Thank you! It’s great to hear you are putting an emphasis on doing this safely.
Alex Barnes
Karma: 322
Tax Havens and the case for Tax Justice
Thank you for posting! Is the above based only on EA-aligned charities? Some cause areas (e.g. Mental Health) may lend themselves to for-profit or social enterprise models. I’m not sure how you’d include those
Great article!
At risk of losing my “EA Card” and being permanently cast out of this community with no recourse, could we perhaps maybe “red team” EA itself? [ducks]
Thank you! This is really useful and actionable advice.
Hypothetical Example
Let’s say you are at EAG to build EA Supply Chain and Logistics and you run into a software engineer who is eager to skill up . You could:ignore them unless they work at Amazon, FedEx, Maersk, etc
try to convince them the best way to improve their skills is to help your group
ask them if they’ve read the recent EA Forum post: I’m Offering Free Coaching for Software Developers in the EA community
introduce them to other software developers/engineers at EAG and in your professional network
encourage them to talk to someone at EA Virtual Programs about if being a facilitator is helpful for learning soft skills
mention the High Impact Professionals session you attended and its relevance to them
In that 5-minute conversation, by listening to their needs and interests, you can deliver immediate actionable advice that could have a high long-term impact. Or you could focus on yourself: is self-focus more effective? More altruistic?
Thank you!
Mankiw’s review article on Optimal Taxation Theory is really great. This is exactly why EA needs more economists.
I find this intriguing:
it is directly concerned with what type of tax system maximises utility
Does “utility” as used by economists diverge in important ways from “utilitarianism” as used by moral philosophers? If the social planner optimizes for minimal negative utility, I assume that could change the optimal tax structure.
In the Mankiw article, the first justification of Capital Income Ought To Be Untaxed seems clear:
because capital equipment is an intermediate input to the production of future output… it should not be taxed
However, I’m not sure if capital income and capital equipment are interchangeable concepts. Perhaps they are.
The second justification seems a bit murkier:Second, because a capital tax is effectively a tax on future consumption but not on current consumption, it violates the Atkinson and Stiglitz (1976) prescription for uniform taxation. In fact, a capital tax imposes an ever-increasing tax on consumption further in the future, so its violation of the principle of uniform commodity taxation is extreme.
I’m not clear how that logic would be different if applied to labour. Probably I need to read more about this to fully understand it. I assume the idea is I can reinvest capital income into more capital, but I can’t reinvest labour income into more labour. The article mentions “human capital”, so maybe I can reinvest my labour income into “human capital” such as education.
Finally, the third justification:This distortion is so large as to make any capital income taxation suboptimal compared with labor income taxation, even from the perspective of an individual with no savings.
Has the premise:
In the Ramsey model, at least some households are modeled as having an infinite planning horizon (for example, they may be dynasties whose generations are altruistically connected as in Barro, 1974).
I’m not sure how realistic it is for households to have an infinite planning horizon. Moreover, it seems undesirable and dangerous to optimize for what could potentially be a totalitarian dynasty. Perhaps I’m misunderstanding the argument here.
The Mankiw article made me curious:
How easy is it to distinguish labour income from capital income? For example, a salaried plumber receives labour income, but a plumber who is paid as an independent contractor presumably receives capital income.
Is a laptop purchased by a business considered capital, but the same device purchased by a family considered consumption?
If tax havens’ low tax is beneficial, could the secrecy they provide to illicit financial flows be considered a harmful externality?
The article raises democratic legitimacy as an important constraint:
When Margaret Thatcher, during her time as the Prime Minister of the United Kingdom, successfully pushed through a lump-sum tax levied at the local level (a “community charge”) beginning in 1989, the tax was deeply unpopular.
Optimal Taxation Theory contains some really interesting ideas. Tax policy, in general, seems like a neglected area of EA.
Congratulations! I find the Snowball Fund structure a little confusing, but I’m looking forward to sharing dealflow between the Snowball Fund and EA Angels. We’ve seen a couple of pitches so far from EA Entrepreneurs at EA Angels:
-EdTech (Europe) - no funding commitments
-FinTech (UK) − 2 funding commitments in discussion
And we have a couple more pitches in the pipeline to see in Apr/May:
-FinTech (Europe)
-RealWorldTech (USA)
My assumption is that there is probably room for several EA-themed funds, syndicates and Angel Investment Groups. At this point, the bottleneck seems to be EA Entrepreneurs actively building for-profit startups. For me and other members of EA Angels, our counterfactual is helping non-EA founders succeed with their for-profit startups; we’d prefer to help EA founders!
