Congress sets the budget, not the president. If you look at proposed white house budgets for the last few decades or so compared to what is enacted by congress, the final budget hews closer to congressional priorities. The exception to this is funding for military endeavors which constitute a significant portion of the discretionary budget. A chunk of military spending is determined by the president and their propensity for wars (see: Bush and the Iraq war, Obama and drone strikes).
The reasoning behind EAs not wanting to tax billionaires seems to be:
The average dollar spent by an EA billionaire is much more effective than the average dollar spent by the U.S. government.
It seems unlikely the U.S. will change its outlay substantially towards utilitarian values soon
Therefore, EAs should not encourage taxing billionaires
I think this is too narrowly focused. Some other considerations:
Billionaires are as wealthy as they are because they have an outsized role in setting the political agenda and writing the laws (especially since citizens united).
The U.S. government spending is not as effective as it could be because it prioritizes billionaire political preferences over utilitarian ones.
If billionaires were taxed more, the marginal increase in government spending would likely be spent on things preferred by the political group that was able to enact greater taxes on billionaires. My impression is that this political group would spend it in ways much more effective than the current average spending.
While returns to capital exceed the rate of economic growth, those worried about the well-being of the poor will eventually need to address income inequality. This is especially acute if economic growth cannot continue forever and wealth generation gets closer to being zero-sum. Given the political power wealth buys, it gets harder to correct wealth inequality the longer it goes on and concentrates except with destructive revolutions, if such revolutions are even possible.
At extreme levels of wealth inequality (arguably the U.S. is at such levels), wealth inequality reduces economic growth and competitiveness.
Well-being is not just absolute but also relative; people’s perception of their well-being is heavily influenced by how wealthy they are compared to others. Reducing inequality (to a point) can improve well-being. This is effect is non-linear and dependent on cultural values and on absolute well-being. I’m not sure what the “ideal” Gini coefficient is (https://en.wikipedia.org/wiki/Gini_coefficient), but in general people [prefer a far more equal distribution of wealth than present] (https://whorulesamerica.ucsc.edu/power/wealth.html).
My take on this is:
Taxing billionaires more is necessary to reduce income inequality.
Reducing income inequality is a valid instrumental goal. In developed countries, it is likely better at improving well-being than absolute wealth gains.
Taxing billionaires should be accompanied by efforts to direct the extra tax dollars effectively.
The reasoning behind EAs not wanting to tax billionaires seems to be:
The average dollar spent by an EA billionaire is much more effective than the average dollar spent by the U.S. government.
It seems unlikely the U.S. will change its outlay substantially towards utilitarian values soon
Therefore, EAs should not encourage taxing billionaires
Just to spell this argument out in more detail: EA billionaires have 30B-50B. All billionaires combined have maybe 10-15trillion[1]. For taxing billionaires to be net negative, we approximately need the marginal EA dollar to be worth 200-500x that of marginal US congressional priorities (more precisely the delta between the marginal dollar used by marginal US federal gov’t and the marginal dollar used by non-EA billionaires).
I do think this argument basically clears. I think global health grantmakers in EA are trying to clear an 1000x bar (1000x better spending than increasing American consumption). Which is higher than 200-500x, but not by much.
We might also hope that EA billionaires will take up a larger fraction of billionaire wealth in the future.
(I think your other considerations are important but I have not given much thought to them. I may mull over this a bit after work today)
I think going forward, the difference in effectiveness between the average US billionaire dollar and average US government dollar will increase, given the chances of
more US billionaires being influenced by EA
more US EAs becoming billionaires
and
of Donald Trump winning in 2024.
I agree that a democratic process here would be good, but again I’d emphasise that US political system excludes 95% of people (and obviously, animals, children and future generations).
I was wrong to say that US government spending is only a bit more democratic than billionaire spending.
Although US government spending is extremely undemocratic, it’s much more democratic than billionaire spending.
It’s plausible to me that sacrificing this much impartially measured effectiveness to incorporate the opinions of 5% of adults is worth it, but I don’t think it is. (This somehow reads like it’s meant to be sarcastic / rude in tone, it isn’t meant to be!)
(I don’t know if this is what you’re getting at, but your comment prompted a bunch of thought in me.).
I find epistemic humility confusing.
I think I trust my own judgement about the proper marginal allocation of limited resources much more than I trust the judgement of the democratic process.
I also think I trust my morals about what’s right to do much more than I trust the implicit morals implied by the American democratic process (and to be clear, America is a really good country! Other countries are usually worse, probably).
You also measure effectiveness in ways the public might not agree with, which is another part of why a democratic process here is important.
