Taxing the Wealthy Promotes Economic Growth

[lpetrich]

Wealth isn't like water in a drought. It can't be "redistributed."

Of course it can. That's largely how people who are currently very wealthy became very wealthy - wealth was redistributed from other people.

Yes, that's what's been going on for some time, like exempting oneself from taxes, often by paying politicians to do so by financing their careers.

The tendency in market economies as they are currently configured is for wealth to concentrate. If the distribution of wealth becomes too unequal, this constrains growth.

One solution to this is to take money from the rich, and give it to the poor. If taken to extremes, this too constrains growth.

The management of an economy therefore consists in large part in balancing the flow of wealth such that those who innovate, or who provide value, can be rewarded for doing so; while at the same time ensuring that these rewards are not so large as to cause harmful concentrations of wealth.

Furthermore, there are ways of concentrating wealth that don't produce much value, like speculation, especially with insider information. Getting favors from politicians is another, like targeted tax breaks. Remember that hedge-fund executive who howled that closing the carried-interest loophole is like "Hitler invading Poland"?

Thomas Piketty also noticed that wealth tends to get concentrated during slow economic growth, because returns on investment are then greater than growth rates.

The Marxists stupidly imagine that you can redistribute wealth to the point where all citizens are equal; but history shows that this leads to stagnation and shortages.

Even worse, a new elite often emerges.

The Randroids stupidly imagine that you can allow the wealthy to become arbitrarily rich, and that taxation is inherently bad; but history shows that this leads to stagnation and shortages too.

They also become a ruling class. Many capitalism groupies love this kind of ruling class and get all starry-eyed over it, often considering it the only legitimate one and any others to be usurpers.

 

[Medicine Man]

I have been aware of this feature for a long time and have never used it. It is my understanding that when you put someone on your ignore list, you no longer see their posts. In terms of feeling good, it might feel good, but it also could lead to a reduced awareness of what is going on in the forum. If the person you are ignoring continues to see your posts and criticizes them, you will have no way of knowing, unless some non ignored poster happens to mention it. Just saying, I have been tempted a few times but decided it is perhaps better to face the conflicts that exist here head on. Maybe I don't understand the ignore feature, but I think I have it right.

I've come to the conclusion that arguing with the conservative and stupid is utterly pointless because the "epistemic closure" is total. Nothing I can say will change their minds....

Hang-in, there.

Back in the mid-to-late '90s (on the very-few political-forums, available)....the suggestions, of legalizing Pot & eliminating the Death Penalty, drove the MAJORITY, NUTZ!!!! You'd think I'd suggested a return to sacrificing small-children, to make it rain.

Despite what "conservatives" insist.....Everything Is TEMPORARY!!!!

Hell....even rocks Change.



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[Horatio Parker]

Why not you? You're here, you posted, (brilliantly btw) you're in it.

That the media has us outgunned is all the more reason.

And who doesn't have better things to do? I'm talking about a post here and there, not entering a monastery.

Besides, you're inconsistent. The implication is that if you could budge one of our resident troglodytes, it would be worth your time. Well, I'm telling you that well reasoned posts do have an effect - just not necessarily on your posting adversaries.

This is why I still do post on occasion. My implication was NOT that it would be worth my time converting the trogolodytes, I just want to avoid getting the infractions that prolonged exposure to them causes me to accumulate. I had been spending too much time on the board getting into fights. The people I loathe are off my radar now, so my personal quality of life has improved.

Fair enough. I suggest you keep it in mind that potential allies are always reading. It also might help in keeping your temper.

 

[Togo]

I get some of of my rep boosts weeks after I posted. People who care are reading.

 

[Wiploc]

Before we discuss new taxes on this or that scapegoat, shouldn't we be assured that the money government already takes in is used efficiently?

I believe there are four reasons to have taxes. Let's see if I can remember ...

1. To create demand for currency: If you have to have greenbacks to pay taxes, then greenbacks become valuable, so they become money.

2. To largely offset the inflationary effects of government spending.

That's all I remember. But I have to think that redistribution should be one of them. If the super-rich are openly buying elections, then it's time to raise taxes on the super-rich. So let's call that number three.

I don't remember number four.

I remember number one because it was so surprising to me.

None of the first three reasons require efficient use of government funds as justification. Even if government spending is not efficient, we don't prefer currency collapse or hyperinflation or loss of democratic freedom to taxation. Therefore, the answer to your question is no.

Okay, I picked up another reason in a different thread, so we've got all four:

1. To create demand for fiat money.

2. To offset the inflationary effects of government spending. (You don't want to overdo this; you should leave some inflation.)

3. Redistribution: You don't want too much wealth to accumulate in too few hands.

4. Incentives: You could, for instance, charge more taxes for cars that pollute more, in order to shift public behavior.

I'm guessing that this is all of the reasons for taxation.

 

[bigfield]

I believe there are four reasons to have taxes. Let's see if I can remember ...

1. To create demand for currency: If you have to have greenbacks to pay taxes, then greenbacks become valuable, so they become money.

