Author Topic: Trickle down economics  (Read 7639 times)

Chris22

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Re: Trickle down economics
« Reply #50 on: June 16, 2017, 04:19:04 PM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.
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Out of the Blue

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Re: Trickle down economics
« Reply #51 on: June 16, 2017, 04:50:32 PM »
The problem with all the studies I have seen that "prove" trickle down economics doesn't work is that they all have too narrow a focus and ignore international capital flows.  I don't believe that lower taxes on the rich in, say, America will necessarily benefit poor Americans more than if taxes on the rich were higher and those tax funds were used to fund social programs in America.  But I believe that lower taxes on the rich in America will benefit the poor in other countries. 

If the rich in America get more money in the form of lower taxes, they either:
  • spend that money - in which case, the effect on GDP will probably be neutral because that money would have been spent (by the government) if it had been taxed anyway
  • hoard that money - in which case, the money supply effectively decreases as a sum of money is taken out of circulation, and everyone else's purchasing power is effectively increased (i.e. everyone else's money is worth a bit more - the opposite of inflation)
  • invest that money - in which case, the place in which they invest will likely reap much of the benefits, with some benefits flowing through to other countries in the form of trade, etc.
Most likely, rich people will invest most of the money they get from tax cuts.  They are likely to invest some of that money in developing countries.  It will benefit poor people in those countries much more than if the money had been spent on social welfare programmes in America.  To those who say neoliberalism and trickle down economics doesn't work - there is no proof for this when a global view is adopted. Look at how many people have been lifted out of poverty in China, in India, and in Vietnam under this system.  Granted, this is not definitive proof - and you'll never get definitive proof in the field of macroeconomics - but it does suggest that the current system might be working. 

I guess if you're an American with an America-centric view, you might not care about people in those developing countries and prefer to protect the interests of middle class/poor in America.  But if you take a more global view - as I prefer to - you wouldn't be so quick to dismiss "trickle down economics" as "bullshit". 

For the record, I do support a system of progressive taxation, with higher tax rates for the rich than the poor; and I support taxes on capital gains being at least as high as taxes on labour.  But tax competition exists, and capital is mobile, so if a country increases taxes on capital too much it will just drive investment offshore, which is worse for the country (including its poor) overall.  Countries and governmental organisations are slowly moving towards a more "united" system of taxation to try and stop tax competition, but this is not nearly as simple as some liberals assume it is, and I am not entirely sure that a more united system will be better for the world on the whole - as opposed to just being better for richer countries like the OECD group.   

GuitarStv

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Re: Trickle down economics
« Reply #52 on: June 16, 2017, 06:41:28 PM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.

"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

Chris22

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Re: Trickle down economics
« Reply #53 on: June 16, 2017, 08:17:58 PM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.

"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

Yeah I will never agree with that philosophically.
"If I could get all the money back I ever spent on cars, I'd spend it on cars." - Nick Mason

GuitarStv

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Re: Trickle down economics
« Reply #54 on: June 16, 2017, 08:34:44 PM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.

"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

Yeah I will never agree with that philosophically.

It's not a philosophy.  Look up the definition of 'Legal Tender'.

Chris22

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Re: Trickle down economics
« Reply #55 on: June 16, 2017, 08:49:43 PM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.

"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

Yeah I will never agree with that philosophically.

It's not a philosophy.  Look up the definition of 'Legal Tender'.

All I see are references that require money to be recognized as payment for debts. Nothing more.
"If I could get all the money back I ever spent on cars, I'd spend it on cars." - Nick Mason

GuitarStv

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Re: Trickle down economics
« Reply #56 on: June 16, 2017, 08:58:35 PM »
You can lead a horse to water . . .

TornWonder

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Re: Trickle down economics
« Reply #57 on: June 16, 2017, 09:05:21 PM »
If people actually believe that giving more money to the government is the right thing to do and that it will help solve some of the problems in our society, why have I never met a single person that has knowingly paid one cent more than they were legally required to pay in taxes?

Good question.  Maybe for the same reason that those people who believe paying more taxes will not help solve some of the problems in our society, then never pay that same money to homeless shelters, poverty programs, etc. or otherwise make an attempt at solving those same problems.

Except your argument doesn't have much basis in reality as American Conservatives are the among the most charitable people on Earth.  The people begging for the government to take care of it tend to be less charitable.

Except your argument doesn't have much basis in reality as my statement didn't specify that charitable giving was a conservative or liberal trait.  Because it's not. I try not to make blanket statements about either party. But, to your point, the American Conservative is certainly known worldwide for taking care of the sick, poor and needy.

Except is does have a basis in reality, because both of my statements have been actual facts and neither of yours have contained any as far as I know.  Do you have any evidence for your claim that "people who believe paying more taxes will not help solve some of the problems in our society ... never pay that same money to homeless shelters, poverty programs, etc. or otherwise make an attempt at solving those same problems"?  I have never seen this stated anywhere.  It's also a strawman to my original question, for which you never actually provided a response.  Not sure who taught you to discuss things in this manner but it's very disingenuous and makes conversation pointless.