Is something like “welp, epistemic humility is hard but I sure still basically think that I trust my judgement more, ah well. So much the worse for the democratic process, I guess.”
I can imagine on a surface level a reasonable person thinking “well the democracy process disagrees with me, so even though I spent several years carefully thinking about the proper allocation of limited resources, and I see clear causal reasons why people might be selfishly biased, and I see clear irrationalities on top of that, and even though the observed results of the democratic process is absolutely awful, the sheer number of disagreeing people is strong enough, and the track record of technocratic experts is bad enough, that basic epistemic humility tells me I ought to allocate resources by American people’s vote over that of my own motivated judgement.” But I can’t viscerally imagine living life like that, and I don’t know how to shape the full argument in a reasonable way.
I don’t think there’s an “agree to disagree” here, or at least not a clear one.
I think basically the synthesis view when “my own best judgement about what’s right to do” disagrees with “the aggregated beliefs of the democratic process” has to be something like “update against both my own judgement, and also update against the American democratic process.” I think how much relative weight you put on the two things is a hard question, but ultimately I place much more weight on my pre-existing views before factoring in this consideration, and relatively little weight on the American democratic process.
I do think “What will the average commonsensical American believe” is a part of my moral parliament for reasons of moral cooperation and humility. But I think it’s a relatively small part, compared to other considerations.
I want to write a detailed response to this, but usually that means I end up not writing anything, so I’ll just state my main point quickly write a jumbled mess:
You can (and should) support the democratic process while also acknowledging that it currently works badly in regards for effectiveness, and wanting to improve it.
Your view seems to me to assume everything is static, and the quality of democratic decision making cannot change. I, on the other hand, think we can influence the public and democratic institutions to learn to analyze, compare numbers, and set priorities.
They won’t necessarily arrive at our priorities or solutions, but that might be because we’re a small group and we’re missing a lot of important things. I think I’m a smart person and I think you’re a smart person too, and we’ve learnt to employ some important tools in our thought process. The humility here doesn’t mean thinking “my contribution is comparable worthless”, but rather “small groups have very bad failure modes, I should use my contributions and synthesize them with the existing processes”.
Also as freedomandutility pointed out, most people aren’t represented by the American democracy specifically, and worrying about their welfare isn’t in the consensus. So I’m not saying “stop giving to developing countries and animal welfare because everyone doesn’t agree”. When I talk about democracy here I usually mean the recipients of aid should be part of the decision making, as well as most EAs together and not just boards of some non profits. The only part I really want the American democracy specifically to deal with is Americans’ tax money, because I feel it naturally belongs to the American people and not to the specific taxpayer.
Yeah, I think the basic argument holds at surface-level considerations.
It’s not just an argument against raising billionaire taxes, but also an argument for reducing them. It raises the question—what is the appropriate tax rate?
At one extreme is zero tax (or even subsidizing billionaires, which one could argue happens quite a bit). Would the world be better off with no billionaire tax and correspondingly much, much smaller U.S. government discretionary spending? Some people with certain political persuasions would say yes. But I think that undervalues the role of shared funding via government services. I’m skeptical billionaires would fill in the funding gap. Plus it ignores how wealth influences politics and wealth inequality influences well-being.
That’s a good point, I did think about the “reversal test” after I posted this comment and about whether I’d support lowering taxes on US billionaires, and I think I would.
But I think I excluded a key consideration—how the tax is raised. I’d support massively raising land value taxes or other property taxes (if they could successfully be enforced) on US billionaires.
But I think I’d support lowering other types of taxes on US billionaires to close to 0, depending on what proportion of the US government budget comes from taxing billionaires.
I strongly agree with most of this, and also wanted to point out that Congress decides on the budget, so thanks for writing that better than I would’ve.
But on this particular point:
If billionaires were taxed more, the marginal increase in government spending would likely be spent on things preferred by the political group that was able to enact greater taxes on billionaires. My impression is that this political group would spend it in ways much more effective than the current average spending.
I’ll say that I don’t know how the American left works, but here in Israel the social-democratic left (which I vote for) is very good at saying “Here are some important and ignored problems, we have to spend money to solve them” but then very bad at saying “Here’s where money needs to go to effectively solve the problems”.
In 2021 my party became part of the government for the first time in ~20 years, and were very good in working to enact laws, but bad in setting economic policy or in spending money from their ministries’ budgets.
The reasoning behind EAs not wanting to tax billionaires seems to be:
The average dollar spent by an EA billionaire is much more effective than the average dollar spent by the U.S. government.
