CategoryEconomics

New Pattern of Behavior? Well, Then New Tax!

Deutch Bank AG’s research arm decided to advocate for a new tax. Because, according to this article from Bloomberg Wealth, “Choosing to earn a living from home once the pandemic ends is a privilege that you should pay for.”

The team propose a 5% levy for those who work from home on a regular basis and not because of a government lockdown mandate. Such a measure could raise $48 billion a year in the U.S. and about 16 billion euros ($18.8 billion) in Germany, they say, to fund subsidies for low-income earners and essential workers who are unable to work remotely.

Snip

The proposed levy would be paid by the employer if they don’t provide their employee with a desk, whereas if the worker decides to stay home based on their own needs, they would be taxed for each day they work remotely, according to Deutsche Bank Research. In the U.S., the strategists calculate, such a tax could pay for a $1,500 grant to the 29 million workers making under $30,000 a year and unable to work from home.

Let’s address the basic bullshit of this tax proposal, and pretty much all tax proposals. They always assume that people will not react to minimize their tax burden. For instance, if this tax was somehow adopted, how many employees may become contractors? How many businesses would simply reduce employee compensation to pay for this tax, resulting in loss of income tax?

All of this also ignores that those of us who work from home haven’t stopped spending money. We’ve stopped spending money in areas of the economy where we spent it before. Businesses who send their people to work from home haven’t stopped spending money. They’ve stopped spending it on the things they used to spend it on, like commercial real estate. Let the shift happen and let the new economies emerge.

Friday Quote – Ludwig Von Mises

The labor unions aim at a monopolistic position on the labor market. They are intent upon restricting the supply of labor in their field without bother about the fate of those excluded.

Friday Quote – Ayn Rand

Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter.

Friday Quote – Jeff Deist

If there is one overriding economic myth that plagues us today it is the notion that society can do collectively what we cannot do individually.

Metropolises In Decline

Some friends on the Book of Face shared a couple of articles that reinforces my belief that cities, particularly the largest metropolises, are about to enter a depression.

First is an article about the impending death of New York. He makes an interesting case about the damage done by COVID may be the mortal blow.

Second is an article on people fleeing San Francisco.

Between COVID and the riots, I believe many folks are asking themselves if all the costs of living in these cities are worth the cost. For a lot of them – particularly those who can do their work remotely – will answer no. They will move to lower cost and relatively safer cities. There will be many cascading effects from the diaspora, but two that I’m watching with interest.

  1. Will this cause the wave of municipal and state bankruptcies some of us have been expecting for some time? If so, does the fed step in? I’m kinda thinking that if it plays out where the fed has to go in and sort out the states’ and cities’ messes, the states and cities will become even more the puppets of Washington. It may also accelerate the feds reckoning, but that’s kind of like a runaway train on a flat track. We know it’s a matter of time when it will derail, but we can’t see where.

  2. What will happen when the refugees from these cities start voting in their new home areas? Will they adopt the values of their new homes? Will they try to bring the “perks” and “expectations” (along with the requisite taxes and regulations) to their new homes? Based on prior experience, I’m not too hopeful.

Friday Quote – Henry Hazlitt

The real problem of poverty is not a problem of distribution, but of production. The poor are not poor because something is being withheld from them, but because, for whatever reason, they are not producing enough. The only permanent way to cure their poverty is to increase their earning power.

“Some Good News” Sold

So John Kra-something-or-other sold his web series “Some Good News” to CBS.

I’m torn. As a capitalist, I’m glad he’s going to make a bunch of money on a great little project. On the other hand, part of SGN’s charm was its simplicity and “thrown-together” feel, as well as John K’s charisma and enthusiasm for his project. I’m skeptical that will survive CBS’s ownership.

Sometimes There Ought to Be A Law

I am very leery of proposing new laws because I am aware the root of all laws is state-sanctioned violence. So, if I’m asking for a law to be passed, it’s because I’m willing to see violence done to enforce it.

Which in the case of New York demanding income taxes from people who came in to help, I want the state of Florida to say that it will not assist in any collection effort against its residents or companies with presence in the state of such a bullshit cash grab. Further, I would be just fine with a corollary that if NY does steal money from the people who came up to work and volunteer during the emergency, the state of Florida will pay those taxes by seizing any and all property in the state owned by any New York government or government official.

If It Saves One Life… But Whose?

In my various feeds, the argument to stopping shelter-in-place and take steps to le businesses open up has been met with caustic derision. The two refrains I hear the most is “You want to sacrifice lives for jobs” and “If it saves one life, then we must continue these measures.” Both of these are hyperbolic extremes that display an outstanding level of ignorance about the nature of trade-offs. The argument isn’t jobs vs lives. It’s lives vs lives.

Those of us in the gun community have heard the “If it saves one life” argument before. Usually, owe r opponents garnish this with “if it saves just one child’s life.” A good example of this argument in action is over waiting periods. Waiting periods may save a life, but we do know it has cost other people their lives who were attacked during that window.

When we look at shutting businesses down and putting millions of people out of work, there is a known uptick in deaths from suicide, overdoses, interpersonal violence, and other conditions. Not doing elective surgeries will cost lives due to not dealing with certain diseases early enough (e.g., cancer). The argument isn’t jobs vs lives, it’s lives vs lives.

The best argument I’ve heard recently came from the podcast Words and Numbers. When we’re deciding among these trade-offs, we often have to boil it down to dollars spent per life saved. It’s not that a life is only worth so many dollars, but more a matter of deciding how to use scarce resources.

How do we help the most people?

Friday Quote – Anthony Scalia

The transformation of charity into a legal entitlement has produced donors without love and recipients without gratitude.

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