site banner

Small-Scale Question Sunday for July 16, 2023

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

Culture war topics are accepted, and proposals for a better intro post are appreciated.

3
Jump in the discussion.

No email address required.

I recently read this article, which seems to have awoken some latent bleeding heart in me. As a result, it’s got me thinking about wealth redistribution, whence the following questions:

  • What are some of the best “utilitarian” arguments against greater wealth redistribution in America? (When I say “utilitarian”, I don’t actually mean calculating out the utils involved— but I do mean arguments other than moral ones like “people ought be able to retain the results of their labor” (which argument I am particularly sympathetic to around tax season).) What are estimates of the argmax of the Laffer curve? Is there an inverse relationship between “innovation” and income tax rate that might explain why America is far more of a tech hub than Sweden? That sort of argument is what I would be looking for.
  • Are there any low-overhead charities out there where you can mostly-directly send money to poorer people? Preferably with options to filter by criteria such as number of kids, marital status, etc.

I understand that this post betrays a real naïveté in both economic knowledge and worldly experience— so I’ll admit that I’m a decent bit embarrassed about making it, but I figure that a Small-Scale Question Sunday thread is the best place to ask this.

In particular, there is an enormous political benefit to moving redistribution "off budget" by doing it via employment law. Minimum wages, the Obamacare employer mandate to provide health insurance, unemployment insurance, etc.

Correct. Particularly concerning employer-provided healthcare insurance, it's a convenient way to bypass democracy and de facto raise taxes (Given the wild inequities in healthcare consumption, insurance premiums are as much a payroll tax as Social Security for the average employee.) on corporations and the upper-middle class without Congress taking a beating in the midterms (Sure it happened in 2010, but premium increases since have been a non-punished exercise in boiling the frog.). I seriously doubt that the US would be willing to sustain its present level of healthcare spending if it weren't obscured by employer-provided health insurance.

Yeah, that was strongly worded on my part. We did democratically agree (whether we realized it at the time or not) to essentially give health insurers the power to levy something like a tax in the form of premiums, be it from policyholders, their employers, or government subsidies. Amusingly, nationalizing student loans was supposed to help pay for those subsidies, but that's turned into a debacle all its own.