Chris22

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Re: Trickle down economics
« Reply #58 on: June 16, 2017, 09:06:28 PM »
You can lead a horse to water . . .

Cut the smug horseshit. Make your argument and cite your references.
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MasterStache

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Re: Trickle down economics
« Reply #59 on: June 17, 2017, 05:25:15 AM »
If people actually believe that giving more money to the government is the right thing to do and that it will help solve some of the problems in our society, why have I never met a single person that has knowingly paid one cent more than they were legally required to pay in taxes?

Good question.  Maybe for the same reason that those people who believe paying more taxes will not help solve some of the problems in our society, then never pay that same money to homeless shelters, poverty programs, etc. or otherwise make an attempt at solving those same problems.

Except your argument doesn't have much basis in reality as American Conservatives are the among the most charitable people on Earth.  The people begging for the government to take care of it tend to be less charitable.

Except your argument doesn't have much basis in reality as my statement didn't specify that charitable giving was a conservative or liberal trait.  Because it's not. I try not to make blanket statements about either party. But, to your point, the American Conservative is certainly known worldwide for taking care of the sick, poor and needy.

Except is does have a basis in reality, because both of my statements have been actual facts and neither of yours have contained any as far as I know.  Do you have any evidence for your claim that "people who believe paying more taxes will not help solve some of the problems in our society ... never pay that same money to homeless shelters, poverty programs, etc. or otherwise make an attempt at solving those same problems"?  I have never seen this stated anywhere.  It's also a strawman to my original question, for which you never actually provided a response.  Not sure who taught you to discuss things in this manner but it's very disingenuous and makes conversation pointless.

I think you are conflating two different things. When you resorted to breaking it down on a political level (weather true or not is irrelevant) it wasn't a valid reply to the original comment. It was in essence either a diversion or straw-man itself.

It's certainly true that folks who pay the minimum in taxes also donate large portions. Bill Gates foundation is an excellent example. Buffet and others have pledged to donate a huge portion of their earnings after they pass. But even Buffet will admit he paid the minimum in taxes (actually less percentage wise than most middle class folks). He often speaks out against as well and will tell you it's not fair.

sokoloff

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Re: Trickle down economics
« Reply #60 on: June 17, 2017, 06:05:02 AM »
But then you have to deal with the problem of making up that revenue from other form of taxes or massively shrink Federal government.
There are some, including me, who consider that property an additional feature rather than a bug.

I see no reason why social support mechanisms ought to be Federal. Any given program should be as local as is feasible. There's nothing particularly country-wide or inherently federal about giving food to those people unable to buy it themselves. Make that a local program and let local taxpayers decide how they want it run and how much to fund it.

It's almost like I wish our founding fathers had thought more carefully about how to divide the powers between the feds and the states and maybe bothered to write some simple text into the Constitution on the topic. Oh wait, they did and we just ignore it.

Cpa Cat

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Re: Trickle down economics
« Reply #61 on: June 17, 2017, 07:51:22 AM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.

"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

Yeah I will never agree with that philosophically.

It's not a philosophy.  Look up the definition of 'Legal Tender'.

But it is a philosophy. It's a political philosophy. We currently have and support a government that endorses capitalism on an individual level. I am allowed to choose my career, work, and keep the money that I earned (to an extent), and spend it on what I want (with limited restrictions).

If the government instead shifts its philosophy toward... say... communism, which places more restrictions on those things, then we're in a different political philosophy. And indeed. as Chris indicates, that government may lose the support of its people.

It may also cripple the economy, since communist governments have proven to be poor stewards of tax dollars and economic well being.

Another philosophy that leads one down the same road is a theocracy, where my ability to choose careers, work, keep my money and spend it on what I want are narrowed and redistributed in different ways.

That's the problem with large, powerful governments and relying on the government's good nature to do the "right thing." There are some governments who sit around that 50% tax mark who seem to be doing alright - but there are plenty more large governments that aren't hallmarks of  success.

At any rate - it absolutely is a philosophy. And we as individuals in a democracy have every right to choose whether or not we support our government's philosophy.
« Last Edit: June 17, 2017, 07:53:07 AM by Cpa Cat »

MasterStache

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Re: Trickle down economics
« Reply #62 on: June 17, 2017, 10:06:34 AM »
We currently have and support a government that endorses capitalism on an individual level. I am allowed to choose my career, work, and keep the money that I earned (to an extent), and spend it on what I want (with limited restrictions).

You're right to choose your career work, etc. have nothing to do with capitalism.

scottish

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Re: Trickle down economics
« Reply #63 on: June 17, 2017, 10:30:45 AM »
We currently have and support a government that endorses capitalism on an individual level. I am allowed to choose my career, work, and keep the money that I earned (to an extent), and spend it on what I want (with limited restrictions).

You're right to choose your career work, etc. have nothing to do with capitalism.

Wouldn't happen if your system was communist.   Just sayin...

I think the reason the government is so inefficient at spending money is because the politicians and bureaucrats have no skin in the game.   Once in a while you'll get a politician who feels its his/her duty to be fiscally responsible (cf Paul Martin), but generally the best you'll get is someone who will try to spend the money rationally.   

