Tax cuts for the wealthy only benefit the rich (2023)
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Tax the rich means: Increase W2 tax and property tax which, takes money away from me to feed lower middle class
Tax cut means: Reduce the estate tax and cooperate tax, keep the W2 tax flat, and cut the benefits that most critical to the bottom: Food stamps while keep other unnecessary programs unchanged: Discounted Toll for low income when driving in HOV lanes.
Once you hit a certain wealth in most OECD countries, you just stop paying taxes. All that is required is to not take any income, which is easily done. So the top of the "income" distribution is a lie. When we say "top 1% pay X of all taxes", we're talking about the top 1% income earners, not the 1% who have the most wealth, or even the 1% who have increased their wealth the most over the last year.
Piketty is clearly correct with his minimum wealth tax proposal. It does seem the only way to tax people who never realize income.
1, billion, 2 billion, 100 billion individuals makes no difference to the average person
In fact there's a misguided sense that they earnt that money through work and not rent seeking
But the sad truth of the matter is - the rich are on the other end of your mortgage or indirectly your rent - the other end of that business loan to your favourite coffee shop controls the price of your coffee - you pay them interest directly or indirectly through everything you pay for and they use that money to buy more of the assets you use - they are a massively increasing rent seeking class
Their wealth growth is exponential it compounds on itself some particularly rich people are seeing 40% annual returns and the overall economies wealth growth is 1 or 2%
It's analogous to a black hole things like capital gains tax and income tax mean nothing to these people because they don't sell and they don't have a "working" income because that's not how the ultra rich accumulate wealth
The sad thing is for people on benefits the government look automatically into your personal bank account and track anything coming in - they have built a massively invasive infrastructure to track the poor so they can remove their benefits if they try to earn £5 selling music or selling IT services - but if you're rich the government don't even know how wealthy you are - the government doesn't know how many billionaires there are - let alone any talk of having to tax them - so they get to pay very close to - if not nothing - whilst software engineers (as an example relative to this forum) in the UK get to be the high rate tax payers where 50% or more is taken
Everyone else has to fund their free ride and its absurd - they're the group that need the least support financially
I wonder how feasible that would be to track as an economic index. Even on individual level its popular to workout which day of the year you start earn money you get to keep after income taxes and vat.
Part of the wealth that workers create is paid in taxes to the government; another part is paid to the shareholders of the company they work for, to the bank they get their mortgage from, and so forth. The latter is equivalent to an hidden tax, part of which goes toward a form of private welfare that's proportional to an individual's wealth.
People get quite angry about government welfare, particularly if the recipient seems undeserving of it. Yet they have no problem with the passive income from billionaires, even if it ultimately amounts to the same thing.
I'm mostly interested in economic growth, so looked at what the paper claimed about that.
It found that major, sudden reductions in taxes on the rich did not have any statistically significant effect on the trajectory of economic growth over the following five years.
But:
- Their sample is small. They only looked at relatively large, discrete declines in their home-grown measure of taxes on the rich. They did not look at all tax-rate changes.
- They did not look at effects beyond the five-year horizon, which means it would probably exclude the impact on people starting startups, as the successful ones usually take more than 5 years to start making serious money. (or did during the period the paper considered, even if timelines have subsequently accelerated.)
- Big sudden tax cuts don't happen in a vacuum, and I don't see a way to control for confounding.
Not taxing the citizens now gives you more room to tax them in the future. Or looking at it another way, cutting those currently implemented taxes can act as a stimulus for the economy, although one with poor measurability compared to other types of stimulus.
Obviously this is correlation, but it's somewhat damning to the conservative gospel (dogma?) that lowering taxes somehow automatically produces more growth.
Given that we have no clear indicator that raising taxes on wealthy people would reduce growth (really, we have the opposite signal from the historical record), there seems little reason not to pursue greater equality.
When you say 'pursue greater equality' do you mean we should keep making the tax system more progressive until everyone's after tax income is equal? If not, what should the shape of the curve be?
Right. But rich people don't have income, so they don't pay any taxes. Our tax code is not progressive at the top. It is progressive for income at the top, but income != accumulation of wealth in a year. Bezos can make $10B in a year and pay $0 tax. In fact he has done literally that for many years. Under the current tax code, he can effectively actually never pay taxes ever.
So at the very least we should have a progressive tax code for everyone. I think that's not controversial?
As for trying to rebalance wealth, that's a broader discussion. It's pretty clear though that the current system will continue to concentrate wealth into the hands of fewer and fewer people, until the general population either rebels or becomes effectively peasants. I mean if the growth rate is 2% and capital returns 5% a year.. eventually you're going to get all the assets concentrated in the 0.0001%.
There's an observation.
They can avoid both through schemes such as taking low salaries and borrowing against assets they will never sell for a profit.
The tax system would need a complete overhaul to plug those holes, but it would always be a game of whack-a-mole.
Basically the idea is to just accept the fact that the super wealthy will find the loopholes, so instead remove the loopholes. Just flatly put a minimum tax all wealth over $XX million at 2%.
