Author Topic: Trickle down economics  (Read 9128 times)

ooeei

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Re: Trickle down economics
« Reply #100 on: June 20, 2017, 07:43:50 AM »
My entire point was really just that the idea that there is no level of income which we might want to discourage is extreme and detrimental to society.

What if Elan Musk decided that after selling Paypal, if he was only going to make 10% of his future income post tax it just wasn't worth creating Tesla, Space-X, etc, and he might as well go lay on the beach somewhere.  Is society better off?
Do you actually think Elon Musk is motivated by money?

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Do you think Tesla or SpaceX would have gotten off the ground if Elon hadn't had about $100 million of his own money to put into each of them?

Of course there are plenty of examples of rich people using their money in neutral or damaging ways to society (lobbying being a big one), but Elon is the perfect example of someone whose riches are on the way to advancing society in a very meaningful way.  I think the same could be said of Bill Gates and his foundation.
« Last Edit: June 20, 2017, 07:45:24 AM by ooeei »

Chris22

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Re: Trickle down economics
« Reply #101 on: June 20, 2017, 07:49:51 AM »
My entire point was really just that the idea that there is no level of income which we might want to discourage is extreme and detrimental to society.

What if Elan Musk decided that after selling Paypal, if he was only going to make 10% of his future income post tax it just wasn't worth creating Tesla, Space-X, etc, and he might as well go lay on the beach somewhere.  Is society better off?
Do you actually think Elon Musk is motivated by money?

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Maybe maybe not, but I bet he isn't interested in working for (nearly) free.  At least not as hard. 
"If I could get all the money back I ever spent on cars, I'd spend it on cars." - Nick Mason

Chris22

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Re: Trickle down economics
« Reply #102 on: June 20, 2017, 07:55:27 AM »
The other thing to consider is that most people with megabucks (billions) are not making their money on earned income.  They're making it via stock gains and company ownership.  And income tax doesn't affect that, it falls under capital gains (once realized).  There are very few segments of society where people are making serious money (millions) solely on wage income; stock brokers/bankers who aren't partners, movie stars, and pro athletes are some of the few groups who do.  So maybe people think it's worth taking a significant chunk of the income from those groups, but most other extremely highly compensated individuals make their millions through stock, profit sharing on partnerships (lawyers, etc), that sort of thing.  Which is generally unaffected by taxes on ordinary income. 

So basically, not only is it a bad idea, it's also likely ineffective.   
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tarheeldan

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Re: Trickle down economics
« Reply #103 on: June 20, 2017, 08:06:04 AM »
Maybe maybe not, but I bet he isn't interested in working for (nearly) free.  At least not as hard.

According to him, he is. He said he's not doing SpaceX and Tesla for the money, and that he's basically a volunteer. His motivations were to bring the shift to renewable fuels and us becoming a multi-planetary species closer. He works pretty damn hard.

This isn't meant as part of the ongoing discussion here, just an aside.

Chris22

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Re: Trickle down economics
« Reply #104 on: June 20, 2017, 08:09:48 AM »
Maybe maybe not, but I bet he isn't interested in working for (nearly) free.  At least not as hard.

According to him, he is. He said he's not doing SpaceX and Tesla for the money, and that he's basically a volunteer. His motivations were to bring the shift to renewable fuels and us becoming a multi-planetary species closer. He works pretty damn hard.

This isn't meant as part of the ongoing discussion here, just an aside.

Perhaps.  But he owns somewhere between $3B and $5B worth of TSLA stock that he hasn't exactly given away.  It's easy to say you aren't in it for the money when you are making serious money. 
"If I could get all the money back I ever spent on cars, I'd spend it on cars." - Nick Mason

shenlong55

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Re: Trickle down economics
« Reply #105 on: June 20, 2017, 11:08:23 AM »
Do you think Tesla or SpaceX would have gotten off the ground if Elon hadn't had about $100 million of his own money to put into each of them?

Of course there are plenty of examples of rich people using their money in neutral or damaging ways to society (lobbying being a big one), but Elon is the perfect example of someone whose riches are on the way to advancing society in a very meaningful way.  I think the same could be said of Bill Gates and his foundation.

Yep, you found two of the reasons I wouldn't want to ban extreme incomes.  I have no problem discouraging them though for a couple reasons...  1. Taxing extreme incomes doesn't prevent anyone from amassing a fortune.  2.  People like Elon and Bill will find a way.  I don't believe high tax rates on extreme incomes would have stopped either of them from doing what they did.  Made it a little harder maybe, but a little extra difficulty wouldn't stop someone like Elon.

Maybe maybe not, but I bet he isn't interested in working for (nearly) free.  At least not as hard.

I disagree.  Based on everything I've read about him I firmly believe that he would be working on the same problems whether he was making money on them out not.  I get that it may be hard for you to understand if you don't have a similar passion, but people with that kind of passion do exist.

