Now we have the new millionaires. The financial pros who sold CDos and packaged bad mortgages destroying the economy. What jobs did they create. They actually broke companies ,destroyed their 401 Ks and sunk their retirements. Nice work if you can get it. But of course they should not pay taxes. Paulson only got 800 million dollars from Goldman Sacks. Why should he pay taxes . He is important after all.
I tend to favor a flat tax with few deductions. In Estonia the flat tax seemed to aide in promoting economic growth so much that thetax rate was dropped.
With a flat tax the wealthy pay more simply because 20% of 10 mil is much more than 20% of 20 to 50k. Nothing discourages investment or innovation. If you make more you know exactly how much more you’ll keep and pay.
I could support a healthy individual and limited children exemption to help the poor although the “personal responsibility” side of my philosophic view says everyone should pay something.
Our current tax system is complicated to the point of being ludicrous. A flat tax makes it very simple for anyone with basic math skills to figure it out.
Well my point was to dispute this as an absolute statement. Assuming an individual has money to invest, then what matters is not what a marginal tax rate is. The individual will invest somehow; the marginal tax rate instead influences which investment makes the most sense for their circumstance. It may create a circumstance in which a low risk choice makes sense or one that a high risk choice makes sense; that just depends.
The other side of supporting the “high taxes=less investment” argument is to state that the individual won’t have the money to invest because the government has it instead. But the government will also be investing the money. Now one can argue about whether the government is more or less likely to invest in a manner that helps the overall good (however you define that), or if that is “fair”, but investments will still be made.
In each case the money is not disappearing; it is just being invested differently.
One assumes my accountant has already done that. Anyway the point here was to dispute the notion that higher marginal taxes (assuming they have to be paid) disincentivize working more. They certainly don’t if you feel you need the money to pay your bills.
This is reminiscent of the liberal economist’s recipe for rabbit stew. The first line is
The conservative’s recipe is exactly the same, except the first word is “Catch”.
Regards,
Shodan
Yep, those conservative economists have been proved dead right about everything by the events of the past couple of years.
And in the case of real estate investors and tax rates, they’d happily pay higher taxes in an economy which more equitably shared the wealth as it would mean higher rents and predictable growth in property bought to sell. And higher long-term profits.
It’s great fun to go back and look at contemporaneous accounts by conservative economists on how great Bush’s tax cuts were supposed to be.
Here’s a howler: Bush’s tax cut is “tiny.” And if Congress doesn’t cut taxes, they will spend the surplus!
Exactly.
CMC fnord!
Is there any way I can get you to write all of my posts? 
Shodan. The scenario being responded to *implicitly * assumed the individual had the money to invest. My point of stating that such was the assumption explicitly was to set up the next point, a discussion of the argument that does not include that asumption, that taxation may keep the individual from having the money to invest and why that still does not imply that the money is not invested.
But if you prefer snide analogies to reasoned discussion, fine. I’ll play with your analogy:
Yes, your Elmer Fudd conservative is all about hunting wascally wabbits. Funny thing about Fudd and his small game hunting, his attempts usually end up with him shooting himself. Now the intelligent economist’s recipe is the same except it begins with
“Forget about the stupid rabbit, they’re boney anyway. Pool your resources with a few other starving hunters, build a ranch, and eat yourself some steaks, boy!”
Taxation is how we starving hunters pool some of our resources to build ourselves our ranch, (to make this explicit for the dense among us, that means our country’s economic prosperity) so that we can all eat ourselves some steaks. It is not theft or confiscation. Sure it is reasonable to debate how much each should contribute to build the ranch, how big the ranch should be, who has to handle the manure, and who gets the prime cuts, but if you are going to live on the ranch (enjoy the benefits of our country) you are going to have to do your share. And better to fixate on how we can we have a bigger herd than on how I can personally make sure my steak is 2 oz bigger than the other guys.
But go on and keep huntin’ wascally wabbit.
I have to agree with everyone who says “the same percent as everyone else.”
Just get rid of all the deductions and loopholes, flat tax. He who has the best accountants shouldn’t win.
I left out a key word in my statement: “productive” – as in lead to “reduced productive investment.”
I believe your analysis is off-topic. Why? Because I thought Sam’s point was about the bigger context of society progress and how the aggregate investment decisions affect the nation’s standard-of-living. Your statement about an individual’s investment decision is like dissecting a single clinical laboratory experiment divorced from finding big picture conclusions. In other words, what do the aggregate results of 1 million lab experiments say?
To explain this concept further, I refer to your comment:
Those government investment decisions will not have the same quality of innovation as private investment. Bureaucrats dole out money based on corrupt lobbying and cronyism. Taking most of the citizens money via taxation and rechanneling it as government investments will lead to lower standard of living. Private investments, on the other hand, are vetted by the public’s skepticism (and greed for personal capital gain). Private investors (in aggregate) will channel the funds into projects that benefit society the most.
Government doesn’t just invest differently – they actually invest wastefully.
History has shown that government (politicians) invests money less wisely than private individuals.
