If you became the leader of your nation...

[ginnyfizz]

But the people that end up paying the higher rate of tax are not necessarily the wealthy, that is a common cry "tax the rich" but the actually rich can afford to pay clever accountants and lawyers to offshore their income - that's one thing that happens with high rates of tax - and the people that get caught in the net (where I am from at least) are the likes of the higher ranking nurses, doctors, headteachers, skilled industrial workers (some of the people grumbling the most when we had the high tax rates were colliery overmen and shotfirers, who got clobbered by the higher rates).

 

So no, your argument doesn't hold up because the higher tax rates invariably bite the hardest on the squeezed middle classes and stop them spending on buying goods.

 

Of course employment can go up after a tax hike, mostly with artificially created public sector jobs.

 

High tax rates hit small scale private entrepreneurs and sole traders the hardest, they begin to wonder if growing their business is worthwhile. For example, although unemployed at the moment I am considering starting my own office services business. At the moment the tax rates are favourable and there are also incentives to take on an apprentice when the work takes off and gets to be too much for one person. "Reward" me for my initiative to get myself off the dole queue by punishing me with extra taxes if I am successful, such that it would be "You're fired!" to the apprentice - how unutterably sad that would be.

 

Talking about the wealthy is just an emotive red herring.

[JimboUK]

It's worth mentioning that the rich aren't rich enough to even make a dent in the debts of western nations, the idea our problems can be solved by simply taxing other people more is a non-starter.

[marharth]

Small scale entrepreneurs are not rich. Hence the "small scale."

 

If you do end up getting to the point of being taxed a lot, it won't tax you out of businesses. What makes you think that? If you are in a high enough percentile to get taxed high you can afford it.

 

If people can afford to offshore money fix the damn tax code then tax them.

[Aurielius]

Oh. Well, you greatly overestimate my knowledge of British/UK/Crown (who sets the tax rates?) economic history, because I was talking about the US. So I guess that makes two.

Nope am sure of the overestimation of of your economic acumen.

 

<snip for brevity sake>

Here's that data evolving over time for the US:

<snip for brevity sake>

 

What that last graph doesn't show is that in the early 1920s, the top rate was around 75%. In just a few years' space, banker-turned–Treasury Secretary Andrew Mellon cut it down to the 24% rate you see there. His argument was exactly the same as yours: A 75% tax rate discourages the wealthy from investing in business, so we should encourage the wealth creators by bringing it down to 24% as quickly as possible. The Great Depression came only months afterward.

 

So let me see , you are establishing a link between lowering the Tax rates and the causality of the Great Depression? Hmm...truly astounding, since I and most economists thought it was the Stock Market bubble which allowed buying shares without adequate collateral to back up Call Orders. Though not much of a Roosevelt fan his banking reforms where judicious and should never have been dismantled.

 

Everybody forgot about Mellon's theory until the '70s, when it came in vogue again: Trickle-down economics. We've got to encourage the wealth creators. And this time you can see we did it in three major stages. The result? An immediate slowdown in growth, followed by a string of recessions, and now economic collapse.

 

So Regan's economic policies had nothing to do with the economic boom of the nineties? The only portion of Reggan's policy I always disagreed with was removal of the barriers between commercial and investment banking which was overly optimistic and not pragmatic.

The current economic implosion has more to do with socialist expansion of Fannie May and Freddie Mac....the idea that everyone should be able to buy a home whether they could afford one or not.

 

Is that painting with too broad a brush? Okay, how about this: GDP growth was 3.8% following the Clinton tax hike, but only 2.5% following Bush's tax cuts for the wealthy (not including the recession, of course). And employment growth was three times higher after the hike than after the cuts.

 

Clinton was the beneficiary of the Bush tax cuts, they were simply not put in place soon enough to aid the elder Bush's re election ( that and Perot splitting the conservative vote).

 

Tax cuts for the wealthy do not spur growth. That's plainly evident even just looking at the first graph. And I think I make a fairly strong case that such tax cuts actually cause economic slowdowns, if not outright recessions. In any case, the theory that we must encourage the wealth creators is complete BS.

 

 

Just who does have the capital it invest in growth? The people with money, make it onerous to acquire a return and they take their capital to where it can be of more use, like overseas which is where we are now. So capital flight is what you advocate for? Government has no money, that money is ours, spending that is simply transferring from your right pocket to your left and calling it growth.

 

Edited December 29, 2011 by Aurielius

[ginnyfizz]

Small scale entrepreneurs are not rich. Hence the "small scale."

 

If you do end up getting to the point of being taxed a lot, it won't tax you out of businesses. What makes you think that? If you are in a high enough percentile to get taxed high you can afford it.

 

If people can afford to offshore money fix the damn tax code then tax them.

