Spenders vs. Savers

by Dave Schuler on December 19, 2012

Arnold Kling has an interesting thought experiment over at his new digs:

Suppose that Lois Lender and Sammy Spender work at identical jobs, earning identical incomes. However, Sammy spends all his earnings, while Lois saves 20 percent of hers. Do you think that Lois should pay more in taxes than Sammy, as happens when we treat interest, dividends, and capital gains as income?

I find a few flaws in the answers he gives but I think it’s an interesting question nonetheless and provides a bit of insight into the national conversation.

{ 61 comments… read them below or add one }

Janis Gore December 20, 2012 at 5:19 pm

I can blather with the best of them, and more to the point.

Janis Gore December 20, 2012 at 5:26 pm

If you take capital gains too low, it releases a lot “ambitious” money, without anything to back it up. The investments become bad, like speculative housing.

Janis Gore December 20, 2012 at 5:29 pm

The loan rate should be higher.

Janis Gore December 20, 2012 at 5:36 pm

“Investment” means something.

Janis Gore December 20, 2012 at 5:37 pm

Drew “invests”.

Janis Gore December 20, 2012 at 5:41 pm

I’m not so sure about Romney.

Janis Gore December 20, 2012 at 5:43 pm

My husband wanted me to see $100,000 out of the condominium. That won’t happen.

Janis Gore December 20, 2012 at 5:48 pm

Ethics are screwed.

Janis Gore December 20, 2012 at 5:49 pm

How’s that, Uncle Dave?

Janis Gore December 20, 2012 at 5:54 pm

“Tramps, like us, Baby we were born to run.”

Janis Gore December 20, 2012 at 5:57 pm

How’s the plumbing going, TB?

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