Palarran wrote:Poorer people have exactly the same choices when it comes to any surplus money they have. They can invest, save, or spend too--in much smaller amounts, obviously, but dollar for dollar is the impact on the beneficiaries of those actions any different?
What is surplus money? I have never heard of that term before.
As to the effect, No. If a poor person buys a tent to live in, he is still employing all the people who made that tent, who delivered that tent, who stocked that tent, and who sold that tent to him.
If a richer person buys a house, he is still employing all of the people responsible for building that house.
There is only a weak correlation between how hard you work and how much you earn.
Not for me, or virtually any other person in my social economic class. I can work harder, make a lot more money, and be taxed at a higher rate because of it. I have coworkers who work 12 hour days, 7 days a week, and the make demonstratively more than I do. And dollar for dollar, they pay much more in taxes than I do.
When I owned my own business I was working every hour of every day of the year. I made more money than my peers, and paid more taxes(dollar for dollar) than my peers.
Other factors are dominant. For an EQ analogy, you don't get the best gear in the game by working hardest at slaughtering moss snakes.
Well knowledge is suppose to be recompensed. Mere labor is not the only valuable tangible of earning.
I can make millions of grass baskets, but no one is going to buy them. Because grass is relatively easy to get, and building baskets out of it is so easy that birds can do it.
Knowing what to do, knowing how to do it is deserving of the requisite reward.
Obviously, any one of us had the knowledge in 1997 to sell books on the Internet. There was knowledge which we did not possess that Jeff Bezos possessed. And he, or any like him, should be paid for their risk and their knowledge, in addition to the mere man hours of labor(which for a business owner so exorbitant that would be illegal if they were employees).
Also remember that our progressive income tax is partially offset by other regressive taxes (sales tax, Medicare and Social Security taxes, etc.)
Sales tax is not regressive, and neither is medicare. Social Security and SE taxes are, only because they drop off at some point that the government thinks that you are so smart or rich that you should be saving for your old age on your own. The more I make the more Medicare I pay, that does not change. The more I spend and buy, the more sales tax I pay, that does not change.
Even with a progressive tax structure, the more money you make the more money you keep.
No, not really. Unless you include money that is not tangible. That is to say appreciation in value of unsold assets.
If I buy a house for 100,000, and it increases in value to 1,000,000. If I sell that house for 1,000,000 and donate 900,000 to charity I will not be taxed on any of it. Communists like Tudamorf do not like this. One, he sees that capital gain as income and deserving of income tax. Two, he does not like the fact that the I get to choose where that money went to. He thinks that a bureaucrat has better insight as to how that money should be spent, he thinks that government is smarter than I am. He really does think that I stole from somebody,,,the government, the taxpayers, those who get entitlements from the government. But I paid 100K for the house, and kept 100K for the house, and I did not make any money. He and Pan thinks that I did.
There is still plenty of incentive to earn more as long as the progressive part isn't taken to an absurd extreme. Would you rather earn $1,000,000 taxed at 50% or $50,000 taxed at 25%? (Obviously you don't somehow work 20 times as hard to earn $1 million.)
I don't pay more for a movie ticket because I make more money than the person behind me in line.
It is most fair that the person making 1,000,000 pays 250,000 and the person making 100,000 pays 25,000. That is equal, fair, and that is just, and I would rather that.
The person making 1,000,000 obviously has knowledge that the person making 100,000 does not have, and should be compensated for that difference.
Just as you make more money than your coworkers who know less than you do, or have coworkers who know more than you, and make more.
Even most 17 year olds know how
to become the CEO of a Fortune 500 company.
They just don't possess the will, the desire, the intellect, or the knowledge to make it happen.
Will, desire, intellect, and knowledge should be compensated for. Anyone can do sweat labor, there is no skill, knowledge, desire, intellect involved. Sweat labor is usually so cheap, that those who have skill, knowledge, desire, and intellect do sweat labor for recreation for free.
PS, all of the millionaires I know work 20 times harder than you do. They are always working, no smoke breaks, no lunch breaks. They are on-call 24 hours a day.
None of this addresses the actual point though, that I was attempting to make. Lute stated that she has never seen an example of Kennedy/Reagan Trickle Down Economics work. I just asked for an example of when it does not work. It works in just about every case, except those who paste bills under wallpaper or stuff mattresses with money, or bury jars in the backyard like crazy people did during the Depression. Rich people spend money, they invest, and they save. Poor people don't hire other people to do work for them. Poor people do not make loans to other people to buy houses. Poor people don't invest in businesses that employ people and make products. Rich people do. I just can't really think of any real actual cases where if rich people are taxed the same as everyone else, and get to keep more of the money they earn, that they don't spend it, invest it, or save it. And when I mean save it, they are putting it into a bank and low interest, and the bank is loaning the money for poor people to buy stuff with it, like houses. The loans you all have is coming from the savings of rich people, every loan you have, every bit of debt you poor people have, comes from rich people loaning you that money.
Just put this little model in your head.
If you made minimum wage tomorrow a 1,000,000 dollars and hour.
Everyone would be rich, wouldn't they.
Everyone would sit around for one day with the 8,000,000 dollars they just made.
Thinking of all the thing they could now buy.
But the people at Wonder Bread now are making 1,000,000 an hour.
A loaf of bread is going to cost 250,000 bucks. A pound of hamburger is going to cost 300,000 dollars.
And so on.
Then there will be ambitious smart people who will want more than that, and they will ask for a billion dollars an hour, or a trillion dollars an hour, and 10 trillion, or 100 trillion.
And then it will just start all over again.