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February 02, 2012

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What would happen if you substituted "contributor" for "voter" in this analysis? The assumption here is that the political system will track the worldview of the median voter; but what if the system is geared to responding to the worldview of the median contributor of money to politicians and their campaigns, would we see some different implications?

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Sorry, but as presented the argument seems clearly flawed -- perhaps fatally. You are, it appears, talking about a wealth, not an income, tax. Such taxes must factor in a long-term better return that inflation that effectively yields approximately 9% per year after inflation for stocks, and 1-3% for bonds. With an index fund to diversify, therefore, an 8 % return on investment after inflation is indicated. To achieve a disincentive for keeping things in capital as opposed to "consumption" (which is not a realistic option for a billionaire), you would have to therefore have a 7-8% tax on total wealth. If you see such a thing out there, let me know. And no, you don't get to argue that capital gains taxes involve taxing things twice -- a careful analysis shows that after careful assessment of just who owns what and net present value effects, the additional tax burden is minor. Finally, because the "capitalist" is concerned with returns to capital, and income/returns to labor are minor to him, it is in his interest to drive the capital rate far below where it should be -- because he is not rational -- or believes that this "capital monopoly" is actually better for him. To put it another way, he will simply seek to offload all taxes on someone else and will accept a monopoly "overshoot" from the government market he controls.

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Their political and economic inter-related in a country, each has contributed to the success of government. Politicians often use a lot of money in their campaigns.

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So folks, what happened with the simpsons??

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What would happen if you substituted "contributor" for "voter" in this analysis? The assumption here is that the political system will track the worldview of the median voter; but what if the system is geared to responding to the worldview of the median contributor of money to politicians and their campaigns, would we see some different implications?
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