Or, we could raise rates across the board, back to historically normal & sustainable levels, have greater government investment in central planning & the commons, & save ourselves some trouble.
Realistically, that’s not going to happen. It’s very hard politically to cut war spending or entitlements, so everything else got slashed [del]to the bone[/del] to the marrow in the years since Reagan. Our EPA regulators don’t even police; they just rely on private self-reporting. Our medical schools had funding cuts in the 1990’s to give the government short-term savings, & now that has to be made up.
We have to increase spending to make up for decades of under-spending under the GOP.
More likely, the top marginal tax rates created a disincentive to accumulation of vast wealth in taxable liquid form. Incomes far above the mean were far rarer, part of one’s compensation could be taken in tax-free benefits, & there were (in line with your point) more tax shelters then.
Hmm. Looks like both countries are regressive, then. I suppose disparity in net worth outstrips disparity in income, but even with a flat tax, one would expect the numbers to be close.
Sounds like you’re going through a Reaganist phase, which we have been doing for 25 years. You’re going to pay for these cuts in the long term as we are.
[QUOTE=Sam Stone;10974711You happen to look at the issue through the filter of ‘social justice’ or ‘fairness’, where the absolute wealth of the rich matters. Not all of us care about that. We just want to figure out how to fund government most efficiently.[/QUOTE]
Eh, but the question is, fund it to do what? Your government funds health care, ours does not. Ours does military R&D *for the entire planet, *yours does not. Our country is a major funder of the UN, & a global hegemon, whereas yours just takes in a shocking number of refugees.
etc.
A. The estate tax has been repealed in the USA.
B. Relative wealth, which sets prices of highly scarce goods, is zero-sum by definition. So, yes, it does matter. Or do you think that a man should be happy to get a raise which fails to keep pace with the inflation of the money supply?
Apparently, I’m dumb enough. Do you really think that a man with savings should be taxed only by his income at the present point, & a man with debt should simply be taxed according to his inflow without regard to his obligations? That’s simply taking a simplistic formula & declaring the only fair approach through failure of imagination.
A child should be expected to think that is most rational. A grown man can be forgiven for seeing further subtleties.
Actually, no, FICA is not kept in separate monies to be given back with interest. Perhaps you’re thinking of W Bush’s attempt to replace FICA with mandatory IRA’s. Or of IRA’s. FICA money goes into the general fund, & is used to fund the military (which, again, is largely overseas indulging imperialist fantasies). Most of the whinging about Social Security’s “unsustainability” is due to the fact that one day FICA will no longer pull in more than SS pays out, & we’re being prepared for the day when SS is canceled & the government welshes on us all.
You know what else transfers wealth from the rich to the poor? Actually hiring poor people & paying them a living wage. Are you against that too?
I simply don’t buy the logic that higher tax rates necessarily increase tax avoidance behavior–certainly not to the degree that revenues go down.
If the top marginal tax rate is 50%, those who dodge their taxes will be the same persons who dodge taxes with a top marginal tax rate of 32%. The exact same set. Anyone who can get away with something & is dishonest enough to do it will do it anyway.
This is a bait & switch argument. You’re saying that because these men have demonstrated an ability to accrue wealth to themselves, that they are better at spending wealth to better society. Non sequitur.
I agree with this comment.
Given that they typically seem unable to accrue wealth, & certainly gov’t policy is in no way to give them wealth (as opposed to giving them subsistence & continuing dependency) this seems to be true.
Despite GOP rhetoric, a hand up will cost far more than a more cheapass handout. But of course the ruling class types don’t all want to give hands up, because that would mean they would have less relative-wealth advantage. Better in many middle-class & upper-class eyes to pat themselves themselves on the back for being rich enough to contribute 5% of income & still contribute “more” than a normal person who pays a traditional 10% tithe, never mind that then less of their chunk of GDP ends up going to charity. The proud justify their behavior with a misuse of the phrase “absolute terms” (as if any unit of currency had either constant or intrinsic value) & an appeal to Mandeville.
Not if you do it right. The whole point of hiring people is that the employee’s work (combined with the resources provided by the employer) generates wealth, part of which is then given to the employee in the form of wages.
To add to this point, the disincentive for gargantuan CEO compensation meant that more money was reinvested in the firm. Today, there is no incentive for CEOs to consider long term growth because compensation packages are negotiated up front with guaranteed severance, salary, bonuses, stock options, and perks regardless of CEO or corporate performance. It doesn’t take vision or ideas to fire workers, cut benefits, and dodge taxes to boost quarterly profits and dividends.
I’m aware that Social Security is a essentially a Ponzi scheme. The point is that FICA taxes supposedly go towards paying later benefits right back to the person who paid the tax. It’s supposed to be a mandatory retirement program. This makes it fundamentally different in philosophy than income tax, which is simply money that goes to paying the cost of government. Get rid of FICA for the poor, and you’re essentially saying that Social Security is simply another welfare program.
No, actually it doesn’t. Not if they are hired through normal market transactions.
But yes, if you put a gun to someone’s head and force them to hire someone under conditions they don’t think will be profitable, then yes, you are forcing a transfer of wealth.
I do not consider this to be a feature.
Are you making the distinction on whether one gets “value for value,” or what?
My analysis of fundamental economic realities is that relative net transfer of value is the product of relative negotiating power, which outstrips any objective measure of the value of the service provided.
Hm. I hadn’t thought about it this way, but… absent rule or custom dictating standardized measures of value (such as usury laws & mandated pay scales), wealth will gradually concentrate in the hands of those with more power, & since money is power, eventually, this will accelerate. So it seems you’re right. In a libertopia, wealth will (first slowly, then more quickly) concentrate in the hands of the already rich & never transfer to the poor by Smithian mechanics. Huh.
But why do you think that’s a good thing?
What’s “objective measure of value of the service provided” ? I tried looking this up on google and couldn’t find anything on it.
I’ve worked day labor jobs and office jobs and all those varied experiences taught that I never had any “objective” value. My shoe size is objective data… but my worth to society is subjective. I believe part of my ability to take advantage of the economy is due to the fact that I always remind myself that my “value” is subjective.
Exactly, Ruminator.
That’s kind of my point. In a world where all prices are set subjectively, those with more power in a negotiation have the power to set prices in their favor. “He who has the gold makes the rules.” Without customary guidelines for wages & prices, this becomes a self-feeding cycle, & the economy moves further & further from equality.
I think a stable equilibrium is reached once a royal family owns everything.