It's useful to keep in mind how the rich are different. When you are poor, you are willing to trade your time to earn money. When you are rich, you trade your money to get more time. For example, the rich hire people to clean their homes, and they don't waste time shopping for bargains. In business school I learned that when people have different preferences, you can usually find a way to engineer a deal.I'm not convinced this is such a bad idea.
Suppose we change the tax code so that in return for higher taxes on the rich, we figure out a way to give the rich some form of extra time. The bad version is that anyone who pays taxes at a rate above some set amount gets to use the car pool lane without a passenger. Or perhaps the rich are allowed to park in handicapped-only spaces.
Ridiculous, you cry! Remember, this is the bad version. And if the rich are only a tiny percentage of the population, they would have almost no impact on the traffic in car pool lanes or the availability of parking spaces for the handicapped. You wouldn't even notice the difference.
You could imagine a host of ways the government could trade time for money. Suppose all government agencies had a mandate to handle the affairs of the rich before everyone else. You wouldn't even notice that your wait at the Department of Motor Vehicles was 2% longer.
As a bonus, what happens to the economy when the people who are most skilled at making money suddenly have extra time? My bet is that they stimulate the economy by spending more or by earning more.
Thursday, February 03, 2011
Money > Time = Tax Surplus
One of my shortest and I think underappreciated posts was one describing why we feel so busy. Dilbert cartoonist Scott Adams has a "bad idea" on how to use that to raise taxes on the rich: