Scott Adams on Taxing the Rich

Dilbert cartoonist Scott Adams says in "How to Tax the Rich: Try giving them perks and privileges (an extra vote?) in return," (Wall Street Journal, January 29, 2011):

When you are poor, you are willing to trade your time to earn money. When you are rich, you trade your money to get more time. For example, the rich hire people to clean their homes, and they don't waste time shopping for bargains. In business school I learned that when people have different preferences, you can usually find a way to engineer a deal.

Suppose we change the tax code so that in return for higher taxes on the rich, we figure out a way to give the rich some form of extra time. The bad version is that anyone who pays taxes at a rate above some set amount gets to use the car pool lane without a passenger. Or perhaps the rich are allowed to park in handicapped-only spaces.

Another suggestion is this:

Suppose the tax code is redesigned so that the rich only pay taxes to fund social services, such as health care and social security. This gives the rich an incentive to find ways to reduce the need for those services, which would in turn keep their taxes under control. Perhaps you'd see an explosion of private investment in technologies that make it less expensive to provide health care. You might see rapid advances in bringing down the cost of housing for seniors.

Would both of these be more value-maximizing than simply an increase in the tax rate?

Inframarginal and Extramarginal Workers

Ike Brannon says in "What is a Life Worth?" Regulation, Vol. 27, No. 4, pp. 60-63, Winter 2004:

If I make $40,000 and my twin brother makes $42,000 at a job that is identical to mine in all respects except for a 1 percent greater chance of death, then an economist assumes that the $2,000 difference is a premium my twin brother requires to accept the riskier job. If he requires $2,000 for a 1 percent greater risk, then I can infer that he is placing a value on his life of $2,000 x (1 ÷ 0.01), or $200,000. There are problems with this approach. University of Wyoming professors Jason Shogren and Tommy Stamland argue that nearly all revealed preference studies are biased upwards to some degree. They observe that the wage at a particular job is just enough to entice the marginal worker. The other workers require less some limit money to accept the risk.

On the other hand, a downward bias is that there are lots of people who did NOT take the job because they require even more money to accept that risk.

Negative Interest Rates?

"Inflation Bonds Are Sold With Negative Yield for First Time" said the New York Times in 2010.

The $10 billion auction of the five-year bonds sold at a negative yield of 0.550 percent, according to the Treasury Department....Bond prices rose, with the yield on the 10-year Treasury down to 2.53 percent from 2.56 percent late Friday.

How could this happen?

Should the Rich Pay a Lower Tax Rate?

"Court strikes down Obwalden tax break for rich" says

The Swiss Federal Court has ruled that canton Obwalden's degressive tax system, aimed at attracting wealthy residents, is unconstitutional.

The country's highest court said on Friday that degressive income taxes ran counter to constitutional measures designed to ensure taxation according to economic performance.
...

Obwalden had adopted a degressive income tax system which meant that the richer you are, the less you pay. Those earning over SFr300,000 ($233,000) per year, for example, had a tax rate as low as one per cent.

It was introduced in 2006 following a cantonal vote as a way of boosting the fortunes of Obwalden, one of the poorest cantons located in Switzerland's mountainous centre.