A summary of trickle down economic theory:

[Kidlicious]

Originally posted by MichaeltheGreat
Capital doesn't follow a growing economy, capital follows wherever the opportunity / risk ratio is most favorable. If you tax wealth accumulation above a certain point, you can guarantee capital flight.

Capital follows economic growth. Boy we disagree on a lot of simple stuff.

[Kidlicious]

Originally posted by HershOstropoler
You are a bizarre mixture of Karl Marx and the average Wallstreet economist.

If you have been exposed to the most minimalistic understanding of economics, you have to know that you're spouting total bollocks.

I'm really a communist, but I'm one who wants to make capitalism work as well as it can.

I guess I'm sort of invisioning a world where other nations have a similar wealth tax and the rich can't hide. Still though, I don't think capital is that scarce and we would have enough to cover our investments. To tell you the truth I'm not sure if we could cover the taxes, but I think we might.

[Arrian]

quote:
Originally posted by Arrian
This thread once again illustrates (as prior threads have done) that you believe that all rich people got their money from their mummies 'n daddies and never work a day in their lives, living in luxury while the working class slaves away.

quote: Originally posted by Kidiculous
I haven't made that assumption.

quote:
Originally posted by Imran Siddiqui

3 or 4? What are you nuts? Just about every family fortune was at one time earned by a person just like Carnegie. Very few families were rich before they got here.

quote: Originally posted by Kidiculous
See you're out of touch. I don't know any actual people who are anything like that, and probably no one I know does either.

I presented you with your faulty assumption, which you rejected, and then not 1 page later you blatantly fell back on that very assumption.

As Imran later pointed out, many people on this site can tell personal stories of "making it" despite growing up poor. Or they can tell you such a story about a close relative (like my grandfather, who I've told you about in a different thread). In other words - IT CAN AND DOES HAPPEN. But it requires a few things:

-hard work
-goals
-determination

The last two are pretty key: determination means that even if the odds seem stacked against you, you try anyway, and don't just say "oh, I can't. It's not fair!"

-Arrian

[Kidlicious]

That's just not true. You said that my assumption was that no poor people become rich. The discourse with Imran was in another context. No assumption was made there. I was simply pointing out that any 'rags to riches' people who were to pay more in wealth tax in a wealth tax system than they so in the current system whould be a very, very small percentage. Remember that there wouldn't be any other taxes. So people in this category would never pay sales tax, income tax or any other tax. More people would be getting wealthy in the new system. Only when these people bacame filthy rich would they end up paying more tax.

[Kidlicious]

Originally posted by Arrian
-hard work
-goals
-determination

The last two are pretty key: determination means that even if the odds seem stacked against you, you try anyway, and don't just say "oh, I can't. It's not fair!"

-Arrian

Luck and opportunity are ther keys my friend. The three charactaristics of the up and comer that you gave are pretty common with most people. The fact is that only an insignificant few become rich, and don't say that I'm saying that people can't improve their financial situation by saving money, because I'm not saying that.

[Arrian]

Luck and opportunity play their part, yes. Then again, there is a great quote that says something along the lines of "luck is just when opportunity and preparedness meet."

And besides, I'm not just talking about the filthy rich. I'm also talking about people who go from poor to middle class (my grandfather, for example). While "rags to riches" may be a very small amount of people, the average person does have the opportunity to better their financial situation. Many do not, either due to poor upbringing, poor education, lack of motivation, and things of that nature. Someone growing up in a poor, high-crime area and attending a terrible public school clearly has a disadvantage. But that doesn't mean they cannot make it. It does mean we as a society should work to remove those disadvantages (better education, lower crime, etc).

Now, as for your "wealth tax" the major problem is that a lot (if not most) of the wealth is tied up in assets. Land, buildings, stock, etc. If my family were subjected to a "wealth tax" it would almost surely force my parents to sell their home, because that's where a substantial amount (half or more) of their wealth is.

Oh, and would you vary the wealth tax cutoff (who is wealth and who is not) by region, taking into account variations in property value and cost of living?

-Arrian

[HershOstropoler]

Originally posted by Kidicious

Still though, I don't think capital is that scarce and we would have enough to cover our investments. To tell you the truth I'm not sure if we could cover the taxes, but I think we might.

The US savings rate is short 5 % of GDP - NOW. The net investement rate sucks. Further discouraging savings is madness - a madness you, oddly enough, share with a former Randite, Alan Greenspan.

[DAVOUT]

The Kidicious Wealth Tax Theory has been enforced in France in 1981.

The purpose was to tax the net assets of everybody fiscally considered living in France.

