Hawk Talk

This week’s guest, Robert McDonald, author of Confounding Father talks about the quintessential American philosopher: Thomas Jefferson. During the birth of America, innumerable obstacles stood in its way. What followed was the triumph of the first Americans, from a revolutionary war to purchasing Louisiana and everything in between. Join Antony Davies and James Harrigan for a cheerful, optimistic ode to the spirit of America on this week’s episode of Words & Numbers.

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Quick hits

Disney heir calls for wealth tax

https://www.npr.org/2019/06/28/736993245/disney-heiress-calls-for-wealth-tax-we-have-to-draw-a-line

San Francisco bans vaping

https://fee.org/articles/san-francisco-becomes-first-us-city-to-ban-sale-of-e-cigarettes-a-healthier-alternative-to-smoking/

Foolishness of the week

Democratic debates and yoga games

https://thehill.com/blogs/blog-briefing-room/news/450540-marianne-williamson-sends-out-healthy-alternative-to-debate

Topic of the week: Robert McDonald on Thomas Jefferson

Confounding Father

https://tinyurl.com/y39dpz5g

Thomas Jefferson’s Lives: Biographers and the Battle for History

https://tinyurl.com/yxtgkhng

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Antony Davies on Twitter

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https://twitter.com/JamesRHarrigan

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There appears to be a large problem in America with outcome-based thinking, particularly with regards to hot-button political issues. We skip straight to the ending we want and argue for it until we’re blue in the face, and everyone who doesn’t want the same must be evil, stupid, or both. But what if we started the conversation in a different place? What if we started it at the principles that lead to the desired outcome? Would the conversation change? James Harrigan and Antony Davies dig into the subject during their second live recording from FEEcon 2019 on this week’s episode of Words & Numbers.

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Quick hits

From janitor to Executive Vice-President

https://www.cnbc.com/2018/03/27/a-janitor-invented-flamin-hot-cheetos-and-became-a-pepsico-exec.html

Lost wallets experiment

https://www.latimes.com/science/la-sci-people-are-honest-lost-wallets-experiment-20190620-story.html

Foolishness of the week

Manufacturing czar

https://triblive.com/opinion/donald-boudreaux-save-us-from-a-manufacturing-czar/

Topic of the week: Principle and Outcome

Federal receipts are 18% of GDP

https://www.usnews.com/opinion/economic-intelligence/articles/2016-12-01/myths-and-facts-about-the-us-federal-debt

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Antony Davies on Twitter

https://twitter.com/antonydavies

James R. Harrigan on Twitter

https://twitter.com/JamesRHarrigan

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The word “equality” is a tricky one. It means different things to different people in different contexts. Do we mean “income equality”? “Wealth equality”? “Equality before the law”? And how does that sync up with “fairness”? Why are so many fine with professional athletes and movie stars making hundreds of millions of dollars but not CEOs? Join Antony Davies and James Harrigan as they delve into the subject live from FEEcon 2019 on this week’s episode of Words & Numbers.

Show your support for Words & Numbers at Patreon:

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Quick hits:

Tulsi Gabbard

https://www.goodnewsnetwork.org/congresswoman-used-toffee-to-unite-republicans-and-democrats/

People spending more on the Internet than at restaurants

https://www.bloomberg.com/news/articles/2019-06-15/americans-now-spend-more-at-internet-stores-than-restaurants

Foolishness of the week:

O.J. Simpson “has a little getting even to do”

https://www.vanityfair.com/style/2019/06/oj-simpson-twitter-has-a-little-getting-even-to-do

Topic of the week: Inequality:

The problem of inequality

https://www.youtube.com/watch?v=rCjWG8RqH4w

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Antony Davies on Twitter:

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James R. Harrigan on Twitter:

https://twitter.com/JamesRHarrigan

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As the saying goes, if you want less of something, tax it. Recently, a House bill was proposed that would raise the taxable income cap for Social Security to about $400,000. Although there seem to be many reasons to cheer, would this create unintended consequences? What could be done instead? Is privatization the way to go? Join James Harrigan and Antony Davies this week as they suggest an elegant solution to a sticky situation on this week’s episode of Words & Numbers.

