Thursday, October 16, 2014

Links

Farnam Street with a great excerpt from Atul Gawande's latest book (LINK)

Aswath Damodaran values GoPro (LINK)

Buffett Cuts Tesco Stake (LINK)

Rick Bookstaber: My Recent Work on Agent-based Modeling (LINK)
Related book, essentially warning about the risk of a crisis before the 2008 crisis began: A Demon of Our Own Design
Bill Gates shares his thoughts on Thomas Piketty’s Capital in the Twenty-First Century (LINK)
Piketty’s favorite solution is a progressive annual tax on capital, rather than income. He argues that this kind of tax “will make it possible to avoid an endless inegalitarian spiral while preserving competition and incentives for new instances of primitive accumulation.” 
I agree that taxation should shift away from taxing labor. It doesn’t make any sense that labor in the United States is taxed so heavily relative to capital. It will make even less sense in the coming years, as robots and other forms of automation come to perform more and more of the skills that human laborers do today. 
But rather than move to a progressive tax on capital, as Piketty would like, I think we’d be best off with a progressive tax on consumption. Think about the three wealthy people I described earlier: One investing in companies, one in philanthropy, and one in a lavish lifestyle. There’s nothing wrong with the last guy, but I think he should pay more taxes than the others. As Piketty pointed out when we spoke, it's hard to measure consumption (for example, should political donations count?). But then, almost every tax system—including a wealth tax—has similar challenges.