Is anyone else here worried about this notion of redistribution of wealth?

[vintagecushion]

Author: Harriet
Does anyone agree with me that money has marginal utility? In other words, to whom does a dollar mean more? A poor person or a rich person?

Harriet, couldn''t agree more.

 

[miraclesrule]

Damn, I had a great post but was interrupted by the cutest kids ever....so when I got back I refreshed instead of submitted.

Grrrrrrrrrr, okay...

Hahaha Harriet, just doing my daily duty to be a PITA for a lawyer.

And then the rest of my post had to do with people who garnered lots of money as a result of pursuing a dream that wasn''t about money....and then those who wouldn''t turn down a winning lottery ticket when living on the street...to a murmur about those that did win the lottery and wished they hadn''t.

Again...like I said. A Damn good question.

 

[MaggieB]

Date: 10/31/2008 9:50:22 PM
Author: Harriet
Does anyone agree with me that money has marginal utility? In other words, to whom does a dollar mean more? A poor person or a rich person?

I think it is a very hard question to generalize. There are both wealthy people and poor people for whom the dollar means everything, and for whom it means nothing.

My dad''s pretty wealthy. If you met him, you would think he was a homeless person. The sole purpose of a dollar to him is to stockpile and keep score. He doesn''t do a single enjoyable thing with his money, a single altruistic thing. What it means to him, I couldn''t guess.

I find the concept that we "deserve" our circumstances rather ludicrous. (I realize I''m going off on a tangent.) I''ve been poor, and I''ve been rich (sadly never filthy rich) and I''ve deserved neither.

 

[strmrdr]

Date: 10/31/2008 9:52:31 PM
Author: miraclesrule

Date: 10/31/2008 9:50:22 PM

Author: Harriet

Does anyone agree with me that money has marginal utility? In other words, to whom does a dollar mean more? A poor person or a rich person?

Damn Good question. Is ''rich'' the same as ''wealthy''?

No it isn''t, you can be rich and not wealthy and wealthy and not rich.
Rich is a lifestyle more than anything else and to many people have been living that lifestyle on credit with no wealth.
Someone who has 3 million dollars of un-inflated value property is wealthy but they may have little money without taking on debt.
Therefore they are not rich.

Someone else may have 3 millions dollars cash and live the rich lifestyle.
They are rich but they have no wealth

 

[partgypsy]

I confess I didn''t read every single post but I think there are some interesting questions embeded in this conversation, which probably is a few pages back, such as, as there is already redistribution of wealth in this country, we can discuss whether this is a fair restribution or needs to be changed (corporate welfare versus individual welfare). Also about the size of the government, and what the government should be responsible for and what should be voluntary, whether through individuals or the states.

Personally I don''t think government can solve all societal problems, or should. However there are some things that governments are better at doing than either individuals or businesses, and there is utility in having the government provide those. Besides a military, infrastructure, also funding for science projects, I believe healthcare is more efficiently done through a single payer system than the fragmented capitalist system that both is very expensive, does not cover everyone, inefficient with loads of paperwork beuracratic layers, and again really expensive.
One of the best things about this country (or maybe should I say what used to be one of the best things about this country) is that someone could come from a poor background and have upward mobility, and have the freedom to pursue one''s dreams here, whether it be religious freedom, financial mobility, educational. The fact that the lack of universal healthcare coverage can cause someone who is doing everything in their power to have the american dream but can lose it all due to an accident or illness, means right now that equality and the pursuit of life, liberty and pursuit of happiness is true in words but not in action at this time.

 

[neatfreak]

Date: 10/31/2008 9:50:22 PM
Author: Harriet
Does anyone agree with me that money has marginal utility? In other words, to whom does a dollar mean more? A poor person or a rich person?

I completely agree. And so would most economists. Money only makes you happier up to a certain point (and that point is really low, somewhere in the $40-50k range if I remember correctly), then the "happiness" value of an additional dollar of income drops drastically until the additional dollar makes you no happier...

 

[Allisonfaye]

Date: 11/1/2008 12:28:04 PM
Author: neatfreak

Date: 10/31/2008 9:50:22 PM
Author: Harriet
Does anyone agree with me that money has marginal utility? In other words, to whom does a dollar mean more? A poor person or a rich person?

I completely agree. And so would most economists. Money only makes you happier up to a certain point (and that point is really low, somewhere in the $40-50k range if I remember correctly), then the ''happiness'' value of an additional dollar of income drops drastically until the additional dollar makes you no happier...

So we should tax people on how much we think money means to them? How would we administer that program?