Just look at the way most people spend their own money.   Would we really expect our political leadership to be better?

MasterStache

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Re: Trickle down economics
« Reply #64 on: June 17, 2017, 02:03:55 PM »
We currently have and support a government that endorses capitalism on an individual level. I am allowed to choose my career, work, and keep the money that I earned (to an extent), and spend it on what I want (with limited restrictions).

You're right to choose your career work, etc. have nothing to do with capitalism.

Wouldn't happen if your system was communist.   Just sayin...

Again, false. People are not assigned jobs under communist rule. If our government suddenly instituted communism they wouldn't remove me from being an engineer and tell me I am now a janitor. Feel free to provide examples of communist countries past or present that assigned specific jobs to the population.

« Last Edit: June 17, 2017, 02:09:42 PM by BeginnerStache »

Cpa Cat

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Re: Trickle down economics
« Reply #65 on: June 17, 2017, 03:14:25 PM »
We currently have and support a government that endorses capitalism on an individual level. I am allowed to choose my career, work, and keep the money that I earned (to an extent), and spend it on what I want (with limited restrictions).

You're right to choose your career work, etc. have nothing to do with capitalism.

Wouldn't happen if your system was communist.   Just sayin...

Again, false. People are not assigned jobs under communist rule. If our government suddenly instituted communism they wouldn't remove me from being an engineer and tell me I am now a janitor. Feel free to provide examples of communist countries past or present that assigned specific jobs to the population.

You ignored the rest. You could choose to be a doctor under communism, but you could not choose to keep what you earned - that amount would be set by government standards for your salary. You could not choose what to buy, or even what property to own - all of that would have severe restrictions under communism. Doctor shortages are a hallmark of nationalized healthcare systems, so we can't pretend that those restrictions don't impact career choices.

Under a theocracy, as a woman, I might not be able to choose to be a doctor. I might not be able to drive a car or even have a bank account. There are many countries where I would have zero freedom of choice and would need the permission of my male relatives to do anything.

As an engineer, under communist rule, you might be forced to accept a government job because your workplace becomes centralized instead of privatized. You could be forced to accept a salary that is a fraction of what you current enjoy, and you might be forced to downsize your standard of living. Your property could be seized and you might be forced to move to another city because that's where you've been told to work. You may be assigned to an engineering project that you find uninteresting. But you chose to be an engineer... so all is well? To me, I look at that scenario and say: Nope, actually, you really didn't have a heck of a lot of choice.

Capitalism and democracy are political philosophies that affect every aspect of our lives. Taxation and personal enrichment are two aspects of the interplay between those two philosophies.

My point is - governments have philosophies about taxation, about freedom, about a whole host of things. It's wrong to say they don't have philosophies. It's wrong to pretend that we're unaffected by those philosophies. And it's wrong to say that we have no choice but to agree with those philosophies.


accolay

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Re: Trickle down economics
« Reply #66 on: June 17, 2017, 05:16:31 PM »
I see no reason why social support mechanisms ought to be Federal. Any given program should be as local as is feasible. There's nothing particularly country-wide or inherently federal about giving food to those people unable to buy it themselves. Make that a local program and let local taxpayers decide how they want it run and how much to fund it.

The reason things like that are federal is because money. Department of Agriculture does SNAP. Alabama's broke so states that are in the black send more of their taxes to support the whole. I'm guessing a lot of local programs wouldn't have the coin if they ran their own SNAP and there'd be a lot more starving people around than there are already (in the richest country on the planet and at least until the current administration cuts that program too)

IMHO, each state having it's own stupid laws is pretty inefficient, but I can't imagine how much worse it would be if there weren't federal standards to rein it in.

Concerning inefficiency...some of our government by nature will always be inefficient. The process itself is inefficient. It was designed that way and we should want it that way.

Concerning taxes, you get what you pay for. I'm not ready for the third world yet. Although the government can be quite inefficient at times I'm not convinced that the private sector doing the job would really be better.

Also, I feel like those who complain about taxes are stuck with 1980's pricing.

scottish

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Re: Trickle down economics
« Reply #67 on: June 17, 2017, 08:02:29 PM »
We currently have and support a government that endorses capitalism on an individual level. I am allowed to choose my career, work, and keep the money that I earned (to an extent), and spend it on what I want (with limited restrictions).

You're right to choose your career work, etc. have nothing to do with capitalism.

Wouldn't happen if your system was communist.   Just sayin...

Again, false. People are not assigned jobs under communist rule. If our government suddenly instituted communism they wouldn't remove me from being an engineer and tell me I am now a janitor. Feel free to provide examples of communist countries past or present that assigned specific jobs to the population.

I was thinking of trying to work under Joseph Stalin in Russia, for example.   Linky  https://en.wikipedia.org/wiki/Soviet_working_class

MasterStache

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Re: Trickle down economics
« Reply #68 on: June 18, 2017, 06:21:16 AM »
We currently have and support a government that endorses capitalism on an individual level. I am allowed to choose my career, work, and keep the money that I earned (to an extent), and spend it on what I want (with limited restrictions).

You're right to choose your career work, etc. have nothing to do with capitalism.

