Quote:
Originally Posted by 'BusNative
This is only a partially accurate depicition, isn't it? Right, I agree that, for certain markets, those that bring the most value earn the most, and, yes, to those who agree to participate in those types of markets, that is completely fair.
I disagree that these are de facto the most valuable workers in society. For example, a high school math teacher may see 100-130 students in one day. If the teacher is very, very good, perhaps 95% of his/her students will become proficient in math and become valuable market participants down the road. In 10 years this very proficient teacher could theoretically add ~1,000 valuable market participants to the economy. Perhaps these students all enter private industry and earn at very high levels due to their relative value, which was at least partially improved by this highly proficient teacher. What does that teacher earn? Whatever the local school district salary is... probably somewhere between $40k-$50k. But to say that this teacher is not among the most productive in workers would be inaccurate.
So take the highly productive investment banker and the highly productive teacher: let's say both are the sole providers for their families of 4, with kids the same age and live the same distance from work. Both people need a car to get to work, both need groceries for their families, both need to pay mortgage or rent, both have to pay for their kids' educations, both need to save for college, etc., etc. Their needs are the same, their productivity is the same, yet the teacher needs >100% of his/her salary to just cover family needs. The investment banker likely needs much less of his/her salary for family needs, maybe only 30%.
My argument on taxes is that, so long as the country has a tax need, it is more fair to have tax brackets because wealthier people have significantly less need, relative to their incomes. In this example, the teacher's family has more than 3x the need of the investment banker relative to their respective incomes.
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Bus - you're still missing the supply/demand part of this equation. I feel especially qualified to speak on exactly the two professions that you cite because I have done both of them. This is not an indictment of any profession, so please no one take this personally, but after performing both roles myself - these are my findings.
Generally -
1 - The vast majority of investment bankers I know could teach at some level. The vast majority of teachers I know could not do investment banking.
2 - The vast majority of investment bankers I know work 70+ hour work weeks with little or no vacation. The vast majority of teachers I know work from 8-3 with roughly 18 weeks vacation per year.
3 - The vast majority of investment banking is often difficult, tedious, thankless, demanding, and under tremendous time pressure. Conversely, after my first go at teaching and I had my lesson plan in place, it was an incredibly easy job relative to the former.
4 - Investment banking is a job that directly and immediately effects the flow of capital from investors to a productive enterprise. These enterprises now have access to capital that they would otherwise not have, and therefore these new enterprises would never come off the ground to drive the economy. I banking is the very grease of capital markets, and their existence directly creates huge amounts of value, and as alluded to above is not a job that can be performed by many. Conversely, you claim that because a student is taught math well, this somehow should translate to more value created. Well, let me first say that I am a HUGE proponent of education, especially math and science education because that is ultimately the driver off all increases in living standards long term. That said, teaching these ideas is a job that has non-monetary rewards and can be performed by relatively many. Yes, there are good and bad teachers, but there are good and bad i-bankers too - its just the elements of these two subsets vary hugely in size regarding those who are eligible and qualified for both these positions. Taken to its extreme, talking about teachers adding value because they teach well is a shallower variation on a parent raising their child well. If a parent raises their children well, gives them values, manners, education, drive, etc. - all the things that gives the child the best chance to succeed later in life - how much should we then compensate the parent for this? The compensation is "non-monetary" you say? Exactly.......
Last - reading the highlighted material in your last paragraph - it is clear to me that you still do not understand my basic premise.
Once again -
1) WITH OUR CURRENT INCOME TAX STRUCTURE - THE TRULY WEALTHY OF THE NATION PAY VERY LITTLE TAXES. THE HIGH INCOMES (EG - INCOME FROM LABOR/PRODCTIVITY DO. HIGH INCOME DOES NOT EQUAL "RICH". HIGH ASSESTS EQUALS RICH. WE TAX INCOME, NOT ASSETS. Now read that again. One more time. (I really have no idea how this simple notion escapes so many people.) If you really want to capture some of the wealth from the truly wealthy (and no one has yet argued why this should be the case, but lets assume thats the goal), you need either a wealth tax or a consumption tax. Less than 1% of the nation controls over 33% of the WEALTH. These people who have it all almost pay no tax. The people they hire to issue their debt, do their legal, do their accounting, etc. do. A consumption tax would now capture these free riders. If you want to do a wealth tax, a 10% wealth tax on the top 2% would FREE THE OTHER 98% COMPLETELY FROM ANY TAXES. Just taking 10% from the truly rich would pay for all of the nations taxes on every level. Now you can see why it would never happen.......
10-18-2008, 12:13 PM
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