- Franchise : 750 000€
- Exemption : Assets necessary for your job, artworks, antics (older than 100 years)
- Rate : from 0.55% to 1.8% (above €15 Millions)
- Number of payers : 150 000
- End result: Cost of collection almost equalling the amount collected, AND move to Switzerland, Belgium and GB of a significant number of wealthy people. Finally, the middle class owning their home in Paris, often worth more than 750000€ is the victim of this tax which was named : Tax on the Great Wealth, then, in a more politically correct way, Tax of Solidarity on the Wealth.

This was created by the left, but the right, when in power, never dare to suppress it. In fact, nobody bother any longer, since all those concerned are now organized.

[Arrian]

Thank you for that contribution, DAVOUT.

-Arrian

[Kidlicious]

Originally posted by Arrian
Luck and opportunity play their part, yes. Then again, there is a great quote that says something along the lines of "luck is just when opportunity and preparedness meet."

And besides, I'm not just talking about the filthy rich. I'm also talking about people who go from poor to middle class (my grandfather, for example). While "rags to riches" may be a very small amount of people, the average person does have the opportunity to better their financial situation. Many do not, either due to poor upbringing, poor education, lack of motivation, and things of that nature. Someone growing up in a poor, high-crime area and attending a terrible public school clearly has a disadvantage. But that doesn't mean they cannot make it. It does mean we as a society should work to remove those disadvantages (better education, lower crime, etc).

I don't want to say that a poor person can't improve their situation either. If a middle class person were to become temporarily poor I'm sure that 9-10 times they could improve their sitiuation, but it's different for a person that grows up in that environment. If you grow up in that environment you probably won't be able to set your goals, because poor people see so much failure around them. Perceptions are very powerfull.

I used to teach poor kids, so I've seen it first hand.

Originally posted by Arrian
Now, as for your "wealth tax" the major problem is that a lot (if not most) of the wealth is tied up in assets. Land, buildings, stock, etc. If my family were subjected to a "wealth tax" it would almost surely force my parents to sell their home, because that's where a substantial amount (half or more) of their wealth is.

Few common folks who own their own homes would pay more tax overall. Some people may choose to buy smaller houses though. A wealth tax will increase productivity. Land will be expensive to hold which will encourage productivity improvements. Speculation would decrease.

[Kidlicious]

Originally posted by HershOstropoler


The US savings rate is short 5 % of GDP - NOW. The net investement rate sucks. Further discouraging savings is madness - a madness you, oddly enough, share with a former Randite, Alan Greenspan.

Investment is dependent on consumption, not savings.

[Arrian]

If you grow up in that environment you probably won't be able to set your goals, because poor people see so much failure around them. Perceptions are very powerfull.

I used to teach poor kids, so I've seen it first hand.

And I have friends who have taught poor kids, which is why I mentioned stuff like that. I know that's a huge problem - seeing failure & poverty everywhere they look, and therefore giving up. I don't really see how a wealth tax will help that, though.

A wealth tax will increase productivity. Land will be expensive to hold which will encourage productivity improvements

How? All I see is lots of people having to liquidate their assets to pay the tax - and having a helluva time selling because everyone with the money to buy those assets will be taxed up the whaazoo as well. And, as Roland (Hersh) pointed out, your system will discourage savings - at least by anyone anywhere near the tax threshold. And for those that might be inclined to go a create something like Microsoft or Dell or whatever, they will probably just say "screw it" and either move to another country or decide to just work their 9 to 5 and get by like the rest of the righteous proletariate.

-Arrian

[Kidlicious]

Originally posted by DAVOUT
The Kidicious Wealth Tax Theory has been enforced in France in 1981.

The purpose was to tax the net assets of everybody fiscally considered living in France.

- Franchise : 750 000€
- Exemption : Assets necessary for your job, artworks, antics (older than 100 years)
- Rate : from 0.55% to 1.8% (above €15 Millions)
- Number of payers : 150 000
- End result: Cost of collection almost equalling the amount collected, AND move to Switzerland, Belgium and GB of a significant number of wealthy people. Finally, the middle class owning their home in Paris, often worth more than 750000€ is the victim of this tax which was named : Tax on the Great Wealth, then, in a more politically correct way, Tax of Solidarity on the Wealth.

This was created by the left, but the right, when in power, never dare to suppress it. In fact, nobody bother any longer, since all those concerned are now organized.

The US never has had as much problem with capital flight as other countries though. And maybe with the US lead, the rest of the world would feel more confident of creating their own wealth tax.

[Arrian]

Investment is dependent on consumption, not savings.

Excuse me? Care to tell me how someone with no savings can invest in something?

-Arrian

[HershOstropoler]

Originally posted by Kidicious


Investment is dependent on consumption, not savings.

No really. When 100 % of output is consumed, what do you invest? The outcome of your digestive processes?