 

[neatfreak]

Date: 11/1/2008 12:31:26 PM
Author: Allisonfaye

Date: 11/1/2008 12:28:04 PM

Author: neatfreak

Date: 10/31/2008 9:50:22 PM

Author: Harriet

Does anyone agree with me that money has marginal utility? In other words, to whom does a dollar mean more? A poor person or a rich person?

I completely agree. And so would most economists. Money only makes you happier up to a certain point (and that point is really low, somewhere in the $40-50k range if I remember correctly), then the ''happiness'' value of an additional dollar of income drops drastically until the additional dollar makes you no happier...

So we should tax people on how much we think money means to them? How would we administer that program?

Where are you getting that? All we are talking about here is the economic concept of marginal utility. I''m not talking policies here...just theory.

 

[zhuzhu]

Date: 11/1/2008 12:32:51 PM
Author: neatfreak

Date: 11/1/2008 12:31:26 PM

Author: Allisonfaye

Date: 11/1/2008 12:28:04 PM


Author: neatfreak

Date: 10/31/2008 9:50:22 PM


Author: Harriet


Does anyone agree with me that money has marginal utility? In other words, to whom does a dollar mean more? A poor person or a rich person?

I completely agree. And so would most economists. Money only makes you happier up to a certain point (and that point is really low, somewhere in the $40-50k range if I remember correctly), then the 'happiness' value of an additional dollar of income drops drastically until the additional dollar makes you no happier...

So we should tax people on how much we think money means to them? How would we administer that program?

Where are you getting that? All we are talking about here is the economic concept of marginal utility. I'm not talking policies here...just theory.

Actually I think Harriet was using the marginal utility term to support her view on what tax system is the best one (see one of her replies). However we should let her explain her theory in details before jumping into any assumptions.

 

[neatfreak]

Date: 11/1/2008 2:45:28 PM
Author: zhuzhu

Date: 11/1/2008 12:32:51 PM

Author: neatfreak

Date: 11/1/2008 12:31:26 PM


Author: Allisonfaye

Date: 11/1/2008 12:28:04 PM



Author: neatfreak

Date: 10/31/2008 9:50:22 PM



Author: Harriet



Does anyone agree with me that money has marginal utility? In other words, to whom does a dollar mean more? A poor person or a rich person?

I completely agree. And so would most economists. Money only makes you happier up to a certain point (and that point is really low, somewhere in the $40-50k range if I remember correctly), then the ''happiness'' value of an additional dollar of income drops drastically until the additional dollar makes you no happier...

So we should tax people on how much we think money means to them? How would we administer that program?

Where are you getting that? All we are talking about here is the economic concept of marginal utility. I''m not talking policies here...just theory.

Actually I think Harriet was using the marginal utility term to support her view on what tax system is the best one (see one of her replies). However we should let her explain her theory in details before jumping into any assumptions.

Ahhh. Well mine was just a comment!

 

[zhuzhu]

I know.

I am curious as to her views on the tax system actually - as she had lived in Singapore. I wonder if she could share a comparative view on the two systems (if they are different).

Harriet are you around?

 

[Allisonfaye]

Date: 11/1/2008 12:32:51 PM
Author: neatfreak

Date: 11/1/2008 12:31:26 PM
Author: Allisonfaye

Date: 11/1/2008 12:28:04 PM

Author: neatfreak

Date: 10/31/2008 9:50:22 PM

Author: Harriet

Does anyone agree with me that money has marginal utility? In other words, to whom does a dollar mean more? A poor person or a rich person?

I completely agree. And so would most economists. Money only makes you happier up to a certain point (and that point is really low, somewhere in the $40-50k range if I remember correctly), then the ''happiness'' value of an additional dollar of income drops drastically until the additional dollar makes you no happier...

So we should tax people on how much we think money means to them? How would we administer that program?

Where are you getting that? All we are talking about here is the economic concept of marginal utility. I''m not talking policies here...just theory.

Sorry for jumping to conclusions. I would love to hear more.

 

[Harriet]

I am invoking the economist''s concept of the "marginal utility of money." By "utility," I''m referring to objective and not subjective utility. Let me sharpen my question as best as I can: "To whom is that extra dollar of more use? A person with more money or one with less?"
P.S. Any distinction between being rich and being wealthy is irrelevant (not that I see one).

Zhuzhu,
Sorry to disappoint you. I''ve never had reason to look at the Singapore tax system and so don''t know it.

 

[miraclesrule]

Now I think it''s a trick question.

Depending on one''s acceptance or rejection of the fundamental theory which excludes "self interested behavior" and relies heavily on the "pain/pleasure measure", the answer would be subject to endless debate. This would preclude an absolute answer. Logical arguments and hypotheticals can be made for either answer, but I am still going to choose the one with less money.

 

[Harriet]

Am I your lawyer of the day again?

