EPTReplacing corporate taxes with capital gains taxes or progressive consumption taxes would be a good idea.
European Politico-economics QA Mega-thread - Page 1183
| Forum Index > General Forum |
Although this thread does not function under the same strict guidelines as the USPMT, it is still a general practice on TL to provide a source with an explanation on why it is relevant and what purpose it adds to the discussion. Failure to do so will result in a mod action. | ||
|
Nyxisto
Germany6287 Posts
Replacing corporate taxes with capital gains taxes or progressive consumption taxes would be a good idea. | ||
|
Sent.
Poland9335 Posts
| ||
|
warding
Portugal2397 Posts
The problem with both corporate tax and capital gains tax is that both of them figure prominently in any individual or business trying to calculate the return on a possible investment. There's a pretty direct link between increasing these taxes and affecting the incentive to invest, which is kind of the thing that makes economies grow and jobs get created and all of that supply side stuff happen. | ||
|
Nyxisto
Germany6287 Posts
| ||
|
schaf
Germany1326 Posts
On September 20 2018 00:51 Big J wrote: Not if you assume a neutrality of property and money, which means that capital cannot be used to secure more capital. Only providing the better service can then lead to a monopoly, which is then completely justified (and cannot be abused). Edit: Basically if you take the invisible hand of Adam Smith literally and assume its (longrun) perfection. Can you elaborate on that? Do you mean there can not be accumulation of both? I really don't understand it... O.o | ||
|
Big J
Austria16289 Posts
On September 20 2018 15:21 schaf wrote: Can you elaborate on that? Do you mean there can not be accumulation of both? I really don't understand it... O.o What I am saying is that there are many economists and politicians that believe that the invisible hand is a general law in a capitalist market system. So sellers and traders always get paired in an optimal way. So that you always buy those products that are best fit to your needs and for the prices you can afford. (This includes work as a product, that you sell for the best price you can get, depending on the needs of society. So if you earn low that is because your job isn't worth much to others.) (the assumption is a statistical one. There may be short term flaws due to a lack of information, but in the longrun you will make rather optimal sell and buy decisions and therefore everyone gets what they deserve. Social systems are therefore redistributors that give things to people that they don't deserve) If you make that assumption, then monopolies are only existant for the time that an enterprise actually sells the best product. The moment a competitor enters the market with a strictly better product, everyone will switch to the better product in a very short time. (and the reason why we have so many different products is that most of them are rather unique - Android does things iOS can't and vis-verca) If you believe that, then there are two logical conclusions in regards to monopolies: 1) they exist because they deserve it for the time being or 2) a state intervention (a regulation, a subvention etc.) is preventing better competitors from taking over - therefore you should deregulate so that the market can take over | ||
|
solidbebe
Netherlands4921 Posts
| ||
|
Big J
Austria16289 Posts
On September 20 2018 18:45 solidbebe wrote: That whole story is ignoring a whole lot of issues with monopolies like how they buyout fledgeling competition and other issues like how consumers do not always have perfect information about products. It is not my belief either. But it is a good way for liberal politicians to acquire voters in a democracy: "Look guys, socialism is a good idea. But it doesn't work. It turns out capitalism is the most communist thing possible!" And it is an easy way to model decision processes in mathematical models. a>b so a gets bought. | ||
|
warding
Portugal2397 Posts
| ||
|
farvacola
United States18870 Posts
| ||
|
Big J
Austria16289 Posts
On September 20 2018 21:59 warding wrote: What Big J described is the model that explains perfect competition in microeconomics. It's not news to anyone that not every market or industry behaves like that. It would be wrong to assume, however, that every market is imperfect and needs a nudge from regulation to make it right. How so? Especially, how do you even separate "a market" from all other markets? And how do you measure such an imperfection? | ||
|
Plansix
United States60190 Posts
On September 20 2018 22:59 Big J wrote: How so? Especially, how do you even separate "a market" from all other markets? And how do you measure such an imperfection? The rental/real estate market is distinctly separate from market for food. Although related by the fact that they exist in the same planet, they both operate on completely different scales of time to such a degree that they have almost no impact on each other. The availability and cost of fresh fruits does not impact my mortgage payment. As for imperfection, markets only have merit if they serve the majority of the population. A real estate market that doesn’t provide housing for the labor in the region is failing in its purpose. | ||
|
warding
Portugal2397 Posts
On September 20 2018 22:59 Big J wrote: How so? Especially, how do you even separate "a market" from all other markets? And how do you measure such an imperfection? You measure concentration, profitability, among others, and you have competition authorities that are on the lookout for such cases: http://ec.europa.eu/competition/ecn/competition_authorities.html | ||
|
Big J
Austria16289 Posts
On September 20 2018 23:06 Plansix wrote: The rental/real estate market is distinctly separate from market for food. Although related by the fact that they exist in the same planet, they both operate on completely different scales of time to such a degree that they have almost no impact on each other. The availability and cost of fresh fruits does not impact my mortgage payment. I disagree on a very personal level. I buy cheap food and clothing for the sole reason that I want to save as much as possible as fast as possible to be able to buy a flat someday. Fun story: one of the main reasons why I want a flat is to invest in a high tech kitchen (and keep it up to date) because I like cooking high quality food. | ||
|
Jockmcplop
United Kingdom10022 Posts
On September 20 2018 23:06 Plansix wrote: The rental/real estate market is distinctly separate from market for food. Although related by the fact that they exist in the same planet, they both operate on completely different scales of time to such a degree that they have almost no impact on each other. The availability and cost of fresh fruits does not impact my mortgage payment. As for imperfection, markets only have merit if they serve the majority of the population. A real estate market that doesn’t provide housing for the labor in the region is failing in its purpose. I think they mean perfect competition, rather than perfect in terms of merit. Perfect competition is the total absence of monopoly (plus many other factors). Perfect competition is a mythical state of being. It doesn't happen over any sustained period of time. It requires perfect knowledge on the part of the consumer and the seller. I don't understand warding saying that not every market is imperfect, given that perfect competition is hypothetical. | ||