It seems unlikely the U.S. will change its outlay substantially towards utilitarian values soon
Therefore, EAs should not encourage taxing billionaires
Actually, I think my argument is weaker than this. My reasoning is that I think the average dollar spent by billionaires in general is more effective than the average dollar spent by the US government, but obviously this is disproportionately affected by the effectiveness of spending by EA-associated billionaires. I’d say this is the part of my argument I’m least confident about.
The U.S. government spending is not as effective as it could be because it prioritizes billionaire political preferences over utilitarian ones.
I think this is true, but I also think nationalism is a relatively larger constraint on the effectiveness than billionaire selfishness.
If billionaires were taxed more, the marginal increase in government spending would likely be spent on things preferred by the political group that was able to enact greater taxes on billionaires. My impression is that this political group would spend it in ways much more effective than the current average spending.
I agree with you, but I think it would still be less effective than if that money was spent by billionaires, because the political group here (progressive Democrats) still place much less value on foreign lives and prioritise global issues less than the average billionaire (again, the effectiveness of the average billionaire dollar is massively skewed by EA associated billionaires).
While returns to capital exceed the rate of economic growth, those worried about the well-being of the poor will eventually need to address income inequality. This is especially acute if economic growth cannot continue forever and wealth generation gets closer to being zero-sum. Given the political power wealth buys, it gets harder to correct wealth inequality the longer it goes on and concentrates except with destructive revolutions, if such revolutions are even possible.
I don’t think we should be super confident in Piketty’s claims. However, I am strongly pro land value tax anyway, which could be a way to raise taxes on American billionaires, and would also spare most EA money, so I would support this particular approach to raising taxes on American billionaires.
But that being said, I’m not disregarding the importance of reducing inequality. Part of my argument is that “raising taxes on American billionaires will have a net effect of reducing inequality inside America, but of increasing global inequality”, unless the taxes are raised via land value tax, or perhaps another form of property tax.
At extreme levels of wealth inequality (arguably the U.S. is at such levels), wealth inequality reduces economic growth and competitiveness.
I’m not entirely sure whether I want better growth in the USA or not because of climate concerns, but on balance I’d say that this is a downside. But I think less growth in the USA is outweighed by wellbeing gains from not raising taxes on billionaires.
Well-being is not just absolute but also relative; people’s perception of their well-being is heavily influenced by how wealthy they are compared to others. Reducing inequality (to a point) can improve well-being. This is effect is non-linear and dependent on cultural values and on absolute well-being. I’m not sure what the “ideal” Gini coefficient is (https://en.wikipedia.org/wiki/Gini_coefficient), but in general people [prefer a far more equal distribution of wealth than present] (https://whorulesamerica.ucsc.edu/power/wealth.html).
This is an important point, but I expect the effect of relative income on wellbeing is driven primarily by income relative to people around you, and is not affected by distant billionaires.
Reducing income inequality is a valid instrumental goal. In developed countries, it is likely better at improving well-being than absolute wealth gains.
Personally, I see reducing income inequality as a terminal goal too, but I think global wealth inequality matters far more than wealth inequality inside one country, and I think taxing American billionaires more (except for via land value taxes or other property taxes) will worsen global wealth inequality.
Congress sets the budget, not the president. If you look at proposed white house budgets for the last few decades or so compared to what is enacted by congress, the final budget hews closer to congressional priorities. The exception to this is funding for military endeavors which constitute a significant portion of the discretionary budget. A chunk of military spending is determined by the president and their propensity for wars (see: Bush and the Iraq war, Obama and drone strikes).
The reasoning behind EAs not wanting to tax billionaires seems to be:
The average dollar spent by an EA billionaire is much more effective than the average dollar spent by the U.S. government.
It seems unlikely the U.S. will change its outlay substantially towards utilitarian values soon
Therefore, EAs should not encourage taxing billionaires
I think this is too narrowly focused. Some other considerations:
Billionaires are as wealthy as they are because they have an outsized role in setting the political agenda and writing the laws (especially since citizens united).
The U.S. government spending is not as effective as it could be because it prioritizes billionaire political preferences over utilitarian ones.
If billionaires were taxed more, the marginal increase in government spending would likely be spent on things preferred by the political group that was able to enact greater taxes on billionaires. My impression is that this political group would spend it in ways much more effective than the current average spending.
While returns to capital exceed the rate of economic growth, those worried about the well-being of the poor will eventually need to address income inequality. This is especially acute if economic growth cannot continue forever and wealth generation gets closer to being zero-sum. Given the political power wealth buys, it gets harder to correct wealth inequality the longer it goes on and concentrates except with destructive revolutions, if such revolutions are even possible.