2. To largely offset the inflationary effects of government spending.

That's all I remember. But I have to think that redistribution should be one of them. If the super-rich are openly buying elections, then it's time to raise taxes on the super-rich. So let's call that number three.

I don't remember number four.

I remember number one because it was so surprising to me.

None of the first three reasons require efficient use of government funds as justification. Even if government spending is not efficient, we don't prefer currency collapse or hyperinflation or loss of democratic freedom to taxation. Therefore, the answer to your question is no.

Okay, I picked up another reason in a different thread, so we've got all four:

1. To create demand for fiat money.

2. To offset the inflationary effects of government spending. (You don't want to overdo this; you should leave some inflation.)

3. Redistribution: You don't want too much wealth to accumulate in too few hands.

4. Incentives: You could, for instance, charge more taxes for cars that pollute more, in order to shift public behavior.

I'm guessing that this is all of the reasons for taxation.

Aren't you forgetting some things? Like police, firefighters, hospitals, schools, roads, utilities etc?

 

[arkirk]

Okay, I picked up another reason in a different thread, so we've got all four:

1. To create demand for fiat money.

2. To offset the inflationary effects of government spending. (You don't want to overdo this; you should leave some inflation.)

3. Redistribution: You don't want too much wealth to accumulate in too few hands.

4. Incentives: You could, for instance, charge more taxes for cars that pollute more, in order to shift public behavior.

I'm guessing that this is all of the reasons for taxation.

Aren't you forgetting some things? Like police, firefighters, hospitals, schools, roads, utilities etc?

These haven't been in the public consciousness to much lately. The government should only be a servant of the people. It needs to be paid for its services and is paid for them whether or not it carries out the services it should....under our current system of payola politics.

 

[Wiploc]

I'm guessing that this is all of the reasons for taxation.

Aren't you forgetting some things? Like police, firefighters, hospitals, schools, roads, utilities etc?

That's spending, not taxing.

As long as we spend---unlike Greece, which uses the Euro---in our own fiat currency, then we don't need to collect what we spend. Taxation, then, is not because we can't spend without it; it's so that the spending doesn't cause too much inflation.

We could accomplish the same thing by burning half our money, instead of sending it to the government. (This would be easier and cheaper too, if only the honor system worked.)

 

[NobleSavage]

I put someone on my ignore list for the very first time. What a nice feature.

I have been aware of this feature for a long time and have never used it. It is my understanding that when you put someone on your ignore list, you no longer see their posts. In terms of feeling good, it might feel good, but it also could lead to a reduced awareness of what is going on in the forum. If the person you are ignoring continues to see your posts and criticizes them, you will have no way of knowing, unless some non ignored poster happens to mention it. Just saying, I have been tempted a few times but decided it is perhaps better to face the conflicts that exist here head on. Maybe I don't understand the ignore feature, but I think I have it right.

The person on the list is mostly invisible, but every now and then you see the name. I haven't really payed any attention to the logic behind it.

 

[Axulus]

Aren't you forgetting some things? Like police, firefighters, hospitals, schools, roads, utilities etc?

That's spending, not taxing.

As long as we spend---unlike Greece, which uses the Euro---in our own fiat currency, then we don't need to collect what we spend. Taxation, then, is not because we can't spend without it; it's so that the spending doesn't cause too much inflation.

We could accomplish the same thing by burning half our money, instead of sending it to the government. (This would be easier and cheaper too, if only the honor system worked.)

What do you mean when you say that the spending causes inflation? Are you talking about a scenario where the money is printed instead of taxed?

 

[bilby]

That's spending, not taxing.

As long as we spend---unlike Greece, which uses the Euro---in our own fiat currency, then we don't need to collect what we spend. Taxation, then, is not because we can't spend without it; it's so that the spending doesn't cause too much inflation.

We could accomplish the same thing by burning half our money, instead of sending it to the government. (This would be easier and cheaper too, if only the honor system worked.)

What do you mean when you say that the spending causes inflation? Are you talking about a scenario where the money is printed instead of taxed?

He is pointing out that fiat money exists at the whim of government. All government spending is therefore 'printing money'; sensible governments take steps to destroy money almost as fast as they print it. The various mechanisms by which this is achieved are known collectively as 'taxation'.

 

[Axulus]

What do you mean when you say that the spending causes inflation? Are you talking about a scenario where the money is printed instead of taxed?

He is pointing out that fiat money exists at the whim of government. All government spending is therefore 'printing money'; sensible governments take steps to destroy money almost as fast as they print it. The various mechanisms by which this is achieved are known collectively as 'taxation'.

That's not how the US treasury works. They actually have to have cash in their accounts to spend it. They can issue debt (which takes cash from one account, usually a private party, and transfers it to the government account, in exchange for an IOU), or they can tax it to increase their balances. They can't just simply create money and start spending it.

 

[arkirk]

He is pointing out that fiat money exists at the whim of government. All government spending is therefore 'printing money'; sensible governments take steps to destroy money almost as fast as they print it. The various mechanisms by which this is achieved are known collectively as 'taxation'.

