to wuf: faultlines and the rich, obama's failings

[wufwugy]

The rich will stop spending and increase prices on goods and services to make up for higher taxes.

Even if that were true, it wouldn't have a detrimental effect on the economy because of turnaround spending with tax dollars. But also, that's not a worry because the idea of taxing the rich more than the poor is borne of hoarding practices that come around when people are effectively too rich

Penney, would be nice to get an actual rebuttal

[Sasquach991]

Even if that were true, it wouldn't have a detrimental effect on the economy because of turnaround spending with tax dollars. But also, that's not a worry because the idea of taxing the rich more than the poor is borne of hoarding practices that come around when people are effectively too rich

Penney, would be nice to get an actual rebuttal

It would be nice to get an actual rebuttal. Tell me why it's not true.

Turnaround spending? Explain. I'm no economics expert and really don't care to be.

Hoarding practices? So people who are in a 50% tax bracket should not try to find ways to pay less taxes.

@a500lbgorilla I like the self debate. Keep it going

[a500lbgorilla]

@a500lbgorilla I like the self debate. Keep it going

I could use your help :P

[wufwugy]

It would be nice to get an actual rebuttal. Tell me why it's not true.

Higher taxes on the wealthy doesn't curb their spending and investment because it's meant to address the hoarding issue. We're not interested in cutting into their cyclical consumption or investment. That's why one of the caveats of progressive taxation is that investment can lower your bracket. This is one reason why high taxes on the rich work so well, because it promotes investment instead of hoarding. Currently, our paradigm is the opposite. Soooooo much money has been hoarded, that the richies say they're waiting to use it on good investments, but they don't realize (or more like don't care) that it's because of all that hoarding that the consumption cycle is disrupted and those investments opportunities are not arising

Turnaround spending? Explain. I'm no economics expert and really don't care to be.

Taxes don't just disappear. In fact, they're the highest economic multipliers. It's only when the wealthy are taxed so little that they have so much money they use to corrupt governments that tax dollars are secretly returned to the rich that tax dollars lose their big multipliers. The US government is the largest employer of a middle class than any institution on the planet, and many of what tax dollars pay for are things that greed would like to do away with, but would have egregiously detrimental effects on the masses.

Also, all tax dollars are spent, but not all tax cuts are. If you reduce taxes, you can expect only a fraction on the dollar to return to the economy, but when increase spending by the exact same amount instead of cutting taxes you get the entire sum returning to the economy

Hoarding practices? So people who are in a 50% tax bracket should not try to find ways to pay less taxes.

They should, but nobody in the US is in that bracket (except possibly some measure of poor people when you combine all taxes). Look at it this way, if taxation is progressive and people are paying the top rate, imagine how bad it would have been if that top rate was low because the only reason they're in the top rate is because they have soooo much money that they're not recycling it, and thus the aggregate economy suffers.

All us normies do cyclical consumption. That's what economies are based in. But the rich don't want to do their part in cyclical consumption. Why should you and I be structurally determined to recycle 100% of our wealth through the economy, yet richies should only be structurally required to do a fraction of that?

[Sasquach991]

Higher taxes on the wealthy doesn't curb their spending and investment because it's meant to address the hoarding issue. We're not interested in cutting into their cyclical consumption or investment. That's why one of the caveats of progressive taxation is that investment can lower your bracket. This is one reason why high taxes on the rich work so well, because it promotes investment instead of hoarding. Currently, our paradigm is the opposite. Soooooo much money has been hoarded, that the richies say they're waiting to use it on good investments, but they don't realize (or more like don't care) that it's because of all that hoarding that the consumption cycle is disrupted and those investments opportunities are not arising

So if the rich don't invest in a bad economy then you raise their taxes to try to force them to invest so they will be in a lower bracket. What if they decide to cut costs by laying off employees, or reduce income by closing stores? It's their choice but they get targeted by the guvmint with all the blame.

Taxes don't just disappear. In fact, they're the highest economic multipliers. It's only when the wealthy are taxed so little that they have so much money they use to corrupt governments that tax dollars are secretly returned to the rich that tax dollars lose their big multipliers. The US government is the largest employer of a middle class than any institution on the planet, and many of what tax dollars pay for are things that greed would like to do away with, but would have egregiously detrimental effects on the masses.

Greed? When someone will not do with THEIR money what you want them to do then they are greedy? No sale there.

Also, all tax dollars are spent, but not all tax cuts are. If you reduce taxes, you can expect only a fraction on the dollar to return to the economy, but when increase spending by the exact same amount instead of cutting taxes you get the entire sum returning to the economy.

Of course all tax dollars are spent. It's not their money. It's easy not to be greedy with other people's money. If you lower taxes on the rich will they be more or less likely to hoard?

They should, but nobody in the US is in that bracket (except possibly some measure of poor people when you combine all taxes). Look at it this way, if taxation is progressive and people are paying the top rate, imagine how bad it would have been if that top rate was low because the only reason they're in the top rate is because they have soooo much money that they're not recycling it, and thus the aggregate economy suffers.