At extreme levels of wealth inequality (arguably the U.S. is at such levels), wealth inequality reduces economic growth and competitiveness.
Well-being is not just absolute but also relative; people’s perception of their well-being is heavily influenced by how wealthy they are compared to others. Reducing inequality (to a point) can improve well-being. This is effect is non-linear and dependent on cultural values and on absolute well-being. I’m not sure what the “ideal” Gini coefficient is (https://en.wikipedia.org/wiki/Gini_coefficient), but in general people [prefer a far more equal distribution of wealth than present] (https://whorulesamerica.ucsc.edu/power/wealth.html).
My take on this is:
Taxing billionaires more is necessary to reduce income inequality.
Reducing income inequality is a valid instrumental goal. In developed countries, it is likely better at improving well-being than absolute wealth gains.
Taxing billionaires should be accompanied by efforts to direct the extra tax dollars effectively.
Just to spell this argument out in more detail: EA billionaires have 30B-50B. All billionaires combined have maybe 10-15trillion [1]. For taxing billionaires to be net negative, we approximately need the marginal EA dollar to be worth 200-500x that of marginal US congressional priorities (more precisely the delta between the marginal dollar used by marginal US federal gov’t and the marginal dollar used by non-EA billionaires).
I do think this argument basically clears. I think global health grantmakers in EA are trying to clear an 1000x bar (1000x better spending than increasing American consumption). Which is higher than 200-500x, but not by much.
We might also hope that EA billionaires will take up a larger fraction of billionaire wealth in the future.
(I think your other considerations are important but I have not given much thought to them. I may mull over this a bit after work today)
Source says 9T, but unclear because the source is 2019?
And this is excluding Bill and Melinda Gates Foundation, Rockerfeller Foundation etc
This argument hinges on a very specific and temporary situtaion. I don’t think this is the way you want to set long-term policy.
You also measure effectiveness in ways the public might not agree with, which is another part of why a democratic process here is important.
I think going forward, the difference in effectiveness between the average US billionaire dollar and average US government dollar will increase, given the chances of
more US billionaires being influenced by EA
more US EAs becoming billionaires
and
of Donald Trump winning in 2024.
I agree that a democratic process here would be good, but again I’d emphasise that US political system excludes 95% of people (and obviously, animals, children and future generations).
I was wrong to say that US government spending is only a bit more democratic than billionaire spending.
Although US government spending is extremely undemocratic, it’s much more democratic than billionaire spending.
It’s plausible to me that sacrificing this much impartially measured effectiveness to incorporate the opinions of 5% of adults is worth it, but I don’t think it is. (This somehow reads like it’s meant to be sarcastic / rude in tone, it isn’t meant to be!)
(I don’t know if this is what you’re getting at, but your comment prompted a bunch of thought in me.).
I find epistemic humility confusing.
I think I trust my own judgement about the proper marginal allocation of limited resources much more than I trust the judgement of the democratic process.
I also think I trust my morals about what’s right to do much more than I trust the implicit morals implied by the American democratic process (and to be clear, America is a really good country! Other countries are usually worse, probably).
I think these are contentious claims in some domains. One person’s modus ponens is another’s modus tollens.
I guess my perspective re:
Is something like “welp, epistemic humility is hard but I sure still basically think that I trust my judgement more, ah well. So much the worse for the democratic process, I guess.”
I can imagine on a surface level a reasonable person thinking “well the democracy process disagrees with me, so even though I spent several years carefully thinking about the proper allocation of limited resources, and I see clear causal reasons why people might be selfishly biased, and I see clear irrationalities on top of that, and even though the observed results of the democratic process is absolutely awful, the sheer number of disagreeing people is strong enough, and the track record of technocratic experts is bad enough, that basic epistemic humility tells me I ought to allocate resources by American people’s vote over that of my own motivated judgement.” But I can’t viscerally imagine living life like that, and I don’t know how to shape the full argument in a reasonable way.
I don’t think there’s an “agree to disagree” here, or at least not a clear one.
I think basically the synthesis view when “my own best judgement about what’s right to do” disagrees with “the aggregated beliefs of the democratic process” has to be something like “update against both my own judgement, and also update against the American democratic process.” I think how much relative weight you put on the two things is a hard question, but ultimately I place much more weight on my pre-existing views before factoring in this consideration, and relatively little weight on the American democratic process.
I do think “What will the average commonsensical American believe” is a part of my moral parliament for reasons of moral cooperation and humility. But I think it’s a relatively small part, compared to other considerations.