Perhaps.  But he owns somewhere between $3B and $5B worth of TSLA stock that he hasn't exactly given away.  It's easy to say you aren't in it for the money when you are making serious money.

So, because he's not giving away his current stash he must have created Tesla and SpaceX to make more money?  I don't think that follows.


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« Last Edit: June 20, 2017, 11:58:28 AM by shenlong55 »

Out of the Blue

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Re: Trickle down economics
« Reply #106 on: June 20, 2017, 02:29:32 PM »
The other thing to consider is that most people with megabucks (billions) are not making their money on earned income.  They're making it via stock gains and company ownership.  And income tax doesn't affect that, it falls under capital gains (once realized).  There are very few segments of society where people are making serious money (millions) solely on wage income; stock brokers/bankers who aren't partners, movie stars, and pro athletes are some of the few groups who do.  So maybe people think it's worth taking a significant chunk of the income from those groups, but most other extremely highly compensated individuals make their millions through stock, profit sharing on partnerships (lawyers, etc), that sort of thing.  Which is generally unaffected by taxes on ordinary income. 

So basically, not only is it a bad idea, it's also likely ineffective.

This is true.  And although the answer would be to impose a tax on capital gains at the same rates, as I've pointed out above - capital is mobile.  So unless all countries do it, what you'll get is people investing their capital in other countries with lower taxes.  I'm not even talking about tax havens - if the US puts a top marginal rate of 70% on capital but Canada doesn't, you can bet that Canada will get a lot of investment that would have otherwise gone to the US.  That would not be good for the US as a whole.

And if you don't tax capital as heavily as income, you get horizontal inequity and avoidance opportunities.  Because someone earning, say, $1m/year in income will get taxed at up to 70% but someone earning $1m/year in capital gains could pay much less tax. 

scottish

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Re: Trickle down economics
« Reply #107 on: June 20, 2017, 03:54:11 PM »
I pay the same capital gains tax - to the Canadian government -  on my US investments as my Canadian investments.   As you mentioned above, we only pay taxes when the gains are realized.   So it doesn't matter if I make $1000 on Pfizer or $1000 on Saputo, I pay the same amount of tax.

Is this not the same in the US?   I have the impression the IRS is even more picky and determined than the CRA.    so you would have to emigrate to Canada to get the better capital gains rate in Canada (in the unlikely event that our tax rates ever become lower than US tax rates)?

Out of the Blue

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Re: Trickle down economics
« Reply #108 on: June 21, 2017, 02:55:54 AM »
Yes, most countries tax based on residence and source. (US is unusual in that it also taxes based on citizenship.)  So if you're resident in Canada but have a capital gain in the US, you'd potentially be liable to tax under both countries.  To prevent this double taxation, there are tax treaties.  US and Canada might have agreed that Canada has the sole right to tax in that case - in which case you'd only be concerned about Canada's tax rates.  And you'd be correct in saying that you'd get the better capital gains rate in Canada (if Canada's tax rates are lower than the US) by emigrating to Canada.

But the treaty may give the right to tax to the US instead - e.g. the US will tax your capital gain, and Canada only gives you a tax credit for US tax paid to offset your Canadian tax liability resulting in zero additional Canadian tax to pay if the US tax rate is higher.  Or they may give Canada the first right to tax, but allow US the right to tax the residual (e.g. if Canada tax is 30% and US tax is 70%, the treaty will let the US tax only 40%).  In these cases, even though you're in Canada, you'd still be paying tax at the higher US tax rate.  So if the US tax rate for capital gains is 70% and you're a Canadian with capital to invest, you may well decide to invest back in Canada instead, or the UK, or Australia, or one of the many other countries with lower tax rates.

I'm not saying foreign investment in the US would completely dry up.  But anyone outside the US with serious capital to invest, faced with a US tax rate of 70%, will certainly reconsider investing in the US, or at least structure their investment so that their US profits are minimal.  (This already happens to an extent, but a 70% tax rate would exacerbate it.)  And the US - as with all other countries - benefits greatly from foreign investment.

scottish

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Re: Trickle down economics
« Reply #109 on: June 21, 2017, 03:45:44 PM »
Yes, that happens with dividend payments from US companies for my cash accounts.   They withhold tax at US rates, and then I get a credit from the CRA when I file for the taxes paid to the IRS.

We occasionally hear stories about the US going after non-resident citizens who live in Canada and didn't bother to file a US tax return.    In most cases, it seems like a lot of trouble for no benefit.   I guess if they catch a billionaire once in a while it would be cost effective though.