Wouldn't happen if your system was communist.   Just sayin...

Again, false. People are not assigned jobs under communist rule. If our government suddenly instituted communism they wouldn't remove me from being an engineer and tell me I am now a janitor. Feel free to provide examples of communist countries past or present that assigned specific jobs to the population.

You ignored the rest.

No I specifically responded to the part that was false (see bolded).
« Last Edit: June 18, 2017, 06:27:00 AM by BeginnerStache »

BlueHouse

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Re: Trickle down economics
« Reply #69 on: June 18, 2017, 01:02:05 PM »
Except your argument doesn't have much basis in reality as American Conservatives are the among the most charitable people on Earth.  The people begging for the government to take care of it tend to be less charitable.

I'm going to have to ask for a source on this claim.
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dividendman

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Re: Trickle down economics
« Reply #70 on: June 18, 2017, 07:36:59 PM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.

"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

Yeah I will never agree with that philosophically.

It's not a philosophy.  Look up the definition of 'Legal Tender'.

All I see are references that require money to be recognized as payment for debts. Nothing more.

I think the philosophical difference isn't about the actual minting of currency, it's about how you perceive your own success (or lack thereof).

It's my position that most (meaning well more than 50%) of your financial standing in life is pure luck. Where you were born being the major indicator of later financial success and this has nothing to do with your own choices/skills/hard work.

So, if like me, you think your position is mostly luck based on your surroundings, you will feel more obligated to contribute, and force all the other lucky folks, to contribute heavily to those surroundings that allowed for fertile ground in which people like me could flourish.

For those people like you (I presume) who think their own skills and choices are the predominant reason they are in their position are less likely to believe their hard work should be taken away and given to others because those others failed to make the smart decisions and hence your problem with > 50% tax.

My own life is like this: 1) I was born to poor immigrants but was born in a rich country that allowed me to get a valuable skill set, 2) I did try decently hard at school and work to advance this skill set, 3) I now make > $400k/yr with this skill set.

So, did I do most of the work of acquiring this very lucrative skill set? Or was most of the work the luck of my parents moving here, being in a rich place with relatively cheap education, being able to migrate to Silicon Valley with ease, and being part of the recent tech boom?

It's hard to say how much % is the luck part and how much is me working hard/making smart decisions. Sometimes I tend to think I'm really smart and deserve all the money. Other times I look around and wonder how I can make so much, am I really that different from the McDonalds drive through person I just got my coffee from but that person couldn't get a tech education? It's tough.

Anyway, in recent years I'm coming down on the side that me and the McDonalds person probably aren't that different except for our environments and hence I (and the folks lucky enough to be in my position) should pay more in tax to allow that person to have a better life.


GuitarStv

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Re: Trickle down economics
« Reply #71 on: June 19, 2017, 05:48:37 AM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.

"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

Yeah I will never agree with that philosophically.

It's not a philosophy.  Look up the definition of 'Legal Tender'.

But it is a philosophy. It's a political philosophy. We currently have and support a government that endorses capitalism on an individual level. I am allowed to choose my career, work, and keep the money that I earned (to an extent), and spend it on what I want (with limited restrictions).

If the government instead shifts its philosophy toward... say... communism, which places more restrictions on those things, then we're in a different political philosophy. And indeed. as Chris indicates, that government may lose the support of its people.

It may also cripple the economy, since communist governments have proven to be poor stewards of tax dollars and economic well being.

Another philosophy that leads one down the same road is a theocracy, where my ability to choose careers, work, keep my money and spend it on what I want are narrowed and redistributed in different ways.

That's the problem with large, powerful governments and relying on the government's good nature to do the "right thing." There are some governments who sit around that 50% tax mark who seem to be doing alright - but there are plenty more large governments that aren't hallmarks of  success.

At any rate - it absolutely is a philosophy. And we as individuals in a democracy have every right to choose whether or not we support our government's philosophy.

Legal tender is a concept, not something concrete.  When you amass fiat currency issued by a government, you aren't actually amassing anything.  The government can choose to make all the money you've got invalid and unusable.  The government can choose to inflate away the value of 'your' money.  When you choose to use the money, it is implicitly agreeing to be bound by the terms and conditions that the issuing government has stated.  That's why it's silly to get upset about paying taxes . . . the money that you believe you own is actually owned and is effectively controlled by the government at all times.  (This of course, doesn't even touch on the fact that it would be difficult to impossible to amass any quantities of the government's money without the infrastructure that said government has put into place to facilitate your actions.)

ooeei

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Re: Trickle down economics
« Reply #72 on: June 19, 2017, 06:40:48 AM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.

"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

Yeah I will never agree with that philosophically.

It's not a philosophy.  Look up the definition of 'Legal Tender'.

But it is a philosophy. It's a political philosophy. We currently have and support a government that endorses capitalism on an individual level. I am allowed to choose my career, work, and keep the money that I earned (to an extent), and spend it on what I want (with limited restrictions).

If the government instead shifts its philosophy toward... say... communism, which places more restrictions on those things, then we're in a different political philosophy. And indeed. as Chris indicates, that government may lose the support of its people.

