Why we should raise taxes on the rich

[SimpleDon]

The ever increasing income inequality and the wealth inequality that it produces is corrosive to our economy. We have to correct it to avoid the adverse effects to our capitalism. Just like the forming of monopolies erodes capitalism income inequality also does. The ever increasing concentration of wealth diverts money from wages and the resultant wealth of the middle class and reduces the middle class increasing the ranks of the poor. This will invariably result in increased social strife. How do we know this? Because it always has. The longer it builds up the more likely will be the tendency to overreact and to swing too far and too fast the other way.

Income inequality also reduces growth in the economy. The wealthy have a lower propensity to spend and a greater propensity to save. Like it or not our economy depends on consumption, spending. And the ever growing amount of money that is diverted to savings and the wealth of the rich is money that isn't spent on consumption, money that isn't creating demand in the economy. money that doesn't create the demand that induces job growing investment.

The Willie Sutton rule, the rich have the money. And taxing the rich comes with no downsides for the economy. Taxing the poor and the middle class reduces even further the demand in the economy. Taxing the rich reduces the deficit and the amount of Treasury bills that have to be issued every year.

And no, the investing that the rich do doesn't build the economy. The money in tax cuts that we give to the rich to supposedly increase the money available to invest increases the deficit which means that the Treasury has to issue the amount of the tax cut in new T-Bills that are bought overwhelming by the rich with money that they have available to invest. The result would be a wash if the Treasury doesn't have to pay interest on the T-Bills. Since they do have to pay interest we actually reduce the amount of money available to invest by giving the rich tax cuts. This is stupid, unless you are rich because they have more wealth in the form of the T-Bills.

If the Republicans want to increase the deficit to improve the economy they should spend more money on partially anything else but tax cuts for the rich.

 

[coloradoatheist]

If an economy that was based solely on consumption being the best then all the previous economies plus most of the third world countries would be the economies that we would want to live in. But it's not and that's because investing is key to growing the economy, not spending. We don't improve an economy just by spending more for an banana.

 

[laughing dog]

If an economy that was based solely on consumption being the best then all the previous economies plus most of the third world countries would be the economies that we would want to live in. But it's not and that's because investing is key to growing the economy, not spending. We don't improve an economy just by spending more for an banana.

To my reading and knowledge, no one is claiming that only consumption-based economy is the best. So what on earth are you talking about?

Investment will not be productive if people do not buy the resulting output. Investment is necessary for productive capacity. Consumption is necessary for life and to provide an incentive/return to investment.

 

[sharon45]

If an economy that was based solely on consumption being the best then all the previous economies plus most of the third world countries would be the economies that we would want to live in. But it's not and that's because investing is key to growing the economy, not spending. We don't improve an economy just by spending more for an banana.

Yet spending can easily be another form of investing, but what we actually spend on and invest in are the economy's most important components.

 

[coloradoatheist]

If an economy that was based solely on consumption being the best then all the previous economies plus most of the third world countries would be the economies that we would want to live in. But it's not and that's because investing is key to growing the economy, not spending. We don't improve an economy just by spending more for an banana.

Yet spending can easily be another form of investing, but what we actually spend on and invest in are the economy's most important components.

You said investment and spending. But investment is what got us the Internet, not consumption. People underestimate the importance of investment, it's what created and sustains the middle class, not just consumption. If consumption was the driver in an improved economy, Africa would be the leading economies.

 

[LordKiran]

Yet spending can easily be another form of investing, but what we actually spend on and invest in are the economy's most important components.

You said investment and spending. But investment is what got us the Internet, not consumption. People underestimate the importance of investment, it's what created and sustains the middle class, not just consumption. If consumption was the driver in an improved economy, Africa would be the leading economies.

The internet happened because there was a need for a transnational computer network, nothing else. The internet was created so the us gov could consume it. The fact that it fundamentally changed the world we live in is just a happy accident after the fact.

 

[sharon45]

Yet spending can easily be another form of investing, but what we actually spend on and invest in are the economy's most important components.

You said investment and spending.

Right.

But investment is what got us the Internet, not consumption. People underestimate the importance of investment, it's what created and sustains the middle class, not just consumption. If consumption was the driver in an improved economy, Africa would be the leading economies.

It is a partnership of said investment and spending. Both are necessary. When people buy a bunch of garbage, those folks invested in trash, and most likely, more rubbish will be produced to meet and try to take advantage of that apparent demand.

 

[coloradoatheist]

You said investment and spending. But investment is what got us the Internet, not consumption. People underestimate the importance of investment, it's what created and sustains the middle class, not just consumption. If consumption was the driver in an improved economy, Africa would be the leading economies.

The internet happened because there was a need for a transnational computer network, nothing else. The internet was created so the us gov could consume it. The fact that it fundamentally changed the world we live in is just a happy accident after the fact.

