Power Law Policy 2024-05-23T05:28:46.022Z
The Progress Paradox 2023-12-27T18:26:52.506Z


Comment by Ben Turtel (ben-turtel) on Power Law Policy · 2024-05-23T21:41:06.461Z · LW · GW

Hey @NeroWolfe.  

I think you're looking at the wrong numbers. For example, their 23.3% for the top 5% INCLUDES the top 1%, which skews the averages precisely because of the power laws at play.

The have another table further down where they break this out:

High income earners pay the highest average income tax rates according to latest federal income tax data

Comment by Ben Turtel (ben-turtel) on Power Law Policy · 2024-05-23T16:44:27.247Z · LW · GW

Hey @TeaTieAndHat, thank you for the comment!

I think the core idea I'm trying to get across - and the reason I hoped this was a good fit for LW - is not about how govs can maximize revenue for its own sake, but that as a society we could do a much better job caring for the 99% by acknowledging the power laws behind wealth creation and focusing more on increasing our yield at the top.  

This is true even if your goal as a government is NOT to maximize productive capacity, because cost / revenue is the bottleneck preventing you from funding everything else.  Shifting policy to take advantage of this could let us better support all the "non-productive" things we care about: higher safety nets, public arts, etc.

So for example - if your goal as a country is to raise the standard of living via benefits to the bottom 50% of earners, unintuitively, the best to fund this is to help more high-potential folks become high-earners.  Moving a single person from the 5% to the 1% generates enough revenue to pay for many dozens of basic incomes in the bottom quartile.

Thanks again for the thoughtful read and the feedback!

Comment by Ben Turtel (ben-turtel) on Power Law Policy · 2024-05-23T16:43:59.876Z · LW · GW
Comment by Ben Turtel (ben-turtel) on Power Law Policy · 2024-05-23T15:24:00.305Z · LW · GW

Hey @Myron Hedderson, thanks for reading and for the thoughtful comment!

The 1% in this article is just a proxy for that level of success - we claim is that we can grow the number of people who achieve the level of success typically seen in the top 1%, not that we can literally grow the 1%.  Productivity and the economy isn't zero sum, so elevating some doesn't mean bumping others down (although I acknowledge that there are some fields where relative success is a driver of earnings).

I agree I could have been more clear about this a little bit, and I considered it - I just thought it was a bit of a distraction from the core point.  Maybe I was wrong :)   I appreciate the feedback.

"I am somewhat leery of having a government bureaucracy decide who is high potential and only invest in them." - 100% agree with this point.  I see this mostly as pushing for a better way of allocating efforts and budgets that are already being spent, but I like your framing around marking sure "everyone has access" instead of picking winners.