Monday, June 22, 2015

Could the Income Tax be Turned into a a Progressive Consumption for all but but Some of the Top 1%

Could the income tax be turned into a a progressive consumption tax for all but some of the top 1%?  I think it could, by allowing Americans to contribute up to $5 million lifetime before taxes to an IRA. Withdrawals would be allowed at any age and would be taxed as income. You would also want to raise the rates a bit and eliminate the corporate tax, the corporate tax being a tax on saving and investing.

This would greatly simplify my tax return!

Little Gov. Spending Goes to the Important Stuff

Francis Woolley  has a written a paper titled "Why public goods are a pedagogical bad".

The interesting thing to me is how small a part of the budget things most of think as the core function of government are. 

  • All of transportation spending (including roads and bridges) 3%.
  • Police courts and incarceration 5%. 
  • National defense about 6% (the USA is much higher here which BTW is silly. The USA would no less safe spending half that).
  • Basic research less than 1% 

What is left are welfare programs but do not get the wrong idea, little of that is welfare for the poor. It is mostly welfare for the rich and middle class including Social Security, Medicare and schooling. Now this would not be a problem except that people usually spend there money much more efficiently than Government spends there money for them.

Tuesday, June 2, 2015

RICARDO HAUSMANN On "The Education Myth"

 On:  The Education Myth

It should probably be titled The schooling myth?
My grandfather came to the USA from Italy in his mid teens with 1 year of schooling. He eventually owned a barber shop and some real-estate and sent his son to Brown University. He would call certain people “male educato” which meant some thing different than in what it means in English and something that seems far more important to me. It does not mean that you did not go to the right schools. he in fact I think he seemed more educated that many college grads.

Bill commented:

Let’s have a controlled experiment for Hausmann’s hypothesis.We will take half of his children, and let them go to college,And, the other half will stop at high school.Would he take the challenge?
But you really need 4 groups. 

All must be students projected to graduate college easily.

Group 1 Goes right to work without a degree after high school and starts earning.
Group 2 Gets a degree right out of high school and goes right work after high school and starts earning.
Group 3 Goes to college and get degree but must hide that fact and live as if they have no degree.
Group 4 Goes to college get degrees and then to work.

Wait a long time and compare life time earnings.

Who would you bet does best from those 4 groups?

I think school helps people get to where they can read, write and do arithmetic and those skills are important to most everyone. A little algebra probably helps to. I think that the rest can be learned outside of school. My grand father evidently learned enough in one grade to continue to learn without more schooling but I would guess that somewhere between 3 to 6 years of schooling would yield enough school learning for most people. For scientists and engineers much more school probably benefits.

One could also argue that more schooling helps society to not miss as many late maturers. That is it might be difficult to see which 12 years should get the more schooling to become the scientists and engineers. So we might reap a benefit yet from our long period of schooling.