One nice aspect of the policy is that it's a tax minimum: so people with high incomes who are already paying that much, regardless of how wealthy they are, don't need to pay the tax.
Another nice aspect is it's relatively easy to implement. There aren't that many people with $XX millions in wealth.
This would result in a land grab only the super wealthy could afford.
I already pay high taxes on everything from fuel to food to tissue to wipe my ass. Taxing my land ownership might push people to the edge.
The super wealthy would avoid it by pyutting everything into an offshore trust. Us little people, with expensive houses their parents worked hard and paid taxes for would just see another tax.
> with expensive houses
In some parts of the world $100k is an expensive house to inherit from a parent.
Normal people are completely unaffected by such a tax, since they already pay a high effective tax rate on their income (normal people generally cannot avoid income tax like the wealthy can).
I didn't follow your argument about offshoring, since a wealth tax taxes all wealth regardless of it's location.
So unless your parents left you a $20M mansion this is irrelevant
The policies of supply-side economics, however, are much more defensible, but it seems people would much rather pick on the strawman.
Unlike many of our worst ideas, I'm actually surprised this one didn't become more popular around the world.
I suspect that were I to learn about the industrial revolution I would find that the US Robber Barons didn't invent their talking points either and that they simply took British Industrialist talking points and, err, gave them 3 minutes on the stove.
I think it’s been decades by now.
The hikes on labor come later, when the debt needs to be paid and Democrats are once again tricked into being fiscally responsible.
As for tax hikes <90%, this hasn’t occurred in income; the opposite has occurred. You could make the case that it hasn’t been worth it for the poorest brackets though, given other coincident policy changes
When half the country has believed something for close to a half a century, across multiple generations, you bet your ass it needs to be debunked. The fallacy of the "precious job creators" is as American as "pulling yourself up by your bootstraps"
The fact that you and I were not dumb enough to fall for it doesn't really help anyone in the grand scheme of things. There's still an insane amount of work left in educating the public, and we may even be regressing at this point.
You know what, you might just be right.
Except the folks that implement it:
> The cuts were based on model legislation published by the conservative American Legislative Exchange Council (ALEC),[8][9][10][11] supported by supply-side economist Arthur Laffer,[12] anti-tax leader Grover Norquist,[13] and the influential industrialists Charles and David Koch.[14][15]
* https://en.wikipedia.org/wiki/Kansas_experiment
The term was invented by its opponents, but it was a label that was put on actual policies, like Hoover's:
> In 1932, humorist and social commentator Will Rogers wrote a column criticizing Herbert Hoover's policies and approach to The Great Depression and stated: "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot."[11] In 2007, political commentator William J. Bennett credited Rogers for coining the term "trickle down" and observed its persistent use throughout the decades since.[12]
And Reagan's:
> Ronald Reagan launched his 1980 campaign for the presidency on a platform advocating for supply-side economics. During the 1980 Republican Party presidential primaries, George H. W. Bush had derided Reagan's economic approach as "voodoo economics".[16] Following Reagan's election, the "trickle-down" reached wide circulation with the publication of "The Education of David Stockman", a December 1981 interview of Reagan's incoming Office of Management and Budget director David Stockman, in the magazine Atlantic Monthly. In the interview, Stockman expressed doubts about supply side economics, telling journalist William Greider that the Kemp–Roth Tax Cut was a way to rebrand a tax cut for the top income bracket to make it easier to pass into law.[17] Stockman said that "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."[17][18][19] Reagan administration officials including Michael Deaver wanted Stockman to be fired in response to his comments, but he was ultimately kept on in exchange for a private apology.[20]
* https://en.wikipedia.org/wiki/Trickle-down_economics
It is pejorative, but it is not attacking a straw man, but actual policies that right-wing folks want implemented (and have).
It dates back to the late 1890s (and has been criticized since then):
> In 1896, United States Democratic presidential candidate William Jennings Bryan claimed in his Cross of Gold speech that his opposition based their policies on the idea that the success of the rich would "leak through" to the lower classes, stating: "There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below."[8][9][10]
> In 1932, humorist and social commentator Will Rogers wrote a column criticizing Herbert Hoover's policies and approach to The Great Depression and stated: "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot."[11] In 2007, political commentator William J. Bennett credited Rogers for coining the term "trickle down" and observed its persistent use throughout the decades since.[12]
* https://en.wikipedia.org/wiki/Trickle-down_economics
so I'm not hopeful it will ever go away.
I found at least found one analysis (by a left leaning think tank, so take it for what you will) https://www.americanprogress.org/article/the-failure-of-supp... that seems to show that supply-side economics hasn't panned out.
It seems obvious that there is an optimal tax rate, too much or too little is bad. But I'd definitely say right now we are far far on the too little side of things.
"the term 'trickle-down economics' was popularized by Democrats in the US to derogate Reaganomics"
"not to be confused with trickle-down economics"
As for whether supply-side economics actually works, to say it "hasn't panned out" I think, is really oversimplifying. Has capitalism (efficient markets but also environmental decay) worked? Has socialism (universal healthcare but also the military) worked? It depends on who your asking and in what regard. In some ways yes and in other ways no. The category is too broad.
