Tax Cuts

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Thank you ToughDiamond.

I have a thought in my head and it's not quite developed properly yet. So it's difficult for me to articulate.

It's kind of like: the poor people work hard and put all of their earnings into the system (capitalism) and the rich people sit back an live of what they are earning from this. So the wealth from capitalism is being kept by the rich people and distributed around themselves. Like champaign socialism.

Well, I think the wealthy often work quite hard, but not so long and hard as to actually earn the money they get for it. It would be impossible.

In the US, tax cuts are proposed as a matter of principle not because it is believed that they will in some way benefit society.

Mainstream political thought in the US is dominated by two companion philosophies, Objectivism and Libertarianism. Libertarianism basically teaches that it's tyrannical for the government to oblige anyone to hand over their hard-earned money to benefit some other person they wouldn't have otherwise chosen to help. Objectivism teaches that it's basically wrong to help such a person no matter how the money for doing so is obtained.

It might help to understand that Christians in the US believe themselves to be in favor of welfare per se, however they believe it should be the responsibility of religious communities composed of members who have joined by their own choice and freely agree to tithe. Also bear in mind that tithing refers to a constant percentage of one's income regardless of the size of that income, so many people also believe that whatever taxes a country does need to levy e.g. to maintain security against external threats, to administer the judicial system, etc. should be at a "flat rate" not "bracketed" like the current US Income Tax.

I guess people who feel this way think that the US went in the wrong direction during the Depression, and after the country recovered due to World War II (which was the best thing that ever happened to the US) there has been a struggle to roll back all the New Deal and subsequent "social engineering" programs that began with FDR. The first real victories in this struggle were achieved under Ronald Reagan and the trend has continued in that direction ever since.

Also I think a lot of Americans believe that government benefits are addictive, that once people get them they are unable to wean themselves away and regain their freedom, but instead conduct lives of having basic necessities met but in the absence of any self-respect.

Tax policy is my profession.

The sales pitch is that lowering taxes at the top frees up those funds for more investment. The increased investment then leads to more jobs.

The reality is that it does not actually work that way, but the top tier in an economy holds outsized power and can pay for the ads and influence it takes to convince voters and politicians.

The data shows that trickle up, however, does work. In other words, increasing spending power at the bottom will grow an economy more than increasing spending power at the top.

But tax policy isn't really about the data. It's about politics.

Thank you guys. I'm sure there must be some people out there who are pro tax cuts but they're reluctant to share.

I'm still waiting on our government to come up with anything intelligent to say about it but instead they just seem to enjoy bamboozling us with the same bullish!t as per usual.

I've really enjoyed reading these posts so thanks again.

I am pro tax cuts when taxes end up absorbing 70-90% of one's income. But I don't think there are any countries with that as a top rate right now. Even when you believe tax cuts can help an economy, you have to recognize it is a tool with diminishing returns. Cutting 40% to 30% isn't nearly as impactful for an economy as cutting 70% to 60%. Here in the US we've been mostly cutting taxes since Reagan; there just isn't much impact left in it.

they are trying to short the pound, and looks like they are succeeding right now