It may also cripple the economy, since communist governments have proven to be poor stewards of tax dollars and economic well being.

Another philosophy that leads one down the same road is a theocracy, where my ability to choose careers, work, keep my money and spend it on what I want are narrowed and redistributed in different ways.

That's the problem with large, powerful governments and relying on the government's good nature to do the "right thing." There are some governments who sit around that 50% tax mark who seem to be doing alright - but there are plenty more large governments that aren't hallmarks of  success.

At any rate - it absolutely is a philosophy. And we as individuals in a democracy have every right to choose whether or not we support our government's philosophy.

Legal tender is a concept, not something concrete.  When you amass fiat currency issued by a government, you aren't actually amassing anything.  The government can choose to make all the money you've got invalid and unusable.  The government can choose to inflate away the value of 'your' money.  When you choose to use the money, it is implicitly agreeing to be bound by the terms and conditions that the issuing government has stated.  That's why it's silly to get upset about paying taxes . . . the money that you believe you own is actually owned and is effectively controlled by the government at all times.  (This of course, doesn't even touch on the fact that it would be difficult to impossible to amass any quantities of the government's money without the infrastructure that said government has put into place to facilitate your actions.)

Of course you can be upset with the government for taking away your work and money you've amassed just because they can, especially if they change the deal midway through your life.  It's all part of a give and take.  Sure the government can technically do what they want with our money, then again we can revolt and destroy the government.  To suggest "they have control so you can't be mad at anything they do" is just ridiculous, and worryingly submissive.  I guess if they came and raped your wife, shot your dog, and stole your kids to send to labor camps you'd just shrug and say "Well it's their system, so I can't be upset.  I only had a wife, dog, and kids because of their systems they put in place, so it's their right."

You would've made a great motivational speaker for slaves back in the day. 

Dabnasty

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Re: Trickle down economics
« Reply #73 on: June 19, 2017, 08:15:23 AM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.
"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

I think we started off with the wrong dispute. GuitarStv had a point to make but it really had nothing to do with the arbitrariness of the 50% mark.

I would argue that 50% is arbitrary given the equation in question. Sure it is the difference between minority/majority but that is purely emotional in this circumstance.

Chris22

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Re: Trickle down economics
« Reply #74 on: June 19, 2017, 08:30:32 AM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.
"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

I think we started off with the wrong dispute. GuitarStv had a point to make but it really had nothing to do with the arbitrariness of the 50% mark.

I would argue that 50% is arbitrary given the equation in question. Sure it is the difference between minority/majority but that is purely emotional in this circumstance.

Is it purely arbitrary?  Once the majority of your additional income goes to benefit someone other than yourself (and family, etc) I'd argue that's a pretty big disincentive. 
"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 #75 on: June 19, 2017, 08:36:31 AM »
Is it purely arbitrary?  Once the majority of your additional income goes to benefit someone other than yourself (and family, etc) I'd argue that's a pretty big disincentive.

So, just a question that I haven't seen asked/answered yet, is there no level of income that we actually want to disincentive?

Chris22

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Re: Trickle down economics
« Reply #76 on: June 19, 2017, 08:48:30 AM »
Is it purely arbitrary?  Once the majority of your additional income goes to benefit someone other than yourself (and family, etc) I'd argue that's a pretty big disincentive.

So, just a question that I haven't seen asked/answered yet, is there no level of income that we actually want to disincentive?

I certainly don't think so.
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Dabnasty

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Re: Trickle down economics
« Reply #77 on: June 19, 2017, 08:51:38 AM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.
"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

I think we started off with the wrong dispute. GuitarStv had a point to make but it really had nothing to do with the arbitrariness of the 50% mark.

I would argue that 50% is arbitrary given the equation in question. Sure it is the difference between minority/majority but that is purely emotional in this circumstance.
Is it purely arbitrary?  Once the majority of your additional income goes to benefit someone other than yourself (and family, etc) I'd argue that's a pretty big disincentive.
Your initial statement:
Philosophically I disagree there should ever be a bracket over 49.9% on earned income.  I don't think the government should ever be entitled to half (or more) of something someone earned.
was opposed to >50% on principal. What I'm saying is that that number is arbitrary mathematically speaking.

Now if we're changing the discussion to what will incentivize others, I would agree that 50% is an important number due to people's (irrational) emotions.

MasterStache

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Re: Trickle down economics
« Reply #78 on: June 19, 2017, 08:59:35 AM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.
"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

I think we started off with the wrong dispute. GuitarStv had a point to make but it really had nothing to do with the arbitrariness of the 50% mark.

I would argue that 50% is arbitrary given the equation in question. Sure it is the difference between minority/majority but that is purely emotional in this circumstance.

Is it purely arbitrary?  Once the majority of your additional income goes to benefit someone other than yourself (and family, etc) I'd argue that's a pretty big disincentive.
That's arbitrary as well. Your assuming the money is spent on something that doesn't benefit the originator of the money as well.



shenlong55

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Re: Trickle down economics
« Reply #79 on: June 19, 2017, 09:01:04 AM »
Is it purely arbitrary?  Once the majority of your additional income goes to benefit someone other than yourself (and family, etc) I'd argue that's a pretty big disincentive.