Also, just as important as how much we tax is where we tax. Carbon tax (very good) vs stamp duty tax (very bad). Competent policy often allows you to have your cake (supporting government services) and eat it too (not sacrificing growth).
Plus the Supply Side Economics wiki article, right below the "Not to be confused with trickle-down economics", contains a huge box pointing out the many issues with the article, including but not limited to "Needs more academic or scholarly research, rather than newspaper articles." and "contains weasel words: vague phrasing that often accompanies biased or unverifiable information."
I also was trying to google it and saw what the other commenter saw btw. The AI overview on Google says "Yes, they refer to the same core economic concept, but supply-side economics is the formal, academic term, while trickle-down economics is a popular and critical label for it. Both argue that cutting taxes and reducing rules for businesses and rich people will help the whole economy". And it references: https://mattbruenig.com/2013/01/07/on-trickle-down-economics... https://en.wikipedia.org/wiki/Trickle-down_economics https://study.com/learn/lesson/video/demand-side-vs-supply-s... https://www.annenbergclassroom.org/glossary_term/supply-side...
For someone who is making a point of using correct terminology this seems really strange. Universal healthcare is a policy that is completely compatible with capitalism, implemented by countries even far from being social democracies.
Much of Reagan’s trickle down stuff was based on the idea that we were on the wrong side of the peak.
In reality higher taxes implies higher spending, and different countries spend differently. It's entirely possible that the peak of the curve moves based on where you plan to spend the money. If you proposed a 5% tax increase to build the supports to take on Taiwan in semi, then you probably have a curve that looks different than a 5% tax increase to start a war.
One is a policy and the other is basically the name of a common criticism for that policy.
For example, the Cartesian circle does not refer to any of the many mathematical advancements Rene Descartes discovered. Instead, it's the name of a common criticism for an argument he made. You can think of it like that.
I can name you differences, but it's like comparing apples and oranges.
tl;dr: If you could name me differences you would name me differences
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I think supply-side economics deserves more nuance than simply thinking we need to make the tax rate arbitrarily low. The Laffer curve isn't the only thing you should look at, since where you tax can be just as important as how much you tax.
Take corporate taxes for example. If one were to advocate to get rid of corporate taxes, you might think that person unabashedly biased. What kind of person would want to give breaks to the richest people (corporations) when everyday people are the most in need of those kind of cuts, right?
But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do. How about then, rather than taxing corporations, you tax the benefactors of those corporations directly? When you tax Walmart, sure you tax the C-suite, but you also make it so that Walmart can hire less people, and invest less in the economy. Rather than taxing the corporation, what if you just taxed the C-suite directly? Tax the Walton family, or the highest earning employees directly, and you get to have your cake and it too since you get similar amounts of tax revenue without damaging the economy nearly as much.
You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states. This is supply side economics at work, and an example of how supply-side economics can be easily misrepresented.
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If you are not going to tell us anything, why are you teasing us as if you will?
Holding back discussion points is not a way to advance a discussion
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I think supply-side economics deserves more nuance than simply thinking we need to make the tax rate arbitrarily low. The Laffer curve isn't the only thing you should look at, since where you tax can be just as important as how much you tax.
Take corporate taxes for example. If one were to advocate to get rid of corporate taxes, you might think that person unabashedly biased. What kind of person would want to give tax breaks to the richest people (corporations) when everyday people are the most in need of those kind of cuts, right?
But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do. How about then, rather than taxing corporations, you tax the benefactors of those corporations directly? When you tax Walmart, sure you tax the C-suite, but you also make it so that Walmart can hire less people, and invest less in the economy. Rather than taxing the corporation, what if you just taxed the C-suite directly? Tax the Walton family, or the highest earning employees directly, and you get to have your cake and it too since you get similar amounts of tax revenue without damaging the economy nearly as much.
You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states. This is supply side economics at work, and an example of how supply-side economics can be easily misrepresented.
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How do you compare a criticism, with a policy? Trickle-down economics doesn't have any legislative appropriations. It's not taught in economics classes. Like saying "what's the difference between a boat and a car?" I can tell you that a boat is not a car, but I can't compare the wheels of a car with a boat, nor the keel of a boat with a car. They are different things is all I'm trying to say.
Now as for why I didn't expand with nuance earlier, in my defense I was expanding, but elsewhere in the thread. I foolishly thought this was enough.
This is only true if you look at the standard tax rate. The effective tax rate of a lot of US corporations is appreciably lower.
It works in places like Scandinavia because they don't give corporations ways to lower their tax burden
In other conversation though, am I curious to know where you got your data. As far as I'm aware the Scandinavian countries do in fact have a robust system of corporate tax incentives. This is part of the reason they boast such high productivity.
I very well might be wrong here though, and the topic is interesting. Would you care to share a source?
So, does the criticism not hold value? Because a large part of "supply-side economics", a term coined in the 70s, is reduction of taxes and regulations. With the idea that that extra capital will then be used to create jobs.
And if that is not what's happening, then I don't care about the semantics of whether or not "trickle-down" is the appropriate term of art to be applied here. The core concept of "giving rich people more money spurs job growth" is apparently false.
