Comment by duxup
2 months ago
I worry about "tax thing I don't like" policies as then government is dependent on that revenue and now ... you to some extent want that activity to occur otherwise you've got budget issues. Now what is the incentive? Do you adjust taxes to eliminate it or does the state try to keep that revenue stream going?
I also wonder if somehow we're trying to seriously reduce advertising what that does to land of the internet where the users of the internet seem to choose / want "free" advertising based products. I'm not convinced folks just suddenly pay and upending that entire economy maybe a serious net negative.
> I worry about "tax thing I don't like" policies
Equating "things I don't like" with "negative externalities" does not seem like a helpful framing for this discussion. I personally like traveling around the world and eating avocados, but they have substantial negative externalities. I personally dislike watching ballet or eating mushrooms, but they have minimal negative externalities.
Advertising may very well be something that the author dislikes AND that has negative externalities, but the point of a Pigovian tax is solely to apply a price commensurate with negative externalities, not the dislike.
> you to some extent want that activity to occur otherwise you've got budget issues
Perhaps, which is why he mentions "freebates", and why I find revenue-neutral Pigovian proposals like the "carbon-fee-and-dividend" so compelling. The primary purpose is not revenue, it is to ensure the correct price on negative externalities so society can rely on a free market to solve tricky allocation problems.
It is not tax "things I don't like".
It is tax things that has macro dynamic negative externalities.
And subsidize things that has positive macro dynamic externalities.
I think it's safe to say the proposition here is that advertising is something the author doesn't like, for reasons, but the same problem remains then. Now the state is profiting from it.
That is a fair criticism of this kind of thing in general, but in this particular case I wanted to combine the Pigovian "tax the bads" idea with the more modern idea of a feebate, which is intentionally revenue neutral (to the Government) in that the fees levied on the "bad" side of the ledger go to pay subsidies or other incentives on the "good" side of the ledger.
https://news.ycombinator.com/item?id=43599667
(Sorry if this blows up the memory usage ;)
The thing economists generally say to do, is to take the revenue from Pigovian taxes and use it to somehow offset either the original negative externality (e.g. using tobacco taxes to fund public health measures) or anticipated damage caused by the tax itself (e.g. using carbon taxes to fund public transit). In either case, in theory: if nobody pays the tax, then you no longer need the revenue.
Not to imply that economists are uniform on this or necessarily correct, but there has been work done here.
It could be more a subtle change. Instead of taxing advertising, what about stop advertising costs from being counted as business expenses. You can spend all you want but you can't claim that cost as an offset to revenue. Doing this now amounts to a subsidy on advertising, so just remove it.
> you to some extent want that activity to occur otherwise you've got budget issues. Now what is the incentive?
I was just talking with some friends recently about an instance of this: distilling, which is still federally illegal in the US for the primary reason that it provides a lot of tax income if you charge for licenses and tax sales, which is incredibly frustrating because it's easy and safe to make yourself high-quality liquors at a fraction of the price that you'd pay at the store and have a fun hobby to boot.
(pedants: please don't bring up safety issues - it's trivial to realize with five minutes and internet access that distilling isn't significantly less safe than many other unregulated activities in the world as a whole)
When advertising is taxed/banned, we'll have to resort to making our own dangerous forms of advertising and bootleg them around without the cops catching us.
Forget about the safety issues of the distilling itself (and the risks of accidentally creating methanol), I'd be far more concerned with the safety and public-health issues of cheap, unregulated access to high-proof alcohol.
> I'd be far more concerned with the safety and public-health issues of cheap, unregulated access to high-proof alcohol.
This isn't grounded in reality.
Alcohol itself is already dangerous, yet we've managed to figure out how to build cultural elements that mitigate the risks a lot.
You can already buy huge amounts of high-proof alcohol for cheap after you're 21, and most underage kids know someone who could get it for them anyway.
And it's already legal to brew your own alcohol - it's fairly easy to get up to 20% ABV with wine.
And I don't know where you got "unregulated" from. I certainly didn't mention anything about that. Alcohol is already regulated quite heavily - you can't give to a minor or sell without a license, homebrew or not - and legalizing distillation wouldn't change that.
You need to do some research, because you're clearly not familiar with the legal and social environments of the US, at least.
Like how whenever they want to introduce gambling, they always tie it to school funding, as if magically, it’s the only way to pay for schools
We could start by not having a bulk rate for ~spam~ snail mail. Charge them double, perhaps. Especially political.