|
Plansix
United States60190 Posts
On September 20 2018 23:38 Big J wrote: I disagree on a very personal level. I buy cheap food and clothing for the sole reason that I want to save as much as possible as fast as possible to be able to buy a flat someday. Fun story: one of the main reasons why I want a flat is to invest in a high tech kitchen (and keep it up to date) because I like cooking high quality food. But I am not going to sell my house based on influxes of the price of fruit for a given year, especially with my 30 year mortgage. I’ll just buy different food. But our personal preferences are irrelevant to the given discussion. The daily price of food and the rental market operate on different time scales. People rent months or years, but we eat 3 times or more in a day. For the rental market to be significantly impacted by the price of food would require a massive increase in costs or complete collapse of the food market. This is the problem when talking about “free markets” is that the discussion resolves around this one overriding, interconnected market that don’t not really exist. And the concept of the All Market also does precludes the idea that there can be the absence of an economy and market. The world is made up of smaller markets that influence each other in complex and unpredictable ways. | ||
|
Jockmcplop
United Kingdom10022 Posts
On September 20 2018 23:06 Plansix wrote: The rental/real estate market is distinctly separate from market for food. Although related by the fact that they exist in the same planet, they both operate on completely different scales of time to such a degree that they have almost no impact on each other. The availability and cost of fresh fruits does not impact my mortgage payment. As for imperfection, markets only have merit if they serve the majority of the population. A real estate market that doesn’t provide housing for the labor in the region is failing in its purpose. This is only true when you ask about food prices and their effect on the housing market. If you asked whether house prices affect the market for food you might be surprised by the answer. House prices determine consumer spending power, and tend to be a guide for an overall interest rate. | ||
|
Plansix
United States60190 Posts
On September 21 2018 00:18 Jockmcplop wrote: This is only true when you ask about food prices and their effect on the housing market. If you asked whether house prices affect the market for food you might be surprised by the answer. House prices determine consumer spending power, and tend to be a guide for an overall interest rate. More affluent communities have more affluent people, who are able to spend more money on any given product. The amount of money within that given economy is higher, which impacts the costs of everything. Again, though people needs to be specific when they talk about markets. What scale of market are we talking about? The lending market is a large scale, macro level market for lending. It is different from the smaller scale rental market for a given city. As someone who has a lot of experience dealing with the housing market in lower income cities, the interest rate on loans isn’t a factor anyone talks about when trying to create solutions to a housing shortage. It is such a macro level factor in housing that it doesn’t have any impact on the number of rentals in a given city at a specific time. | ||
|
Big J
Austria16289 Posts
On September 21 2018 00:05 Plansix wrote: But I am not going to sell my house based on influxes of the price of fruit for a given year, especially with my 30 year mortgage. I’ll just buy different food. But our personal preferences are irrelevant to the given discussion. The daily price of food and the rental market operate on different time scales. People rent months or years, but we eat 3 times or more in a day. For the rental market to be significantly impacted by the price of food would require a massive increase in costs or complete collapse of the food market. This is the problem when talking about “free markets” is that the discussion resolves around this one overriding, interconnected market that don’t not really exist. And the concept of the All Market also does precludes the idea that there can be the absence of an economy and market. The world is made up of smaller markets that influence each other in complex and unpredictable ways. Maybe you don't change your pricing due to food markets, but my landlords are sending me letters every 1-2 years telling me that my rent is going up because of inflation, i.e. other prices. The whole problem when talking about free markets is this scientific attitude towards them. Shit just happens because billions of people interact. Stop pretending there is some form of optimization going on beyond a personal level optimization with very limited information. | ||
|
Plansix
United States60190 Posts
On September 21 2018 00:34 Big J wrote: Maybe you don't change your pricing due to food markets, but my landlords are sending me letters every 1-2 years telling me that my rent is going up because of inflation, i.e. other prices. The whole problem when talking about free markets is this scientific attitude towards them. Shit just happens because billions of people interact. Stop pretending there is some form of optimization going on beyond a personal level optimization with very limited information. Not for nothing, your landlord can be and is likely full of shit unless there are laws preventing them from lying in rent increase letters. As a guy who has worked for a lot of landlords, the reason they raise rent is because everyone else is, so they know they can. And then they lie to justify it because they don't like being seen as completely greed driven. I’ve worked for banks, investors and so many other forms of moneyed folks and not one is more entitled, petty and opportunistic than the landlord. But on topic, I think you and I basically agree on markets. I think when Farva talked about markets being imperfect, he isn’t talking about efficiency. He is referencing when a market is clearly failed or excluding a specific group, or not fulfilling a need of a specific region. Like a shortage of low and middle income housing. Or a milk prices being so low that dairy farmers cannot afford to live. Those are things aberrations in a functioning market that the government needs to address. I forget the word Adam Smith used for it, but he specifically talks about how the government needs to iron out those aberrations to assure the market functions for the largest number of people. | ||
| ||
