Also known as kicking the can down the road.

If you don’t fail a kid in elementary school they’re gonna fail in high school. If you don’t fail them in high school they’re gonna fail in university or in life in general.

Life has consequences for making mistakes and not learning from them. If we try to shelter children from their mistakes and bad habits then we raise adults who are poorly equipped for handling the challenges of life.

When I was in first year of university I met so many nice, seemingly-well-adjusted people who hit a brick wall with their coursework. I believe around a third of my peers failed to graduate at all in their programs. Many dropped out or transferred to other departments or other universities.

But here’s the thing: my peers had already been subject to a rigorous selection process to get in (only about 10% of applicants were admitted). If you had put all applicants through the rigours of the coursework far more would have failed.

The really tragic part of this whole story is when you factor in the degrees of the consequences for failure. In elementary school the consequences for failure would be very low. Children who are older than their peers tend to outperform them anyway. In university, however, the consequences for failure are very high (thousands of dollars wasted on failed courses that need to be repeated).

The consequences for failure outside of school (real life as they call it) are even higher: unemployment, homelessness, incarceration, and even violence and death.

They did mention being a driving instructor. Driving (and teaching students to drive) all day every day is going to put a lot more wear on the tires than a typical driver.

When the right goes too far, they’re ascendant in politics. They’ve won the election and they’re enacting some seriously bad policies.

When the left goes too far they fragment into a million pieces. No coalition can be built because everyone is too caught up in fighting over the details.

What I described is water filtration: biological filtration. Runoff from farms is organic in nature: manure and fertilizer, for the most part. Filtering it with traditional water filters (which need to be regularly replaced) is a huge waste of materials and a source of plastic waste that needs to be disposed of. It’s spending more money in order to fill up landfills needlessly.

Furthermore, it doesn’t even make sense from an infrastructure perspective. Artificial water filters are designed to be installed in pipelines. The water runoff on farms is not contained in a pipeline. It’s caused by rainfall and snowmelt on fields and running downhill (as well as sinking into the ground, soil permitting) over a large area. To filter it artificially you’d need to collect all that water into a pipe which would require enormous infrastructure to construct.

It’s so much easier, so much more economical, and so much more environmentally friendly to do minimal landscaping and allow water to collect in a basin located downhill where the water was flowing anyway. Some of it may need to be diverted for one reason or another, but that’s nothing compared to the cost of full collection and water treatment. Plus all those native wetlands plants that uptake the excess nutrients provide a habitat for native wetlands wildlife. It’s a win-win!

Fixing the runoff problem is just a matter of proper landscaping. Establishing an artificial wetland or preserving a natural wetland can go a long way towards reducing nutrient loads in the water that drains from a farm.

It’s all about having a basin to store water so it doesn’t drain off the farm too quickly and allowing native aquatic plants to take up nutrients to filter them out of the water.

I love this. I am a big fan of the use of colour, the small details, the little spires in the distance. So evocative! Beautiful!

Even chess feels the inevitability of carcinization! We might as well start calling it like it is: the 4th law of thermodynamics.

Look at the gold line then. That’s the effective tax rate which incorporates all of the different bands (right now there are only 2 bands anyway).

Why are you so ardent to defend taxing billionaires?

Please, be more charitable than that.

My argument is not that we shouldn’t make wealthy people pay their fair share. It’s that tax avoidance isn’t a trivial problem to solve. It’s actually very complicated because people are smart in general and they generally always try to minimize the taxes they pay.

This is half of the reason the entire accounting profession exists (the other half in auditing)! When one tax loophole is discovered, an accounting firm can put it to work for all of their clients.

What I suspect you're identifying is the loophole whereby wealthy individuals hold on to stocks to avoid taxable events. They then take out a loan with the stocks as collateral. The bank charges a small % because the risk to them is tiny. Thus it's far cheaper for the individual than simply paying the capital gains.

Yes, though it’s not just billionaires who do this. Regular people do this as well. And they don’t just do this with stocks and bonds, they do it with real estate. Reverse mortgages, home equity lines of credit, rental properties, etc!

If you own a million dollars worth of stocks and bonds you can use that as collateral for a loan to help you make the down payment on a new mortgage. Then you can convert that property into a rental and use the rental income to pay off the loan as well as make mortgage payments. Or you could use the loan to help you start a small business.

There’s just so much people can do when they have access to capital. Our whole economy is based on it.

Capital gains taxes only need to be paid when the gains are realized; that is, when stocks or bonds are sold for a profit or when dividends are paid. Capital gains taxes are not owed if you’re just holding a stock as it rises in value over time.

If you look at the history of capital gains taxes in the US, you’ll see that when capital gains taxes are high people don’t realize their gains because they don’t want to pay the tax. Instead they’ll hold on to their investments until a later time when taxes are low again:

As you can see with the “taxes paid on capital gains” line in the graph, lowering capital gains tax can actually increase the total amount of taxes you collect.