The mistake that Republicans made is thinking that the nobles are loyal to the kingdom instead of their own personal greed.
Foolish: policies that favor capital are good
Smart: let's check interest rates to see if policies that favor capital are good
You know enough about it to misidentify that obvious string replacement command as an example of it.
Your comments are incoherent and disingenuous. Saying that trickle down economics is "an entirely pejorative term created by detractors of supply-side economics" is very much saying that they refer to the same thing ... and it's the thing they refer to that TFA argues only helps the rich. You say that "the policies of supply-side economics, however, are much more defensible" but you offer no defense, and no rebuttal to TFA.
> For example, the Cartesian circle does not refer to any of the many mathematical advancements Rene Descartes discovered. Instead, it's the name of a common criticism for an argument he made.
This is the most inept attempt at an analogy that I can recall seeing.
I have a thing about people who act in bad faith, or argue so ineptly that it looks like it ... I won't be responding further.
I figured the syntax was like an either-or thing, but I wasn't sure.
> Saying that trickle down economics is 'an entirely pejorative term created by detractors of supply-side economics' is very much saying that they refer to the same thing...
I don't think it is. What I'm _not_ trying to say is that trickle-down economics is a nickname for supply-side economics. More, trickle-down economics is a strawman. Not the same thing or a different name, but an inaccurate version--a caricature which doesn't even resemble policy. Also I'm not sure what "TFA" stands for.
> This is the most inept attempt at an analogy that I can recall seeing.
It was kind of rough.
Regardless of the incompetence of my arguments though, I promise I am not being intentionally dense. I really do try to act in good faith here on HN, and I'd appreciate it if I could hear more of your perspective and continue this civilly.
Most of the nation (and world) never took any economics. This stuff is all magic or religion or whatever to them. Ronnie Raygun is as good as a saint to much of the US.
I also don’t like targeted new taxes, like taxing sports gambling and recreational drugs, because it unnecessarily entrenches those in our society. Even worse is when they earmark it, like using casino money to fund schools.
Maybe not the name, but the literal idea that the money given to them will flow down. There were even graphics gping with it. Again, in all seriousness.
So yes, it needs to be debunked.
My quick take is that during the 2008-ish great financial crisis, those in power were children of the 1970s supply-side shocks (demand>supply resulting in shortages and inflation), and used precisely the wrong tool to handle the demand-side shock of the GFC: interest rates were zero-to-negative, indicating a surplus of investable cash and no place to put it to work, and policymakers responded by...cutting everything on their side to the bone as well (austerity). At a high level: the economy was literally trying to pay the government to spend money on productive investment, but this once-in-a-lifetime opportunity was largely squandered
Supply-side economics is based on a flawed premise of looking at only the Laffer curve and saying if taxes are too high the economy suffers, therefore we must make the tax rate arbitrarily low. In reality though there are more nuances to making the tax rate arbitrarily low (e.g. high inflation and cost of living for starters).
Take corporate taxes for example. If one were to advocate to get rid of corporate taxes, you might think that person unabashedly biased. What kind of person would want to give breaks to the richest people (corporations) when everyday people are the most in need of those kind of cuts, right?
But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do. How about then, rather than taxing corporations, you tax the benefactors of those corporations directly? When you tax Walmart, sure you tax the C-suite, but you also make it so that Walmart can hire less people, and invest less in the economy. Rather than taxing the corporation, what if you just taxed the C-suite directly? Tax the Walton family, or the highest earning employees directly, and you get to have your cake and it too since you get similar amounts of tax revenue without damaging the economy nearly as much.
You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states. This is supply side economics at work, and an example of how supply-side economics can be easily misrepresented.
And in order to do that, it needs money.
Money it raises by taxation.
So it looks like this: Ancient Greece: state has to care for people English Enlightenment: govern French enlightenment: govern but you need to care for your people German enlightenment: govern based on ideas
Given the Americans rebelled against the English and aligned with the French, it’s a wonder modern Americans have adopted this brutalistic attitude. Btw the French Enlightenment is what led to the Romantic period.
TLDR: role of government depends on whose philosophy you adopt. But in terms of the greatest figures and looking at the healthiest countries, I’d say it is to look after its people.
They do get taxed same as everyone else, more even. What’s not taxed though is the stocks which never get materialized into cash and grow in value because of the low corporate tax rate that makes them more profitable.
> But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do
That’s a rhetorical jump you made. Corporations benefit from the government creating order and structure just like everyone else. They have a legal system they can use to settle disputes and protect themselves. They have solid roadway networks that help their employees get to work and to transport their goods. They get a military that protects their goods in transit to/from foreign lands. They get a police force that ensures that people don’t destroy their property. It’s only damaging if the value provided to all corporations is less than the tax rate is, but claiming any tax is damaging is laughable on its face. And that’s ignoring all the other kinds of non-monetary value the government grants corporations (eminent domain, water rights, suppression of various regulations, etc)
This says nothing about the wider economy nor about what the tax rate should be, and on its own it doesn’t seem too controversial to me.
Should business that actually do create jobs in practice get bigger tax breaks?