So, just a question that I haven't seen asked/answered yet, is there no level of income that we actually want to disincentive?

I certainly don't think so.

Wow.  Don't you think that's kind of an extreme position?
« Last Edit: June 19, 2017, 09:05:17 AM by shenlong55 »

sokoloff

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Re: Trickle down economics
« Reply #80 on: June 19, 2017, 09:27:50 AM »
So, just a question that I haven't seen asked/answered yet, is there no level of income that we actually want to disincentive?
I certainly don't think so.
Wow.  Don't you think that's kind of an extreme position?
If you disagree with it, then it's an extreme position. If you agree with it (as I do), then the opposite is an extreme position.

shenlong55

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Re: Trickle down economics
« Reply #81 on: June 19, 2017, 09:36:03 AM »
So, just a question that I haven't seen asked/answered yet, is there no level of income that we actually want to disincentive?
I certainly don't think so.
Wow.  Don't you think that's kind of an extreme position?
If you disagree with it, then it's an extreme position. If you agree with it (as I do), then the opposite is an extreme position.

Well, I agree that the opposite (that we should disincentive all income levels) would also be extreme.  Are you trying to imply that there is no possible position on this issue that is not extreme?

sokoloff

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Re: Trickle down economics
« Reply #82 on: June 19, 2017, 10:19:40 AM »
I believe that a call for a 100% (or greater) marginal rate as a disincentive for income production over a certain level is an extreme position.

I believe that those who believe that "all taxation is theft" are also holding an extreme point of view.

I'm not as interested in theoretically angels on heads of pins discussion of whether there exist any possible <foo> such that <bar> is true.

shenlong55

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Re: Trickle down economics
« Reply #83 on: June 19, 2017, 10:22:31 AM »
I believe that a call for a 100% (or greater) marginal rate as a disincentive for income production over a certain level is an extreme position.

I believe that those who believe that "all taxation is theft" are also holding an extreme point of view.

I'm not as interested in theoretically angels on heads of pins discussion of whether there exist any possible <foo> such that <bar> is true.

As Chris22 has already pointed out, "a 100% (or greater) marginal rate" is not required to dis-incentivize income...

ETA: My point was simply that everyone seems to be assuming that dis-incentivizing income is -always- a bad thing.  There is absolutely no discussion going on of whether there are good reasons for us to want to dis-incentivize (not ban) certain levels of income and I don't believe that the position that we may want to dis-incentivize extreme levels of income to some degree is extreme.
« Last Edit: June 19, 2017, 11:20:02 AM by shenlong55 »

acroy

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Re: Trickle down economics
« Reply #84 on: June 19, 2017, 10:42:03 AM »
I believe a major fault of the popular tax systems is they all tax income (production) vs spending (consumption).

This violates the basic precepts of: reward what you want to encourage. tax what you want to discourage.

Income tax discourages productivity; encourages hiding income (evasion).

I think a better system would be consumption tax. Or maybe just poll tax. You want to vote, to be represented? pay up. It works that way anyway - let's just be more honest about it.
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crazyworld

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Re: Trickle down economics
« Reply #85 on: June 19, 2017, 11:20:59 AM »
A thought to add to the taxes discussion upstream: why do some folks who want to cut taxes and pay down the deficit. still want to keep adding to the defense budget?  Because the rich have the most assets, both domestically and abroad, which they would like to protect.

Two reasons:

1.  Defense is one of the few specifically enumerated powers in the Constitution for the Federal government.

2.  It's one of the things that really is not well provided for in most instances by the private sector, and is not done hardly at all by the states (lots of other things are double dipped, state and Fed)

Sure, but why keep spending more & more?  Especially if at the same time there are complaints by the same people about "debt" and "deficit"

sokoloff

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Re: Trickle down economics
« Reply #86 on: June 19, 2017, 11:29:08 AM »
I don't believe that the position that we may want to dis-incentivize extreme levels of income to some degree is extreme.
OK; fair enough. Turn it around. Why do you believe it does make sense to dis-incent extreme levels of income? What goal(s) are you hoping to accomplish with that?

That's the philosophy; now for the practicality:

Do you think that any perturbance of activity by taxpayers would result? Would the aggregate result be more or less beneficial than the progressive rate system we have today?

shenlong55

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Re: Trickle down economics
« Reply #87 on: June 19, 2017, 11:52:58 AM »
I don't believe that the position that we may want to dis-incentivize extreme levels of income to some degree is extreme.
OK; fair enough. Turn it around. Why do you believe it does make sense to dis-incent extreme levels of income? What goal(s) are you hoping to accomplish with that?

That's the philosophy; now for the practicality:

Do you think that any perturbance of activity by taxpayers would result? Would the aggregate result be more or less beneficial than the progressive rate system we have today?

One reason could be to manage (***manage != eliminate***) the extreme inequality potential of raw capitalism.

As to the practical questions, how would a 70-ish% top rate at extreme levels of income (just to throw a number out there, 1.5MM/year maybe) be significantly different from our current progressive rate system besides the rates?

