You forgot the part where you prove that rich people “create” jobs.
Is the conservative belief that a low tax rate on the rich is necessary to stimulate growth a fraud?
It would not be one time. It would yield 900 billion, year after year. It would impact the debt every year it was in place, until the debt was gone.
Well, we can go with Martin Hyde’s theory or look at what actually happens. Theory is all well and good but the economy is a complex beast and simple theories from Econ 101 have a place but for my money I’d rather go with proven examples.
On the face of it one would think raising taxes will negatively impact the economy. The problem is more complex though. If you implement a 1% tax or a 99% tax you are going to get bad results. The answer lies somewhere between the two (and as a note remember that a 90% tax rate is progressive which is to say you pay 20% up to a certain amount then 30% on the next chunk and so on up to 90%).
Right now the Capital Gains tax rate is very low and tops out at 15% for long term. Is it any wonder this is where people put their money?
Now, one can argue that this is a good thing and I would agree with them…to an extent. Spurring investment overall is good. With the current market it goes too far though. Rather than building a new factory put your money in the market. One would suppose then a company can invest and they do…to an extent but they too are better off in the market.
It becomes an Emperor has No Clothes problem. As long as everyone keeps agreeing the markets are fine everyone makes money. But precious little money is going to infrastructure or expanding your laborers and so on. The easy money is in the market. We saw this during the dotcom boom. Some companies had a market capitalization rate higher than IBM despite them having a handful of employees and nothing like IBMs infrastructure. This works as long as everyone pretends there is value there. Sooner or later the bubble bursts when people can no longer continue to pretend.
At the end of the day you need economic activity.
When the money goes to the government it does not disappear. The government uses it to do stuff. Of course we can argue whether the government is efficient or not. In some cases they are the only ones to do the job (military, mail delivery, etc.) and in other cases they would be terrible (selling iPods).
One thing that is certain though is concentrating wealth into the hands of a very few is not good for economic activity. How many iPods would you own if you were the richest person in the world? How many Big Macs would you eat if money were no issue?
The chart I linked to above showed there was not a correlation between employment and income taxes.
Imagine you are a rich person and your company made $1 million in profit. You can pocket that money and pay taxes or you can reinvest in your company.
When taxes are low you pocket that money. When taxes are high it behooves you to put that money back into the company (so it won’t be taxed). The money is still there, you can show a bank your assets and get loans which would be cheaper than paying taxes.
We have a decade and more of lower taxes and the results for the economy have been less than stellar unless you are fabulously rich.
How the wealthy can continue to say the only way they will hire people is if taxes are lower is beyond me. We have tried that experiment. It is not happening.
This is pretty complicated subject, and it doesn’t make sense to talk about raising or lowing taxes in the abstract. We have a ginormous deficit and are deeply in debt, and that has a big effect on the credit markets. We have to cut back on spending and raise some revenue. That’s the math. I’d love to believe we could cut government enough to close the gap, but that ain’t gonna happen.
So, the question we need to ask is: what is the best way to raise the revenue we need that has the least negative impact on the economy. As I’ve said before, I don’t think we can predict or even measure the impact on the economy of the small increases the marginal rates that are under discussion. No one is talking about raising rates to 50%, much less to the 90% we had not that long ago.
I think the Republicans know they are going to have to give in at some point, and they are doing none of us a favor by stalling the process. All that does is create uncertainty, and that is not good for the economy. I’ve often wondered what is more important: a fluctuating and unknown tax rate +/- some small percentage, or just keeping the tax rates constant at the higher percentage so everyone knows how to plan his business affairs into the future.
I think they know it too.
I think what they are doing is playing to their base in stubbornly not raising taxes and making the Dems take the fall for it.
Thing is, IIRC, the budget starts in the House by law and the Republicans control the House. Guessing they want to show they fought the good fight till the 11th hour and then only capitulated because the Dems forced the issue and rather than destroy the economy they had to relent. Just be sure to vote more Reps into office next time and it won’t be a problem
Here’s an interesting analysis that gets to the issue I brought up earlier. Tax rates are down for the realthy, but the percent of the tax burden paid is up.
