"Capitalists = Job Creators" is Completely Wrong

[Ideologue]

Trickle-down economics assumes that rich people with more money invest more heavily, creating jobs (I suppose their consumption is also supposed to create more jobs, but the major part is that investment).

And sure, without investment, nobody's going to have jobs.  However, investment does not only come from the rich, and in fact investment is drawn from a broad cross-section of the upper and middle classes.  As an upper middle-class fellow, I'm sure you have substantial investments in the market.  Those a bit further down the ladder, like my folks, are invested in the same type of enterprises, albeit to a lesser degree.  And even poor people have bank accounts.

As for consumption and demand, the demand of the middle class in aggregate so dwarfs the demand of the rich that they are not even comparable; and the consumption arising from that demand is necessary for a thriving economy where 90%+ of the population is engaged in productive labor, since all goods required for subsistence can be managed by a mere 1-10% of the population.  This is possibly a bad thing, but we're talking about the system we have, not one I'd find ideal.

Without demand, there is nowhere to invest anyway.  The need for middle class demand is far more fundamental than top rate tax policy (although the latter does no favors for middle class demand).  The two propositions aren't really similar.

[Syt]

So is it fair to say that the consumer's demand, as perceived by the suppliers/investors, and weighed for profitability is what creates supply/jobs in the free market?

[Ideologue]

I think that's empirically true.

[Tamas]

I think what Yi meant to say was "This is 100% correct shit," but he committed a series of typographical errors.

you do realize that if we accept that the middle class is the motor of economic growth (on basic principle I agree), then wealth redistribution is counter-productive and damaging, since it hurts the middle class.
And before Martinus jumps in saying that redistribution is there to create middle-class, I call BS on that right now.

[Ideologue]

I don't see how that follows.  Wealth redistribution is necessary to ensure middle class existence.  Can't have a middle class without roads, or with hockey mask-wearing gangs of rapists and oil thieves, or all the vast instrumentality of government that we take for granted.

[Tamas]

I don't see how that follows.  Wealth redistribution is necessary to ensure middle class existence.  Can't have a middle class without roads, or with hockey mask-wearing gangs of rapists and oil thieves, or all the vast instrumentality of government that we take for granted.

That's funny. Where the true middle class came into existence (and one can argue  that ever existed), in Western Europe and North America, it came to be with no wealth redistribution.

Funny how one of the often mentioned problems of our days is the "dissappearance of middle class". That quite contradicts your theory.

[Ideologue]

Is it?  The American middle class, as it exists today, is what survives from a class which rose in the 1940s-1970s, a period where we redistributed wealth like mad.

There is not much continuity between the middle class that--once--comprised 80% of American households, and the small but politically influential "middle class" of 16th-18th century Europe.  Perhaps there is more between the smaller middle class that existed in the U.S. before and through the Great Depression.  I'm not sure.

However, recall that the decline of the American middle class and the fall of taxes have gone hand in hand.  I'm not necessarily arguing causation, but there is a correlation.  I don't know how it happened in Europe, or even if it happened in Europe.

P.S.: I like paying my taxes.  Somehow that 30% taken out of my check does not demotivate me to work more.  That said, I do think it's kinda unfair were I to get hit with a higher bracket because I work over 40 hours a week.  My pay-per-hour is the same as if I worked 40; why penalize me for working harder when I'm not making more per unit of time (as I'm FLSA exempt)?  Of course a lot of my economic policy tends to revolve around whatever I'm doing at the moment, so I'll concede the issue.

[Martinus]

Ide is right on that. American middle class became strong during the New Deal days. It shrinked after Reagan's years. You really need to be uneducated to argue that modern day America is redistributing more wealth than 1950s America.

Your problem, Tamas, is that you perceive everything, from economics to human condition, through the lenses of Hungary and people who live in it. It's like Raz arguing what sanity is based on personal experience.

[Tamas]

Your problem, Tamas, is that you perceive everything, from economics to human condition, through the lenses of Hungary and people who live in it. It's like Raz arguing what sanity is based on personal experience.

Oh shut the fuck up with that already. NEWSFLASH: people's experiences influence their view on the world. OH THE SHOCK!

Just look at the very last post of Ide. Progressive taxing isn't such a good idea once he stops being a benefactor of it right?

Meh. I wanted to continue with examples, but you know what? Screw you. If it it convinient for you to dismiss my views based on my ethnicity  (lol how very Polish of you), when welfare states around the world suffer and crumble under their own weight, well, I am glad to be of help.

Redistribution is a failed experiment and we will witness the end, or very serious reduction of it. Wether through a controlled reform movement, or by crash and  burn, is yet to be seen.

[Zoupa]

 

Redistribution is the only thing holding our tenuous social order together.

[Tamas]

Redistribution is the only thing holding our tenuous social order together.

No wonder, after this many decades of relying on it.

[Ideologue]

I was being facetious, poking fun at what has been my presumed penchant for only advocating things that benefit me.  You guys can't take a joke sometimes.

It's a colorable argument I was making tongue-in-cheek, but I don't really mind being taxed at a higher rate.  And after all, most people making decent money probably do work a bit more than 40, and rarely only work 40 all the time.  BFD.  This is a different problem--whether we should manipulate the labor market by setting maximum hours--and not whether progressive income tax is a good idea in theory; and there is a great deal of underpinning as to why it is morally and practically a good thing.

But it's only my margin that gets taxed at that rate anyway, so I think, where's the harm?  It goes for more roads and schools and bombs and poor people abortions and other shit I need.

[Zoupa]

Redistribution is the only thing holding our tenuous social order together.

No wonder, after this many decades of relying on it.

What's your brilliant idea then?

[Tamas]

Progressive income tax being practically good when the aim is to have more tax to spend, is something I can see. More tax income is good when your goal is to have more tax income. And when you are better off making the people dependent on the state (you) rather than becoming not dependent on it, it makes sense to stop people from acquiring wealth.

But nobody has been able to explain the moral angle. The morally right thing is to tax everyone the same percentage. Why is it immoral that some people earn more than others? Why should these people be punished by a higher income tax?
By that logic, we should ban smart people from going to college, because they can get on in life just fine without higher education. Let's reserve their places to dumb people, they need the education much better!

[Tamas]

Redistribution is the only thing holding our tenuous social order together.

No wonder, after this many decades of relying on it.

What's your brilliant idea then?

Gradually coming off the dope?