RangerOne

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Re: Trickle down economics
« Reply #88 on: June 19, 2017, 12:02:12 PM »
50% isn't arbitrary, it's the exact dividing line between keeping the majority of your wages and losing it to taxes.
"Your" money is actually a privledge granted to you by the government.  "Your" ability to amass that money is controlled heavily by the safety, services, and financial policy pursued by your government.  Sure, there's a lot of hard work that you do . . . but given that the only reason you can complain about the loss of your wages is due to the environment created by those you're paying, I'm not sure you can really argue that the 50% dividing line has any real meaning at all.

I think we started off with the wrong dispute. GuitarStv had a point to make but it really had nothing to do with the arbitrariness of the 50% mark.

I would argue that 50% is arbitrary given the equation in question. Sure it is the difference between minority/majority but that is purely emotional in this circumstance.

Is it purely arbitrary?  Once the majority of your additional income goes to benefit someone other than yourself (and family, etc) I'd argue that's a pretty big disincentive.

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.

In the US we generally have much more control of our income for better and worse, depending on your state of residence. I think the complexity of our tax code obfuscates the reality of how much taxes we really pay. With sales tax, import taxes, hidden gas taxes, income tax, payrole tax, property tax ect, it becomes incredibly difficult for the average person to take the time to understand how much they are being taxed from anyone source and how much return services or improvements they are seeing as a result. People on this site tend to have a better idea than most because many of us are interested in min maxing our earnings.

My long winded point is that there is probably more to your perception that there is something deeply wrong with giving half or more of every dollar earned to the government probably doesn't apply to everyone. It sounds like for you the crux of the matter is that you think it insane that a government should have more of a say on what your money will be used for than you do thus the line where they take the majority of your earned income is a well reasoned line. Thats certainly a argument you could make.

My impression of complicated tax systems is that they are more than just a means to funnel money into the government. Tax code is as much about trying to fairly fund necessary government functions as it is about favoring certain positive behaviors and penalizing ones we perceive as bad, while not taking away the freedom to partake in bad behavior if we value it enough.

RangerOne

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Re: Trickle down economics
« Reply #89 on: June 19, 2017, 12:17:34 PM »
A thought to add to the taxes discussion upstream: why do some folks who want to cut taxes and pay down the deficit. still want to keep adding to the defense budget?  Because the rich have the most assets, both domestically and abroad, which they would like to protect.

Two reasons:

1.  Defense is one of the few specifically enumerated powers in the Constitution for the Federal government.

2.  It's one of the things that really is not well provided for in most instances by the private sector, and is not done hardly at all by the states (lots of other things are double dipped, state and Fed)

Sure, but why keep spending more & more?  Especially if at the same time there are complaints by the same people about "debt" and "deficit"

It is one thing to believe in the mandate of our federal government to provide defense. It is entirely another to suggest that our defense budget is in need of more money. We spend double the amount on defense of our 3 largest adversaries combined (China, Russian and Saudi's)... that alone is highly suspect. Perhaps we should stop projecting so much force globally as if our allies are helpless. It would take a long independent study to convince me that we should not be streamlining our defense budget and cutting costs and programs not making us safer.

If you are a purely a deficit hawk you should be just as concerned about overspending in the military as any other program. Dumping more money into the military is a lazy way for politicians to prove they are pro defense. If our Navy needs to grow, veterans need better care or aging forces need better equipment surely we can divert that money form elsewhere in the our defense budget. I would at least like to see the effort being made.

sokoloff

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Re: Trickle down economics
« Reply #90 on: June 19, 2017, 03:00:11 PM »
As to the practical questions, how would a 70-ish% top rate at extreme levels of income (just to throw a number out there, 1.5MM/year maybe) be significantly different from our current progressive rate system besides the rates?
1.5MM/person (double that for MFJ), I would be OK with a higher rate, and maybe 70% is OK. But remember, we're already smacking that person with 3.8% ACA surtax; that person is probably paying a state income tax on it and might also be paying a local income tax on it. The closer you walk to a 100% effective marginal rate, the more actions people take to defer the recognition of income. Maybe I take shares in a company that allow me to take capital gains in later years. Maybe I trade off some of my own income this year for deferred comp in future years. If instead of making $15MM this year where you tax away $12MM of it, maybe I structure my comp as $1.5MM for each of the next 10 years where you only tax away $7.5MM of it. If that comp is essentially guaranteed, I can still borrow against the future income stream, meaning my purchasing power [and associated control] is preserved, but without the taxman taking quite as deep a bite.

How would a top 70% headline rate (an effective 80+% all-in rate) different from a 39.6% headline rate (effective 50% rate)? Well, it would provide a lot more potential energy to drive structuring of affairs so as to avoid taking current income in favor of future income. Do those things add value to economy? IMO, no; they suck the time, energy, creativity, and attention of smart people away from things that advance society and channel them towards largely unproductive [for society] structuring affairs.

Besides than the weight, how does a 5'10", 300# person significantly differ from a 5'10" 150# person?

scottish

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Re: Trickle down economics
« Reply #91 on: June 19, 2017, 03:31:44 PM »
I believe a major fault of the popular tax systems is they all tax income (production) vs spending (consumption).