So the rich are paying more than they used to, but they are making more, too.
Low tax rates for everyone is good for the economy so long as spending doesn’t exceed revenue in the long run. It’s all a bullshit idelogical argument on both sides anyway.
The left says the right wants to lower taxes on the wealthy because they are greedy selfish bastards.
The right says the left wants to raise taxes on everyone so they can fund welfare programs for all the meth head trailer trash and gheto crack babies.
At the end of the day, Ben Stein is right. It’s a fucking accounting problem made more complex by the politics of greed and entitlement.
Are you going to provide those examples?
And that means what to you?
When you concentrate wealth in the upper few percent is it a surprise they pay the bulk of taxes? Why would that be wrong? Do you espouse an everyone in America pays the same, flat amount to the government? Take all the bills the government has to pay and divide by the population?
400 people have more wealth than the bottom 150 MILLION Americans combined (that would be about half the United States)! (cite)
So again I ask, what is relevant about those people paying more taxes in absolute terms?
No they aren’t. That statement is based on the right wing idea that the government is useless.
Rich people don’t create jobs. Consumer demand creates jobs.
Allowing money to pool at the top leads to economic stagnation. Tax the rich hard and spend the money on the poor and middle class. More regular people with more cash in their pockets means more consumer demand and a healthier economy.
It’s how we ended the Great Depression. We just call it World War II.
Exactly. No one is going to “make jobs” unless there is a demand for what is produced by those jobs. Companies don’t hire people just because they can; they hire people because they need to do so. Cutting taxes on the wealthy won’t do much if anything to create jobs because it doesn’t create any demand that requires them to spend that extra money hiring anyone.
Don’t tax the rich because they invest and/or create jobs?
- If they invest in non-U.S.A. interests, is it still good for this country?
- If they transfer jobs from here to other countries, is it still good for this country?
- If they bank overseas, giving foreign banks greater power and influence, is it still good for this country?
Ignoring the strawman part of that post (bolded), they are not just paying a larger amount in absolute terms, they are paying a larger percent of the total. Significantly larger. I think that is an important piece of information to have at hand when we’re talking about people paying their “fair share”.
Why is that a Strawman? You made a point and I asked for clarification. I do not think it is unreasonable to suppose that when you say Group-X pays more taxes in absolute terms to ask that question.
Further, when you get on to percentages, the amount people are taxed in the US actually is pretty close to flat across all incomes as a percentage of what they have. Yes, we have a progressive income tax rate which makes the rich pay more but that is not the only taxes we pay. When you consider ALL taxes (property, sales, etc) the rates are not exactly even but close enough to not get in much fuss about. (I have posted a cite for that before…still trying to find it…my Google-fu is not strong today)
And yeah, they are paying a larger percent of the total because they have a larger percent of the money. Why is that surprising or even wrong?
You seem to have forgotten the Golden Rule. Guy who’s got the gold, makes the rules.
And do you think we should just throw everyone’s money into a big pile and divide it up equally among us? I’m just asking…
I didn’t offer a value judgement. I’m just trying to paint a full picture. I don’t have a problem in raising the top tax rate to what it was under Clinton. I just wish we could pick a tax rate and stick with it.
He said, batting big, brown innocent eyes. “Why, no, I’m not reducing your argument to an absurdity and inviting you to deny it! Just askin’, is all!”
Got no beef against snark, John, be the last. But if you try to pretend that snark is polite discourse, you oughta get busted for it. Mildly, to be sure, but busted.
Ahem:
Methinks that W-a-M protests too much.
While I happen to agree with Ben Stein on this he’s burned the last of his credibility with me. So outside of Argument from Authority wheres the proof he’s right?
This thread’s title is unnecessarily loaded, I hope we can find an answer despite it.
No.
Nor do I see a place where I even intimated as much.
My question to you was based on statements you made. The follow through was not out of left field.