Forum Post: New Book onDarwinian Economic Theory - Very Interesting Ideas on Taxation

I Started reading the book linked below a few days ago. It's a very simple pop science type book that compares the traditional invisible hand view of markets with a view based on evolutionary competition.

The author's views are very much aligned with the OWS movement, namely that the market system is failing the country in a number of ways and that the invisible hand is not going to fix it.

A quick summary of the idea is as follows: In nature there are 2 types of competition, survival of the species and survival of the individual's genes through winning mates. When left to evolve without direction the competition for mates often produces ridiculous results that are detrimental to the species overall. Examples of this are huge antlers that make mobility through a densely forested area problematic and the extravagant plumage of peacocks which again slow down the male birds making them easier prey. The analog in people is that those who win spend more and more on elaborate, wasteful mansions, luxury cars, etc to compete with each other for position. The corollary to this is that this consumption at the high end increases this type of consumption down the ladder. Also this behavior influences corporations and executive pay.

The Author is an advocate of the so-called progressive consumption tax. The idea is to tax consumption defined as the difference between earnings and savings less a standard deduction. So you get taxed on what you spend, not on what you save like you are now. The rates would be progressive, i.e. higher and higher marginal rates for higher amounts. So in this system the poor would not pay much in taxes and the rich would be faced with the decision of buying a $200k car + a huge tax or instead buying a $100k car and investing the 100k. It makes a lot of sense as is, but the best suggestion he has is to simply add a small progressive tax to the current system only to high earners, 1 million or more per year and then phase it in more broadly should it prove itself successful.

My background is experimental physics, so I absolutely love the notion of running this as an experiment. If the data support it as a successful policy, then it can be expanded to help turn this country around.

http://www.amazon.com/Darwin-Economy-Liberty-Competition-Common/dp/0691153191/ref=sr_1_cc_1?s=electronics&ie=UTF8&qid=1320329776&sr=1-1-catcorr

The book can also be found on ebooksclub.org

An Economist post about the progressive consumption tax

http://www.economist.com/blogs/democracyinamerica/2010/11/inequality_and_executive_pay