Self described super rich capitalist Nick Hanauer calls out the idea that "capitalists are job creators" is completely wrong. Jobs are created by middle class consumers.
http://www.upworthy.com/breaking-you-know-that-ted-talk-you-werent-supposed-to-see-here-it-is-2?c=bl1
That'll be enough of your ignorant claptrap, you socialist idiot.
Who creates middle class consumers?
Especially since so much of the creation of wealth for the super rich has turned into financial tricks and stock fakery which isn't a huge employer, at least not compared to manufacutring, service or resource extraction. And the creation of shareholder value is a destroyer of jobs, at least domestically.
Quote from: CountDeMoney on May 22, 2012, 05:18:28 PM
That'll be enough of your ignorant claptrap, you socialist idiot.
Not my words, the words of a billionaire entrepreneur and venture capitalist :)
Quote from: citizen k on May 22, 2012, 05:25:11 PM
Who creates middle class consumers?
Less rich consumers at home, as well as consumers both richer and poorer abroad.
Quote from: Neil on May 22, 2012, 05:26:16 PM
Especially since so much of the creation of wealth for the super rich has turned into financial tricks and stock fakery which isn't a huge employer, at least not compared to manufacutring, service or resource extraction. And the creation of shareholder value is a destroyer of jobs, at least domestically.
But how else do you expect venture capitalism and private equity firms to succeed in profiteering if the don't have such mechanisms available to generate the funds necessary to buy up and liquidate companies in order to increase shareholder value and generate the funds necessary to buy up and liquidate companies in order to increase shareholder value and generate the funds necessary to buy up and liquidate companies in order to increase shareholder value and generate the funds necessary to buy up and liquidate companies in order to increase shareholder value and generate the funds necessary to buy up and liquidate companies in order to increase shareholder value and generate the funds necessary to buy up and liquidate companies in order to increase shareholder value?
Terrible talk overall, though he did have some good points.
The idea that companies (and their owners) don't create jobs is silly, though. If there are no companies, there are no products to buy. The jobs come first, then the products, and then the consumers. The consumers just decide which products/workers/owners are the winners, though. hey don't "create" job one.
Hanauer's presentation that "the rich" only pay 15% taxes and the middle class pay 30+% was also downright disingenuous. Those funds taxed at 15% are taxed at 15% on top of the 35% corporate profit rate.
He is correct that the growing wealth imbalance between the rich and the rest is a major concern for the US, because he is also correct that the rich don't contribute nearly their fair share of income back into consumption, which certainly drives the US economy (his best line was "my family has three cars, not three thousand!" :lol:). The problem isn't tax rates, though, it is the tax code.
The other problem that he fails to mention, though, is the generally terrible job that government does with the money it has. Education is probably the best example of this, and the most pernicious problem when it comes to creating those opportunities for the middle and lower classes. I'd estimate that one-quarter of all education spending, top to bottom, is wasted. But that's a different story, for a different thread.
Bottom line line here is that Hanauer took a swing, and missed. Great talker, though.
Quote from: grumbler on May 22, 2012, 05:45:37 PM
Terrible talk overall, though he did have some good points.
The idea that companies (and their owners) don't create jobs is silly, though. If there are no companies, there are no products to buy. The jobs come first, then the products, and then the consumers. The consumers just decide which products/workers/owners are the winners, though. hey don't "create" job one.
Hanauer's presentation that "the rich" only pay 15% taxes and the middle class pay 30+% was also downright disingenuous. Those funds taxed at 15% are taxed at 15% on top of the 35% corporate profit rate.
He is correct that the growing wealth imbalance between the rich and the rest is a major concern for the US, because he is also correct that the rich don't contribute nearly their fair share of income back into consumption, which certainly drives the US economy (his best line was "my family has three cars, not three thousand!" :lol:). The problem isn't tax rates, though, it is the tax code.
The other problem that he fails to mention, though, is the generally terrible job that government does with the money it has. Education is probably the best example of this, and the most pernicious problem when it comes to creating those opportunities for the middle and lower classes. I'd estimate that one-quarter of all education spending, top to bottom, is wasted. But that's a different story, for a different thread.
Bottom line line here is that Hanauer took a swing, and missed. Great talker, though.
Your facts have nothing to do with the validity of the narrative, which is about how the poors are supposed to feel. Thinking is dangerous, and is only authorized for those of us on top.
Guess Grumbler's tribe got in the way.
Quote from: grumbler on May 22, 2012, 05:45:37 PMThe idea that companies (and their owners) don't create jobs is silly, though. If there are no companies, there are no products to buy. The jobs come first, then the products, and then the consumers. The consumers just decide which products/workers/owners are the winners, though.
I don't know, I think demand rather than production drives job creation. I'm no economist, though.
QuoteThe other problem that he fails to mention, though, is the generally terrible job that government does with the money it has. Education is probably the best example of this, and the most pernicious problem when it comes to creating those opportunities for the middle and lower classes. I'd estimate that one-quarter of all education spending, top to bottom, is wasted. But that's a different story, for a different thread.
I don't agree that government does a terrible job with the money it has, compared to the alternatives.
Quote from: Jacob on May 22, 2012, 07:22:12 PM
I don't know, I think demand rather than production drives job creation. I'm no economist, though.
If you don't have both, you don't have an economy.
This is some goofy ass shit.
I think what Yi meant to say was "This is 100% correct shit," but he committed a series of typographical errors.
This seems sort of like a chicken and egg debate. I mean you sorta need both supply and demand for the thing to work right?
Demand will create supply. Supply does not necessarily create demand.
Quote from: Ideologue on May 22, 2012, 11:00:32 PM
Demand will create supply. Supply does not necessarily create demand.
It can with proper marketing ;)
Quote from: Ideologue on May 22, 2012, 11:00:32 PM
Demand will create supply. Supply does not necessarily create demand.
My infinite demand for a time-machine has yet to furnish the product.
Demand harder!
Quote from: Habbaku on May 22, 2012, 11:04:17 PM
Quote from: Ideologue on May 22, 2012, 11:00:32 PM
Demand will create supply. Supply does not necessarily create demand.
My infinite demand for a time-machine has yet to furnish the product.
Yeah? Where's your infinite money? :angry:
Quote from: Valmy on May 22, 2012, 11:03:29 PM
Quote from: Ideologue on May 22, 2012, 11:00:32 PM
Demand will create supply. Supply does not necessarily create demand.
It can with proper marketing ;)
Indeed. People didn't go out there and yelled, "Someone invent the lightbulb/car/iPad because our lives feel empty without them."
However, for every successfull new product introduced there's countless others that fail.
Demand isn't for specific products, it's for what tasks products perform; in the instances you noted, for light, transportation, communication/entertainment/conspicuous consumption/Apple faggotry.
Quote from: Valmy on May 22, 2012, 11:03:29 PM
Quote from: Ideologue on May 22, 2012, 11:00:32 PM
Demand will create supply. Supply does not necessarily create demand.
It can with proper marketing ;)
Then you get a public with lots of debt, like we have now.
Quote from: Habbaku on May 22, 2012, 11:04:17 PM
Quote from: Ideologue on May 22, 2012, 11:00:32 PM
Demand will create supply. Supply does not necessarily create demand.
My infinite demand for a time-machine has yet to furnish the product.
If you want to invest capital in a time travel company be my guest.
Why would I do that?
Quote from: Jacob on May 22, 2012, 05:14:02 PMJobs are created by middle class consumers.
The problem with this approach is that most middle class people are employed by someone else rather than running their own businesses. So in order for them to even become consumers, they need their jobs - and that can be provided either by the government or by capital(ists).
And also, isn't the whole "demand creates jobs" approach simply a reiteration of the trickle-down economy concept and as such should be anathema to any leftist?
I don't see how the arguments are similar at all.
Well, don't they both argue that consumers create jobs by spending money on goods produced by others? Doesn't the trickle down economy theory argue that if we leave more money with the rich, they will consume more and their consumption will create jobs for a yoga teacher, a chauffeur, a masseuse, a yacht maker etc.?
This is the opposite of the theory that capitalists create jobs - i.e. that investing the capital should be encouraged whereas consumption side of the economy is not as efficient in creating jobs - this "middle class consumers" theory is simply trickle down economy reiterated, only you think more of it trickles down from a slightly lower level.
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.
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?
I think that's empirically true.
Quote from: Ideologue on May 22, 2012, 10:41:00 PM
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.
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.
Quote from: Ideologue on May 23, 2012, 01:56:16 AM
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.
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.
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.
Quote from: Martinus on May 23, 2012, 02:13:20 AM
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.
:huh:
Redistribution is the only thing holding our tenuous social order together.
Quote from: Zoupa on May 23, 2012, 02:39:25 AM
:huh:
Redistribution is the only thing holding our tenuous social order together.
No wonder, after this many decades of relying on it.
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. :P
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. :mellow:
Quote from: Tamas on May 23, 2012, 02:42:17 AM
Quote from: Zoupa on May 23, 2012, 02:39:25 AM
:huh:
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?
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!
Quote from: Zoupa on May 23, 2012, 02:52:45 AM
Quote from: Tamas on May 23, 2012, 02:42:17 AM
Quote from: Zoupa on May 23, 2012, 02:39:25 AM
:huh:
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?
Meaning what? No more income tax eventually?
Quote from: Tamas on May 23, 2012, 02:53:00 AM
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?
My belief is that they have benefited inequitably from the stability and services provided by the state (and ultimately by the people), so it is fair that they split some of that difference with the state (and ultimately the people) which made their success possible. The state and people invested in them, in uncountably many and different ways. The state and people deserve their return, as well as the individual, whose (undisputed) economic success is factually not due to their own merits alone.
QuoteBy 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!
Quite the opposite. The state, being a prudent investor, should only send people to college who will benefit from it, and whom the people will benefit from being sent to college, and not waste the people's money or individuals' time and effort.
(Of course, an argument can be made that a universally college-educated populace will be more genteel, less violent, more stable populace. But that's a different topic.)
Quote from: Tamas on May 23, 2012, 02:32:07 AMMeh. 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.
But as I've said, this isn't true. The most integrated and comprehensive welfare states exist in Northern Europe, especially the Netherlands, Germany and Scandinavia. Those countries continue to do well, but of course there's always welfare reform ongoing because you can't stop developing and improving the system. Germany went through Schroeder's reforms, for example, and the Netherlands passed enormous healthcare reform in 2006.
By contrast the countries in Europe in trouble have less comprehensive and often quite inadequate welfare states: Spain, Greece, Ireland, Italy, Portugal.
What's more the developing world is building their own welfare systems, tentatively and often with mixed success, but it's happening.
I do think one particular Hungarian angle you have may be that you're in a country with an ageing and a declining population. That's a different perspective on welfare. In the UK and France we may be ageing but we've still got decent birthrates and global languages that are attractive to migrants so our population's aren't projected to decline. That's a totally different perspective and situation to deal with.
QuoteRedistribution 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.
It depends what you mean by redistribution though, there's lots of potentially redistributive policies but I think you mean something specific. In terms of a broad understanding of redistribution, then I think you're wrong.
QuoteOh shut the fuck up with that already. NEWSFLASH: people's experiences influence their view on the world. OH THE SHOCK!
This is true. I'd go further though. I think cultural experience and values - as well as institutional ability - shape welfare policy more than most areas. For example Southern Europe, as I've said, actually has a pretty poor welfare system in comparison with the North. It's also relatively heavily weighted towards the elderly. In part I think this was probably because generally Southern Europe had stronger family ties and relations of mutual support than countries elsewhere. Similarly I think this helps explain other welfare policies. Different cultural values will address similar problems in different ways. But those problems, social immobility, inequality, an ageing population and poverty, are present everywhere and I don't think there's any government outside of the odd African kleptocracy that is giving up on dealing with them.
When I was younger, I thought all the old people would die off, or at least retire, and my, smaller generation would get all their stuff. Didn't happen. :(
Quote from: Zoupa on May 23, 2012, 02:56:12 AM
Meaning what? No more income tax eventually?
No. Altough I find VAT to be more practical and harder to cheat on, but I am no expert.
In general, we pose to have a just society, or by aiming for it, by removing money from the selfish private individual, and giving it to the state so it can objectively redistribute it, helping those who are in need.
But this is utter bullshit. The state is led by a small group of individuals. The spending of tax money is driven by their interests.
Yes, it is in their interest to pay off the poor and slow down the ascend of the middle class, since that preserves the power of the current aristocracy, without the danger of a new one rising.
We need to have a more free, more fair economy. The bailouts must go. A market run on state and central bank declarations must go. This is not capitalism. This is corporatism, if anything.
The state's influence on the marktes must be reduced, and you can only reduce that by reducing the power they have over their own spending.
Quote from: Ideologue on May 23, 2012, 03:00:58 AM
My belief is that they have benefited inequitably from the stability and services provided by the state (and ultimately by the people), so it is fair that they split some of that difference with the state (and ultimately the people) which made their success possible. The state and people invested in them, in uncountably many and different ways. The state and people deserve their return, as well as the individual, whose (undisputed) economic success is factually not due to their own merits alone.
Thanks for taking the time for actually explaining why you think it is fair. I disagree, but at least you took the effort.
I disagree because even if I accept your stance, namely that no individual can benefit from his talent without the mighty state guiding him along the way, the people who achieve higher than average income, enjoy the exact same perks as the ones who don't. And, even with a flat tax, they pay in considerably more than those who failed to take advantage.
My biggest theoretical problem with a progressive tax is that it projects the idea that society's desired place for the individual is somewhat below middle class. Or lower middle class, depending on where your lowest bracket ends. Anything above that is not really necessary or desired, and therefore can be robbed more of it's gains.
Quote from: Tamas on May 23, 2012, 03:13:29 AM
No. Altough I find VAT to be more practical and harder to cheat on, but I am no expert.
I agree VAT should play a big part of the tax mix.
QuoteIn general, we pose to have a just society, or by aiming for it, by removing money from the selfish private individual, and giving it to the state so it can objectively redistribute it, helping those who are in need.
We vote for certain policies and then decide how to pay for them. Those are separate. But I actually generally agree that the tax system's a bad place to find a just society. So far as possible we should have an economically neutral tax system that has a healthy mix of revenue streams and is sufficient to meet the costs of government. That's all. I don't think there's much space for morality in tax policy and fairness is a good topic for elections.