The Internet under the government was extremely slow speed lines connection a few institutions to send black and white short emails. It didn't have anything until Netscape and Mozilla came along and did something with it. And it's not even that. It took the large companies of Level 3, AT&T, Verizon, global crossing, google to upgrade the infrastructure to where it is today.

 

[LordKiran]

The internet happened because there was a need for a transnational computer network, nothing else. The internet was created so the us gov could consume it. The fact that it fundamentally changed the world we live in is just a happy accident after the fact.

The Internet under the government was extremely slow speed lines connection a few institutions to send black and white short emails. It didn't have anything until Netscape and Mozilla came along and did something with it. And it's not even that. It took the large companies of Level 3, AT&T, Verizon, global crossing, google to upgrade the infrastructure to where it is today.

maybe, but my point stands. The internet got its start because the gov had a need for one.

Necessity, not investment (or strictly speaking, consumption for that matter) is what drove its inception.

 

[lpetrich]

The Internet under the government was extremely slow speed lines connection a few institutions to send black and white short emails.

That's unhistorical nonsense. The Internet had rather impressive size when it was opened up to all comers in the early 1990's (Brief History of the Internet | Internet Society,  History of the Internet)

Back then, the Internet had competitors in such proprietary online services as CompuServe, Prodigy, America Online, GEnie, Delphi, and eWorld, and also numerous BBSes operated out of people's homes.

But the operators of those proprietary online services never created an Internet among themselves, and when the real Internet was opened up, they either went on the Internet, folded, or both.

Usenet old-timers have a name for the result of America Online getting onto the Internet: Eternal September. That comes from all the new college students who would arrive each September and act like clueless newbies. Many of AOL's users also acted like that, and their arrival was not limited to one month of the year.

It didn't have anything until Netscape and Mozilla came along and did something with it.

Bull feces. The Internet had *plenty*. E-mail lists, Usenet, Gopher, ... Also, it was Tim Berners-Lee that invented the World Wide Web protocol, what web browsers use, and he was at a research lab when he did so.

 

[coloradoatheist]

That's unhistorical nonsense. The Internet had rather impressive size when it was opened up to all comers in the early 1990's (Brief History of the Internet | Internet Society,  History of the Internet)

Back then, the Internet had competitors in such proprietary online services as CompuServe, Prodigy, America Online, GEnie, Delphi, and eWorld, and also numerous BBSes operated out of people's homes.

But the operators of those proprietary online services never created an Internet among themselves, and when the real Internet was opened up, they either went on the Internet, folded, or both.

Usenet old-timers have a name for the result of America Online getting onto the Internet: Eternal September. That comes from all the new college students who would arrive each September and act like clueless newbies. Many of AOL's users also acted like that, and their arrival was not limited to one month of the year.

It didn't have anything until Netscape and Mozilla came along and did something with it.

Bull feces. The Internet had *plenty*. E-mail lists, Usenet, Gopher, ... Also, it was Tim Berners-Lee that invented the World Wide Web protocol, what web browsers use, and he was at a research lab when he did so.

While oversimplifying it. Can you tell me in the 80s, how many people actually heard of the Internet compared to people knowing what Bulletin Boards were?

And Netscape won the initial browser war. And without Microsoft and IBM the Internet wouldn't have gone anywhere.

 

[Loren Pechtel]

I recall politician Daniel Moynihan once stating that the gold standard would put monetary policy in the hands of the gold miners.

When Spain built its empire in the New World, its citizens likely expected all the gold and silver that they mined there to make them rich. But instead it caused lots of inflation. In 1603, a French traveler said about Spain that "Everything is dear in Spain except silver".

Alchemists are nowadays best known for trying to make gold. But some people feared the economic consequences of their succeeding. In 1404, King Henry IV of England outlawed the "multiplying of gold and silver". That law was repealed in 1688, from the lobbying of (al)chemist Robert Boyle.

It's possible to make gold with nuclear reactions, but it is very expensive to do so.

1 MeV (common unit in nuclear and particle physics) * (Avogadro's number) = 9.64*10¹⁰ joules = 2.67*10⁴ kilowatt-hours. That's one mole of (1 MeV / atom).

Electricity prices vary widely, but 10 USD cents / kWh gives $2,670.

Let's apply 1 MeV per nucleus to gold. It has atomic weight 196.96657, meaning that 1 mole of gold weighs 197 grams. 1 troy ounce weighs 31.1034768 grams, so 1 troy ounce is 0.158 mole. If one needs only 1 MeV per atom to make gold, it would cost only $422 per troy ounce.