For example, if I by some miracle create a 1 man company that makes $100 million / year profit and somebody else creates a company that makes $100 million / year profit but has 2,000 employees...should the two companies be taxed differently?
Walmart employees 1.6 million people in the US. 68% are full time. Average salaries range from $18.25 / hr (field associate) to $27 / hr (supply chain). Median $30,520 across all US employees. 156,000 employees are estimated to be enrolled in Medicaid (9.4%).
Amazon employees 1.1 million. $23 / hour average for field / fulfillment. Median $53,211 across all US employees. 123,000 employees are estimated to be enrolled in Medicaid (11.7%).
Both offer pretty extensive career development, training and tuition assistance programs.
Profit per employee:
- Walmart $10,800 / employee (1.6 million employees)
- Amazon $50,000 / employee (1.1 million employees)
By comparison:
- AppLovin $3.7 million / employee (898 employees)
- NVIDIA $2.86 million / employee (42,000 employees)
So what if we actually had a tax strategy that literally was aimed at "job creators" rather than "capital gains"? What would that look like?
It’s a good thing farming needs an order of magnitude fewer farmers than a century ago.
Is that actually true? Maybe I'm being dense right now but that's not completely apparent to me.
More abundance per person does seem generally better (albeit there's eventually diminishing marginal utility), but that's not the same thing as society as a whole producing more with less labor.
Maybe "all else being equal" is the operative condition here, like assuming that the economy would be able to absorb newly freed labor into new economic activity?
You can also optimize some good things out of existence in this manner, and it's still not clear that robots are going to be able to swoop in and save that kind of newly uneconomical activity, at least within my lifetime.
Yes, it is the same thing. There's no difference.
So what incentive structure would you suggest? How do you prevent the concentration of wealth that results from a business raking in millions of dollars per employee?
And firms are already incentivised to increase productivity, including by offshoring jobs or replacing staff by robots, because that's their profit margin. And in this case we're not concerned with firms reducing costs in general, but firms substituting capital for labour. This was an improvement for agriculture, but it was an improvement because that labour found more productive things to do...
But if you're a government those decisions businesses make don't help unless the robots or Chinese factories are considerably more efficient at making stuff than domestic labour, because a business decision that at the margin spending a dollar less on domestic labour and 99 cents more on another production input is very slightly more efficient loses the government more in income tax receipts than it gains on anything else, and usually adds to their benefit bill. Also, people don't like their jobs being replaced. (And yet ironically, tax structures are often more favourable to companies increasing the capital input and decreasing the labour input...)
Obviously it's true that you can go too far and end up subsidising firms to keep on employees that aren't doing anything useful, but relatively minor tax breaks which mainly advantage low margin retail businesses don't do that, and they're not going to stop NVIDIA being NVIDIA either. But they might make the $45k outsourcing contract not look a substantially better deal than retaining the $50k employee.
That "high efficiency" is actually "less humans in the loop".
Compare something like money managing to car manufacturing. A team of money managers might clear $1B+ in revenue for a year with a team of 200. To clear $1B a yr selling cars, you need workers and supply chains that are tens of thousands of workers deep. It's the very inefficiency of manufacturing goods that makes it so attractive to workers.
This problem is inherent and intractable, but the natural order is to whither away the inefficient parts and only keep the most functional ones.
For those reading closely, this is also how you get a begrudged "coastal elite" and populist presidents like Trump (tariffs, anti-immigrants, state backed industry) elected. They want suffering for the offices of 200 people bringing in billions, and a return of the massive factories and supply chains with tens of thousands being the ones brining in billions.
It compounds if the incentive is aimed at domestic labor.
I'm not sure how to work with the "all else being equal" part. I suspect it's a way to get out of dealing with the truth of the situation, but feel free to expand on it.
But.. to the main point: "you want to produce more with less labor and other inputs" <- the owner of the business does, yes. But unemployment statistics and in general "labour" wants the opposite.
Let's take this to an extreme. Take all the business owners in the land and make them so efficient they only need employ themselves. "Productivity" remains the same, but now the bulk of the inhabitants of the land are unemployed, and can't buy the "products". So now the owners make no money and go bankrupt. And no-one has work. And there's no productivity.
I think what "you" really want (and by "you" I mean "we") is for business owners to make only the slightest margin of profit possible (after paying themselves) to keep their businesses running and to employ as many people as possible, who all get paid as close as possible to the owner; and for any left-over to be reinvested in new businesses with the same approach to paying staff. That way more people have a job, more people are "productive" and more people can buy the stuff made by the companies.
Sure, this is a ridiculous extreme, but it makes more sense to me than "you want to produce more with less labor and other inputs". I am curious though: is there an equally impractical and extreme story that works to bolster your argument, to help me see the pattern more clearly?
So if their employees are on government assistance, the cost to provide that assistance is inherently their burden. One way or another, every employee they employ will be earning a living wage from them.
I don't even care about overlap. If both Target and Walmart have to pay the difference between the full cost of government assistance for the same person, that's fine. Build a fucking library or something.