Quote from: Habbaku on May 23, 2012, 01:16:52 AM
Why would I do that?
To create a supply for your infinite demand of course. I took your statement as a criticism of "demand-side" economics. So presumably a "supply-side" attempt at a time machine would bear fruit.
Quote from: Sheilbh on May 23, 2012, 03:28:33 AM
We vote for certain policies and then decide how to pay for them. Those are separate. But I actually generally agree that the tax system's a bad place to find a just society. So far as possible we should have an economically neutral tax system that has a healthy mix of revenue streams and is sufficient to meet the costs of government. That's all. I don't think there's much space for morality in tax policy and fairness is a good topic for elections.
Yes. I would add that we would probably be better off by removing ideology from governance. What I mean is that a truley liberal society should have a state which ensure fair treatment and an equal "playing ground" for all of it's citizens. It should be forbidden from trying to socially engineer society one way or the other. That would, for example allow religious folks to maintain their own churches, as well as leave more money with solidarity-minded people for charitable activities, and etc.
That's a very ideological position though :mellow:
Quote from: Tamas on May 23, 2012, 03:13:29 AM
Quote from: Zoupa on May 23, 2012, 02:56:12 AM
Meaning what? No more income tax eventually?
No. Altough I find VAT to be more practical and harder to cheat on, but I am no expert.
It also leads to a higher tax quota on lower incomes, because they use a higher percentage of their income for consumption.
Quote from: Sheilbh on May 23, 2012, 03:39:56 AM
That's a very ideological position though :mellow:
Yes, but IMHO it is better to remove the ideological struggles from the state budget, and you can only do that if you seriously curb what can be in the state budget.
It IS a subjective view, granted.
Quote from: Tamas on May 23, 2012, 03:48:53 AMYes, but IMHO it is better to remove the ideological struggles from the state budget, and you can only do that if you seriously curb what can be in the state budget.
What you support is very ideological, though, so you can't non-ideologically remove ideology from politics. Maybe Mario Monti can, but that's it. It's like people saying someone else's politics aren't reasonable, or they're ideological or whatever else - what's really happening is they're saying those views are unacceptable and rather than deal with them we'll declare them anathema. Socially we do this to extremists, which I think is fine, but we shouldn't do it with mainstream views that differ. The Tory leadership have done it with the Tory right, who they say are just ideological headbangers, while they occupy the rational, sensible central ground. It's nonsense of course.
But how is an equal playing field different from other types of social engineering? Also it is, with respect, a bit of a vacuous statement. Outside of a few Tory Lords I don't think anyone would support an unequal playing field anymore. So it's a bit of a bromide, apple pie and motherhood kind of statement.
The way you try and achieve an equal playing field are where the ideology comes in.
equal playing field legally.
Any other "equality" reduces individual freedom. Free people are not equal, equal people are not free.
You need to explain that a bit more.
Quote from: Tamas on May 23, 2012, 03:23:59 AM
Quote from: Ideologue on May 23, 2012, 03:00:58 AM
My belief is that they have benefited inequitably from the stability and services provided by the state (and ultimately by the people), so it is fair that they split some of that difference with the state (and ultimately the people) which made their success possible. The state and people invested in them, in uncountably many and different ways. The state and people deserve their return, as well as the individual, whose (undisputed) economic success is factually not due to their own merits alone.
Thanks for taking the time for actually explaining why you think it is fair. I disagree, but at least you took the effort.
Well, you're a good guy, Tam. If you hold (no offense) ideas I find rather suspect, it's not that you don't hold them honestly or through malice. Also, you're European, and I reserve serious vitriol for people whose votes can affect me. :P
QuoteI disagree because even if I accept your stance, namely that no individual can benefit from his talent without the mighty state guiding him along the way, the people who achieve higher than average income, enjoy the exact same perks as the ones who don't. And, even with a flat tax, they pay in considerably more than those who failed to take advantage.
My biggest theoretical problem with a progressive tax is that it projects the idea that society's desired place for the individual is somewhat below middle class. Or lower middle class, depending on where your lowest bracket ends. Anything above that is not really necessary or desired, and therefore can be robbed more of it's gains.
I think that's the communication breakdown, here. Under your paradigm, taxation as theft; under mine, taxation is payment for services rendered. Services that benefit the rich out of proportion to their income. The example I used once before when explaining this position is roads. The poor use roads--at best--as a mean of transportation, to get themselves to and from their shitty jobs, to buy necessities and amenities. The rich, by contrast, use roads as a means of profit, delivering the goods the capital they own and the labor they hire produces to market. The man who owns a good deal of Wal-Mart stock is employing the transportation network, paid for by tax dollars, as another form of capital. (That it benefits the poor who shop at Wal-Mart as well is beside the point.) Likewise, I can cite education, the military, and the Internet (maybe) as examples of government-funded objects which benefit wealth more than the poor, at a greater than linear (i.e., flat) relationship. Even regulatory processes benefit the rich, although they rarely see it: the FDA's process for approving drugs, for example, creates a more trustworthy, stable market, and thus greater profits in the long run.
I mean, I'd prefer Wal-Mart just be owned by the government, but baby steps.
Quote from: Habbaku on May 22, 2012, 11:04:17 PM
Quote from: Ideologue on May 22, 2012, 11:00:32 PM
Demand will create supply. Supply does not necessarily create demand.
My infinite demand for a time-machine has yet to furnish the product.
Oh, so you've read "The Secret" too, huh?
Quote from: Tamas on May 23, 2012, 02:53:00 AM
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?
Richer people derive more benefit from state intervention. They are prime targets of crime, for example. You only need to look at the amount of money affluent classes need to spend in protection in less developed regions of the world or during past history.
A stable society with suitable infrastructure and access to affordable education acts as a multiplier for those who have capital and provides superior security.
That is a fair point, just like Ide's.
But it is also covered fully by a flat percentage tax, so I don't see how it justifies progressive ones.
Quote from: Tamas on May 23, 2012, 02:42:17 AM
Quote from: Zoupa on May 23, 2012, 02:39:25 AM
:huh:
Redistribution is the only thing holding our tenuous social order together.
No wonder, after this many decades of relying on it.
No, even when it started. Why do you think that the civilized world never had a successful totalitarian movement?
Quote from: Tamas on May 23, 2012, 07:28:12 AM
But it is also covered fully by a flat percentage tax ...
That's an arbitrary opinion, as good as any other.
Quote from: Tamas on May 23, 2012, 02:53:00 AM
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?
That's not morally better than taxing progressively. From each according to his means. The state is a community, and a community shares.
Quote from: Neil on May 23, 2012, 07:48:21 AM
Quote from: Tamas on May 23, 2012, 02:53:00 AM
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?
That's not morally better than taxing progressively. From each according to his means. The state is a community, and a community shares.
for each according to his means. Yes. X% of their income. Nobody is allowed to keep more of their income proportionally than the other. If they benefit more, they pay more.
Quote from: Razgovory on May 22, 2012, 11:55:34 PM
Then you get a public with lots of debt, like we have now.
