Why Don't People Manage Debt Better?

Re:Why Don't People Manage Debt Better? by tunesmith on Friday February 19, 2016 @04:25PM (#11136747)

I don't understand this. If the utility of money is roughly logarithmic, then that would imply the most fair tax bracketing would be a logarithmic curve. An example would be the "logarithmic flat tax" I see mentioned sometimes - figure out how many times above the poverty rate you make, log-10 it, and multiply by some flat constant (they usually recommend 9 or 10). If you plug in a middle-class earner's revenue to that formula, their effective tax rate is far lower than it would be under any flat tax I've seen mentioned. Flat tax in comparison is very regressive.

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Re:Why Don't People Manage Debt Better? by evanpw on Friday February 19, 2016 @09:02PM (#11138279)

Logarithmic utility of money implies that the last X% of your income is worth the same amount of utility, regardless of what your income is: log(x) - log[(1 - r)x] = log(x) - log(1 - r) - log(x) = -log(1 - r). But "does the same harm to every person" is not necessarily the right definition of "fair" in the context of taxes, though.

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Re:Why Don't People Manage Debt Better? by tunesmith on Sunday February 21, 2016 @12:05AM (#11143382)

Can you expand on that? What is x, what is r?

And you are saying that the last 5% of a millionaire's income has the same utility as the last 5% of a different person's income that makes 25k/year?

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