All us normies do cyclical consumption. That's what economies are based in. But the rich don't want to do their part in cyclical consumption. Why should you and I be structurally determined to recycle 100% of our wealth through the economy, yet richies should only be structurally required to do a fraction of that?

Seems a bit greedy to try to tell other people to do with their money regardless of how much they have.

How about this?
I don't think anybody should be able to withdraw any of their poker BR. It stays online where other people have the chance to win it. When you withdraw it to buy a townhouse or a BMW 3 series 335i coupe, you are being greedy (not aimed at you M2M ). When you get to 5000NL you should be required to use 40% of your BR to stake microstakes players so they have a chance to be successful at poker too (not aimed at you Keith ). They didn't earn it but it's fair. If you do not stake the micro players then the amount of rake that only you pay increases by 20%. You don't agree with this thhen you are greedy?

Bill gates worked a "little bit"? Really?

[Lukie]

@jack

Thanks for posting that again. I understand well the concept of decreasing marginal utility. And while I don't agree that a 90% top tax is anything evening approaching fair or ideal, a 90% tax above $1,000,000 is far different than wuf's proposition of a 100% tax above $250,000.

Beyond that though I think there is a fundamental and philosophical difference of opinion here that no amount of debate will change.

[a500lbgorilla]

Jacks entire last post is caesar salad.

Beyond that though I think there is a... philosophical difference of opinion here that no amount of debate will change.

This (edited) every time. That's why I tried to show my hand as best I could in my last post. Whatever it is that places you on one side of the divide from the other, it strikes me as something which isn't grounded in any true difference. That your opinion can become my opinion and vice versa but if we both pursue the truth, debate is not the tool that shall get us there. Debate/ discussion/ rhetoric is the tool that we use to share the truth once we've found it. It's just that we've all learned long ago how to share the truth without actually having the truth.

[Sasquach991]

...we've all learned long ago how to share the truth without actually having the truth.

I like this. My new sig.

[wufwugy]

@jack

Thanks for posting that again. I understand well the concept of decreasing marginal utility. And while I don't agree that a 90% top tax is anything evening approaching fair or ideal, a 90% tax above $1,000,000 is far different than wuf's proposition of a 100% tax above $250,000.

Beyond that though I think there is a fundamental and philosophical difference of opinion here that no amount of debate will change.

FWIW, if I were in charge I would probably go for something like 60% at income above 1 million. My other proposal would drastically change the world and would do things like stifle some aspects of globalization. But I think it would actually boost technological advances. Regardless, the perfect world paradigm is very tight-nit with very low inequality

[Lukie]

FWIW, if I were in charge I would probably go for something like 60% at income above 1 million. My other proposal would drastically change the world and would do things like stifle some aspects of globalization. But I think it would actually boost technological advances. Regardless, the perfect world paradigm is very tight-nit with very low inequality

what are people paying above 1 million now? 35% federal income tax + payroll taxes (capped) + state + local? Isn't that close to 50% already for someone making $1m/year? Heck pre-Bush tax cuts it is probably right around that 60%.

I don't think the current sytem is as bad as you make it out to be. Perhaps closing some particularly egregious tax loopholes would be a good start.

edit: I am not an economist and am not claiming to know what an ideal top tax rate is

[wufwugy]

So if the rich don't invest in a bad economy then you raise their taxes to try to force them to invest so they will be in a lower bracket.

The economy is bad because they have too much of its money. At every given point we're dealing with finite wealth in an economy, and since the economy churns only on cyclical consumption, when there is lack of demand it's because there's too much wealth stuffed away in pockets of the system not contributing. The rich are currently richer than they have ever been. That is why the economy is so shitty. They are holding onto the very wealth that is needed to run the economy via cyclical consumption

What if they decide to cut costs by laying off employees, or reduce income by closing stores?

Then they would be terrible businessmen. But the the evidence has shown that when the rich have a smaller portion of the pie, businesses actually thrive due to more customers spending more money.

Greed? When someone will not do with THEIR money what you want them to do then they are greedy? No sale there.

Be sure to not impose things like morality onto economics. Economics is a mathematical and behavioral system. Moral ideas like ownership are afterthoughts and facets of the system. I mean, I guess you could claim moral ideas are paramount, but don't pretend you're referring to economics then. The fact is that if you want to run an economy, you have to run an economy

Also, the greed I was referring to was the stuff that makes the corruption and bribery

Of course all tax dollars are spent. It's not their money. It's easy not to be greedy with other people's money. If you lower taxes on the rich will they be more or less likely to hoard?

They have and will be more likely to hoard. We've been running the same dysfunctional "give the rich more" econ strategy for four decades now. And things have only gotten worse for everybody else. Much worse, in fact.

Seems a bit greedy to try to tell other people to do with their money regardless of how much they have.

Well that's not what greed is. Such irony in being able to claim trying to stamp greed in exchange for fairness as itself greed

Bill gates worked a "little bit"? Really?

He most certainly never worked harder than my father. Or my brother-in-law. Or me. Or most normal people