This violates the basic precepts of: reward what you want to encourage. tax what you want to discourage.

Income tax discourages productivity; encourages hiding income (evasion).

I think a better system would be consumption tax. Or maybe just poll tax. You want to vote, to be represented? pay up. It works that way anyway - let's just be more honest about it.

Wait - are there no consumption taxes in the US?

sokoloff

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Re: Trickle down economics
« Reply #92 on: June 19, 2017, 03:50:05 PM »
There are sales taxes in most areas (not all) and fuel taxes everywhere.

They are not at EU VAT levels, though, more typically 4-10%.

MasterStache

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Re: Trickle down economics
« Reply #93 on: June 19, 2017, 03:53:38 PM »
I believe a major fault of the popular tax systems is they all tax income (production) vs spending (consumption).

This violates the basic precepts of: reward what you want to encourage. tax what you want to discourage.

Income tax discourages productivity; encourages hiding income (evasion).

I think a better system would be consumption tax. Or maybe just poll tax. You want to vote, to be represented? pay up. It works that way anyway - let's just be more honest about it.

Wait - are there no consumption taxes in the US?

Yes, it's called a sales tax. And the original poll tax ended with the 24th amendment in 1964. Funny how allegedly "encouraging" hiding income is bad but discriminatory laws are somehow "better."

acroy

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Re: Trickle down economics
« Reply #94 on: June 19, 2017, 03:58:14 PM »
I believe a major fault of the popular tax systems is they all tax income (production) vs spending (consumption).

This violates the basic precepts of: reward what you want to encourage. tax what you want to discourage.

Income tax discourages productivity; encourages hiding income (evasion).

I think a better system would be consumption tax. Or maybe just poll tax. You want to vote, to be represented? pay up. It works that way anyway - let's just be more honest about it.

Wait - are there no consumption taxes in the US?

91% of fed income is income tax
http://www.cbpp.org/research/policy-basics-where-do-federal-tax-revenues-come-from
Which, IMHO, is bass-akwards
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Gondolin

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Re: Trickle down economics
« Reply #95 on: June 19, 2017, 04:01:20 PM »
Quote
China, Russian and Saudi's)..

Saudi... You meant Iran, right?
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RangerOne

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Re: Trickle down economics
« Reply #96 on: June 19, 2017, 07:06:49 PM »
Quote
China, Russian and Saudi's)..

Saudi... You meant Iran, right?

In this case I meant the Saudi's. We all round out the top 4 spenders. Iran isn't even a top 10. Technically we are allies but I think fundamentally we have enough difference to where we view Saudi military power much different than say UK military power.

shenlong55

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Re: Trickle down economics
« Reply #97 on: June 20, 2017, 07:06:05 AM »
As to the practical questions, how would a 70-ish% top rate at extreme levels of income (just to throw a number out there, 1.5MM/year maybe) be significantly different from our current progressive rate system besides the rates?
1.5MM/person (double that for MFJ), I would be OK with a higher rate, and maybe 70% is OK. But remember, we're already smacking that person with 3.8% ACA surtax; that person is probably paying a state income tax on it and might also be paying a local income tax on it. The closer you walk to a 100% effective marginal rate, the more actions people take to defer the recognition of income. Maybe I take shares in a company that allow me to take capital gains in later years. Maybe I trade off some of my own income this year for deferred comp in future years. If instead of making $15MM this year where you tax away $12MM of it, maybe I structure my comp as $1.5MM for each of the next 10 years where you only tax away $7.5MM of it. If that comp is essentially guaranteed, I can still borrow against the future income stream, meaning my purchasing power [and associated control] is preserved, but without the taxman taking quite as deep a bite.

How would a top 70% headline rate (an effective 80+% all-in rate) different from a 39.6% headline rate (effective 50% rate)? Well, it would provide a lot more potential energy to drive structuring of affairs so as to avoid taking current income in favor of future income. Do those things add value to economy? IMO, no; they suck the time, energy, creativity, and attention of smart people away from things that advance society and channel them towards largely unproductive [for society] structuring affairs.

Besides than the weight, how does a 5'10", 300# person significantly differ from a 5'10" 150# person?

See, now your talking about details and to be honest I haven't done the research that I would need to in order to tell you exactly what rates I would recommend and at what income levels I would place them (I'm not a congress-person after all).  My instinct based on what I do know is to recommend an ~70% top rate placed somewhere around 20-25x median income (adjusted for inflation, of course).  That's based largely on research that I've seen that indicates that the top rate can go as high as ~70% before we see a significant disincentive to income and the fact that I think that at that level of income it is entirely reasonable to intentionally discourage more income at least slightly.  I also fully understand that some people will try to work around it and still make more income.  But some won't, and I'm sure we can account for some of those workarounds in the actual legislation.  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.

Chris22

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Re: Trickle down economics
« Reply #98 on: June 20, 2017, 07:33:26 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?
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shenlong55

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Re: Trickle down economics
« Reply #99 on: June 20, 2017, 07:37:13 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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