If Walmart employees somebody who's part time and is on Medicaid are they on Medicaid because of Walmart or because they couldn't commit to enough hours to go full time? 9% of 1.6 million employees on Medicaid means they are employing over 1.4 million people who are not on Medicaid, all of whom are taxed for income, payroll, property, sales, etc.
If Walmart decided tomorrow to terminate all employees who were collecting Medicaid so that they could avoid a tax increase for that stat would it be a good thing? Is it better for a company to avoid hiring at all, even part time, if they can't fully purge the employee from government assistance?
Significant enough that Walmart couldn't operate without them. Not to mention, Walmart manages to capture those government dollars through accepting EBT and such.
And the goal is to make WalMart pay regardless of how they try to weasel out. If you say "only full time", then they employ thrice as many people and give no one enough hours to make a living. Same if you prorate to hours worked.
Essentially you need to stop inventing rules and systems that can be gamed. Because Walmart is incentivized to game them. Push them in the direction of hiring people full time and paying them a fair wage for their time.
Supply side economics owners claimed that benefits would "flow" down from the capital owners. The pejorative name "trickle-down economics" accurately reflects that the quantity of benefits that "flows" down to everyone else from those benefiting from massive tax cuts is a mere trickle of the money that the supply side saved from the tax cuts.
https://thehill.com/homenews/house/3522907-gop-lawmaker-byro...
Well here is one of those federal policy-makers you say doesn't exist, a Republican congressman, advocating four years ago for trickle down economics and advocating for "...letting the free market - and yes, trickle down economics, which does work - actually flourish in the United States"
r>g is close to a complete debunk of the trickle-down narrative, today and through history, and it's a remarkably sturdy result.
We can accept that "supply-side economics" is a policy rebranding, but it is not a rebranding of "trickle-down economics". That is abundantly clear. There has never been a policy known as "trickle-down economics".
"Trickle-up economics" has never been formally used to refer to a policy either, but at least if you called it that we would understand what you are trying to say. "Trickle-down economics" doesn't even make sense beyond a device used to setup a joke. It is bizarre that you keep going there.
No, cool tech does not make up for the ruinous cost of health care, housing, and education vs median wages. Maslow's Hierarchy still exists. A system that fails to deliver food and shelter for a reasonable number of worked hours at a reasonable and available job is still a failure no matter how cool the Big Screen TVs are.
If other jobs are not fruitful enough to provide food and shelter then the worker can simply go direct to producing food and shelter themselves. That baseline is always available.
At least it is as long as you have land. That is where relative wealth inequality can quickly come to bite you. That is why nobody gives a shit about the pie growing. They only care about the pie having equally divided slices.
These silly catchphrases you keep coming up with do nothing to change reality.
Reagan's people would disagree:
> Ronald Reagan launched his 1980 campaign for the presidency on a platform advocating for supply-side economics. During the 1980 Republican Party presidential primaries, George H. W. Bush had derided Reagan's economic approach as "voodoo economics".[16] Following Reagan's election, the "trickle-down" reached wide circulation with the publication of "The Education of David Stockman", a December 1981 interview of Reagan's incoming Office of Management and Budget director David Stockman, in the magazine Atlantic Monthly. In the interview, Stockman expressed doubts about supply side economics, telling journalist William Greider that the Kemp–Roth Tax Cut was a way to rebrand a tax cut for the top income bracket to make it easier to pass into law.[17] Stockman said that "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."[17][18][19] Reagan administration officials including Michael Deaver wanted Stockman to be fired in response to his comments, but he was ultimately kept on in exchange for a private apology.[20]
This is like when Trump said that foreign countries pay tariffs. Like Byron Donalds in the article you linked, he’s just wrong.
Foreign countries don’t pay tariffs. Domestic producers have always paid the statutory toll, and most of the time the economic incidence too. No textbook has argued argued otherwise, because this is just the standard.
It’s not that Trump is advocating a different policy when he says foreign countries pay tariffs, it’s just that he (like a lot of other MAGA Republicans) so grossly misunderstand economics and their own party positions, that they end up advocating for a different thing. In this case, Byron Donalds is even going as far to advocate the pejorative version of his own side.
Now if you’re saying that trickle-down has become so widespread that even supply-side supporters have become fooled into thinking that it’s their side, I’d happily grant you that. But what I mean when I say that trickle-down has never been “seriously” advocated is that it’s never been in textbooks. There are no policy appropriations made by legislators to support the goals of trickle-down economics.
Similar to how Republicans nowadays accuse Democrats of trying to bring in illegal immigrants to bolster their voter base (a pervasive lie), to try and “debunk” such a policy would be intellectually dishonest, since the Democrats have never advocated such a thing.
Lowering taxes is one of the policies of supply-side economics:
> Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade.[1][2]
* https://en.wikipedia.org/wiki/Supply-side_economics
Along with decreasing regulation and allowing free trade, so you've just knocked down one of the reasons to think about supply-side stuff seriously.
Although I'm sure government and corporate greed was able to exploit those policies as much as it could.