Well if you market financial products...which we do...heavily. But that is not really related because there is always a demand for money. Countries with low amounts of debt do not have less advertising.
Quote from: Tamas on May 23, 2012, 07:49:48 AM
Quote from: Neil on May 23, 2012, 07:48:21 AM
Quote from: Tamas on May 23, 2012, 02:53:00 AM
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?
That's not morally better than taxing progressively. From each according to his means. The state is a community, and a community shares.
for each according to his means. Yes. X% of their income. Nobody is allowed to keep more of their income proportionally than the other. If they benefit more, they pay more.
The problem with your idea is it won't leave the state with enough money to operate. Therefore, the more successful members of society have to make up the difference.
Quote from: Neil on May 23, 2012, 07:56:52 AM
Quote from: Tamas on May 23, 2012, 07:49:48 AM
Quote from: Neil on May 23, 2012, 07:48:21 AM
Quote from: Tamas on May 23, 2012, 02:53:00 AM
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?
That's not morally better than taxing progressively. From each according to his means. The state is a community, and a community shares.
for each according to his means. Yes. X% of their income. Nobody is allowed to keep more of their income proportionally than the other. If they benefit more, they pay more.
The problem with your idea is it won't leave the state with enough money to operate. Therefore, the more successful members of society have to make up the difference.
How about making a state that can operate within the means of a just taxing system?
Quote from: Tamas on May 23, 2012, 07:59:57 AM
Quote from: Neil on May 23, 2012, 07:56:52 AM
Quote from: Tamas on May 23, 2012, 07:49:48 AM
Quote from: Neil on May 23, 2012, 07:48:21 AM
Quote from: Tamas on May 23, 2012, 02:53:00 AM
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?
That's not morally better than taxing progressively. From each according to his means. The state is a community, and a community shares.
for each according to his means. Yes. X% of their income. Nobody is allowed to keep more of their income proportionally than the other. If they benefit more, they pay more.
The problem with your idea is it won't leave the state with enough money to operate. Therefore, the more successful members of society have to make up the difference.
How about making a state that can operate within the means of a just taxing system?
I don't accept that your system is just.
At any rate, the state can't cut back anymore. When the sense of community and human relationships were destroyed by the post-war and post Cold War eras, the state had to rush in to meet the fallout for all those people whose support networks had vanished. The selfishness of your ideology is what makes the state necessary.
It is not selfish. Quite the contrary. It seeks fair and proportionally same contribution from each citizen, with no qualitive distinction between them based on income (one way or the other, I understand the US gives tax breaks to the rich, which is even more retarded than overtaxing them), and doing that by ensuring that as much income (PRODUCTS OF THEIR WORK, let's not forget) remains with them as possible.
Quote from: Valmy on May 23, 2012, 07:53:12 AM
Countries with low amounts of debt do not have less advertising.
I'd be surprised if that is true.
Tamas, I understand your point, but think you are looking at the "fairness" angle incorrectly, IMO.
You are looking at it from the individuals perspective.
I look at it more from a systemic perspective.
The state requires funds to operate. Quite a lot of funds in fact. Where should it get those funds?
The simple reality is that a flat tax system cannot generate the funds necessary without taxing the poor and lower middle class at crippling rates. It simply does not work. This is just math.
So therefore we need some other system. What is fair? Hell, I don't see the state using its monopoly on violence to force it's citizens to give it money as a partifularly "fair" endeavor anyway you slice it - so I care a lot more about making the system work and cause the least amount of harm while it goes about collecting the revenue society has decided it needs to operate.
And that means a moderately progressive tax system. The simple reality is that the wealthy can give up a larger portion of their income while
A) Not causing them great harm, and
B) Not screwing up the economic system (ie dis-incenting them from working/creating GDP)
I have a household income somewhere around the 100k/year mark. Taxing me another 1% harms me very little compared to taxing someone making 30k/year. It also has very little impact on my desire to work more compared to someone making far less than I do. Is it "fair" to tax me at 28% and someone making a little less at 27%? Absolutely - depending on how you look at it. Is it unfair to tax me more than someone else? Absolutely - depending on how you look at it.
Arguments of "fair" can be validly made in either direction - therefore they don't really have any place in the debate, IMO. I think what is more relevant is what works and does not work, and how the tax system does what it is supposed to do (generate revenue) while minimizing the harm that it does in the process through creating perverse incentives.
I do NOT think that the purpose of the tax system ought to be moving wealth from the wealthy to the not wealthy as a primary objective - I am ok that this will happen as a secondary effect of deciding to implement social programs that society deems desirable. A subtle difference, to be sure, but an important one, IMO.
Quote from: Razgovory on May 23, 2012, 08:26:05 AM
Quote from: Valmy on May 23, 2012, 07:53:12 AM
Countries with low amounts of debt do not have less advertising.
I'd be surprised if that is true.
Germany and Japan have famously savings crazy populations. Do you think those countries are low on ads?
:hmm:
"Capitalists = Job Creators" is Completely Wrong"
What an excellent example of how to completely ruin an otherwise potentially interesting point by grossly overstating a premise.
Quote from: Valmy on May 23, 2012, 08:58:49 AM
Germany and Japan have famously savings crazy populations. Do you think those countries are low on ads?
They're also big on shit porn. Connection?
Quote from: Tamas on May 23, 2012, 08:19:41 AM
It is not selfish. Quite the contrary. It seeks fair and proportionally same contribution from each citizen, with no qualitive distinction between them based on income
I wonder if you realize that these are merely words, selected by you to make you feel better about your a priori conclusion. :hmm:
It is perfectly fair to tax the rich disproportionately to income if they receive disproportionate benefit from the government services that are paid for by the taxes.
Quote...and doing that by ensuring that as much income (PRODUCTS OF THEIR WORK, let's not forget) remains with them as possible
These two implicit arguments are separate from the issue of progressive taxation. It is certainly arguable that government taxes should leave as much income as possible in private hands (since it is consumer demand that drives modern economies), and is is also, and separately, arguable that income that is the product of work rather than investment should be treated differently from inherited or investment income. But these points aren't related to progressive taxation at all, and aren't really much about the "fair" element, either.
Quote from: Berkut on May 23, 2012, 08:56:09 AMYou are looking at it from the individuals perspective.
I look at it more from a systemic perspective.
The state requires funds to operate. Quite a lot of funds in fact. Where should it get those funds?
I agree with everything you've said and I'd just chip in that there's a social element. What is a fair tax system is going to be decided differently by different societies - which is why it's really an issue for elections not dogma. So I think there is broad support for very high tax rates in Scandinavia because they think that's a fair way to support their very large welfare state which is also broadly supported. That system wouldn't work in the UK and I'm certain it wouldn't work in Eastern Europe or the US either.
The other thing is that I personally suspect that the rate of tax a country can bear is linked to social trust - which is high in Northern Europe. If you basically trust and respect your state institutions and there's a sense of community then you'll be willing to pay more. If you don't respect them, think they're corrupt or whatever then you won't and you'll be more likely to evade tax. I think within Europe Scandinavia and parts of Eastern Europe are probably at different ends of those extremes, so they need and can bear different policies to actually support the state.
