Archive for August, 2008

Barry Schwartz on the Paradox of Choice

Tuesday, August 26th, 2008

Schwartz states that when there are few choices and you are dissatisfied, you blame the world, but when there are many choices and you are dissatisfied, you blame yourself. I don’t do this. When there are many choices and I am dissatisfied, I often still blame the world for not arranging the information in an efficient way. In doing so, I am taking stock not only of the physical choice available to me, but also of the cognitive choices I have. I choose not to spend 10 min deciding what type of pasta to buy.

This is a meta-choice, and unless you are equipped with the right recursion stoppers, it’s hard to be confident that you are doing what you intend on a meta level.

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just call me doctor

Friday, August 15th, 2008

Successfully defended today.

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Rich People pay Less

Wednesday, August 13th, 2008

I just thought of a reason for why the effective corporate / upper bracket tax rate is persistently low. These entities simply avoid taxes by responding more effectively to tax incentives. Tax rebates are out there because the government wants to buy certain types of behavior right? The problem, accounting-wise, is that effective behavior-changing tax rebates don’t show up as (income – expenditure), they just show up as reduced government income.

This is a case of the market value vs. book value dilemna. Things are worth more to you than what you paid for them, otherwise you wouldn’t have decided to buy. Tax rebates buy behavior which is presumably more valuable to the government than the tax income lost, but under simple analysis is valued at the tax income lost.

Of course, when the tax-avoiding behavior is not the anticipated kind, then it is called a loophole. If you believe that regulators will never outsmart corporate tax lawyers, you should be arguing for a simplification of the tax code.

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