Thursday, January 31, 2008

Manipulation vs. Carefully Crafted Incentives

I have not really felt like writing, so started looking back at some blog entries that I started and abandoned – ether because I was bored with the subject, or I forgot about the blog entry. This is one of those posts; guess I started it in November.

~Deb had an interesting Blog entry on Friday, dealing with manipulation.

Well, I am not going to expand on what she wrote – it is beautifully written, and I don't really think I can add to the discussion.

But when I was reading the blog entry, one question kept echoing in my brain: "Some of this manipulation stuff sounds a bit like carefully crafted incentives."

For instance.

I don't take crap anymore. Is this manipulative or incentivized? There are people who say mean things. And when people say mean things, I walk away. I don't argue or even make faces, I just leave. So if people want to interact with me, they better play nice. Some consider this manipulation – I think it is aligning incentives with outcomes I support.

Tax code. It is tax time again, and if you pull your hair out when filing your taxes, think for a second about government-determined incentives. If you are blind, you get more of a deduction – but if you lost a leg in Desert Storm, not so much. There have been incentives for specific car types (think lobbying did not occur there?), owning a home (mortgage interest), or being philanthropic (hint: look at Schedule A). Personally, I think taxes should be about generating income to run the government, and I would favor what they do in Europe: allow sixteen-year olds to drink alcohol and have consumption tax. I am sort of kidding about the sixteen-year olds drinking. Well, sort of. Consumption taxes make sure hookers and senators pay their fair share of taxes. Now, according to the tax code, sex for money and kickbacks are supposed to be reported on the income tax return, but they rarely are.

Play nice for sex. When I want sex from my hubbie, I don't bitch earlier in the evening. I don't tell him that he needs to take out the garbage or complain that he has not made the bed (his job). I play nice. Not that he needs incentives for sex.


Sister Sassy said...

play nice for sex! LOL! Omg, I could do almost anything include not shave my legs for months and he wouldn't care if I was offering sex. :)

Ian Lidster said...

Playing nice is always good. No matter how horny I might be, if my mood has been put off then nothing rises to the occasion.

Prata said...

I always play nice....but not for sex. I don't have to play nice for that..there's still passion far...kind of...or something like that.

I agree that taxes should pay for running the government, but government spending has been and is out of control, look at the debt which the government carries. Their salaries are also kind of conspicuous to me, what kind of environment do we live in when someone balks at a fact like the President makes 400k a year running the country. That is not a small sum of money. When people are surprised that someone would, "run a country for that amount of money.." it says something about the state of public affairs and the disparity of wealth in our country (not our country vs. some other country..that's way off topic).

Anonymous said...

I think playing nice for taxes is what we need. And, it's called FairTax.

Gov. Huckabee's advocacy of the FairTax is the single most important policy position in this election. Research findings explain why:

The FairTax rate of 23 percent on a total taxable consumption base of $11.244 trillion will generate $2.586 trillion dollars – $358 billion more than the taxes it replaces [BHKPT].

The FairTax has the broadest base and the lowest rate of any single-rate tax reform plan [THBP].

Real wages are 10.3 percent, 9.5 percent, and 9.2 percent higher in years 1, 10, and 25, respectively than would otherwise be the case [THBNP].

The economy as measured by GDP is 2.4 percent higher in the first year and 11.3 percent higher by the 10th year than it would otherwise be [ALM].

Consumption benefits [ALM]:

• Disposable personal income is higher than if the current tax system remains in place: 1.7 percent in year 1, 8.7 percent in year 5, and 11.8 percent in year 10.

• Consumption increases by 2.4 percent more in the first year, which grows to 11.7 percent more by the tenth year than it would be if the current system were to remain in place.

• The increase in consumption is fueled by the 1.7 percent increase in disposable (after-tax) personal income that accompanies the rise in incomes from capital and labor once the FairTax is enacted.

• By the 10th year, consumption increases by 11.7 percent over what it would be if the current tax system remained in place, and disposable income is up by 11.8 percent.

Over time, the FairTax benefits all income groups. Of 42 household types (classified by income, marital status, age), all have lower average remaining lifetime tax rates under the FairTax than they would experience under the current tax system [KR].

Implementing the FairTax at a 23 percent rate gives the poorest members of the generation born in 1990 a 13.5 percent improvement in economic well-being; their middle class and rich contemporaries experience a 5 percent and 2 percent improvement, respectively [JK].

Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax [THBPN].

Charitable giving increases by $2.1 billion (about 1 percent) in the first year over what it would be if the current system remained in place, by 2.4 percent in year 10, and by 5 percent in year 20 [THPDB].

On average, states could cut their sales tax rates by more than half, or 3.2 percentage points from 5.4 to 2.2 percent, if they conformed their state sales tax bases to the FairTax base [TBJ].

The FairTax provides the equivalent of a supercharged mortgage interest deduction, reducing the true cost of buying a home by 19 percent [WM].

ALERT: Kotlikoff refutes Bruce Bartlett's shabby critiques of the FairTax.

Leesa said...

sassy: funny lady!

ian: my hubbie would agree.

prata: yeah, you make some interesting points. I want to do a post about it.

ian the fair tax guy: I don't believe everything you have written, but it beats the current system.

~Deb said...

Oooof oooof oooof- that post I wrote on Nov. 2nd correlates with the post I wrote for today. Same person. Same crap. Different debts. I swear, I can't get away from manipulative people or, people with 'carefully crafted incentives'.

I'm exhausted!

~Deb said...

P.S. My Christianity is totally lost when this type of stuff hits! lol!

Leesa said...

~deb: well, sweetie. We are all human.

Prata said...

Except for Grant Leesa. *nods*