The other thing I'd add on Hungary in particular is that continuity helps. My old job was as a tax researcher and Hungary was one of the nightmare countries, because they had a habit of changing everything enormously every year. We had to update computer programs that run tax calculators too and more than once we had to write entirely new code not used for any other country just to deal with what the Hungarian government was doing :lol:
QuoteThe other thing is that I personally suspect that the rate of tax a country can bear is linked to social trust - which is high in Northern Europe. If you basically trust and respect your state institutions and there's a sense of community then you'll be willing to pay more. If you don't respect them, think they're corrupt or whatever then you won't and you'll be more likely to evade tax. I think within Europe Scandinavia and parts of Eastern Europe are probably at different ends of those extremes, so they need and can bear different policies to actually support the state.
Yes, this is a big, probably decisive element.
While mostly conceeding to Berkut's point, I would argue that in modern times, VAT would be a more efficient way to handle state income. I am not sure about the implications of it - we have a record high VAT AND considerable income tax, thats all I know :P
But you could play with VAT as well, not having any on subsistence goods for example, while high ones on top luxury items.
Income tax is pretty easy to cheat, VAT is much, much harder.
But to return to the quote - again, I think that is indeed a decisive factor, and also a pretty good argument against showcasing the Scandi states as regular welfare states. They have (well, had) a culture and society very fit for it. They are the exception, not the rule.
Quote from: Berkut on May 23, 2012, 09:00:00 AM
"Capitalists = Job Creators" is Completely Wrong"
What an excellent example of how to completely ruin an otherwise potentially interesting point by grossly overstating a premise.
Seems like it's gone pretty good so far, perhaps with a few (and unsurprising) exceptions :)
Quote from: Jacob on May 23, 2012, 09:39:01 AM
Seems like it's gone pretty good so far, perhaps with a few (and unsurprising) exceptions :)
Just shows how interesting discussions can come from abandoning the most absurd polemical starting premises, with the usual (and unsurprising) exceptions. :)
Quote from: Tamas on May 23, 2012, 09:24:20 AM
QuoteBut you could play with VAT as well, not having any on subsistence goods for example, while high ones on top luxury items.
Income tax is pretty easy to cheat, VAT is much, much harder.
VAT on goods is reasonably easy to enforce, on services less so.
And if VAT gets very high (which it would have to if income tax were to be abolished or significantly reduced) then the incentives to avoid it (e.g. through smuggling) would become much greater.
Income tax is pretty easy to enforce except against the very rich. PAYE schemes work very efficiently.
Quote from: Tamas on May 23, 2012, 09:24:20 AM
But to return to the quote - again, I think that is indeed a decisive factor, and also a pretty good argument against showcasing the Scandi states as regular welfare states. They have (well, had) a culture and society very fit for it. They are the exception, not the rule.
I'm not suggesting the Scandis should be a model. I'm saying they're an extreme example. Different welfare states are doing different things in different ways all over the world. There is no 'regular' welfare state. So to rail against that and suggest we tear it all down is about the same as saying we should all be Scandinavians.
Quote from: Tamas on May 23, 2012, 09:24:20 AM
But to return to the quote - again, I think that is indeed a decisive factor, and also a pretty good argument against showcasing the Scandi states as regular welfare states. They have (well, had) a culture and society very fit for it. They are the exception, not the rule.
Well, yeah, duh! That's
precisely what the quote argues.
Edit: Too slow. :(
Quote from: Razgovory on May 22, 2012, 10:19:30 PM
Explain.
It's sophomoric extension of the chain of causality. It would make as much sense to say that it's neither consumers nor capitalists, its mothers who create jobs by giving birth to people who demand goods and services. Or it's employers who create demand by paying people.
As Haiku alluded to, demand doesn't automatically create a job. I would like to eat some Ethiopian food for lunch, but no one is reading my mind and rushing to cook it spontaneously. Someone somewhere has to make a prediction/guess about demand, assume some risk, put his money and time on the line, and hope that the demand materializes.
Quote from: Valmy on May 23, 2012, 08:58:49 AM
Quote from: Razgovory on May 23, 2012, 08:26:05 AM
Quote from: Valmy on May 23, 2012, 07:53:12 AM
Countries with low amounts of debt do not have less advertising.
I'd be surprised if that is true.
Germany and Japan have famously savings crazy populations. Do you think those countries are low on ads?
I suspect less then the US. Doesn't Japan and Germany have a subscription based TV like the UK? I imagine they have less TV commercials because of that. In fact, checking the internet Germany has restrictions on how many commercials can be shown in an hour. I wonder if you can advertise prescription medications on the TV in those countries.
Quote from: Admiral Yi on May 23, 2012, 11:14:53 AM
Quote from: Razgovory on May 22, 2012, 10:19:30 PM
Explain.
It's sophomoric extension of the chain of causality. It would make as much sense to say that it's neither consumers nor capitalists, its mothers who create jobs by giving birth to people who demand goods and services. Or it's employers who create demand by paying people.
As Haiku alluded to, demand doesn't automatically create a job. I would like to eat some Ethiopian food for lunch, but no one is reading my mind and rushing to cook it spontaneously. Someone somewhere has to make a prediction/guess about demand, assume some risk, put his money and time on the line, and hope that the demand materializes.
I don't think anyone said demand automatically creates a job. Also what is with you and Habbkku and weird technology to prove your points. Mind reading and Time Machines.
Quote from: grumbler on May 23, 2012, 09:50:33 AMJust shows how interesting discussions can come from abandoning the most absurd polemical starting premises, with the usual (and unsurprising) exceptions. :)
Thank you for taking the thread in a constructive direction :)
Quote from: Admiral Yi on May 23, 2012, 11:14:53 AMIt's sophomoric extension of the chain of causality. It would make as much sense to say that it's neither consumers nor capitalists, its mothers who create jobs by giving birth to people who demand goods and services. Or it's employers who create demand by paying people.
As Haiku alluded to, demand doesn't automatically create a job. I would like to eat some Ethiopian food for lunch, but no one is reading my mind and rushing to cook it spontaneously. Someone somewhere has to make a prediction/guess about demand, assume some risk, put his money and time on the line, and hope that the demand materializes.
You're right, of course.
I'd say that the function of capital in a well-functioning economy is to identify unserved demand and unrealized efficiencies and to address those in the pursuit of profit. This certainly can (and does) generate jobs, but it is secondary to the pursuit of profit. Certainly, we should encourage private capital to be deployed in ways that create jobs, but if we go too far we end up with the inefficiencies of planned economies.
I also think it's pretty uncontroversial that to say that a large, economically secure middle class with disposable income drives demand of existing goods and services and is also a pretty good market for capitalists to identify new demands and efficiencies in servicing. It seems to me that the
Additionally, I believe we can also agree that wealth is created as capital circulates rather than when it accumulates and sits unproductive. Capital has to work, so to speak.
So if we're looking at improving any given economy, we have to figure out what it is that's holding it back. Are there restrictions that prevent capital to be applied to inefficiencies or unserved demands? In many places and times, that's definitely the primary problem (in Communist economies, for example) but is it in the US? Personally, I don't think so. Of the things that is undermining confidence and consumer demand from the middle classes, are there any that are addressable in the US? I think so, but I don't think that income tax on the most wealthy is one of them.
