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Thread: Please explain...

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Please explain...

    Can someone please explain to me how increase taxes on the richest Americans can balance the budget and lower unemployment?
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Senior Contributor Doktor's Avatar
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    With the collected extra taxes the Government will open new factories, that will pay more taxes, that will open more factories, that will employ every single American.

    Wait, something is wrong with that equation
    No such thing as a good tax - Churchill

    To make mistakes is human. To blame someone else for your mistake, is strategic.

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    That's the plan by the tax gnomes:

    1. raise taxes on the rich
    2. ???
    3. balance budget and lower unemployment
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Governments need revenues to balance budgets. Cutting expenditure would not be bad, but in the case of the USA that would mean ending the empire abroad, and instituting medicare death panels at home. US politicians (possible exception Ron Paul) don't have the guts to go for either of those options.

    Now revenue can only be collected from people who actually have some money.

    Over the past thirty-odd years, the trend in the USA--and throughout the developed world--has been toward lighter and lighter taxes on high incomes and especially on capital gains. Over the same period, public debts have mushroomed. So it is quite natural that the policy pendulum will swing a bit.

    The only other easy alternative would be for the USG to stop merely putzing about with central bank purchases of gov't bonds, and directly print itself some revenue. Sovereign governments have been known to do things like that from time to time, with predictable results.
    Last edited by cape_royds; 10 Nov 12, at 02:38.

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    gunnut,

    Can someone please explain to me how increase taxes on the richest Americans can balance the budget and lower unemployment?
    this is a strawman argument because no one is arguing that increasing taxes on the wealthiest can, by itself, balance the budget and lower unemployment.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

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    So why do it?

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by cape_royds View Post
    Over the past thirty-odd years, the trend in the USA--and throughout the developed world--has been toward lighter and lighter taxes on high incomes
    Please define "high" income.

    Quote Originally Posted by cape_royds View Post
    and especially on capital gains.
    Capital gains have already taxed once by the government at the corporate level. I am all for allowing corporations to write off dividends as an expense and not taxable as an income. Then we can tax it like regular income at the personal level.

    Quote Originally Posted by cape_royds View Post
    Over the same period, public debts have mushroomed. So it is quite natural that the policy pendulum will swing a bit.
    This is a natural result when government employees are allowed to bargain collectively and the party they negotiate with essentially sit on the same side of the table.

    Quote Originally Posted by cape_royds View Post
    The only other easy alternative would be for the USG to stop merely putzing about with central bank purchases of gov't bonds, and directly print itself some revenue. Sovereign governments have been know to do things like that from time to time, with predictable results.
    But that would be too easy and too obvious.
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Senior Contributor Doktor's Avatar
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    The only somehow reasonable explanation I have read so far on why to tax very rich people more is that by doing that the government corrects the cash flow, which has tendency to group in one category of citizens aka 1%.

    Then the gov will redistribute wealth because 1% of the people in let's say USA wont buy 300 million liters of milk every day, don't need 1,000,000,000 l of oil every day etc etc... to keep the economy moving.

    Now that redistribution is what buggers me.
    No such thing as a good tax - Churchill

    To make mistakes is human. To blame someone else for your mistake, is strategic.

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    Quote Originally Posted by snapper View Post
    So why do it?
    Cutting food stamps and Medicaid by themselves, wont balance the budget either. So why do that too?

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    Quote Originally Posted by gunnut View Post
    Please define "high" income.
    I meant simply the top brackets, however they might be defined in a given country. Almost no matter where you go in the OECD, income tax rates on the top brackets have fallen, often sharply, during the past few decades.


    This is a natural result when government employees are allowed to bargain collectively and the party they negotiate with essentially sit on the same side of the table.
    Are physicians unionized public-sector workers? Are pensioners? Or how about private military contractors? The USA has a lot of these sorts of people, they're all high-priced, and they all make big demands on the public purse. To balance the budget, either: (1) taxes have to go up, or (2) some of these people have to get the chop. Or, (3) the joker gets played--the government prints money and pays itself first.


    But that would be too easy and too obvious.
    Sounds like you would choose Door Three, but you were probably just being ironic.

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    snapper,

    So why do it?
    the whole point is because the major cuts that can be expected in a deficit deal will mostly impact the lower/middle-classes. if we're to be a nation, and we decide to cut deficits for the common good, then everyone should take a part in shouldering the burden.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

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    Quote Originally Posted by gunnut View Post
    Can someone please explain to me how increase taxes on the richest Americans can balance the budget and lower unemployment?
    it doesnt.

    but it does get you elected. or reelcted.

    put 99 normal (middle class or lower) people in a room with one rich person.

    tell the 99 they wont lose a thing next year, or pay more, but to get there, the one guy (the one percenter) in the corner, we are gonna tax him more and make him pay more for you.......

    all you need is 52% of the 99 to think thats the way to go... and term number two.

    who cares if its works or if its fair, as long as it gets you the vote....

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    Defense ProfessionalSenior Contributor tbm3fan's Avatar
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    It doesn't but it is symbolic. Since over the last 25 -28 years the top 1% has seen their net worth increase, four fold I have read, while the middle class has been stagnant.

    Second I don't believe for one instance that these people will create more jobs with the money they save on taxes. They just save the money which is what I would do. Jobs wife is now very rich. Will she create jobs in industry? Highly unlikely as she is nowhere as a driven competitor as her husband. Larry Ellison is mega rich. Does he create jobs? Actually not that much any more. He, instead, buys out the company he wants and then a few years down the road lays off those employees up here. Of that I have very good first hand knowledge from those former employees.

    Did the tax rate of what, 67% in the 50's, stop people from becoming millionaires? Did that tax rate sap the US economy in the 50's? I recall it was a boom time. Naturally, I don't believe in the supply side lie either.

    So it is very symbolic. If the middle class has to tighten their belts they everybody damn well better have some skin in the game one way or the other.

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    Quote Originally Posted by astralis View Post
    the whole point is because the major cuts that can be expected in a deficit deal will mostly impact the lower/middle-classes. if we're to be a nation, and we decide to cut deficits for the common good, then everyone should take a part in shouldering the burden.
    But if you take away all privately capital you stop private enterprise... if you take it ALL away only the State can invest and the entire population becomes state dependent. The more private capital the State takes the less able an economy becomes able to create new jobs without State intervention. There is NO point taking the private capital upon which future wealth depends; ask the French President!

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