I want to write a detailed response to this, but usually that means I end up not writing anything, so I’ll just
state my main pointquickly write a jumbled mess:You can (and should) support the democratic process while also acknowledging that it currently works badly in regards for effectiveness, and wanting to improve it.
Your view seems to me to assume everything is static, and the quality of democratic decision making cannot change. I, on the other hand, think we can influence the public and democratic institutions to learn to analyze, compare numbers, and set priorities.
They won’t necessarily arrive at our priorities or solutions, but that might be because we’re a small group and we’re missing a lot of important things. I think I’m a smart person and I think you’re a smart person too, and we’ve learnt to employ some important tools in our thought process. The humility here doesn’t mean thinking “my contribution is comparable worthless”, but rather “small groups have very bad failure modes, I should use my contributions and synthesize them with the existing processes”.
Also as freedomandutility pointed out, most people aren’t represented by the American democracy specifically, and worrying about their welfare isn’t in the consensus. So I’m not saying “stop giving to developing countries and animal welfare because everyone doesn’t agree”. When I talk about democracy here I usually mean the recipients of aid should be part of the decision making, as well as most EAs together and not just boards of some non profits. The only part I really want the American democracy specifically to deal with is Americans’ tax money, because I feel it naturally belongs to the American people and not to the specific taxpayer.
Yeah, I think the basic argument holds at surface-level considerations.
It’s not just an argument against raising billionaire taxes, but also an argument for reducing them. It raises the question—what is the appropriate tax rate?
At one extreme is zero tax (or even subsidizing billionaires, which one could argue happens quite a bit). Would the world be better off with no billionaire tax and correspondingly much, much smaller U.S. government discretionary spending? Some people with certain political persuasions would say yes. But I think that undervalues the role of shared funding via government services. I’m skeptical billionaires would fill in the funding gap. Plus it ignores how wealth influences politics and wealth inequality influences well-being.
That’s a good point, I did think about the “reversal test” after I posted this comment and about whether I’d support lowering taxes on US billionaires, and I think I would.
But I think I excluded a key consideration—how the tax is raised. I’d support massively raising land value taxes or other property taxes (if they could successfully be enforced) on US billionaires.
But I think I’d support lowering other types of taxes on US billionaires to close to 0, depending on what proportion of the US government budget comes from taxing billionaires.
I strongly agree with most of this, and also wanted to point out that Congress decides on the budget, so thanks for writing that better than I would’ve.
But on this particular point:
I’ll say that I don’t know how the American left works, but here in Israel the social-democratic left (which I vote for) is very good at saying “Here are some important and ignored problems, we have to spend money to solve them” but then very bad at saying “Here’s where money needs to go to effectively solve the problems”.
In 2021 my party became part of the government for the first time in ~20 years, and were very good in working to enact laws, but bad in setting economic policy or in spending money from their ministries’ budgets.
Thanks for your comment!
Actually, I think my argument is weaker than this. My reasoning is that I think the average dollar spent by billionaires in general is more effective than the average dollar spent by the US government, but obviously this is disproportionately affected by the effectiveness of spending by EA-associated billionaires. I’d say this is the part of my argument I’m least confident about.
I think this is true, but I also think nationalism is a relatively larger constraint on the effectiveness than billionaire selfishness.
I agree with you, but I think it would still be less effective than if that money was spent by billionaires, because the political group here (progressive Democrats) still place much less value on foreign lives and prioritise global issues less than the average billionaire (again, the effectiveness of the average billionaire dollar is massively skewed by EA associated billionaires).
I don’t think we should be super confident in Piketty’s claims. However, I am strongly pro land value tax anyway, which could be a way to raise taxes on American billionaires, and would also spare most EA money, so I would support this particular approach to raising taxes on American billionaires.
But that being said, I’m not disregarding the importance of reducing inequality. Part of my argument is that “raising taxes on American billionaires will have a net effect of reducing inequality inside America, but of increasing global inequality”, unless the taxes are raised via land value tax, or perhaps another form of property tax.
I’m not entirely sure whether I want better growth in the USA or not because of climate concerns, but on balance I’d say that this is a downside. But I think less growth in the USA is outweighed by wellbeing gains from not raising taxes on billionaires.
This is an important point, but I expect the effect of relative income on wellbeing is driven primarily by income relative to people around you, and is not affected by distant billionaires.
Personally, I see reducing income inequality as a terminal goal too, but I think global wealth inequality matters far more than wealth inequality inside one country, and I think taxing American billionaires more (except for via land value taxes or other property taxes) will worsen global wealth inequality.