Quote from: Jacob on May 23, 2012, 12:55:28 PM
. Of the things that is undermining confidence and consumer demand from the middle classes, are there any that are addressable in the US? I think so, but I don't think that income tax on the most wealthy is one of them.
Jake, I thin this is a very key point, and one I agree with completely.
The idea that the wealthy are anywhere near the point at which their taxes are stifling their positive contribution to the economy is simply crazy.
On the other hand, I don't think we can solve our deficit problem simply by jacking up taxes on the rich. There isn't even close to enough money there.
Quote from: Berkut on May 23, 2012, 01:07:48 PM
On the other hand, I don't think we can solve our deficit problem simply by jacking up taxes on the rich. There isn't even close to enough money there.
Too bad you see increasing and replacing lost revenue streams as "simply" the only option the left is promoting, and you and your jackboot racist GOP thug buddies on the right would prefer seeing "simply" reduced spending as the solution. Needs to be both.
Quote from: Berkut on May 23, 2012, 01:07:48 PM
Quote from: Jacob on May 23, 2012, 12:55:28 PM
. Of the things that is undermining confidence and consumer demand from the middle classes, are there any that are addressable in the US? I think so, but I don't think that income tax on the most wealthy is one of them.
Jake, I thin this is a very key point, and one I agree with completely.
The idea that the wealthy are anywhere near the point at which their taxes are stifling their positive contribution to the economy is simply crazy.
On the other hand, I don't think we can solve our deficit problem simply by jacking up taxes on the rich. There isn't even close to enough money there.
Even if increasing taxes on the wealthy were the solution to the problem, simply increasing the income tax rate isn't going to do the job. The real reasons the very wealthy pay such an effectively low income tax rate isn't because the top tax rate is so low, but rather because they have so many tax loopholes available to them.
I haven't read the article, but I've read the Languish response to the article which I feel is just as valid a use of my time.
First, a brief history of "jobs." When people think of jobs right now they think of some task or labor they are paid currency to perform, they use the currency to satisfy their basic needs and to buy things they want. Ideally. (Some people need government assistance on top of their job to even fulfill their basic needs, but that's a side issue.)
Traditionally jobs like that mostly did not exist. On the fringes there have been people with "jobs" like that since the ancient time, but they were a super small portion of humanity. Instead historically some 90%+ of humans first worked in agriculture to satisfy their need for food, and in their spare time would erect shelter and make clothing. A small portion of humans would be responsible for protecting the agriculture workers from raiding bandits who sort of lived as parasites. This portion of humans would take from the agricultural workers a portion of their produce, so that they could eat without having to work fields for it. That basic model is true for most of the history of civilized humans. When you read about the Roman Empire, the Middle Ages, the Renaissance, you're really often reading the history of the 10% of people who didn't live in that model. But the truth is up until the late 19th century the overwhelming majority of humans spent the overwhelming majority of their time making enough food for themselves and then a bit of surplus so that the ruling classes could skim it off the top and live without having to work the field.
The industrial revolution went hand in hand with the agricultural revolution (which doesn't get as much press but was by far the more important revolution), this created a situation in which non-upper class people could accumulate more wealth, consumer goods and etc. This did other things too, like require farm workers to find other ways to make a living and for the first time larger numbers of people were working a "job" which paid a wage which they could then use to fill their needs and some of their wants. This initial spurt of job creation definitely happened because of capitalists, capitalism was key to the creation of the first large industrial ventures and the organizational and financial principles of capitalism allowed complex operations with large shared risk to pop up.
However, some people get confused here and start thinking the purpose of a capitalist is to create jobs. That is not the case. Capitalists exist to move capital and allow capital to be focused from many sources into one, in simpler economies there was no easy way to raise capital or to scale projects up or to pool resources.
Early capitalists didn't focus on creating jobs, that was just a side effect. They focused on producing products that people needed. People needed better light sources than whale oil, so capitalists started mass producing kerosene. The demand for lighting had always been there, but was only semi-efficiently satisfied. People had a demand for travel and transportation faster than walking or horse, so railroads were laid and ran by capitalists. The demand for transportation is as old humanity, but capitalists found a way to satisfy it more efficiently. Efficiency and technological progress generally create wealth which leads to more free time, more discretionary income and etc.
Obviously without demand for things there are no "jobs", but there is built in demand that comes with humans as a species. Capitalists more efficiently fill those demands, and they do it in a way that generates wealth which allows more demands to be filled by more people which creates greater need for production, management, etc which creates need for labor.
But yes, technically capitalists don't really create "jobs." Jobs are created because people desire a way to accumulate possessions and fulfill needs without having to do the actual work of creating the items or filling those needs themselves.
Quote from: dps on May 23, 2012, 02:11:52 PM
Even if increasing taxes on the wealthy were the solution to the problem, simply increasing the income tax rate isn't going to do the job. The real reasons the very wealthy pay such an effectively low income tax rate isn't because the top tax rate is so low, but rather because they have so many tax loopholes available to them.
The overwhelming bulk of the explanation for lower average taxation of the rich is the lower rate on capital gains and dividends than on earned income.
"So many loopholes" is Obama class warfare talk. It's wrong and dishonest.
Quote from: Admiral Yi on May 23, 2012, 07:13:43 PM
"So many loopholes" is Obama class warfare talk. It's wrong and dishonest.
"Class warfare" is GOP rich guy talk. It's wrong and dishonest.
Quote from: CountDeMoney on May 23, 2012, 07:17:15 PM
Quote from: Admiral Yi on May 23, 2012, 07:13:43 PM
"So many loopholes" is Obama class warfare talk. It's wrong and dishonest.
"Class warfare" is GOP rich guy talk. It's wrong and dishonest.
:contract:
And transparent.
Quote from: grumbler on May 22, 2012, 05:45:37 PM
Hanauer's presentation that "the rich" only pay 15% taxes and the middle class pay 30+% was also downright disingenuous. Those funds taxed at 15% are taxed at 15% on top of the 35% corporate profit rate.
Plenty of ways around that.
Class warfare is a legit phenomenon, but I don't think talking about a simplified tax code is it.
Assholes banning foxhunting is class warfare.
Quote from: CountDeMoney on May 23, 2012, 07:17:15 PM
"Class warfare" is GOP rich guy talk. It's wrong and dishonest.
Then how would you like to characterize Obama's "taking advantage of loopholes" talking point? An honest mistake? Misunderstanding of the tax code? A bright, shining truth?
Quote from: Admiral Yi on May 23, 2012, 07:46:44 PM
Quote from: CountDeMoney on May 23, 2012, 07:17:15 PM
"Class warfare" is GOP rich guy talk. It's wrong and dishonest.
Then how would you like to characterize Obama's "taking advantage of loopholes" talking point? An honest mistake? Misunderstanding of the tax code? A bright, shining truth?
A signal that he thinks the tax code needs to be changed, so that the very rich pay more tax on their income from various sources.
Quote from: Neil on May 23, 2012, 07:40:56 PM
Class warfare is a legit phenomenon, but I don't think talking about a simplified tax code is it.
Assholes banning foxhunting is class warfare.
I am just glad California has banned Foie gras. MoFos force feeding 3 month old Duckys and Goose :ultra:
I hope the Great State of Washington follows soon.