Most wealth isn’t in the form of houses and luxury goods, it’s in the form of capital. Ownership of businesses, stocks, and bonds.

Trying to seize all that wealth in the stock market is even more difficult than seizing a car or a boat. As we’ve seen, the stock market can drop by billions and trillions of dollars within seconds. The truth is, that wealth doesn’t really exist in the same way that a rock or a tree exists. That wealth is based on people’s perception of value. It’s literally a figment of our imaginations and it can vanish in an instant if people come to believe it has.

Imposing a large wealth tax on people’s stocks and bonds would crater the market far worse than the Great Depression. It would trigger bank runs and total chaos.

Even if you announced a plan to gradually phase it in over several years, you’d have people phase out their market holdings faster than that. They’d switch to buying tankers full of oil or other hard commodities that they keep off-shore. And they’d use it to hold the country hostage as everyday living costs skyrocket.

I mean unless you’re going to turn the world into a giant prison, there’s tons and tons of ways to avoid paying taxes.

Life is not a matter of problems and solutions, it’s all about tradeoffs. When you think you’re solving one problem, you’re really creating another one somewhere else.

When it comes to society and the laws we make for it, this should be clearer than it is. Every law has intended and unintended consequences. For example, in the Code of Hammurabi most crimes were punishable by death. This would’ve had the unintended consequence that criminals would feel no deterrence against murdering all witnesses, since they faced execution either way when caught.

The theory of why we don’t maximize all punishments against criminals is called marginal deterrence. This theory applies way more broadly than just criminal law however. It applies to all laws and their effects on people’s behaviour within a society.

It even applies to biology and ecology more broadly, for example with parasites. The more resources a host spends defending against parasites the less resources it has available for other biological functions. A maximalist approach to fighting off parasites would leave the host with too few resources for survival, so would not be a good strategy overall.

Companies do leave over time though. Look at the history of manufacturing in the US. So much of it has left for cheaper places to do business, such as China. Trump now has this fantasy of using tariffs to try to force companies to come back to manufacturing in the US, and he’s destroying the economy to try and achieve it.

People sometimes forget that tariffs are a tax. Other sorts of extreme taxes (like the 90% income taxes in the past) can have similarly devastating effects. Those effects may have been mitigated to an extent by the relative difficulty of moving around back then. Today it’s much easier to move. A big part of that is jet travel which allows you to closely monitor a factory in another country by travelling there to check up on it and hold meetings and plan.

Also note that just because a company leaves the US doesn’t mean its executives have to. They keep their wealth offshore while travelling freely between countries. The only way to prevent that is to impose draconian measures such as restricting freedom of movement and capital controls. This is the kind of stuff China does to its citizens to try to stop wealth from leaving the country and it’s not even all that successful at preventing the wealthiest people from moving their money out, despite being highly draconian.

It’s not just local tax loopholes. Companies and wealthy individuals can leave the country if taxes get too high. Unless you’re willing to embargo the country they move to and become a pariah like North Korea then those companies can do business in your country from afar.

The only other solution is to create some kind of world government, but now you’re way outside the realm of practicality. Even if you started the process of forming a world government you’d have to find some way to avoid turning into a dystopian dictatorship. Look at what’s happening in the US right now and it should be clear how difficult it is to prevent that.

But back to tax policy: you have to ask yourself what you’re trying to achieve with taxes. Is it to pay for social programs and national defence is or is it wealth redistribution? If it’s the latter then you might have better ways of achieving that than corporate taxes. Why not land value taxes? You can’t take the land with you when you leave the country, so that loophole is closed.

Okay that looks really delicious! Well done!

Would love to know how much these companies spent on reorganization and accounting to reduce their taxes paid.

One thing I think a lot of people miss with tax policy is that raising taxes on companies or wealthy individuals can often result in them paying lower taxes because they adjust to avoid paying them. There’s a “sweet spot” which I’ve heard is around 23% where they just pay the tax because it would cost more to avoid it.

The way to train more docs is to build more medical schools, more hospitals. Gotta lay out the big money for that!

The other problem we have is the demographic bubble. The population is still aging. As the boomers approach their 80s the medical costs of caring for them will rise exponentially.

Oh I thought he was reflecting on all the cholesterol he’s about to consume!

Well yeah, because it really sucked. Early agrarians were much less healthy, suffering from malnutrition and diseases that hunter-gatherers did not.

People persisted though. And over ten thousand years they eventually won out. Turns out that being able to store enough food to last all winter is a huge long term advantage. Specialization was an even greater advantage (that also took millennia to develop).

And the issue with trying to put the genie back in the bottle is that if one group left that money on the table another group would come along and pick it up.

And then finally 1 kid caring for 2 parents and 4 grandparents. 1 worker and 6 dependents.