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.
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.