A summary of trickle down economic theory:

[MichaeltheGreat]

Originally posted by Kidicious
Yes there is such policy. It's a choice that we make. The current policy benefits the wealthy more. If you want to benefit everyone equally then you just change your policy.

Bull****. Under the current policy, owning a majority of shares in a C-corporation, I can have a maximum combined marginal Federal and state tax exposure in excess of 65% on my dividended income. Going sub-S interferes with my ability to amass retained earnings for future investment without going into debt. The current policy does not "benefit the wealthy more" unless you have some perverse notion that tax equity only occurs if every taxpayer ends up with the same after-tax income. You also fail to define who in your view is "wealthy," except for your notion that (whoever they are) they just sit around with silver spoon in hand living off the backs of the noble, exploited working man.

You've already made the assumption that people with money are superior. Probably it's not because you really believe it, but because you think that a fair system would be bad for you personally. That's not necessarily true unless you are very rich right now.

Since all the Marx meets Robin Hood crowd have their silly stereotypes of "the rich" to self-justify forced wealth transfers via taxation, I just troll you guys by acting out the attitudes you stereotype. I really don't mind peasants if they keep quietly out of the way.

Based on what your idea of a "fair" system is, I'd move, or just say "**** it" and let all the Marxist bozos figure out how to make things work and how to employ people. Luckily, there's a bit more common sense in US economic policy.

The idea that increasing my marginal exposure from 65+% on dividended income to 75% or more, or increasing my taxes X percent, on the rationale that taking my money to give to shoprats and Walmart greeters all over the US is somehow going to help me is a bunch of nonsense.

Those people already pay less taxes in gross terms, and they pay less taxes in terms of percentage of their income. If they find it tough to live on what they make, they need to make themselves more competitive in the job market, not look for wealth transfers from the government.

People largely choose what they do for a living, how they spend their money, and how much time they allocate to improving their education and job skills. So if they don't like what they've got, then they can do something about it. I decided I didn't want to spend the rest of my life getting crap wages for crap employers in an unstable job market, so I did something about it.

[Agathon]

Originally posted by Adam Smith
I gave a reason. Competition keeps organizations focussed.

Are you talking about New Zealand or Ontario? And have you accounted for other factors? E.g., if the public authority owned all the hydro, which is dirt cheap and has few moving parts, then of course the public authority would be cheaper and more relaible. But then all else is not equal.

That's roughly the point. I'm talking about NZ.

First, if public firms are not earning a competitive return on the capital they use, then that is a signal that the capital can be used more productively elsewhere, providing society with a net benefit.

But a public power utility doesn't have to produce a profit. The return in this case is keeping power prices as cheap as possible.

I am talking about functions which don't need to be monopolies, so I guess the department store example applies.

Then there isn't a dispute here.

Nope. Defense is a classic example of a public good (I am still defended, even if I don't pay for it.) Leave this as a government function, but please fix the procurement system.

Health care is also in some respects a public good.

[Kidlicious]

Originally posted by MichaeltheGreat




There is not one "objective fact" in economics theory. Let alone calling "trickle down is bad" an "objective fact. Hasta la victoria siempre, Comrade.

Where did you get the idea that I said that was an objective fact. Better reread.

[Japher]

MtG's got it straight...

[Kidlicious]

Originally posted by MichaeltheGreat
Bull****. Under the current policy, owning a majority of shares in a C-corporation, I can have a maximum combined marginal Federal and state tax exposure in excess of 65% on my dividended income. Going sub-S interferes with my ability to amass retained earnings for future investment without going into debt. The current policy does not "benefit the wealthy more" unless you have some perverse notion that tax equity only occurs if every taxpayer ends up with the same after-tax income. You also fail to define who in your view is "wealthy," except for your notion that (whoever they are) they just sit around with silver spoon in hand living off the backs of the noble, exploited working man.

MtG, the wealthy simply get more benefits or they wouldn't be wealthy. I don't know why you are complicating this with an argument about taxes. Some things are obvious.

Originally posted by MichaeltheGreat
People largely choose what they do for a living, how they spend their money, and how much time they allocate to improving their education and job skills. So if they don't like what they've got, then they can do something about it. I decided I didn't want to spend the rest of my life getting crap wages for crap employers in an unstable job market, so I did something about it.

I've got no argument to counter that because your assumption that poor people have the same choices as rich people is just too absurd.

[Arrian]

Value only comes from labor

There's more to it than that. Unskilled labor doesn't produce much value (unless you put a LOT of it together, which is kinda what assembly lines & sweatshops do) on its own. The unskilled laborer usually needs something to make (not always, MtG's guy holding a SLOW/STOP sign doesn't). Somebody has to think of a product that other people want and will pay for. Having had discussions with you before, I know you don't think the guy who thinks of the product has done any "labor" but without him, there is no product and hence no value. Ingenuity + Labor = value.

