERFECTLY INELASTIC AND CAN NOT
SHIFT!
A completely normative question that I can offer no proof for or
against.
Translation: don't confuse you with facts.
Roy confuses facts with value judgements.
I as argued before this is the crux of your argument. This is
an argument about fairness.
It's also about how good an idea it is to punish people in proportion
as they contribute, as opposed to requiring payment from them in
proportion as they benefit.
As I said, Roy's argument is based in emotion and belief. Roy has no
clue as to the science he claims to know something about. That is how
you define a liberal one who appeals only to emotion and muddles logic
to fit their emotions.
You seem to be aware of the "ability to pay" principle. Why do you
refuse to know the "beneficiary pay" principle?
The benificary pay principle can not always be applied. That would
mean Social Security recipients pay for Social Security. Welfare
recipients pay for welfare. I am not saying you should agree with this
programs but it is kind of silly to have a welfare program where the
government makes them pay for the ability for the government to give
money back to them. It would say if you receive $100 in food stamps
you should pay $100 in taxes to get the benefit. It defeats the
purpose. SS as the retirement fund makes a little more since but it
would stupid to say we are giving you disability (SSI) of $10,000 so
you owe us $10,000.
.
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