But 1 MeV/nucleon is rather grossly optimistic. The easiest way to make gold with nuclear reactions is to irradiate some lower-atomic-mass elements with neutrons. That's because neutrons can get past the electrostatic fields of nuclei very easily. One can put one's raw materials in a nuclear reactor, but that does not have a very high neutron flux. A quicker route would be to make an intense neutron beam by spallation -- accelerating electrons or protons and hitting nuclei with them. One would need a few MeV to have enough energy to knock out a nucleon (proton + neutron), and even then, lots of protons and small nuclei will be knocked out in addition to neutrons. So with 1 proton vs. 1 neutron, that gives a factor of 2.

So even platinum-to-gold is very expensive. Less expensive elements will require more neutrons per nucleus, and that will be even more expensive.

As a rough, hand-waving guess, I'll multiply the amount of energy needed by 100, and that gives $42,200 per troy ounce -- very expensive.

I was going to say you were nuts, platinum costs more than gold so why do it? However, I find you would gain about $400/oz by this conversion.

Going down the table until I can find a raw material that isn't very expensive means 5 steps down to Tungsten.

Also, the sequence is worse than you're making it out to be.

Platinum -> Gold.
32% Pt194. Oops, it simply absorbs the neutron.
33% Pt195. Again, it laughs at you.
25% Pt196. Finally, success!
7% Pt198. Success--except it soon turns into mercury.

Also, any gold atom that takes a hit becomes mercury. You can't just leave it there in the target, you must frequently separate the gold out from the platinum. You need about 2 hits per gold atom and you lose 7% of your raw material besides.

The next step down, Iridum.
37% Ir191. 95% chance of Pt192--which will take 5 more hits to yield gold, else Os192.
62% Ir193. 4 hits to make gold.

The next step down Osmium.
2% Os187. 10 hits to make gold.
13% Os188. 9 hits.
16% Os189. 8 hits.
26% Os190. 7 hits.
40% Os192. 5 hits.

Rhenium is 10 or 12 hits.

Tungsten is 11 to 15 hits.

None of the important decay sequences takes very long and the only one where an extra hit matters on the decay is platinum.

 

[SimpleDon]

Here are two surveys of popular opinion that are concerned with this thread. One is "Top Frustrations With Tax System: Sense That Corporations, Wealthy Don’t Pay Fair Share" dated 4/14/2017, that says that a majority of Americans believe that corporations don't pay enough in taxes, that the wealthy don't pay enough in taxes, that the system is too complex and that the poor shouldn't have to pay more in taxes. Here is the graph from the article in case they take it down.

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The second survey is “Raising Taxes on Rich Seen as Good for Economy, Fairness" dated July of 2012, the lede of the article,

By two-to-one (44% to 22%), the public says that raising taxes on incomes above $250,000 would help the economy rather than hurt it, while 24% say this would not make a difference. Moreover, an identical percentage (44%) says a tax increase on higher incomes would make the tax system more fair, while just 21% say it would make the system less fair.

Surprising for me is that the popular wisdom is correct, raising taxes on the rich would help the economy. Not surprising at all is that Republicans ...

.. are more divided: 41% say this would hurt the economy, while 27% say it would help and 24% it would make no difference. And while 36% of Republicans say raising taxes on incomes over $250,000 would make the tax system less fair, 30% say this would make no difference and 25% say it would make the tax system more fair.

They ignored the I don't know responses, which I don't like.

 

[lpetrich]

While oversimplifying it. Can you tell me in the 80s, how many people actually heard of the Internet compared to people knowing what Bulletin Boards were?

BBSes were mostly mom-and-pop online services that operated off of telephone lines, though there were some large ones. According to  Bulletin board system, "Infoworld estimated that there were 60,000 BBSes serving 17 million users in the United States alone in 1994, a collective market much larger than major online services such as CompuServe." But in the next few years, the rise of the Internet killed most of them.

And Netscape won the initial browser war. And without Microsoft and IBM the Internet wouldn't have gone anywhere.

 History of the web browser -- the first ones were essentially text-only, with images being opened outside of them with helper apps. The first one with inlined images was NCSA Mosaic in 1993. The head of the Mosaic team, Marc Andreessen soon quit and founded Netscape Communications Corporation, and the Netscape Navigator browser first appeared a year later. Another year later, Microsoft entered the competition with its Internet Explorer. M$ gave away IE and included it with Windows, so Netscape found it hard to compete.

In 2002, M$ seemed to have won. But back in 1998, Netscape's management thought of a way around M$'s threat. Not only to give Netscape Navigator away, but to give away its source code also. Thus was born the Mozilla project. It was originally the Mozilla Suite, intended for commercialization, but the Mozilla Foundation eventually decided to release its own web browser and e-mail client as standalone products, and Firefox turned the tide against M$.

 Usage share of web browsers,  Browser wars