Friday, May 14, 2004
been reading catallarchy.net, and was reminded of a rant i didn't get written down at the time when i was offline.
take a walk on the supply side
Because, over at my other blog, i'm leading the opposition to wyden-graham, i've been running into a lot of wyden's no-internet-tax memes.
statistic, which could be wrong: the internet economy is growing 14%/yr. the net is almost untaxed and only semi-regulated. to simplify, we'll call it the unregulated sector.
the overall economy is growing at 4% (again, these are premises, my source is only that i read it somewhere, and the 4 and 14 may have used different methods.
I have, as yet, no data on how large the unregulated sector is. 1% of the overall? 10%? Tentatively let's assume 10%, but that could be way off; it's based on nothing.
Also, there are good reasons to think the net would be growing even if pervasively regulated. So i'm making an imperfect model, as is customary in quasi-experimentation of this sort.
If the net economy is 10%, it contributed 1.4 of the 4%, so the growth in the non-net economy would have been 2.6%.
The charactiture (sp? the toon version) of reaganomics is that it uses low taxes and regulation to grow the economy out of debt.
Let's further assume that a libertarian is somehow elected this fall, who suspends the income tax for 4 years and cuts the (growth of the) budget by the same amount, so the debt stays the same. During that 4 years the economy grows 14% yr.
(1.14) to the 4th. Somebody do the math. I'm functionally math-illiterate. Ok, let's say the result is 1.7 times the base; that the economy grew 70%. Now, it would have grown some at 2.6 %, can i cheat and call that 1.1 times base?
Oh heck, let's say the economy only grows 50% more in the unregulated model. With the larger economy, taxes could be re-instituted at 2/3 the former level and raise the same revenue. Say the avg rate had been 30%, now it's 20%. In 4 years, people's after-tax incomes, on average, grow 10%.
No that's not right. The average after tax income grows 60%, part economic growth, part tax break. On the down-side, we lose all those nifty programs for 4 years.
One kind of complaint is that "on average" obscures that some will adapt less well than others to the new economy.
But, it's like harry browne says: would you give up your favorite government program, in exchange for average raises of 60%? I live in the hood, where average income is $13K in this census district. A raise to $20k would go a long way to making up for some of the social programs we'd lose -
space program, war in iraq, library grants, etc.
That was my rant. I haven't convinced anybody of anything.
But i was able to take a thought out of my head and get it down in hard electrons. Hope you enjoyed this lil walk on the supply side.
take a walk on the supply side
Because, over at my other blog, i'm leading the opposition to wyden-graham, i've been running into a lot of wyden's no-internet-tax memes.
statistic, which could be wrong: the internet economy is growing 14%/yr. the net is almost untaxed and only semi-regulated. to simplify, we'll call it the unregulated sector.
the overall economy is growing at 4% (again, these are premises, my source is only that i read it somewhere, and the 4 and 14 may have used different methods.
I have, as yet, no data on how large the unregulated sector is. 1% of the overall? 10%? Tentatively let's assume 10%, but that could be way off; it's based on nothing.
Also, there are good reasons to think the net would be growing even if pervasively regulated. So i'm making an imperfect model, as is customary in quasi-experimentation of this sort.
If the net economy is 10%, it contributed 1.4 of the 4%, so the growth in the non-net economy would have been 2.6%.
The charactiture (sp? the toon version) of reaganomics is that it uses low taxes and regulation to grow the economy out of debt.
Let's further assume that a libertarian is somehow elected this fall, who suspends the income tax for 4 years and cuts the (growth of the) budget by the same amount, so the debt stays the same. During that 4 years the economy grows 14% yr.
(1.14) to the 4th. Somebody do the math. I'm functionally math-illiterate. Ok, let's say the result is 1.7 times the base; that the economy grew 70%. Now, it would have grown some at 2.6 %, can i cheat and call that 1.1 times base?
Oh heck, let's say the economy only grows 50% more in the unregulated model. With the larger economy, taxes could be re-instituted at 2/3 the former level and raise the same revenue. Say the avg rate had been 30%, now it's 20%. In 4 years, people's after-tax incomes, on average, grow 10%.
No that's not right. The average after tax income grows 60%, part economic growth, part tax break. On the down-side, we lose all those nifty programs for 4 years.
One kind of complaint is that "on average" obscures that some will adapt less well than others to the new economy.
But, it's like harry browne says: would you give up your favorite government program, in exchange for average raises of 60%? I live in the hood, where average income is $13K in this census district. A raise to $20k would go a long way to making up for some of the social programs we'd lose -
space program, war in iraq, library grants, etc.
That was my rant. I haven't convinced anybody of anything.
But i was able to take a thought out of my head and get it down in hard electrons. Hope you enjoyed this lil walk on the supply side.
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