Wexler

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Re: Trickle down economics
« Reply #110 on: June 22, 2017, 09:40:35 AM »
The other thing to consider is that most people with megabucks (billions) are not making their money on earned income.  They're making it via stock gains and company ownership.  And income tax doesn't affect that, it falls under capital gains (once realized).  There are very few segments of society where people are making serious money (millions) solely on wage income; stock brokers/bankers who aren't partners, movie stars, and pro athletes are some of the few groups who do.  So maybe people think it's worth taking a significant chunk of the income from those groups, but most other extremely highly compensated individuals make their millions through stock, profit sharing on partnerships (lawyers, etc), that sort of thing.  Which is generally unaffected by taxes on ordinary income. 

So basically, not only is it a bad idea, it's also likely ineffective.

This is a great point, and it's also one of the hidden reasons that there is so much opposition to the ACA.  The ACA introduced a tax on capital gains that only affects high earners like the ones mentioned by Chris.

With all the fuss kicked up over a 3% marginal increase in W-2 income over 450k under Obama, I can't imagine what kind of misinformation would happen if someone tried tax capital gains at the rate of ordinary income.  Probably an army of Joe the Plumbers making 30k under the table and loudly complaining about how someone was trying to tax all their (nonexistent capital gains) income.

Hey-remember when Trump said he was going to close the carried interest loophole?  Good times.

Mac_MacGyver

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Re: Trickle down economics
« Reply #111 on: August 25, 2017, 08:05:42 PM »
The idea that the only thing standing between poor people and medicine and food is a bunch of rich people hoarding tax money so they can buy BMWs and yachts is simply absurd.  Even if we doubled everyone's taxes I have no confidence the federal government could use that money effectively to accomplish anything.

So your complaint is that the federal government doesn't spend it's tax revenues wisely, and you think that's the reason we have poverty in America?

Let's review.  You're literally asking the federal government to give more money to rich people than they currently get, because you think the federal government isn't doing enough to address American poverty?  That's some classic trickle down bullshit, right there.

You don't routinely deal in economics or how the economy and taxes work do you? You seem to have a fundamental misunderstaning.

sol

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Re: Trickle down economics
« Reply #112 on: August 25, 2017, 08:37:50 PM »
You don't routinely deal in economics or how the economy and taxes work do you? You seem to have a fundamental misunderstaning.

Are you suggesting that trickle down economics is not a fraud?  Because if so, you can just come out and say so.  We're accustomed to dealing with all kinds of ridiculous opinions on this forum.

sokoloff

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Re: Trickle down economics
« Reply #113 on: August 26, 2017, 03:43:37 PM »
You don't routinely deal in economics or how the economy and taxes work do you? You seem to have a fundamental misunderstaning.
Are you suggesting that trickle down economics is not a fraud?  Because if so, you can just come out and say so.  We're accustomed to dealing with all kinds of ridiculous opinions on this forum.
Are you suggesting that positive financial incentives to create businesses and jobs doesn't increase the number of businesses and jobs created?

Or are you suggesting that the removal of those incentives will cause the same number of businesses and jobs to come into being?

Let's imagine that we're playing a game where we flip a fair coin. Every time it comes up heads, you win some amount of money, X. Every time it comes up tails you win nothing. You must pay $10 in order to flip the coin. Does the value of X change your willingness to play the game at all?

scottish

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Re: Trickle down economics
« Reply #114 on: August 26, 2017, 08:10:20 PM »
How do I know it's a fair coin?

sokoloff

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Re: Trickle down economics
« Reply #115 on: August 27, 2017, 07:29:15 AM »
How do I know it's a fair coin?
Look at the history of the coin. Or, since this is a mental exercise, take it as a given. Or, if you are worried that it's unfair, pick a different $X to offset the bias you perceive.

GuitarStv

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Re: Trickle down economics
« Reply #116 on: August 27, 2017, 07:38:55 AM »
You don't routinely deal in economics or how the economy and taxes work do you? You seem to have a fundamental misunderstaning.
Are you suggesting that trickle down economics is not a fraud?  Because if so, you can just come out and say so.  We're accustomed to dealing with all kinds of ridiculous opinions on this forum.
Are you suggesting that positive financial incentives to create businesses and jobs doesn't increase the number of businesses and jobs created?

Or are you suggesting that the removal of those incentives will cause the same number of businesses and jobs to come into being?

Let's imagine that we're playing a game where we flip a fair coin. Every time it comes up heads, you win some amount of money, X. Every time it comes up tails you win nothing. You must pay $10 in order to flip the coin. Does the value of X change your willingness to play the game at all?

Incentives don't create jobs.  People create jobs.  The likelihood that a particular incentive will convince a person to do something that creates a job is dependant upon a lot of variables, many of which have little / nothing to do with the incentive.

sokoloff

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Re: Trickle down economics
« Reply #117 on: August 27, 2017, 01:47:29 PM »
Incentives don't create jobs.  People create jobs.  The likelihood that a particular incentive will convince a person to do something that creates a job is [dependent] upon a lot of variables, many of which have little / nothing to do with the incentive.
Agreed (of course).