Similarly incentives to buy EVs naturally only apply to the folks who are better off. Most working class buy cars that are +10 years old. (The average car age is among the oldest in Europe btw)
(Very) rich people with their legal (eg tax loopholes) and illegal (eg sold politicians) tactics cost middle class people almost 100% their optimal income. Not to mention qualities of life like social state and safety. Calculations need a blog post.
---ron white, upon experiencing a flash of enlightenment. quote from memory.
The only reason this isn't common sense is because the rich have fought it for millennia.
The only real way to tax the rich is to ensure that the rich have to compete for workers by paying competitive wages
there are all sorts of losses inherent to poverty that shouldn't be discounted, like the inability to save via bulk purchasing, transportation, high cost credit, preventative spending, time losses...
in theory eliminating the poor by literally giving them money could have an impact that makes society better for everyone... it's very reductive to assume there's just one big knob that the rich can turn to get it all back
at the very least locking up a trillion dollars with some douchebag isn't a reasonable strategy against inflation
Taxes on the rich are like increased power bills. Businesses pass on costs at a markup.
They can do that because you need a job to eat and they only need to hire if there is a profit to be had.
It seems like all it does is lock people into poverty with unreasonably high effective marginal tax rates.
EDIT: Seems like the article is suggesting that giving more disposable income to the rich, results in them using that extra income to buy capital rent seeking assets. So it is a double fuck you to the poor. Because not only do the rich end up paying proportionally less in taxes, but they also use the extra money to compete with you for your home, buy the home and rent it back to you, putting you in an even worse financial situation.
In UK though the salaries are fixed at 25k GBP annually until forever, they simply like this number.
Source: https://www.destatis.de/DE/Themen/Gesellschaft-Umwelt/Einkom...
France is concerned that the IMF main jump in and take things under control because the government's public deficit is out of control. With a GDP of about $3.6 trillion (american trillion, not french) and public spending representing, officially, 57.2% of those $3.6 trillion, that's a cool $2 trillion spent, yearly, by the state. This is where wealth goes to die.
If you were to seize, just fully seize (and consider it's liquid, which it is not), the wealth of all the billionaires in France (there aren't even 50 of them) you'd end up with $500 billion.
So if you were to just take all the wealth from all the french billionaires, you'd only pay a quarter (!) of the budget of the french state. For one year.
And that's it. 25% for a year.
Another way to see it: the french public deficit is more than $100 billion, yearly. If you were to seize the wealth of all french billionaires, you'd only have enough money to prevent the public debt from growing (which has to be at around 140% by now) for five years.
I'm not listening to talks about "taxing the rich" anymore until that caste called politicians stops spending money it doesn't have, enslaving future generations that shall be taxed to death to pay the insane public debt their governments are creating.
Wanna talk about what's happening to the city of Brussels (Belgium), my native city? 40% right at the poverty line. Immense deficit. Conditions of living going down the drain. First political party in the poll is now the PTB, a full on communist party (and communist in the EU have noticed that, at the moment, they could get the votes of islamists, so strangely enough in a "the enemy of my enemy of my friend" way, communists in countries like France and Belgium happen to be very welcoming to religious extremism [in France the communist party literally has been forced, when it created a coalition with others party at the left, to sign a paper saying it condemned islamism terrorism for they've been so cosy with the idea that it really wasn't clear at all that they actually were against islamist terrorism]).
And you want to get me started on that wonderful discovery the left made recently: that by importing millions of poor migrants and then giving them the right to vote, by a very surprising coincidence these poor imported migrants happened to not vote for the right?
How... Convenient?
Several countries are discovering that: "you eventually end up of the money of others" and "when the rich becomes poor, the poor dies".
The one thing that really irks me in this is the full-on hypocrites I know who believe that anyone richer than them should be taxed to death: to them "trickle down economics" do not work but that they live a middle-class lifestyle more preposterous than 99% of the planet doesn't bother them. They want lower taxes but not for those richer than they are.
I cannot understand that mindset.
I hate the Zuck: really, screw that guy and his faked 3D legless avatar demo for his dystopian VR world (how did that one turn out btw? As well as the Meta AI race?) and screw his PHP+JavaScript "punch the monkey" abusive ad world. Just fuck it. But I don't give a single crap in the world that he's got two $250 million Yacht or whatever they cost and however many he's got.
Good. For. Him.
I'd rather be poor and free than live under communism. And doubly so if we're talking about living in a society dictated both by religious intolerance and communism (which is where several countries are headed).
And if you want to "help the poor", go give all your money, open your house/appartment to pooor migrants and give me a fucking break.
We literally spend more government money per person on healthcare than France does while having less public healthcare, precisely because of the "help the rich" policies causing most of that public money to go to subsidizing insurance companies.
Where on earth did you get this idea? US Households have much higher disposable income (~50% higher than the Western European average) and much lower household debt levels than the average Western European country. See OECD links below.
> We literally spend more government money per person on healthcare than France does while having less public healthcare, precisely because of the "help the rich" policies causing most of that public money to go to subsidizing insurance companies.