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Quick hits

Ladybugs:

https://www.usnews.com/news/national-news/articles/2019-06-06/cloud-of-ladybugs-in-california-so-large-it-appears-on-weather-radar

Influencer can’t sell 26 shirts:

https://www.indy100.com/article/instagram-influencer-arii-t-shirt-sales-followers-fail-twitter-response-8936836

Foolishness of the week

Over-the-counter birth control:

https://www.livescience.com/24940-birth-control-pill-over-the-counter.html

 

Topic of the week: Social Security

The SECURE Act:

https://www.bankrate.com/retirement/how-secure-act-could-impact-retirement-savings/

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Antony Davies on Twitter:

https://twitter.com/antonydavies

James R. Harrigan on Twitter:

https://twitter.com/JamesRHarrigan

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If life is an inalienable right, does that take the death penalty off the table? Is there really a need for social safety nets? Taxation, the Articles of Confederation, the Postal Service, and more come together this week as James Harrigan and Antony Davies explore their ambivalence (it doesn’t mean what you might think it does) on many controversial topics on this week’s episode of Words & Numbers.

Come to FEEcon 2019! Show Notes:

Arthur Laffer awarded Medal of Freedom

The top half of income earners pay 97% of the federal taxes

Spelling Bee winners

Foolishness of the week

UBI could solve childhood obesity

Topic of the week: Ambivalence

Join the conversation

Words & Numbers Backstage

Antony Davies on Twitter

James R. Harrigan on Twitter

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Only twice has the U.S. House of Representatives impeached a president, and never has the Senate voted to remove an impeached president from office. People tend to think of impeachment as a judicial tool that should be used rarely and only when a president has broken the law in some egregious way. But impeachment was designed as part of the checks-and-balances. It is a political tool. On this week’s episode of Words & Numbers, join Antony Davies and James Harrigan as they discuss what impeachment is and how the political process might work better if impeachment were used more often.

Come to FEEcon 2019! Show Notes:

Artificial intelligence learns to spot cancer

Employment changes over the past century

Sanders says that teacher salaries should start at $60,000

Foolishness of the week

MSNBC asks political candidate how MSNBC can do better for him

Topic of the week: Impeachment

How does impeachment work?

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Words & Numbers Backstage

Antony Davies on Twitter

James R. Harrigan on Twitter 

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If the federal government disappeared, would there still be a United States? Does every country fall on a spectrum between two extremes, capitalism and communism? Are there any good reasons to restrict voting rights? This week, James Harrigan and Antony Davies answer questions about the subjective theory of value, debts to society, guns vs. butter, and plenty more in this week’s jam-packed episode of Words & Numbers.

Come to FEEcon 2019!

Foolishness of the week

Pennsylvania Mayors

Pew Poll on Views About Gun Regulation

Topic of the week: Listener questions

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Words & Numbers Backstage

Antony Davies on Twitter

James R. Harrigan on Twitter

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Americans, as individuals, carry a lot of debt. But don’t panic! Not all debt is created equal, and not all debt is necessarily a bad thing. Some debt—like mortgages, vehicles, even some college degrees—can be good debt. There are also bad kinds of debt, too. But the thing about individual debt is that it’s the individual's responsibility and really only the business of the borrower and the lender. Once the government gets involved, though, things can get messy. Just how messy and in what ways? Join Antony Davies and James Harrigan as they sort through the bills in this week’s episode of Words & Numbers.

Come to FEEcon 2019! Show Notes:

Amazon hiring robots

$6 trillion war

Foolishness of the week:

Limiting credit card interest rates

Topic of the week: Good debt and bad debt:

Household debt

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Antony Davies on Twitter

James R. Harrigan on Twitter

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Lately, headlines seem to focus on big companies that pay no corporate taxes. However, most of those big companies are still paying payroll taxes. So, have these big companies actually paid their fair share? Americans have their own tax burdens as well. How do we measure a fair tax for all incomes? How do people define what “fair” means? Join James Harrigan and Antony Davies as they cover progressive/regressive taxes, sales taxes, sin taxes, and more on this week’s episode of Words & Numbers.