 

 

Are you not listening? The higher tax rates are catching some people who are by no means rich. Over here they start kicking in at an income of £35,000 per year. If you have a couple both earning less than the national average they can cop it. For a business, the tax rates can alternately mean the difference between success and failure, the ability to take on more employees, the decision whether or not to move abroad if you are big enough

 

"If you are in a high enough percentile to get taxed high you can afford it" - ROFL. That's a rather sweeping statement. What it means in practice is that you get to pay for everything, including your taxes, and receive no benefits, and also pay for social benefits that others who do not earn quite so much CAN get. And so middle income earners can end up with less disposable income than some (I am NOT saying all)of the people on benefits.

[marharth]

Small scale entrepreneurs are not rich. Hence the "small scale."

 

If you do end up getting to the point of being taxed a lot, it won't tax you out of businesses. What makes you think that? If you are in a high enough percentile to get taxed high you can afford it.

 

If people can afford to offshore money fix the damn tax code then tax them.

 

 

Are you not listening? The higher tax rates are catching some people who are by no means rich. Over here they start kicking in at an income of £35,000 per year. If you have a couple both earning less than the national average they can cop it. For a business, the tax rates can alternately mean the difference between success and failure, the ability to take on more employees, the decision whether or not to move abroad if you are big enough

 

"If you are in a high enough percentile to get taxed high you can afford it" - ROFL. That's a rather sweeping statement. What it means in practice is that you get to pay for everything, including your taxes, and receive no benefits, and also pay for social benefits that others who do not earn quite so much CAN get. And so middle income earners can end up with less disposable income than some (I am NOT saying all)of the people on benefits.

Then do it properly. If it starts kicking in at the wrong place fix it so it doesn't. Income tax does not affect businesses in the same way.

 

As much as you might hate it, someone has to pay taxes. The middle and lower class can not afford as much as the upper class. I don't give a damn if the rich end up having to pay for other peoples benefits, that the entire purpose of a society. I am sorry if you have to give up a few sports cars to pay for someones healthcare.

 

If you don't want to pay for other peoples benefits go live in Somalia. The entire idea of a society is to give up things to work together.

Edited December 29, 2011 by marharth

[Marxist ßastard]

So no, your argument doesn't hold up because the higher tax rates invariably bite the hardest on the squeezed middle classes and stop them spending on buying goods.

Okay, so you're just going to ignore 90 years of data because it doesn't mesh with your personal views? That's nice.

 

Tax cuts for the wealthy do not spur growth. That's all there is to it. It doesn't matter if you think the wealthy deserve tax cuts.

 

Of course employment can go up after a tax hike, mostly with artificially created public sector jobs.

Since when are public-sector jobs "fake jobs"?

 

High tax rates hit small scale private entrepreneurs and sole traders the hardest, they begin to wonder if growing their business is worthwhile.

Okay, well, you're free to think that I guess. But it doesn't change the fact that tax cuts for the wealthy do not spur growth.

 

So let me see , you are establishing a link between lowering the Tax rates and the causality of the Great Depression? ... The current economic implosion has more to do with socialist expansion

Yes, I'm sure it's all just a weird coincidence that for 90 years, high taxes on the wealthy have coincided with a strong economy, and low taxes on the wealthy have coincided with slowdowns and recessions. We've got to keep encouraging the wealth creators because this time things will be different! :smile:

 

Clinton was the beneficiary of the Bush tax cuts

Yes, and I'm sure that growth after Bush Jr.'s tax cuts for the wealthy was poor because Clinton's tax hike sabotaged it somehow.

 

So I guess that tax cuts for the wealthy do spur growth, but it only takes effect at the next tax hike. Thank you so much for clarifying that! :smile:

[Aurielius]

 

So let me see , you are establishing a link between lowering the Tax rates and the causality of the Great Depression? ... The current economic implosion has more to do with socialist expansion

Yes, I'm sure it's all just a weird coincidence that for 90 years, high taxes on the wealthy have coincided with a strong economy, and low taxes on the wealthy have coincided with slowdowns and recessions. We've got to keep encouraging the wealth creators because this time things will be different! :smile:

 

Clinton was the beneficiary of the Bush tax cuts

Yes, and I'm sure that growth after Bush Jr.'s tax cuts for the wealthy was poor because Clinton's tax hike sabotaged it somehow.

 

So I guess that tax cuts for the wealthy do spur growth, but it only takes effect at the next tax hike. Thank you so much for clarifying that! :smile:

 

Just where you can draw your final conclusion from has to be from some inner core beleif that cannot be gainsayed by reason or fact. If you examine Clinton's tax legislation it was NOT predominately on the wealthy, he unlike the current office holder was a moderate in fiscal policy. The reality you seem to see is only through the prism of your ideology. :facepalm:

[Marxist ßastard]

And what is "my ideology," exactly?

[juderodney]

One would think your name would explain enough what your ideology is, would it?