Oh, of course! I was just going the long way to say that it hasn’t ever been used as an actual piece of theory that’s been used to analyze and set tax rates.
It’s been co-opted into a talking point for the GOP, along with the assumption that taxes are too high and strangling the economy. “Taxes are too high! See, the Laffer Curve says that if we reduce them, GDP will rise! Let’s lower taxes!”
This is what I keep hearing, that Americans support tax cuts for the rich because they are convinced that someday they will be rich themselves, and so supporting policies favoring the rich is in their best interest in the long term.
Is this even plausible? Does the average American really believe that they will be rich someday? Seriously? Because the people I see are struggling to make it to the next paycheck. They might fantasize about being rich, but they don’t think they actually will be. It’s always, “If I win the lottery…”
It’s never “When I make the big time with this stuff I’m working on…” Nobody I know honestly believes tax cuts for the rich will ever favor them.
And if I remember right, Joe the Plumber was a Republican plant anyway.
From the Wiki page
Wurzelbacher spoke to Katie Couric of CBS Evening News on October 15, shortly after the conclusion of the final debate. Asked whether Obama’s proposed $250,000 tax threshold would affect him, Wurzelbacher replied: “Not right now at presently, but (…) he’s going to do that now for people who make $250,000 a year. When’s he going to decide that $100,000 is too much? (…) You’re on a slippery slope here. You vote on somebody who decides that $250,000 and you’re rich? And $100,000 and you’re rich? (…) Where does it end?”[22] He also said: "I asked the question but I still got a tap dance
I’m told that “trickle down” was coined by Will Rogers, along with “trickle up” way back in the Depression era. He wrote the following
One of the main ways in which tax rates are lower for the wealthy is that capital gains taxes are lower than earned income taxes, and there is a good reason for that: inflation.
If you buy something for $10 and sell it for $20, you have $10 of capital gains income. If you did that over the course of a few days, then, that’s basically the same as getting paid $10 in wages. If you owned the thing for a few years, it’s pretty close. But if you did it over a long period, then inflation is going to make your gains potentially illusory. Average inflation is somewhere around 2% a year, so after about 35 years, the thing you bought for $10 will be worth $20 even if its value hasn’t gone up at all. But you’ll still be taxed on the $10 in gains on paper.
A capital gains rate that’s as high as the earned income rate would discourage long-term investment, and that would probably be bad for the economy.
An arguably better way to handle this would be to index the cost basis to inflation and then tax capital gains at the same rates as normal income. Back when taxes were done on paper this was potentially a big pain in the ass, but it’s really not anymore.
But those JFK tax cuts do not seem to show up in the graph just before your post.
The “some” who believe that lower taxes for high-income people are good are the high-income people.
From his mouth to your ears:
Stranger
AIUI, lower taxes for the rich means they can invest more money, which supports companies trying to grow their business, and growing their business will lead to more hiring and more jobs, which lowers unemployment. The whole “job creators” meme.
However, without demand, companies cannot grow, even with abundant capital. And that is where this whole house of cards falls down, as well as the rich just keeping/hiding the money they are not paying in taxes, so it’s not really doing any good anyway - it’s not getting plowed back into the economy the way the supply-side theorists believe.
Tax cuts for the not-so rich would definitely increase spending, and stimulate demand, so companies can grow. There is probably some balance of available capital to demand - it cannot be all one and none of the other.
I’m not sure where you stand on this from your post. All I know is that if the increase in wealth concentration we’ve seen in the past 40 years led to an increase in charitable giving, my mailbox (both real and electronic) wouldn’t be filled with charitable organizations wanting money.
Simple: because the people with lots of money and influence spent a ton of money and influence convincing everyone that doing what was best for the people with a lot of money and influence was in fact the best thing we could do for everyone else too.
Thus a bunch of people with little money, little influence, and little prospect for more of either became convinced that supporting people with lots of money and influence would be the best thing for themselves.