Ceteris paribus, do incentives making the creation of jobs more financially rewarding to employers tend to increase, have no effect, or decrease job creation?

sol

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Re: Trickle down economics
« Reply #118 on: August 27, 2017, 02:43:57 PM »
Ceteris paribus, do incentives making the creation of jobs more financially rewarding to employers tend to increase, have no effect, or decrease job creation?

The fundamental problem with this, and all of trickle down economics, is that different incentives are effective at different points in the business cycle, or depending on the status of the current economy.

In an economic environment in which taxes are stifling business growth because businesses are too poor to have access to capital to expand, then cutting taxes on businesses incentivizes growth by giving them access to more funds to invest in their businesses.  In an environment in which businesses are flush with cash (like now) and businesses can't expand because they can't find new customers, then cutting taxes on (lower income) customers incentivizes growth, because it creates more demand.  In an environment in which the government cannot protect a functioning fair free market, then raising taxes incentivizes growth, because it prevents monopolies and fraud.

Of these three scenarios, I think the US economy has most recently had more problems with market abuses (credit default swaps, anyone?) and a lack of low income customers (stagnant worker wages, anyone?) than it has with businesses being unable to afford expansion (historically low interest rates, anyone?). 

At this point in time, cutting taxes on businesses is the exact wrong thing to do if you want to grow the economy.  It is only the right thing to do if you want to make our wealthiest citizens wealthier at the expense of our economy.  Unfortunately, our wealthiest citizens have bought approximately half of our elected representatives to pursue exactly that outcome.  I include both candidates of the most recent presidential election on the "bought" list.
« Last Edit: August 27, 2017, 02:48:18 PM by sol »

A Definite Beta Guy

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Re: Trickle down economics
« Reply #119 on: August 27, 2017, 02:57:01 PM »
Incentives don't create jobs.  People create jobs.  The likelihood that a particular incentive will convince a person to do something that creates a job is [dependent] upon a lot of variables, many of which have little / nothing to do with the incentive.
Agreed (of course).

Ceteris paribus, do incentives making the creation of jobs more financially rewarding to employers tend to increase, have no effect, or decrease job creation?
All else equal, it'll help create some jobs, but the cost is pretty high. You're essentially giving everyone a tax break in order to induce some marginal investment.

Like, if you have 100 companies investing a total of $100 billion, and you switch to immediate deduction of all expenses, you're losing $100 billion in tax revenue. You might increase investment, say to $110 billion, but you're hitting the government bottom line at a 10:1 ratio.

I personally support the idea of eliminating corporate taxes, but it should be coupled with increases in personal income and dividend and capital gains taxes.

For inducing growth in the supply side....well...I think the US is actually doing an awesome job, all things considered. I'm a big believer in the "Great Stagnation" hypothesis that suggests all the easy innovations of the industrial revolution were exhausted by the early 1970s, with a resulting drop in productivity growth. The US has managed that transition very well, much better than pretty much any other nation.

The real hope is to get the US up the technology curve, which is going to depend on frontier firms pushing technology, smart people for those frontier firms, and having a good mix of people so best practices can percolate through the economy.

There's some convincing evidence that laggard firms aren't picking up best practices as quickly as they used to. I think workers aren't moving around as much as they used to, particularly at the higher levels. I guess those Wall Street consultants aren't a good substitute for actual workforce turnover...

scottish

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Re: Trickle down economics
« Reply #120 on: August 27, 2017, 06:51:40 PM »
Hehe, you Americans are too busy digging up coal to move up the technology curve.

Observations in the field suggest that incentives to create jobs provide bonuses to the executives responsible for gaining the incentives for their companies.  Job creation?   I'll believe it when you can demonstrate it.

GuitarStv

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Re: Trickle down economics
« Reply #121 on: August 28, 2017, 10:08:06 AM »
Incentives don't create jobs.  People create jobs.  The likelihood that a particular incentive will convince a person to do something that creates a job is [dependent] upon a lot of variables, many of which have little / nothing to do with the incentive.
Agreed (of course).

Ceteris paribus, do incentives making the creation of jobs more financially rewarding to employers tend to increase, have no effect, or decrease job creation?

It depends on the incentive.  If you can guarantee that the incentive you're providing will only incentivize job creation, then sure . . . It'll probably create jobs.  Tax breaks (for example) have historically not been correlated with job creation though.

dividendman

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Re: Trickle down economics
« Reply #122 on: September 04, 2017, 01:01:30 PM »
People love to confuse issues.