Again, you’re focused on a single scenario of needing that very last dollar of income to pay the bills. Lot’s of folks (the “wealthy” ones that we’re trying to extract additional tax from) don’t live paycheck to paycheck. They have ways of recovering the loss of +3% tax hit without having to work additional hours.
No his point was that we are in a 1.6 trillion dollar budget hole.
I agree but you don’t use the highest spending year in our history as the baseline.
I think we should pay down debt or (gasp) save money when we expect a surplus but the last surplus we had was consumed (and then some) to pay for tax cuts for the rich. Remember Clinton left an expected budget surplus and before 9/11 or any of that stuff, Bushco jammed a tax cut for the wealthiest Americans through congress and this tax cut more than consumed the projected surplus but Bush said it would be OK ebcause tax cuts will generate more tax revenue (something even the CATO institute doesn’t believe anymore).
I am glad you got the point. Unfortunately, you go on to claim -
You begin by saying, in essence, “assuming somebody has extra” and then immediately proceed to “assuming we are all starving”.
No matter how much we take, there will always be more. Until there isn’t.
Regards,
Shodan
I think you are confusing a graduated tax system with a complicated tax system. Our tax system isn’t complicated because we have tax brackets, our tax system is complicated because we have too many bells and whistles in the tax code. everything from the mortgage and student loan interest deduction to special tax treatment of insurance products to the treatment of oil and gas depletion, the tax code is never going to be simple. It can be simpler but it will never be simple for a whole host of reasons.
No, private individuals expect to get more money from their investments. The government has obligations to provide basic services which by the very nature of the activities cannot be expected to be profitable. Having police, roads, courts, air traffic control, a military, social programs, libraries, schools, and all that other stuff are investments which provide returns that have value, but cannot easily be turned into dollar figures.
Sure, there’s waste in government. But it’s funny how we excoriate government for the Bridge to Nowhere (which was never built) for years and years after the fact, but quickly forget what a disaster New Coke was. We criticize government for spending too much on senior citizens, but large numbers of small businesses fail in the first two years, and we don’t talk about how entrepreneurs are often fools who have bad ideas.
Now, of course government has to be held to a different standard because it uses the public’s money. However, if we are to judge government by a different standard, then let us actually be consistent in applying that standard, and not return to facile comparisons to business whenever it helps some people make some cheap shots.
It would kill domestic investment. It would drive non-productive wealth offshore. This is the highest wealth tax that I could find (France) and it accounts for about 2% of government revenues because of a realtively large exclusion (a million dollars or so) and because you just don’t park your wealth in France if you can help it.
The current estate tax begins at 3.5 million and ratchets up to 55% pretty quickly.
The problem is that there are too many opportunities for tax planning. Parking assets offshore, insurance products, trusts and estates.
I thought somebaody was arguing for taxation a the 99% rate for million dollar earners.
It doesn’t matter that you can’t put an exact $$$ figure on those items. The OP’s tone is about extracting additional pounds of flesh from the rich vs analyzing government outlays into roads and libraries.
Also btw, you have it backwards. Social programs are the side effect of building wealth. When society builds new wealth, they can afford to provide social benefits.
Well, the government wasted $25 million on the “Road to Nowhere”
You may dislike Palin but any googling will uncover both Democrats and Republicans with unproductive wasteful projects.
Those bad business ideas do not live forever enshrined in a government institution (Department of XYZ), or committee, or military base, that can’t be dismantled because of politics. There is no Department of New Coke with politicians that fight budget cuts.
Damuri, it wasn’t me in any case.
Rum, well the point that I heard being made was that taxing individuals makes for less investment. Period. That is the point I disputed. It is false.
Moving to your point, well that is a different debate: Does it make for less productive investment? Is it true that individuals’ separate investment choices in aggregate make for a greater societal and/or economic good and do so more efficiently than does the a government doing the investing? Lawdy, that debate has been has here before. You believe that there is an established answer to that question. Fine. I would disagree with that as an absolute statement.
Let us take some areas of investment:
Investing in providing for security. Is it more efficient or better for individuals to each invest on their own or to pool resources through the government to provide for police and fire and national defense?
Primary and secondary education. Same question.
Basic science research. Same question.
We may disagree about exactly which things the government does better and which things individuals acting in aggregate motivated by self-interest do better, but to take an absolute position is clearly false at either pole.
No, I’m saying that the value of government programs is not evaluated by the effects of building wealth.
As I said above, the utility of exacting additional pounds of flesh from the wealthy must be measured against the circumstances of what the government requires to do the job it must do. If we’re in a crisis of some type, whether military or social, then of course people should be paying more taxes. If things are hunky-dory, then people shouldn’t pay as much.
You can’t view any government program as the side effect of wealth, as in, we establish Tax Policy A, gather up the money, and then figure out what to do with it, and if we don’t have enough money to keep police on the streets or to keep old people from freezing to death in the winter, too bad. There are two variable here (how much to tax and how much to spend) and we can adjust them both. We should balance the legitimate roles of government in providing services with how much people ought to be paying.