pitereal wrote:
Your assumtion that DVD's and such would only come about if the wealthy have the bucks to invest is faulty. It's minds, not money that create these things. And if you have a good idea, it doesn't matter if you have one very wealthy backer, or one hundred backers with a bit of cash, if it's a good thing, it will happen. It is silly to make the assertion that we wouldn't have cell phones without the very rich folk in the world.
In fact, if more people had some spare change to invest in those new ideas, they may get developed even faster and more efficiently. And just maybe, everyone in this land would benifit a bit more.
First off, you contradict yourself right off the bat. You claim it's minds and not money that create new things, but then go right on to say that it doesn't matter if it's one wealthy investor or one hundred backers with a bit of cash. That implies that it's not just the minds, but the minds and financial backing that creates new things.
Can we please get past the rhetoric on this? At some point, you *must* have capital backing for new things to come to market. And on that score, you're absolutely correct. It makes no difference if it's one wealthy backer, or one hundred "less wealthy" backers. Money is money.
My whole point has been that when we focus taxes "on the rich", we're not really taxing people, but economic events. In this specific case, we're talking about capital gains taxes. Those taxes apply equally whether you are one wealthy person, or 100 less wealthy people. Note also that those 100 backers are still investing "wealth". They have money that they have earned but not spent on themselves, so they invest it. They obtained that "wealth" by spending less then they earned in the first place.
It's not a one time equation. It's fluid. People become wealthy by investing instead of consuming. The more wealth they accumulate, the greater the percentage of their "income" (including capital gains here) that they can afford to re-invest back into the economy. That's why wealth in the hands of the ultra-rich will be invested at a higher percentage the that same wealth held by everyone else. You *could* take all the wealth of the ultra rich and divide it among the entire population. However, most of the recipients of this wealth would spend it via consumption instead of investing it, for *exactly* the same reasons they weren't wealthy in the first place. The end result *would* be fewer new things like cell phones and DVDs. And this trend would continue since presumably your redistribution would not be a one time thing. You'd continually tax "wealth accumulation" (capital gains) heavily and hand that back to the working class in the form of entitlement. That would increase consumption (since they'd have more spending cash), which would flow back into business, but since you're taxing the gains on those things, it does not result in the same amount of total wealth available for investment.
I don't understand why you and many others can't see this. Every time this topic comes up and folks like me argue that anyone can invest and become wealthy, it's inevitably met with a chorus of "no. That's impossible!". Yet, your argument that if we redistributed the wealth a bit it would not dent total investment in new "stuff" is based on the exact opposite assumption. You're assuming that every single person that recieves extra money as a result of this wealth redistribution would invest it so that the total would remain the same after redistributing it. But, at least based on the statements in this thread alone, I seriously doubt that assumption. Most people don't believe that it's worth their time or money to invest. Most people don't invest as a result of this belief. The very people who'd be the recipients of this redistributed wealth are the ones arguing that they can't invest (interestingly enough, because they aren't "wealthy enough" in their own eyes). And if you think increasing their final relative income a bit will change that, you are sadly mistaken.
The trend is that people increase their consumption to match their income. This would be no different. You give everyone in the country 20k dollars a year extra and they'll buy 20k more stuff each year. Period. The vast majority will simply see it as a windfall and use it to buy more "stuff". Interestingly enough, since the process of doing this taxes investment anyway, they're actually right. By increasing taxes on capital gains, we decrease the benefit of investing. If so few people choose to put money aside and invest it now, how many fewer will make that choice if we decrease the benefit of investment over time?
What this would really do is increase the barrier between the working class and the "rich". Those who already own businesses and large investment portolios will be able to handle the increased taxes on their wealth. Those who don't, will find it virtually impossible to ever accumulate enough wealth to become financially independant and will be stuck in the working class for their enire lives. Couple that with a nice big estate tax, and you ensure their children can't ever be more then working class either. This *is* the Social Liberalist goal. Even if you don't know it. Sure. They're all for making things better for the working class. But the cost is the opportunity to make your own life better, and a gradual reduction in relative standard of living over time.