Tax cuts != job creation
Government spending = job creation

Businesses will only create jobs if required to increase profits. Every business is looking at how to increase efficiency (read: eliminate people/do more work with less people). It's entirely possible that cutting taxes will allow businesses to invest in technology that will allow them to eliminate even more positions.

I don't think creating jobs is good reason to do anything.

I want the corporate tax cut because I'm rich, own a bunch of capital, and this will give me more. If you want the corporate tax cut for some other reason you're going to be disappointed.
« Last Edit: September 04, 2017, 01:03:15 PM by dividendman »

scottish

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Re: Trickle down economics
« Reply #123 on: September 04, 2017, 02:53:21 PM »
Well of course.   Corporate tax cuts benefit corporate shareholders, boards of directors and corporate executives.   

ooeei

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Re: Trickle down economics
« Reply #124 on: September 08, 2017, 07:29:00 AM »
Maybe maybe not, but I bet he isn't interested in working for (nearly) free.  At least not as hard.

I disagree.  Based on everything I've read about him I firmly believe that he would be working on the same problems whether he was making money on them out not.  I get that it may be hard for you to understand if you don't have a similar passion, but people with that kind of passion do exist.

My boss's boss is one of those people. He retired years ago after selling a business, and ended up coming to work here because he loves the job. Even taking that into account, I can tell you he wouldn't be doing it for free, he's told me that himself.

Money may not be the primary motivator for people, but it's often enough to push them over the edge, and to keep them doing the not so fun stuff. My dad just retired and is doing some contract work traveling around. He enjoys the job, but a big part of his motivation is the money (even though he doesn't need it). The money also keeps him going during the days of paperwork and meetings that aren't as glamorous.


A Definite Beta Guy

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Re: Trickle down economics
« Reply #125 on: September 08, 2017, 07:54:00 AM »
People love to confuse issues.

Tax cuts != job creation
Government spending = job creation

Businesses will only create jobs if required to increase profits. Every business is looking at how to increase efficiency (read: eliminate people/do more work with less people). It's entirely possible that cutting taxes will allow businesses to invest in technology that will allow them to eliminate even more positions.

I don't think creating jobs is good reason to do anything.

I want the corporate tax cut because I'm rich, own a bunch of capital, and this will give me more. If you want the corporate tax cut for some other reason you're going to be disappointed.

Ehhh, the chances of technology causing widespread unemployment are really low. It hasn't happened before and practically every economist I have read has come out against the Neo-Luddite narrative. Assuming that we actually do hit Technological Singularity, and people become useless, we'll be incredibly rich, not poor.

Getting business to invest more is a key goal of supply-side tax policy. We want to get businesses to create more capital, because we're richer as we have more capital per worker. Part of the problem with recent wages (by which I mean post-2008 recent) is a lack of investment and less capital growth per worker.


GuitarStv

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Re: Trickle down economics
« Reply #126 on: September 08, 2017, 08:35:24 AM »
Assuming that we actually do hit Technological Singularity, and people become useless, we'll be incredibly rich, not poor.

Agreed that we as a species will be incredibly rich.  The problem lies in the distribution of the wealth.  If it's concentrated in the few who control the means of production (and an awful lot in recent history would seem to indicate this is the most likely scenario) then people becoming useless will coincide with the vast majority of people being extremely poor.

shenlong55

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Re: Trickle down economics
« Reply #127 on: September 08, 2017, 10:23:51 AM »
Even taking that into account, I can tell you he wouldn't be doing it for free, he's told me that himself.

Then he's not one of the people that I'm talking about.  I know these type of people exist, because I am one.  I work on my passion in my off time now, for free.  I do have plans to make money off of it eventually, but that's only because that will give me more time to work on my passion instead of having to work another job for basic subsistence.  And if I actually make it to FI before I am able to monetize my passion, then I'll likely do it for free.

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« Last Edit: September 11, 2017, 12:36:18 AM by shenlong55 »

Jrr85

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Re: Trickle down economics
« Reply #128 on: September 11, 2017, 03:46:41 PM »

A person could reasonably come along just as offended by having to give up say 40% for very similar reasons. 40% is still a shit load of money to give to the government for work you did. Since reasonable people can disagree on the same premise that 30%,40%, 50% is a lot to part with I think the number at which you find income tax offensive is arbitrary with respect to the feelings of the greater population. I can't very well tell you what is arbitrary for you personally.

For me personally I think "trickle down economics" is part of a long narrative that has been feed to the right to convince them beyond a shadow of a doubt that progressive income tax is akin to theft, which goes along with our slow push to crunch all the tax brackets down to one. But I think the reality of what is too much income tax and what is not enough greatly depends on context. There are many higher tax Western nations where by and large high middle income earners are very happy because they perceive that they are getting value out of their taxes.