Thank you for offering a virtual option! So excited for EAG London 2021 : Virtual Edition!!
Dear Aaron,
I don’t think we share the same definition for the word “Retirement”.
Sincerely,
-average humans everywhere
P.S. Thank you for all your help with the one serious EA Forum article I wrote. Despite you and Hauke’s heroic efforts, it was still terrible. Related: did you pay 26 people to vote for it out of sympathy?
Can you post a summary/link to this article from the Healthier Hens LinkedIn account? I can share that more easily with EAs in Kenya. For example, there are a group of EAs in Kenya who are in the process of launching EA Nairobi
Thanks!
Is it true that some tech folks started up a low-impact-angst group for all the Zaharas out there? (Asking question, not telling!)
More Systems/Complexity aligned Slack Groups:
EA Supply Chain and Logistics—classic stock and flow territory
EA Entrepreneurs—successful startups are Complex Adaptive Systems
EA Mental Health—one modality is called “Internal Family Systems”
Nice! Also, if you’d like to get started with Systems and Complexity, there is a Thinking in Systems Reading Group Slack. The book they are reading is Donnalea Meadows’ classic Thinking in Systems
Thank you Micheal—Great Post! I love this part:
Design systems that scale from a small base. If you have a grand plan that requires a complete system to function, but no way of getting there, you do not have a plan.
At the EAG Virtual Entrepreneurs Gatheround event, the discussion of going from 0->1 came up over and over. One trap I see in EA is the hesitancy to act under uncertainty. Yonatan Cale’s recent post I’m Offering Free Coaching for Software Developers in the EA community demonstrates an approach to break out of this trap: start small, launch fast, stay open to feedback.
One perspective on the Play Pumps story is that the founder failed to pay attention to feedback: what was the experience of the first kid who used the first Play Pump?
I’m glad you wrote this, let’s explore Systems and Complexity further—one great venue is Complexity Weekend—can we borrow some of their tools/processes for an EA Systems and Complexity Event?
EA Slack Groups—Mental Health, SW Eng, Entrepreneurs (and more!)
[Question] EAG/EAGx and GLAMs (galleries, libraries, archives, and museums)
Thank you! Great analysis and synthesis of the Randomista and Systemista perspectives.
I hope you take a look at Lant Pritchett’s new paper, Development Happened, Did Aid Help? If you find it intriguing, I encourage you to write an EA Forum post about it; your writing is concise and interesting.
Thank you Jonas for linking to this article on the EA Entrepreneurs Slack Group and thank you Paal, for tagging me in Slack to draw my attention to it.
Also, thank you for linking to What we learned from a year incubating longtermist entrepreneurship. I wasn’t previously aware of this article. I would have been if I’d searched the EA Forum using The Entrepreneurshiptag which:
covers posts that discuss entrepreneurial ventures, including nonprofit startups and for-profit startups founded with social impact in mind.
Simon Haberfellner and I talked yesterday about a post-Covid plan to foster more meaningful connections between EA Entrepreneurs, EA communities and non-EA Customers, Angels and VCs. One super-nerdy metaphor we’ve adopted is a Fourier Transform of EAG/EAGx/EA Retreats into an extended EA Vacation a small group of EA participants spends in an EA Host City. We are still working the creativity alchemy on the idea!
Another idea which might lead to Longtermist Entrepreneurship would be to scout the landscape for EAs interested in investing in the startup scene. For example, for students:
Front Row Ventures (FRV) is a Canadian student-run, university-focused venture capital fund
Black Gen Capital (BGC) is a 100% minority-owned student investment fund in the US
Student Investment Funds exist at: University of Waterloo, University of New Brunswick, Mount Royal University and many more Canadian Universities (honestly, I didn’t even know these last two places had universities—aside: maybe this is why anti-Toronto sentiment runs high in small town Canada!)
Someone wrote How to Start and Run a Student-Managed SRI Fund (I only skimmed it, but it has 37 footnotes, so they probably did way more research than I’m capable of)
Questions you could explore:
Do such student-run funds also exist in Europe, Africa, Asia-Pacific and Latin America?
How would an EA who is a student join such a fund? Are they only for finance students?
Are there any EAs already involved in these funds? If not, would outreach in this direction be cost-effective?
What would be required to start a Longtermist Student-Managed Fund at University X? Which universities would be good candidates? A ranking table might reveal UNB and MRU to be contenders after all…
One person’s Value Drift is another person’s Bayesian Updating