Does Taxing the Wealthy Hurt the Lower Class ?
Oodain
Veteran
Joined: 30 Jan 2011
Age: 34
Gender: Male
Posts: 5,022
Location: in my own little tamarillo jungle,
no its only an argument for a balance between the two, no private nor public ideology is good on its own and maintaining that fallacy doesnt really help anyone.
_________________
//through chaos comes complexity//
the scent of the tamarillo is pungent and powerfull,
woe be to the nose who nears it.
On that note, the tax system desperately needs to be changed to support savings, investment and production.
We need to make savings non-taxable, instead of punishing it. There's really not a very good incentive to save when tax rates are so much higher than interest rates?
Once your taxes are paid, you have three options with your after tax money: you can spend it; you can invest it; or you can save it.
Remember, we already incentivize savings with the tax system. Pension and retirement savings contributions are generally made with pre-tax income, and only become taxable upon withdrawal. These tax deferral systems serve to maximize savings growth for individuals. Why on earth would we need to do more than that?
Outside of the tax system, we already have an incentive for savings--it's called recession. When the stock market drops, people start putting their money in dollars--buying up treasury notes and GICs. Savings are good, in the sense that they provide a liquidity cushion that makes recessions less dramatic, but ironically, people who can save tend to do so more in recessions, which actually makes them worse, because of the loss in consumer confidence that this represents. Over the last three years, I have been pouring money into buying cheap investments--which is good for market liquidity--but which means that I am not spending anything close to what my income would support in consumer spending.
So while you are advocating for the tax system to incentivize savings and investment, bear in mind that you are also advocating for the tax system to disincentivize spending. And that is something that you need to think about carefully.
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--James
There are other factors in the savings rate drop. Like a generational shift in attitudes. By the 1970-80s a lot of frugal people who had seen the Great Depression were dropping dead. My grandmother would save and fold up wrapping paper from each present at Christmas for re-use. She'd wince when people tore paper. Today impulse spending is tied up with self-worth.
They've been trying to close these for half a century or more. They never get closed. Obama took a swing in 2010 but was fillibustered.
On that note, the tax system desperately needs to be changed to support savings, investment and production.
We need to make savings non-taxable, instead of punishing it. There's really not a very good incentive to save when tax rates are so much higher than interest rates?
Once your taxes are paid, you have three options with your after tax money: you can spend it; you can invest it; or you can save it.
Remember, we already incentivize savings with the tax system. Pension and retirement savings contributions are generally made with pre-tax income, and only become taxable upon withdrawal. These tax deferral systems serve to maximize savings growth for individuals. Why on earth would we need to do more than that?
Outside of the tax system, we already have an incentive for savings--it's called recession. When the stock market drops, people start putting their money in dollars--buying up treasury notes and GICs. Savings are good, in the sense that they provide a liquidity cushion that makes recessions less dramatic, but ironically, people who can save tend to do so more in recessions, which actually makes them worse, because of the loss in consumer confidence that this represents. Over the last three years, I have been pouring money into buying cheap investments--which is good for market liquidity--but which means that I am not spending anything close to what my income would support in consumer spending.
So while you are advocating for the tax system to incentivize savings and investment, bear in mind that you are also advocating for the tax system to disincentivize spending. And that is something that you need to think about carefully.
Maybe economists need to start thinking outside the box and come up with new solutions. It seems to me the decrease in savings and increase in the amount of GDP tied up in asset bubbles and private debt (both personal debt and corporate debt in the form of "leveraging" for profit) is a form of compensation for a much more fundamental structural weakness. It's not an accident at all that people are buying more and saving less. Corporations benefit through this mechanism and actively encourage it. It seems a modern absurdity that entire nations rely on frivolous and excessive consumption (in the name of Keynesian stimulus) just to keep jobless rates down and people off the streets. I don't see any absence in the ability of our society to produce vast material wealth. The problem is we are not interested in distributing the wealth we produce in a functional way.