That's not how the US treasury works. They actually have to have cash in their accounts to spend it. They can issue debt (which takes cash from one account, usually a private party, and transfers it to the government account, in exchange for an IOU), or they can tax it to increase their balances. They can't just simply create money and start spending it.

What about quantitative easing by the Fed? What about the zero or near zero interest rates hurting seniors while the Fiat Money flies all over the fucking planet? You don't think THAT IS FIAT MONEY? wake up!

 

[bilby]

He is pointing out that fiat money exists at the whim of government. All government spending is therefore 'printing money'; sensible governments take steps to destroy money almost as fast as they print it. The various mechanisms by which this is achieved are known collectively as 'taxation'.

That's not how the US treasury works. They actually have to have cash in their accounts to spend it. They can issue debt (which takes cash from one account, usually a private party, and transfers it to the government account, in exchange for an IOU), or they can tax it to increase their balances. They can't just simply create money and start spending it.

Those are accounting rules, and are as arbitrary as the fiat money they control. They are the 'steps' to which I alluded in my post.

These rules are not laws of nature.

 

[Underseer]

Taxing the Wealthy Promotes Economic Growth

BEEN There!!!
May 22, 1997

"Not only was the entire national deficit eliminated after raising taxes on the wealthy in 1993, but the economy grew so fast for the remainder of the decade that many conservative economists thought that the Fed should raise the prime interest rate in order to slow it down."​

Yes, but much of that economic benefit went to middle class and even *gasp* lower class people, therefore those benefits do not count as benefits at all. The only benefits that matter are things that benefit very rich people and large corporations. Anyone who tries to bring benefit of any kind to mere commoners is persecuting rich people and large corporations, and is therefore a communist. Why do you hate freedom? [/conservolibertarian]

 

[Medicine Man]

Tax the rich until they are ready to be eaten.​

I'm sure they'll be capable (enough) to scrape-up....​

...The Grocery Buck$.​

"The estate tax is a tax on the transfer of assets at death.

When someone dies, his or her assets (the "estate") are distributed to heirs.

If the total value of the estate is larger than the tax-exempt amount (currently $5.25 million for individuals and $10.5 million for couples), an estate tax is imposed on everything above the exemption before the remaining assets are distributed. Any amount of an estate given to a spouse or charity is tax exempt.

 

[Medicine Man]

Taxing the Wealthy Promotes Economic Growth

Yes, but much of that economic benefit went to middle class and even *gasp* lower class people, therefore those benefits do not count as benefits at all. The only benefits that matter are things that benefit very rich people and large corporations. Anyone who tries to bring benefit of any kind to mere commoners is persecuting rich people and large corporations, and is therefore a communist. Why do you hate freedom? [/conservolibertarian]

Aw, gee....and, all-this-time I've been able to fool myself into IGNORING the plight o' the rich!!!!!

Thanks, a lot!!!!

Now I'm gonna have to get addictied to Pot....to overcome the shame I feel, presently.

I hope you're satisfied with yourself....although, in another 10 minutes, I won't really care....one-way-OR-another.

 

[Trodon]

From 1921 to 2000 the United States has had Republican presidents for 40 years, and Democrat presidents for 40 years. Generally speaking, taxes on the rich have been higher under Democratic presidents than Republican presidents. The top tax rate declined to 24% under Herbert Hoover in 1929. It rose to 94% under Franklin Roosevelt in 1944.

http://www.irs.gov/pub/irs-soi/02inpetr.pdf

From 1921 to 2000 the United States has had Democrat presidents for forty years, and Republican presidents for the other forty. During this time the per capita gross domestic product in 1996 dollars has grown $7,233 under Republican presidents It has grown $17,546 under Democratic presidents. It grew nearly as much under Franklin Roosevelt's first term as during the terms of Warren G. Harding and Calvin Coolidge.

http://www.singularity.com/charts/page99.html

From the presidencies of Harry Truman to that of George W. Bush there have nearly always been more jobs created per year under Democratic presidents than Republican presidents.

http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/

"Since 1900, the Dow has averaged a 7.8% annual gain under Democratic presidents, compared with a 3% annual gain under Republicans."
http://blogs.wsj.com/marketbeat/2012/11/06/what-an-obama-win-may-mean-for-stocks/

 

[Wiploc]

What do you mean when you say that the spending causes inflation? Are you talking about a scenario where the money is printed instead of taxed?

Suppose a country's citizens would spend $100 a year. (Probably it's a very small country.) Now suppose the government spends an additional $50. That's $150 competing for goods and services that would otherwise only draw $100. So, with the government spending in addition to the private spending, prices are going to go up.

But, now suppose that the government also collects taxes. It sucks $45 out of private hands, so the people are spending only $55, not the original hundred. The result is that a total of $105 is competing for goods and services. So there's a little inflation, but not too much.

The spending is inflationary. The taxing is deflationary. Together they are mildly inflationary.