It's already been explained up-thread, but "trickle down economics" is not a narrative that has been fed to the right.  It is a narrative fed to the left.  If you are arguing for or against trickle down economics, you are either (1) dishonestly setting up and attacking a straw man to sucker other people, (2) honestly attacking a strawman you don't realize has been set up by other people to sucker you, or (3) arguing in favor of a strawman argument just because you think the people arguing against it are idiots and you're just assuming you should be for whatever they are against.

 

simonsez

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Re: Trickle down economics
« Reply #129 on: September 12, 2017, 04:31:35 PM »
Assuming that we actually do hit Technological Singularity, and people become useless, we'll be incredibly rich, not poor.

Agreed that we as a species will be incredibly rich.  The problem lies in the distribution of the wealth.  If it's concentrated in the few who control the means of production (and an awful lot in recent history would seem to indicate this is the most likely scenario) then people becoming useless will coincide with the vast majority of people being extremely poor.

Going to have a lot of people eating their yummy steak in the Matrix

zolotiyeruki

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Re: Trickle down economics
« Reply #130 on: September 13, 2017, 10:08:12 AM »
I'm going to toss another wrinkle into this discussion, one that was briefly mentioned on page 2 but not fleshed out enough IMO.  That issue is the question of which level of government should be setting economic policy and doing the spending, and on what.

In other words, why do we have so much of our spending/economic policy/taxation originate on a federal level?  When I look at education, infrastructure, law enforcement, urban planning, social welfare, etc, the vast majority of them would be better handled on a more local level.  For example, my village wants to widen 4.5 miles of road (2 lanes ->4) and add roundabouts at a half dozen locations.  The projected cost is $50 million.  That's a lot of money for a village of 30,000 to raise.  But it's no problem, because Uncle Sam is going to pay for a bunch of it!

If instead the village had to finance the project entirely on their own, they'd be forced to reconsider what they actually need to build.  Instead of paving 4 lanes for the entire distance, they'd probably realize "hey, two lanes is actually enough, it's just at intersections that it becomes a problem."  Or, instead of building a massive 100-foot-wide corridor (8' bike path, grass strip, 4' paved shoulder, 2x 11' lanes, 18' median, 2x 11' lanes, 4' shoulder, grass strip, 4' sidewalk, plus more right-of-way on either side), they'd be forced to only build what is needed.  But since they're expecting the lion's share to be paid by the Federal government, there doesn't appear to be much appetite for restraint.

In short, it's a lot easier to accept higher taxes (of any sort on anyone) when they're being spent efficiently, and with greater accountability to the folks paying the taxes. And that's more likely to happen the more local the taxing and spending happens.

GuitarStv

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Re: Trickle down economics
« Reply #131 on: September 13, 2017, 10:30:57 AM »
When I look at education, infrastructure, law enforcement, urban planning, social welfare, etc, the vast majority of them would be better handled on a more local level.

There's an issue with uniformity when doing what you suggest.

To pick a single point to dispute let's look at education.  The purpose of education is to produce enough useful minds in the workforce to keep the economy chugging along.  If education isn't standardized then you will get a different education depending on where you live.  Some places will be great and produce large quantities of bright students.  Some places will suck and produce useless students.  This will have the ultimate effect of certain areas of the country failing year after year (since it can take a very long time to change people's opinions about the effectiveness of their chosen course) . . . which means that students from some areas will be passed over when competing for higher education time and again . . . which means that you will end up with a large number of people unable to significantly contribute to the economy.  Although I suspect that eventually some course correction will take place . . . having a couple generations of badly/poorly educated is going to be a hell of a difficult obstacle to overcome.

zolotiyeruki

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Re: Trickle down economics
« Reply #132 on: September 13, 2017, 01:39:20 PM »
When I look at education, infrastructure, law enforcement, urban planning, social welfare, etc, the vast majority of them would be better handled on a more local level.
There's an issue with uniformity when doing what you suggest.

To pick a single point to dispute let's look at education.  The purpose of education is to produce enough useful minds in the workforce to keep the economy chugging along.  If education isn't standardized then you will get a different education depending on where you live.  Some places will be great and produce large quantities of bright students.  Some places will suck and produce useless students...
That's a valid concern, but I have three counterpoints:
1) We already have a system of uniformity, and it doesn't appear to be producing much uniformity. Compare Chicago Public Schools to the suburbs, for example.  Would some school districts show worse performance, given more local control?  Possibly.  Would some school districts show better performance without the micromanagement and unfunded one-size-fits-all mandates?  Absolutely.
2) Transparency.  The quality of schools (often judged on the basis of standardized test scores) is already a major factor in where people decide to live, and all that information is readily available.
3) The quality of a school system isn't the only factor affecting students' success down the road, nor is it the biggest factor.  The biggest factor (from what I've heard) is parental involvement in their kids' education.  Which means that issues of non-uniformity are more a cultural problem (and in some cases, a financial problem, if both parents have to work a lot and don't have the time) than a regulatory or fiscal one.  I would argue that attempts to encourage uniformity actually make this issue worse, because parents lose their ability to influence their kids' education, and so they become less engaged in the education process.