Can you think of other reasons? People stuck in crap jobs dream, lucky for us. One example. There were 1.6 million self published books last year (or some recent year.) I see pitches for self publishing all the time, and many are about how much more money you’re going to make not paying a publisher. Which is true for a very few people, but half of self published writers make under $500 a year, and I don’t know if that counts the expense of preparing the book in terms of covers.
Hell, remember Ralph’s get rich quick schemes in “The Honeymooners?”
Now some of it is lying to the credulous. Remember how Republicans said that estate taxes would break up family farms, while never being able to find cases where that happened?
I never saw anything to make me think Joe didn’t believe he was going to be successful. He did get touted by the GOP, but for some reason the story took hold. I think it was exactly because they were playing to this make it rich fantasy.
Well, to answer your question succinctly:
You gotta hand it to the Republicans for convincing a large number of people to vote for them and against their own interests, using the culture war as a wedge.
I’d give them more credit if they had come up with it themselves. Their strategy is identical to the one used by every tin pot dictator or authoritarian figure - “ignore our control over the economy; you are inherently superior and deserving of praise due to your [RACE/RELIGION/HARD WORK/MILITARY SERVICE/ETC]; all your problems are caused by [INSERT OUTSIDE GROUP YOU ALREADY DISLIKE HERE] and if it wasn’t for them you’d have the glory you so justly deserve; and anyone who criticizes us is a puppet of [AFOREMENTIONED DISLIKED GROUP] and is out to destroy you”.
Throughout history (and probably even prehistory), this set of arguments was used by more regressive regimes than you can shake a stick at. To avoid godwinizing the thread, I will leave specific examples up to the reader.
Right, but generally investing in companies means tax write-offs. Until they become profitable, anyway. A higher tax on the wealthy would actually encourage them to invest more in “tax shelters” of small businesses, and profit off the ones that do well, and write off the ones that fold.
Exactly, no one has ever hired another employee because they had their taxes cut. They hire another employee because there is more work to be done than their current labor force can supply. No one has expanded their business because they had more money, they expanded to meet increasing demand for their goods or services.
Wealth tends to attract wealth, so money in the economy will tend to pool itself at the top.
The best way to get money to move in the economy is to remove it from where it has pooled up and put it back to where it will be spent.
Meh, it’s a basic propaganda model. Walter Lippman laid it all out in Public Opinion a century ago, even before we had Fox News and Facebook to disseminate it so quickly and effectively. Arguably the Republicans aren’t even that good at it; it has taken them a couple of decades of deliberate effort to really stir up the fires of dissent; most fascist movements manage it in just a few years, but then, they also go straight for the fear factor of immigration/Jews/terrorism rather than just whinging about “The War on Christmas”, a transparent ruse that is really impossible to repeat with a straight face.
Stranger
It should also be said:
Some of them are getting there - you don’t have to scratch the paint job on the “globalist” or “cultural marxist” rhetoric very deeply at all to realize that these are just new (old) terms for “Jews”.
And judging by the trailer, Tucker Carlson’s upcoming ‘documentary’ about the events of the January 6 insurrection, “Patriot Purge”, would make Goebbels proud.
My take on this question is a little different.
Discussions on the effectiveness of tax policy aside, the facts are:
In the US, Conservative legislators promote and enacts policies of lower taxation on the wealthy.
Conservative voters support these policies.
Conservatives have been shown to score high on Authoritarianism beliefs.
In my opinion, the observed support of lower income Conservatives for lower taxation of the wealthy is an expression of the Authoritarian mindset. The lower income Conservatives perceive the wealthy as “better” and “powerful” - as Authorities. And, to them, they deserve praise and more importantly, adoration - they are objects of affection. And much like the proverbial images of old, they feel good about paying tribute to these powerful figures (laying riches at the feet of the King). Maybe, because they feel that will keep them in their good graces? 'Dunno.
Consequently, any attempt to raise taxes on them are seen as attacks on their adored betters.
It’s not about logic, or “against their own best interests”, or economic / fiscal beliefs, it’s purely emotional reaction to how they perceive that the objects of their affection are being treated.