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.

That's a fetid, steaming pile of crapola. That doesn't mean I'm a supporter of "trickle down" theory or the most recent tax cut. It just means I think your worldview is seriously warped.

-Arrian

[EQUALITY OF OPPORTUNITY, NOT OF OUTCOMES!]

[Kidlicious]

Originally posted by Arrian




There's more to it than that. Unskilled labor doesn't produce much value (unless you put a LOT of it together, which is kinda what assembly lines & sweatshops do) on its own. The unskilled laborer usually needs something to make (not always, MtG's guy holding a SLOW/STOP sign doesn't). Somebody has to think of a product that other people want and will pay for. Having had discussions with you before, I know you don't think the guy who thinks of the product has done any "labor" but without him, there is no product and hence no value. Ingenuity + Labor = value.

I'm not necessarily arguing that ingenuity doesn't create value, but I am arguing that funding both does not create value. Paying people to work doesn't create value, but working does.

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.

I haven't made that assumption. I'm just saying that people who do recieve their money that way should pay more taxes. Do you disagree?

[Imran Siddiqui]

I'm just saying that people who do recieve their money that way should pay more taxes. Do you disagree?

You mean a person that inherits $100,000 should pay more taxes than a person that makes $100,000? If that is what you mean, then, at the very least, I don't agree.

[Lawrence of Arabia]

Trickle down doesn't work. It assumes a consumption function which is finite, which doesnt make sense. The more money people have, the more they will spend.

[Arrian]

I haven't made that assumption. I'm just saying that people who do recieve their money that way should pay more taxes. Do you disagree?

I'm actually in favor of the rather high inheritance tax we have in the U.S. There are probably too many loopholes, though, and I would support closing them, or making them more limited.

-Arrian

[Kidlicious]

Originally posted by Arrian


I'm actually in favor of the rather high inheritance tax we have in the U.S. There are probably too many loopholes, though, and I would support closing them, or making them more limited.

-Arrian

I'm in favor of a single flat wealth tax.

[Japher]

Trickle down does work. At least it did before. The problem was not due to the assumption of a finite consumption, it was due to following it up with the idea that economies are stagnant (only true in Argentina), which it is not. There will never be a long term tax cut, everything has to be fluctuated in order to keep the economy active...

I think government needs to cut spending, drastically. Only then will taxes actually help than hinder.

Until that time I am for any reduction in taxes; income, sales, even inheritence. Don't weaken the weaken. You must strengthen the strong.

[PLATO]

Those people already pay less taxes in gross terms, and they pay less taxes in terms of percentage of their income. If they find it tough to live on what they make, they need to make themselves more competitive in the job market, not look for wealth transfers from the government

The straight up TRUTH. 5 % of the population already pay >70% of the taxes. The bottom 50% of population pay less than 5% of taxes. If you want to say the system is unfair, you get no argument here.

Paying people to work doesn't create value, but working does.

But how much value? Putting part "A" into part "B" does indeed add value. Designing part "A" or "B" adds more. Risking capital to produce and market it adds more. Naturally creative and risk based activities have a larger return than labor activities. The problem is that the reward is minimalized by a tax system that can take up to 65% of your earnings. With a greater reward people would be inclined to take a greater risk and more value would be created and more opportunity for those who did not wish to assume the risk.

I'm just saying that people who do recieve their money that way should pay more taxes. Do you disagree?

I absolutely disagree. I am working a job right now that I would not be working if I wasn't trying to put myself in a position to leave something for my kids. I earned it...If I want to give it away, then why is that the governments business?????? It isn't like these people stuff the money in their mattresses. It is eithier spent or invested. Both of which add value to the economy.

[PLATO]

Originally posted by Japher
I think government needs to cut spending, drastically. Only then will taxes actually help than hinder.

Until that time I am for any reduction in taxes; income, sales, even inheritence. Don't weaken the weaken. You must strengthen the strong.

Government spending should grow at the inflation rate, not be cut. Government spending provides two dollars worth of value to the economy for every one dollar spent.

Taxes should be drastically cut when recission occurs and the government should spend in deficit. Dollars returned to private individuals provide three dollars worth of value to the economy for every one dollar spent.

Inflation will devalue the governments debt over time making it more cost effective to carry a debt long term.

Taxes should be raised when inflationary pressure builds and the government should run a $0 deficit.

This is the law acording to PLATO

[Imran Siddiqui]

Government spending should grow at the inflation rate, not be cut.

The only problem is government spending grows at a rate MUCH larger than inflation. Inflation is low, 2-3%, government spending has been rising at an average of 8% since 1990 (IIRC).