Do you know why this is even an article? Because it's meant to look like a complex and intellectual ISSUE. It shouldn't even be up for discussion. Who do you expect to pay for all of the crap that poor people can't pay for? The birds and the bees and the fish in the sea? No! The people who make more than their fair share! The people who have enough for everyone. Remember in kindergarden when you had more than one or two? You were told to give one to your friend. I guess that lesson some how went out the window once people realized that crime pays. But what does it pay? Material wealth, which is scientifically proven to not make people feel complete.
denmark has a high income tax and lower ammount of unemployed compared to the us.
so at least we can be sure its not inherently so or the most realistic option, there are thousands of variables independant of tax that help decide how people behave.
why we even entyertain these absolutist notions in either direction is far beyond me.
And than some .....
_________________
Theirs a subset of America, adult males who are forgoing ambition ,sex , money ,love ,adventure to sit in a darkened rooms mastering video games - Suicide Bob
Who makes these things? Why, machines do? Who invested in the machines? Governments did that, it was government research that drove automation. That means the people. One more point; NAIRU. Governments deliberately create a reserve army of labour in the name of fighting inflation. Surely it would be indecent not to keep the army of inflation fighters alive.
all the more reason for keeping the government as unpowerful as possible consistent with peace and order within the domain.
ruveyn
Indeed, an entity that's the most accountable to the people must be defanged so a bunch of ultra-psychopathic Bond villains can run loose. Brilliant!
all the more reason for keeping the government as unpowerful as possible consistent with peace and order within the domain.
ruveyn
Indeed, an entity that's the most accountable to the people must be defanged so a bunch of ultra-psychopathic Bond villains can run loose. Brilliant!
The day to day running of the U.S. government is quite unaccountable to the people. The U.S. government is the thing most dangerous to the liberty of the American people.
When Joseph was viceroy of Egypt he laid on a 20 percent tax and was accounted a wicked man for doing so.
During the Feudal period serfs paid at 25 percent tax to their Liege Lord.
The American people are taxed at over 30 percent on the average.
We are not only overtaxed we are expected to thank our government for plucking our feathers out.
ruveyn
The main problem with government is that there are such filthy rich people who are allowed to be so filthy rich that they buy off politicians and control the government. That's the main problem. If those people were defanged that would solve much of what's wrong with the government. The problem is the filthy rich who think they should own everything and everyone.
People have more say about what they get for taxes than any serf on a demesne ever did. That is until a bunch of filthy rich bought the government of course.
ruveyn
Well, I think that most people have no (or little) federal income tax.
State income and sales taxes take a bunch, as do property taxes.
You are correct. I think around 47% of the population doesn't pay any federal income taxes in this country. State and local governments, is where most of our tax dollars go (as it should be). When you add up all of the nickel and diming from state, local, and federal governments, some people (especially the ones that pay federal income taxes) are paying in the neighborhood of 40-50% of their income out to taxes.
I understand what you are saying, but I don't really make more that my fair share, yet I am still required to pay extra for people that don't. This is an issue for the working poor, and middle class people as well, you know.
The way people in our government think, is like this; "hey, rich people have all of the money now, so we'll just tax them more, and give it to ourselves, and/or other people"
What they should be thinking is this; "Hey, how did such a small percentage of people get so much money, while the rest of the population has very little?"
Many got rich because we dropped their rates substantially in the 1980s and never replaced the revenue stream. Hello debt.
The same reason that so many don't pay federal income taxes. Under Clinton the rate was only 34% not paying. Today it's 47%. That's the Bush cuts. When you cut taxes and increase credits you put more people into that zone. It's funny that it's a GOP talking point today. They voted for it. lol.
Everyone needs to pay more. Cold hard facts. But it's not a pretty thing to run on.
The same reason that so many don't pay federal income taxes. Under Clinton the rate was only 34% not paying. Today it's 47%. That's the Bush cuts. When you cut taxes and increase credits you put more people into that zone. It's funny that it's a GOP talking point today. They voted for it. lol.
Everyone needs to pay more. Cold hard facts. But it's not a pretty thing to run on.
I agree. The amount of money coming in should at least be equal to the amount going out, and that doesn't even cover paying off the debt. The problem with those people that aren't paying enough, or any taxes, is that they will pitch a fit if they have to pony up, even though they should have been paying more all along.
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