GuitarStv

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Re: Trickle down economics
« Reply #133 on: September 13, 2017, 02:15:08 PM »
When I look at education, infrastructure, law enforcement, urban planning, social welfare, etc, the vast majority of them would be better handled on a more local level.
There's an issue with uniformity when doing what you suggest.

To pick a single point to dispute let's look at education.  The purpose of education is to produce enough useful minds in the workforce to keep the economy chugging along.  If education isn't standardized then you will get a different education depending on where you live.  Some places will be great and produce large quantities of bright students.  Some places will suck and produce useless students...
That's a valid concern, but I have three counterpoints:
1) We already have a system of uniformity, and it doesn't appear to be producing much uniformity. Compare Chicago Public Schools to the suburbs, for example.  Would some school districts show worse performance, given more local control?  Possibly.  Would some school districts show better performance without the micromanagement and unfunded one-size-fits-all mandates?  Absolutely.

I suspect that the answer to your two questions would be 'Yes.' and 'Yes.'  The US is a big place, and there are going to be over and under-performers no matter what you do.

The system of uniformity doesn't guarantee that every student will do as well as the next.  It guarantees that students are presented with roughly the same information.


2) Transparency.  The quality of schools (often judged on the basis of standardized test scores) is already a major factor in where people decide to live, and all that information is readily available.

While I'm not a huge fan of it, the standardized testing used to rank schools is part of the federal government program that you're trying to do away with.  With each school studying a different curriculum and responsible for their own testing, test scores are simply not comparable to each other.  An 80 in California might only be worth a 60 in Utah.  That makes information much more difficult to get and use.  Without a nation wide standard set of tests and results, the only way you can tell how an education system is doing is to check university results . . . which means you're waiting a generation or so before you have any kind of useful data.



3) The quality of a school system isn't the only factor affecting students' success down the road, nor is it the biggest factor.  The biggest factor (from what I've heard) is parental involvement in their kids' education.  Which means that issues of non-uniformity are more a cultural problem (and in some cases, a financial problem, if both parents have to work a lot and don't have the time) than a regulatory or fiscal one.  I would argue that attempts to encourage uniformity actually make this issue worse, because parents lose their ability to influence their kids' education, and so they become less engaged in the education process.

You're attempting to use one of the triumphs of a standardized curriculum to attack it.  The goal of standardization is that each student is presented with the same material in school.  Even a shitty teacher still has to teach the same stuff as everyone else.  You lose this protection when you allow schooling to be a local issue.  All of a sudden a class in Idaho with the best teacher may not be as well prepared for university as a student in Georgia.

Sure, parental involvement in education is very important.  The attitude of parents and the community has a huge impact on kids work ethic.  Appreciation of cultural differences is very important too.  If the parents are more involved because they live in the bible belt and the class is now teaching creationism as though it were something legit, I'd argue that the increase in parental involvement and extra culture is actively damaging the child's education though.  The most enthusiastic parent in the world isn't giving their kid a good education if the basic facts being taught are wrong.

zolotiyeruki

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Re: Trickle down economics
« Reply #134 on: September 13, 2017, 03:24:27 PM »
When I look at education, infrastructure, law enforcement, urban planning, social welfare, etc, the vast majority of them would be better handled on a more local level.
There's an issue with uniformity when doing what you suggest.

To pick a single point to dispute let's look at education.  The purpose of education is to produce enough useful minds in the workforce to keep the economy chugging along.  If education isn't standardized then you will get a different education depending on where you live.  Some places will be great and produce large quantities of bright students.  Some places will suck and produce useless students...
That's a valid concern, but I have three counterpoints:
1) We already have a system of uniformity, and it doesn't appear to be producing much uniformity. Compare Chicago Public Schools to the suburbs, for example.  Would some school districts show worse performance, given more local control?  Possibly.  Would some school districts show better performance without the micromanagement and unfunded one-size-fits-all mandates?  Absolutely.

I suspect that the answer to your two questions would be 'Yes.' and 'Yes.'  The US is a big place, and there are going to be over and under-performers no matter what you do.

The system of uniformity doesn't guarantee that every student will do as well as the next.  It guarantees that students are presented with roughly the same information.
I guess we're seeing the same thing here, but are focusing on opposite ends of the spectrum.  You are worried about underperforming schools/students being left behind, while I'm worried about high-performing schools/students being hindered.  My argument is that enforced uniformity hurts the latter more than localized control might hurt the former.