Quote from: Admiral Yi on May 23, 2012, 07:46:44 PM
Quote from: CountDeMoney on May 23, 2012, 07:17:15 PM
"Class warfare" is GOP rich guy talk. It's wrong and dishonest.
Then how would you like to characterize Obama's "taking advantage of loopholes" talking point? An honest mistake? Misunderstanding of the tax code? A bright, shining truth?
Could be an actual truth. A lot of the "capital gains" are capital gains only as far as IRS is concerned.
Quote from: Jacob on May 23, 2012, 07:49:16 PM
A signal that he thinks the tax code needs to be changed, so that the very rich pay more tax on their income from various sources.
He doesn't need to signal anything, he's already come out with an explicit statement in favor. Several statements.
It's agitprop, designed to create more animosity towards the rich.
Whenever I encounter a tricky question like this, I ask myself -- what would Johnny Maynard say?
I figure something like this:
Q. What generates employment?
A. Investment
Q. Ok. What generates investment?
A. It can come from either the private sector or the State.
Q. Let's start with the private sector. What determines the level of investment?
A. The perception that one can make more money by investing and the availability of sufficient financing.
Q. What drives the perception that investment will be profitable?
A. Several factors: (1) the belief that there will be sufficient buyers for the ultimate product (i.e. consumer demand); (2) the projection of cost (based on available technologies, labor rates, transport, etc) and (3) the degree to which the investor is willing to take risks ("Animal Spirits")
Q. And what determines the availability of financing?
A. The general supply of money and overall level of liquidity preference (i.e. the willingness of agents to hold long-dates illiquid commitments).
Q. And what determines the level of State investment?
A. The State just decides how much to invest and how.
So the "capitalist" does play a role in creating employment, but only through his capacity as a risk-taker. The more wild gamblers, the more propensity to invest -- although capitalism being cyclical, heavy risk taking may increase investment and employment in the short run, but it may also make the bust part of the cycle harder.
Quote from: Admiral Yi on May 23, 2012, 07:13:43 PM
Quote from: dps on May 23, 2012, 02:11:52 PM
Even if increasing taxes on the wealthy were the solution to the problem, simply increasing the income tax rate isn't going to do the job. The real reasons the very wealthy pay such an effectively low income tax rate isn't because the top tax rate is so low, but rather because they have so many tax loopholes available to them.
The overwhelming bulk of the explanation for lower average taxation of the rich is the lower rate on capital gains and dividends than on earned income.
"So many loopholes" is Obama class warfare talk. It's wrong and dishonest.
Do you have me confused with Ide or something?
Quote from: The Minsky Moment on May 23, 2012, 08:11:39 PM
Whenever I encounter a tricky question like this, I ask myself -- what would Johnny Maynard say?
I figure something like this:
Q. What generates employment?
A. Investment
Q. Ok. What generates investment?
A. It can come from either the private sector or the State.
Q. Let's start with the private sector. What determines the level of investment?
A. The perception that one can make more money by investing and the availability of sufficient financing.
Q. What drives the perception that investment will be profitable?
A. Several factors: (1) the belief that there will be sufficient buyers for the ultimate product (i.e. consumer demand); (2) the projection of cost (based on available technologies, labor rates, transport, etc) and (3) the degree to which the investor is willing to take risks ("Animal Spirits")
Q. And what determines the availability of financing?
A. The general supply of money and overall level of liquidity preference (i.e. the willingness of agents to hold long-dates illiquid commitments).
Q. And what determines the level of State investment?
A. The State just decides how much to invest and how.
So the "capitalist" does play a role in creating employment, but only through his capacity as a risk-taker. The more wild gamblers, the more propensity to invest -- although capitalism being cyclical, heavy risk taking may increase investment and employment in the short run, but it may also make the bust part of the cycle harder.
:hmm: I'm going to put you down for "the rich pay too little in taxes".
Quote from: DGuller on May 23, 2012, 08:32:27 PM
:hmm: I'm going to put you down for "the rich pay too little in taxes".
You've misread.
Surely Keynes would have understood the limits to the state's power to invest. After all, he was the one sent begging to Washington and Ottawa after the war.
Quote from: Neil on May 23, 2012, 08:39:18 PM
Surely Keynes would have understood the limits to the state's power to invest. After all, he was the one sent begging to Washington and Ottawa after the war.
That was after the little pissant island of Britain, its Empire already in tatters, managed to generate war production on the level of the leading Great Powers, including more aircraft production then Germany and almost as much as the USSR.
Quote from: The Minsky Moment on May 23, 2012, 08:43:35 PM
Quote from: Neil on May 23, 2012, 08:39:18 PM
Surely Keynes would have understood the limits to the state's power to invest. After all, he was the one sent begging to Washington and Ottawa after the war.
That was after the little pissant island of Britain, its Empire already in tatters, managed to generate war production on the level of the leading Great Powers, including more aircraft production then Germany and almost as much as the USSR.
Is it that surprising that Britain, with her not insignificant Empire, was able to out-produce Germany in aircraft, especially since Udet pretty effectively bungled the Luftwaffe's design and supply, even by retardo Nazi standards?
Quote from: Neil on May 23, 2012, 09:16:04 PM
Is it that surprising that Britain, with her not insignificant Empire, was able to out-produce Germany in aircraft, especially since Udet pretty effectively bungled the Luftwaffe's design and supply, even by retardo Nazi standards?
Yeah it is surprising, given that at the same time Britain simultaneously engaged in a massive shipbuilding campaign, and given that maintaining the frayed links to the Empire probably cost as much resources as it brought back.
Quote from: The Minsky Moment on May 23, 2012, 09:27:39 PM
Quote from: Neil on May 23, 2012, 09:16:04 PM
Is it that surprising that Britain, with her not insignificant Empire, was able to out-produce Germany in aircraft, especially since Udet pretty effectively bungled the Luftwaffe's design and supply, even by retardo Nazi standards?
Yeah it is surprising, given that at the same time Britain simultaneously engaged in a massive shipbuilding campaign, and given that maintaining the frayed links to the Empire probably cost as much resources as it brought back.
Would you consider the Dominions to be a part of the Empire?
At any rate, Britain's shipbuilding campaign is countered by Germany's enormous efforts to produce tanks and murder Jews.
Quote from: Admiral Yi on May 23, 2012, 08:09:47 PM
Quote from: Jacob on May 23, 2012, 07:49:16 PM
A signal that he thinks the tax code needs to be changed, so that the very rich pay more tax on their income from various sources.
He doesn't need to signal anything, he's already come out with an explicit statement in favor. Several statements.
It's agitprop, designed to create more animosity towards the rich.
Why is that bad?
Quote from: Ideologue on May 23, 2012, 10:11:18 PM
Why is that bad?
I don't think policy should be driven by manufactured hatred. Your results may vary.
It's not really manufactured. It's there, just unfocused, or focused on the wrong things.
Quote from: Admiral Yi on May 23, 2012, 08:09:47 PM
It's agitprop, designed to create more animosity towards the rich.
You've got a point; the rich are quite able to generate plenty of animosity on their own.
Quote from: Admiral Yi on May 23, 2012, 08:09:47 PM
He doesn't need to signal anything, he's already come out with an explicit statement in favor. Several statements.