Come to FEEcon 2019!

Show Notes:

New York may ban glass and steel buildings

Scientists discover how to convert blood to Type O

Foolishness of the week:

Treasury: US may have to stop borrowing

Topic of the week: Taxes

Amazon 1

Amazon 2

Join the conversation:

Words & Numbers Backstage

Antony Davies on Twitter

James R. Harrigan on Twitter

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Thought Experiment: Should the government tax buyers or sellers?

Consider the following three scenarios. In all three scenarios, a seller sets a price and a buyer decides, based on the price, how many units to buy. The number of units the seller sells varies depending on the price the seller charges:

Units sold = 100 - Price per unit

For simplicity (and no meaningful reduction in realism) suppose that it costs the seller $40 for each unit the seller sells. In the first scenario there is no tax. This is a baseline against which we can compare the scenarios in which there is a tax. In the second scenario, the government imposes a $6 per unit tax on the seller. For each unit the seller sells, the seller must pay (in addition to the $40 cost of selling the unit) $6 to the government. In the third scenario, the government imposes a $6 per unit tax on the buyer. For each unit the buyer sells, the buyer must pay the seller’s price to the seller plus an additional $6 to the government.

In each scenario, you can see the price that maximizes the seller’s profit. This is the price the seller will charge in that scenario. You can check the work by choosing a different price. You’ll see that any price other than the one shown results in less profit. At the end of each scenario, you see the final result: how much the buyer pays per unit and how much the seller receives per unit. Compare those results across the three scenarios to see something remarkable.

Scenario 1: No Sales Tax

Profit is maximum when the seller charges $70 per unit.

Units sold = 100 - 70 = 30

Sales = $70 x 30 units = $2,100

Cost of goods sold = $40 x 30 units = $1,200

Profit = $2,100 - $1,200 = $900

→ Buyer pays $70 per unit

→ Seller receives $70 per unit

Tax the Seller $6 per Unit Sold

Profit is maximum when the seller charges $73 per unit.

Units sold = 100 - 73 = 27

Sales = $73 x 27 = $1,971

Cost of goods sold = $40 x 27 + $6 x 27 = $1,242

Profit = $1,971 - $1,242 = $729

→ Buyer pays $73 per unit

→ Seller receives $73 per unit less $6 per unit tax = $67 per unit

→ Compared to No Tax, buyer pays $3 per unit more and seller receives $3 per unit less

Tax the Buyer $6 per Unit Purchased

Profit is maximum when the seller charges $67 per unit.

Units sold = 100 - 67 = 27

Sales = $67 x 27 = $1,809

Cost of goods sold = $40 x 27 = $1,080

Profit = $1,809 - $1,080 = $729

→ Buyer pays $73 per unit ($67 per unit plus $6 per unit tax)

→ Seller receives $67 per unit

→ Compared to No Tax, buyer pays $3 per unit more and seller receives $3 per unit less

Conclusion

It doesn’t matter whether the government taxes the buyer or the seller, they end up sharing the tax burden in the same way. The government decides from whom the tax is collected. The market determines who actually pays the tax.

 

 

No Tax

Tax the Seller

Tax the Buyer

Sale price

$70

$73

$67

Price seller receives (net of tax)

$70

$73 - $6 = $67

$67

Price buyer pays (including tax)

$70

$73

$67 + $6 = $73

 

 

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There’s no such thing as a free lunch or, in this case, a free college education, despite the promises of certain presidential candidates. The federal government already guarantees student loans. But what would happen if we just forgave all that student debt? What would it take, politically speaking, and what would it cost? And what’s the value of a college education these days, anyway? Join Antony Davies and James Harrigan as they tackle the topic on this week’s episode of Words & Numbers.

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Quick hits

Chalk on tires violates Fourth Amendment

Phone surveillance

Foolishness of the week

Williams College is afraid of free speech

Tuition at Williams College

Tuition at University of Massachusetts

Topic of the week: Free stuff is too good to be true

Free college too good to be true

Constitutional concerns about a wealth tax

Wealth tax

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Antony Davies on Twitter

James R. Harrigan on Twitter

Let us know what you think at: [email protected]

 

 

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