[Retric]

I agree it’s a terrible strategy on average, but Money has diminishing marginal utility. Having 1/10th as much money is far worse than having 10x as much is better.

As such once people can lock in a reasonable retirement they often get really conservative.

[h2zizzle]

This is why high progressive tax rates, let alone high marginal tax rates, are justifiable. The less you earn, the lower a percentage of your earnings you can afford to lose before having to make drastic lifestyle changes. However, relatively low on the absolute income range for Western countries, you reach a point where you could lose 90% of your income, live in a high-cost-of-living area, and still experience negligible change in your circumstances. Tax rates should be based on analyzing where that point is.

[lotsofpulp]

I find earned income tax is never justifiable. Working should never cost you money. Marginal land value tax rates do make sense though (and marginal sales tax rates, but that’s harder to implement).

The current situation of low land value tax rates and high earned income tax rates leads to two old people living in excessively large lots while two young working people give up goals of having kids because they don’t want to raise them in a 1,000 square foot rental they don’t consider stable enough.

[h2zizzle]

>Working should never cost you money.

If I had a nickel for every time a recruitment process was jeopardized by my asking for the company to cover travel expenses to the interview, I would have two nickels. Which isn't a lot, but it's weird that it happened twice.

[47282847]

> Working should never cost you money.

And that’s the case as long as the income tax is at or less than 100%. Income taxes could well be collected from employers directly and never reach you (like some European countries do for roughly 50% taxes due). Ultimately what counts is how much your employment costs. Psychologically, it then may not feel like you are paying anything, because you don’t. You working supports public infrastructure for public benefit (which includes you again). Prefer to pay no taxes but having to build your own roads? Good luck with that.

[dragonwriter]

> And that’s the case as long as the income tax is at or less than 100%.

No, its true as long as taxes on income plus the necessary-but-non-deductible expenses associated with maintaining the job that would not be required otherwise are less than the pay for doing the job.

But income taxes aren't the only taxes on income (payroll taxes exist), and costs of work (added wardrobe costs imposed by dress codes and expectations, commute costs, added childcare costs) are real.

[Retric]

Functioning governments drastically increase worker productivity through several means such as enforcing the rule of law, sanitation, infrastructure etc. This is also why people want to immigrate to countries with such high tax rates and more specifically income tax rates.

Thus as the value of wages and investment returns is a direct result of government actions just as the value of land is a direct result of government enforcement of property rights, it’s got equal legitimacy for taxing both.

[dragonwriter]

I don't disagree with anything you said but I also don't see how it bears any relationship (positive or negative) to my post that it responds to.

[47282847]

Hardly anyone would work if the downsides outweighed their personal benefit. Actually, some people decide not to. It’s a trade-off that I’m personally happy to take by working. I enjoy my benefits. Feel free to quit! If it would cost me more than I gain from it, your original point, I would certainly do that.

[lotsofpulp]

> Prefer to pay no taxes but having to build your own roads? Good luck with that.

I never implied preferring not to pay taxes. Marginal land value and consumption tax rates would set incentivizes properly.

Earned income tax is the rich and the old and their younger beneficiaries benefiting (rent seeking) off of others’ labor.

[giantg2]

Tax rates should also be based on what the public expenditure need is, not just maximum revenue.

[h2zizzle]

The redistributive effect of taxes is a feature, not a bug. Inequality distorts political and social dynamics. One of the functions of taxation is to make rich people less rich, and we shouldn't run from that.

[giantg2]

It doesn't seem like taxes are a cure for inequality. At least I don't see any examples of it.

[Retric]

The goal is to mitigate inequality not eliminate it. Someone making 10x as much as the average person has minimal impact, 100x isn’t a big deal, but you keep adding zeros especially with passive income and there’s significant repercussions.

US inequality increased significantly after the top tax rates, long term capital gains, etc declined significantly. There’s no question those are related, it was explicitly the intended effect.

[giantg2]

It doesn't seem to have the intended effects in other countries. Income inequality has gone up in other places such as Europe too. The real driver seems to be the modernization of jobs with the job types moving from secondary to tertiary types, especially knowledge work. The main reason the wealth is uneven here more so than in other countries is because of the big tech companies that we have and others don't. All those unrealized gains from company ownership are the main driver of the extra 20-30% the top people have vs the top people of other countries.

[Retric]

That’s true up until the point of budget deficit.

[no_wizard]

This is why you might say, transition out of stocks being the majority of you portfolio to bonds.

To completely cash out - as in, not be invested at all - isn't wise.