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Marginal tax on intelligence ! February 1, 2007

Posted by Sharath Rao in contemplation, economics, humor.
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Brad Delong says :

Bill Gates, Paul Allen, Steve Ballmer and the other millionaires and billionaires of Microsoft are brilliant, hardworking, entrepreneurial and justly wealthy. But only the first 5 percent of their wealth can be justified as an economic incentive to encourage entrepreneurship and enterprise. The next 95 percent would create much more happiness and opportunity if it were divided evenly among U.S. citizens or others than if they were to consume any portion of it.

To which I say :

Bill Gates, Paul Allen, Steve Ballmer and the other millionaires and billionaires of Microsoft are wealthy and **justly brilliant**. But only the first 15 percent of their *brilliance* can be justified as essential for entrepreneurship and enterprise. The next 85 percent of their *brilliance* would create much more happiness and opportunity if it were divided evenly among U.S. citizens or others than if they were to use any portion of it.

Is he serious about that working out ? [ I am of course joking whether he is serious or not ! ]. Besides, why does he say US Citizens ? Moral grounds, political grounds ? Or because they made their money at the cost of their own citizens and so they should give it back ?

Actually even though I am joking, lets assume both are technically possible. And although I am against this kind of coercive redistribution, just for kicks, lets play along with Brad. What is preferable – to distribute the wealth somewhat equally or the intelligence (equally) somewhat equally ? Marginal tax on intelligence, so to speak ! Most would say money because money is better correlated to happiness than intelligence. Or is it ? The route to happiness from money is more direct than the one from intelligence to happiness. If not happiness, atleast to basic needs and a decent standard of living.

Via MR

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