As for "same information,"  I'll get to that in a bit.
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2) Transparency.  The quality of schools (often judged on the basis of standardized test scores) is already a major factor in where people decide to live, and all that information is readily available.
While I'm not a huge fan of it, the standardized testing used to rank schools is part of the federal government program that you're trying to do away with.  With each school studying a different curriculum and responsible for their own testing, test scores are simply not comparable to each other.  An 80 in California might only be worth a 60 in Utah.  That makes information much more difficult to get and use.  Without a nation wide standard set of tests and results, the only way you can tell how an education system is doing is to check university results . . . which means you're waiting a generation or so before you have any kind of useful data.
Please don't misunderstand me--I'm not advocating the abolition of standardized tests, and I dislike them as much as you. :)  What I object to is Federal money being tied to a state or district's acceptance of a specific program chosen by the DoE in DC.  It's one thing to rate states/districts/schools on standardized test scores.  It's entirely another to tie money to it.

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3) The quality of a school system isn't the only factor affecting students' success down the road, nor is it the biggest factor.  The biggest factor (from what I've heard) is parental involvement in their kids' education...
You're attempting to use one of the triumphs of a standardized curriculum to attack it.  The goal of standardization is that each student is presented with the same material in school.  Even a shitty teacher still has to teach the same stuff as everyone else.  You lose this protection when you allow schooling to be a local issue.  All of a sudden a class in Idaho with the best teacher may not be as well prepared for university as a student in Georgia.
We're getting off the track of funding and down the rabbit hole of curriculum, but I'll dive into it anyway.  This is an even more fundamental question of who decides what should be taught.  You're concerned that students in some conservative Christian areas would be taught Creationism as fact.  The folks in those areas might be equally concerned that kids in more liberal areas would be taught that there's nothing wrong with sexual promiscuity.  Personally, I find it very concerning that so many people in our country have very little understanding of how our government is structured.  I feel that students should have a decent grasp of civics and basic economics, but it's clear that such knowledge is getting left behind.  Besides all that, folks on the right have developed a deep distrust of pretty much everything that comes out of DC, and often with good reason.  Government employees, including those at the DoE, are overwhelmingly liberal, and the policies and regulations they issue are perceived as an ever-encroaching attack on their values and beliefs.

It's not just at the extremes, either.  It goes all the way down to what materials are used in the classroom.  Das Kapital, or Atlas Shrugged?  Are native Americans portrayed as noble savages?  Which historical figures do you spend time studying?  Do you portray the Founding Fathers as enlightened statesmen, or privileged, rich white slaveowners?

So back to the question: who decides what gets taught?  And who decides what material is used in that teaching?

A Definite Beta Guy

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Re: Trickle down economics
« Reply #135 on: September 13, 2017, 03:30:07 PM »
I think one of my posts may have been garbled. Education as is isn't very centralized, even at the state level. There are curriculums and standardized tests, but many states do not provide any ability for the state to impose management on a local school district. A lot of places failed the NCLB standards and were never held to account.

In several states, it's the nominally "small-government" GOP trying to pre-empt local school district rule, usually in Blue inner-city school districts.

Most of what the US federal government does (spending-wise) are income transfers that make some bit of sense at a federal level. It helps even out regional differences, so states that are falling on hard times that can get income from states that are doing relatively well. That and the military, which has been a huge, and federal, responsibility since WWII.

The majority of road spending does come from state and local governments:
http://www.bidnet.com/bne-cms/content/bid-resources/business-insights/us-government-spending-highway-infrastructure-en.jsp
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Since 2009, highway infrastructure spending has begun to increase again; but some of this increase can be attributed to a rise in the cost of construction labor and materials. In 2014, a total of $416 billion was spent on highway and water infrastructure, $320 billion of which came from state and local government, with $112 billion for capital projects and $207 billion for operation and maintenance. The federal contribution amounted to $96 billion, of which $69 billion was for capital projects and $27 billion was for operation and maintenance. Of the $416 billion total, $165 billion was for highways alone, which includes national, state and local roads, bridges and tunnels. Mass transit spending amounted to $65 billion.

Out of the almost $4 trillion the US government spends, only $600 billion is spent on stuff that can conceivably be returned to states (non-defense discretionary spending). And actually that's an overestimate, because that includes $200 billion for VA, State, DHS, and Intelligence, which can't be turned over to the states, so realistically $400 billion. I'm absolutely okay with halting the education portion of it, because I don't think we get any value for our money, but I don't see the value in not investing in NIH research spending, which accounts for a pretty big chunk.

There's probably certain regulations that can be turned over to the state governments. The EPA punishes counties for exceeding certain pollutant thresholds. The EPA shouldn't be concerned if the state of Utah chooses to poison itself, only if the state of Utah poisons the people of Nevada in the absence of an interstate compact.