 

[miraclesrule]

Date: 11/1/2008 10:53:37 PM
Author: Harriet
Am I your lawyer of the day again?

Hahaha, yes.
I just love a good debate, but I just finished watching "The Corporation" and it sapped my cells. Otherwise, I would try and support my answer. I thought I could support the personal life survival argument, but then I remembered that I would starve before I allowed my daughter to starve, rendering my argument moot. So, back to thinking I go.

 

[Harriet]

Argh! Let''s think tomorrow then.

 

[miraclesrule]

:::::still thinking of an infallible argument::::::::

 

[miraclesrule]

I also watched "The Debaters" today, so you quickly shifted my brain cells back to the first DVD.

 

[Skippy123]

Date: 11/1/2008 5:51:22 PM
Author: Harriet
I am invoking the economist's concept of the 'marginal utility of money.' By 'utility,' I'm referring to objective and not subjective utility. Let me sharpen my question as best as I can: 'To whom is that extra dollar of more use? A person with more money or one with less?'
P.S. Any distinction between being rich and being wealthy is irrelevant (not that I see one).

Zhuzhu,
Sorry to disappoint you. I've never had reason to look at the Singapore tax system and so don't know it.

the working class poor or those at the bottom (those w/the most need for it), since our tax system is a layered system the top layers feel it least. (it has been awhile since I had economics).

 

[Harriet]

Miraclesrule,
I can't think anymore. Here's some reading for you

: http://en.wikipedia.org/wiki/Progressive_tax

Skip,
I'll be back tomorrow. I can't think anymore.

 

[Skippy123]

eta: I will explain my thoughts later...

 

[Harriet]

I get it.

 

[Skippy123]

Date: 11/1/2008 11:32:07 PM
Author: Harriet
I get it.

LOL, I thought you said you didn't get it and here I erased my post. Let play with some numbers so others understand too.

eta: personally I think numbers are easier to understand

etaa: Karls thoughts on a flat tax aren't a true flat tax either.

 

[LaraOnline]

It''s funny to think that even the economic concept of ''marginal utility'' could be an emotive concept when applied to money. When I was first taught the concept of marginal utility, my high school teacher used the example of ''ice creams'', as in how many ice creams could you consume before your enjoyment of the icecream started to decrease, and then even perhaps make you feel bad.

I don''t feel the issue is as cut and dried with money, on an individual subjective basis. After all, some people have a strong stomach, and could eat a lot of icecream! Also, money, unlike icecream, is kind of a gross resource for obtaining other things, so you could switch to a hamburger if you wanted.

To think about marginal utility, first you have to think about the two groups you are comparing, when measuring marginal utility. Who could benefit most from the extra dollar?: The starving woman in Africa, or the corporate guy in US Moneytown, who has already paid off his mansion, his palatial holiday home and all his collectables?
I mean, it''s obvious. And it''s probably good comment about the unfairness of it all, as well.

But how about comparing other, less extreme, group representatives: the struggling small business owner/entrepreneur, hocked to the hilt, vs the comfortable middle manager (employee) that has paid off all his loans. Who needs the money now? How does ''marginal utility'' impact upon assumptions made about employment status (employer/employee), financial status, and money?

How will Obama''s tax strategies impact on the business class? If taxes are to be cut for working people, indirectly that''s helping business by keeping cost pressures down somewhat.

 

[luckystar112]

I also don''t think it is about the dollar alone.
I think it''s about how much debt you have and how much money you have left over at the end of the week/month. I think of it sort of like the cost of living in different areas. For example, I live in TX where real estate is extremely cheap. We make good money for Texas but not anywhere near what people would consider "rich". On the other hand, someone living in California where real estate is high probably makes a lot more money than us, but their cost of living is higher. So I don''t think that my dollar would mean any more to me than the person living in California, even though they make more.

 

[partgypsy]

Talking about redistribution of the wealth, does anyone remember this conversation from the last election? Some states receive more money from the Federal government than they pay in taxes, while other states pay more out in taxes than services received (redistribution of wealth). Ironically it is often the blue states that pay out more than they receive, while the red states more likely at the "federal feeding trough". Maybe liberals are more giving than they realize!

http://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.htmlhttp://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.html

 

[partgypsy]

http://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.html

let''s try that again.

 

[miraclesrule]

Date: 11/2/2008 10:34:52 AM
Author: part gypsy
http://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.html

let''s try that again.

That doesn''t surprise me at all. Well, maybe a little. I know the budget and breakdown of the line items, but never looked at the state recipients of spending. That''s an interesting little report. it should be posted in the Dem and Rep thread.

 

[Harriet]

The taxprof blog is a great blog in general for anyone interested in tax policy.