Is this shocking display of government incompetence supposed to be an argument for increased spending, more government involvement, or both?
https://www.oecd.org/en/data/indicators/household-debt.html
https://www.oecd.org/en/data/indicators/household-financial-...
https://www.oecd.org/en/data/indicators/household-savings.ht...
https://www.oecd.org/en/data/indicators/household-disposable... (Select 2024 to see US data included)
The impact of having stupid-rich people isn't limited to clean-room economic thought experiments. It is seemingly incompatible with democracy as we practice it in the US.
However, we are saying that making the tax code progressive is better than what we're doing now.
I think we can all agree that Bezos paying an effective tax rate of 4% or whatever is not a fair way to organize society.
I'm not sure why thousands of middle class people would "bear the burden", since by definition they are far too poor to be effected by a wealth tax.
Because there are many ways it can play out.
One of the obvious - if rich are too uncomfortable they flee the assets out of the country and the amount of taxes collected drops -> all middle and low class is left to compensate for it.
As far as i know similar dynamics already happened in various places throughout history.
But dumb marxists are incapable of thinking about anything productive or creative to solve the problem, they only think about how to take someone else’s.
Partially because of low intellect (i.e. inability to calculate multiple steps forward), but mostly because of the scarcity mindset, thinking about life as a zero sum game.
We need to be better than that.
I can't imagine anyone is supportive of an upper-middle income earner having a 50% tax rate and a super wealthy billionaire paying 5%.
Or are you in favor of a regressive tax code, where richer people pay less tax? If so, I'm curious why you believe we should structure society that way.
Not sure what to make of your Marx rant. I never mentioned Marxism so I'm not sure what you're referring to.
In all places i know - income tax is already progressive enough. It never regresses.
> Piketty has several books on the subject you can read
There are plenty of books written on marxism, voodoo magic etc. it doesn’t prove pikketty is smart or his ideas will work. What kind of argument is that?
I agree income taxes are progressive. Tt's just that very wealthy people don't pay them by virtue of not having any taxable income (they of course have tremendously large incomes, but our tax code doesn't consider their income taxable).
Thus our tax system effectively falls off at the top end: the overall tax burden decreases after say $50-100M and continues to fall from there. If you are really wealthy you can entirely avoid income tax rather easily, as Trump and Bezos demonstrate for us quite regularly.
The point is that income tax's progressivity is ineffective when your richest people don't have income, which is why you need a wealth tax to fill the gap.
The Piketty proposal I mentioned is designed to target this tax specifically at the gap: that is, people will very large amounts of wealth.
I mean I'm perfectly fine with people who work hard making a lot of money. But that changes once that money is used against me. From that moment on I want to be compensated for damages, and the best way to do it is through taxes.
I don't want to be personally compensated. I just want to live in a society where people's basic needs are easily met: clothes, food, medicine, housing. The current landscape is, by the day, increasingly dystopian.
Also just because someone benefits, that doesn't mean that other people have to suffer.
If basic needs aren’t being sufficiently eased, there’s no money left to invest.
PS And you wonder why Mississippi is richer than the UK.
PPS The Laffer curve is real, has a mountain of evidence and disproves this paper.
And in the late 70s, they launched Operation Berkshire as a bulwark against negative press and government regulation.
They have literally been found guilty of conspiring to suppress the health risks.
every single time its resulted in lower tax intake compensated with more deficit spending.
The last 6 CA tax increases all resulted in less taxes being collected the following year. Now there are multiple things that can impact total tax collected for CA (mostly the S&P500), but those factors all varied in those 6 tax increases. As for federal tax, if a tax cut doesn't result in an increase in taxes collected, then you are likely below the optimum point in the curve.
PS The government doesn't have a tax collection problem, it has a spending problem. On average, every public sector job costs 3 jobs in the private sector. If the size of a government is choking the economy, then messing about with the tax rate won't fix the problem.
Because Mississippi didn't have Brexit /s
All jokes apart I don't see any real evidence that Mississippi is richer than the UK. Their median household disposable income is pretty damn close ($49k vs $54k). The UK has a better social and health safety net (where would you rather be unemployed or disabled?).
Mississippi has much lower life expectancy than the UK (69 vs 79 for men). Crudely speaking a Briton makes $5k less/year but lives 10 years longer - a trade almost anyone would make in a heartbeat.
I won't bother digging into other quality of life indicators vs economic indicators but I expect Mississippi will be mostly equal or worse.
On average Mississippi may have higher dollar numbers on a spreadsheet. That doesn't mean squat for the ordinary person on the street. If anything this is an argument against trickle-down economics/the Laffer curve.
I have been to the UK and I have been to Mississippi. Quality of life in Mississippi is far higher unless you really really like musicals (London is big for those). Mississippi has a better history of music and writing over the last 100-150 years. The food is cheaper and far more tasty. The weather is warm and winters are mild. They generally don't get natural disasters unless you live right by the coast and even then its once in 70 years. The health care is far higher quality. The people are warm and friendly. And the cost of living is lower.
The British are known for being miserable for a reason.
PS We had bad ice storms where I live (certainly far worse than MS) 2 winters ago. I wouldn't call it a natural disaster.
PPS Remember we are comparing the weather to the UK, not Hawaii or San Diego.
I'm not sure what point you're trying to make