It's agitprop, designed to create more animosity towards the rich.
:blink:
Yeah, cry me a river, millionaires. :lol:
Quote from: Sheilbh on May 24, 2012, 12:19:50 AM
Quote from: Admiral Yi on May 23, 2012, 08:09:47 PM
He doesn't need to signal anything, he's already come out with an explicit statement in favor. Several statements.
It's agitprop, designed to create more animosity towards the rich.
:blink:
Yi is feeling persecuted.
Tamas, Martin Wolf recently did a blog making similar points to mine - but with evidence and charts!
QuoteTaxation, productivity and prosperity
May 31, 2012 11:11 am
The focus of US economic policy discussion at present is almost entirely on fiscal deficits and the level of taxes. My view is that these are second or even third order issues. What matters far more is the capacity of the economy to offer satisfactory lives for the citizenry. This depends on far more fundamental forces than deficits and taxes, such as innovation, jobs and incomes. Evidently, I am arguing that taxes and deficits do not determine these outcomes. I am suggesting this because they do not.
So I want to address two widely held, but mistaken, views. The first is that lower taxes are the principal route to better economic performance. The second is that the financial crisis is a crisis of western welfare states.
How does one measure economic performance? The most important measure is incomes per head. Employment and the distribution of income matter, too. But incomes per head are the place to start. In the long run, income per head determines the standard of living. So an obvious question is how far tax levels explain growth of income per head.
The chart below compares the prosperous western democracies. It uses data on real gross domestic product per head from 1989 to 2011, at purchasing power parity, provided by the Conference Board's wonderful Total Economy Database. The starting point is 1989 because that is the first year for data on a united Germany. The data on government revenue as a share of GDP is an average for 1989-2011 from the International Monetary Fund, though some data are for slightly shorter periods.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fblogs.r.ftdata.co.uk%2Fmartin-wolf-exchange%2Ffiles%2F2012%2F05%2FMWtaxchart11-590x406.jpg&hash=6f58cb7046ae4d2c171a0f091b7e92c3cfbb8d4b)
What can be learned from this chart?
The first conclusion is that there is no relation between the share of government revenue and the rate of growth of real output per head (that is, productivity) over the 1989-2011 period. The "regression line" is flat. We see low tax countries with low productivity growth (Japan) and high tax countries with high productivity growth (Finland and Sweden). Ireland is a striking outlier: it had relatively low taxation and relatively high growth of real incomes per head. This was partly because it was a successful catch-up story (particularly in the 1990s) and partly because it had an unsustainable boom (particularly in the 2000s).
The second conclusion is that these advanced democracies seem to fall into three groups. The English-speaking countries all have relatively low average tax rates, ranging from close to 30 per cent of GDP to Canada's 42 per cent. They share this range with Japan, Switzerland and Spain. In the next range come the continental European countries, with tax ratios from 40 per cent to 50 per cent of GDP. In this group, Italy and Germany are relatively less highly taxed and Austria and France relatively more highly taxed. Finally, there are the Scandinavian countries, whose ratios of government revenue to GDP averaged over 50 per cent.
The third conclusion is that the spread in the average tax ratio is quite large, at 26 per cent of GDP, from Japan to Denmark. It is even quite surprising that such a spread seems to have no effect on economic performance. Incidentally, the tax ratio also has no relation to the level of GDP per head in 2011, as is shown below. What we are seeing are, in essence, different preferences for government welfare spending. (It is easy to work out which country is where from the previous chart. But, to help, I add a listing of the countries, by GDP per head.)
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fblogs.r.ftdata.co.uk%2Fmartin-wolf-exchange%2Ffiles%2F2012%2F05%2FMWchart2-590x403.jpg&hash=9d69109303d486a2a991730be5e99a5c37f9d44e)
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fblogs.r.ftdata.co.uk%2Fmartin-wolf-exchange%2Ffiles%2F2012%2F05%2FMWchart31-590x404.jpg&hash=8670346e09e646a8f7422b9dcd2b7d39d83b384d)
The fourth conclusion is that many of today's most solvent countries are highly taxed. Indeed, among the eurozone countries shown, crisis-hit Ireland, Spain and Italy had relatively low average tax rates. (They also had fiscal surpluses or negligible fiscal deficits, prior to the crisis. But that is a topic for another occasion.) The heavily taxed eurozone countries on the right hand side of the chart (from Germany on up) are all now relatively crisis-free.
The conclusion to be drawn is that a tax burden within the range of 30 per cent to 55 per cent of GDP) tells one nothing about a country's economic performance. It is far more a reflection of different social preferences about the role of the state. What matters far more are culture, quality of institutions, including law, levels of education, quality of businesses, openness to trade, strength of competition and so forth.
My conclusion is that the focus on the tax burden is misguided. Alternatively, the economic arguments are a cover for (perfectly understandable) self-interest.
I think that penultimate paragraph's particularly important. The welfare state a country has depends on culture and institutions and all the rest and isn't economically determinative.
What this analysis fails to account for is the possibility of different consumption utilities of state vs. private sector goods and services.
The point about productivity growth is interesting though.
Well duh. Govt spending is part of the GDP calculation. You can "grow" GDP by just borrowing a shitload and spending it on garden gnomes.
Quote from: MadImmortalMan on May 31, 2012, 12:35:04 PM
Well duh. Govt spending is part of the GDP calculation. You can "grow" GDP by just borrowing a shitload and spending it on garden gnomes.
I think there are better ways to spend stimulus money than garden gnomes.
Quote from: Jacob on May 31, 2012, 12:43:57 PM
I think there are better ways to spend stimulus money than garden gnomes.
MIM's point is that garden gnomes show up in national accounts at whatever price you paid for them.
Quote from: Admiral Yi on May 31, 2012, 11:46:21 AM
What this analysis fails to account for is the possibility of different consumption utilities of state vs. private sector goods and services.
The point about productivity growth is interesting though.
Well it's addressing two points. One is that low taxes doesn't necessarily lead to higher growth and the second is that this crisis is of western welfare states. It's that last one that interested me because it's one Tamas makes a lot.
Quote from: Sheilbh on May 31, 2012, 12:46:47 PM
Well it's addressing two points. One is that low taxes doesn't necessarily lead to higher growth and the second is that this crisis is of western welfare states. It's that last one that interested me because it's one Tamas makes a lot.
Fair enough. A better line of attack is to describe Greece as an example of Latin American spendthrift vote-buying.
Quote from: Sheilbh on May 31, 2012, 12:46:47 PM
Well it's addressing two points. One is that low taxes doesn't necessarily lead to higher growth and the second is that this crisis is of western welfare states. It's that last one that interested me because it's one Tamas makes a lot.
Well it is that, but honestly I don't think it's a good scientific way to see if high taxes or low taxes have an effect on growth due to the use of GDP as the measurement. I could create an insane correlation between growth and low taxes if I just had whatever country it was in question stop taxing at all and just spend an extra trillion borrowed dollars that year. Even if the country didn't grow at all the GDP would raise by a trillion due to the G metric and everyone would go "oh look low taxes make everyone rich!"
No doubt, but this is over 22 years so I think those effects are balanced out - with the possible exception of Ireland.