Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Taro who wrote (229939)	4/19/2005 12:52:50 PM
From: TimF	Read Replies (1) \| Respond to of 1572605

The optimum level of income tax is exactly like the optimum level of pricing of any goods on the market: that is the perfect market price! Optimums are optimums for one person or group or another. If we are told to split $1mil your optimum would probably be for you to have it all, mine might be for me to have all of it. From the perspective of the government considered as an isolated entity the highest revenue possible might make sense. However the government in a democracy while it does in some ways act like an isolated entity, is in theory, and hopefully often does even in practice, represent the will of the people. Price it any lower than the level people are prepared to pay would be fiscal stupidity and get you nothing but possibly popular support in the short term on election day. Extracting less wealth from the people than the maximum that they will pay is not fiscal stupidity. Extracting the maximum is not optimal when you consider the system as a whole. 1 - If you take the maximum you will probably slow down economic growth, lowering future maximums, which makes it bad even when you are just considering the fiscal implications of the tax. 2 - Fiscal implications are not the only things to consider. If you extract the maximum you lower individual freedom, cause more resentment and do other things that have negative consequences or are themselves negative consequences. Tim