"I'm rich; tax me more!"Follow

A flat tax does the same (unless the rate is 0%).

A regressive system (the more you make, the lower your rates are) does the same and punishes people for being poor.

What's your point?

What phil said....whats the point of expanding when the market is weak as it is. It is weak because people aren't spending money, people aren't spending money because they have no confidence in the market. Even if you lift taxes for everyone, businesses will still suffer because people are still worried about the economy taking another ****. (a **** caused because the richest people in the country got greedy and wanted more money, why give them a break when they shot the economy all to hell in the first place.)

It would seem that $US are being printed in ever vaster quantities. That's bound to help....

Because their sales going up would have no influence on the business' revenue and ability to grow, right?

You're trying to boil economics down into nonsense - it isn't working, in case you can't tell.

You are soo full of ****:

http://abcnews.go.com/Business/top-highest-paid-worst-performing-ceos/story?id=8642794

http://www.examiner.com/workplace-in-norfolk/what-s-rising-faster-than-unemployment-ceo-salaries

http://www.perthnow.com.au/news/western-australia/power-bosses-get-bonuses-while-electricity-costs-skyrocket/story-e6frg13u-1225929306695

http://articles.cnn.com/2009-08-22/politics/veterans.affairs.bonuses_1_bonuses-inspector-general-va-s-office?_s=PM:POLITICS

http://www.law.com/jsp/article.jsp?id=1202429689471

http://www.usatoday.com/travel/news/2003/2003-03-27-nwa-bonus.htm

http://www.businessweek.com/magazine/content/09_36/b4145000403938.htm

http://www.cbsnews.com/8301-503983_162-20015340-503983.html

http://www.wsws.org/articles/2010/feb2010/bank-f09.shtml

http://www.businessinsider.com/group-of-nuns-attacks-goldman-over-large-bonuses-2009-10

http://www.reuters.com/article/idUS177093+14-Oct-2009+PRN20091014

If I don't touch your money, but no one buys anything from your store you're not any better off in the long run. Whether or not it creates additional net income for owners, flow of money through the system is still desirable, because it creates economic confidence which makes producers more willing to expand their services, put money into R&D and alternative markets. If you don't know if you'll be able to sell anything, there is no point in making it, there is no point in opening other locations, and there is no point in even paying operating costs.

and here we see how ******* ridiculously limited your actual economic knowledge is. You're treating the world market like it's full of just commodities, when in fact "true" commodities don't exist in real life. You don't need "better" products, you don't need more efficiently produced products, and you don't need more resources to increase GDP. All you need to do is a) have a market with discretionary income (your country+foreign) b) be able to convince people that they should buy what you're selling at whatever price you're selling it. Designer clothing, TVs with "the fourth color", <insert region> wine, "car care" fuels, gourmet foods, and all sorts of other products sell for like crazy here and abroad despite not being significantly/any different than cheaper alternatives. Not to mention emerging technologies and service sectors. It's all about perception. Japan and the UK didn't get into the top 10 countries by GDP by having vast amounts of resources or really efficient processes.

The issue isn't that we expect money to pop into existence from no where, the issue is that without progressive programs money tends to "pool" in the upperclasses, retarding the flow of goods and services and hurting the economy as a whole. People without discretionary income don't have the same lax reinvestment habits (via spending or otherwise), because they don't have a choice.

That's kinda the problem though, isn't it? No one seems to be able to clearly state what they *are* talking about. The article in the OP was talking about income taxes affecting investment decisions. Someone else wants to talk about how lowering taxes on working and middle class people will help because they'll have more spending money, but don't seem to want to take into account where taxes will have to come up to balance that loss of revenue. And now we're talking about "small businesses" as though it makes a difference where the money gets spent.


What's happening is that the second a point is countered, someone pipes up with another side point and ignores the counter. And when that is countered, they spin off into talking about something else. If we want to examine the effects of tax changes, we need to look at the entirety of a single proposed change, not bounce around from one thing to another.


If we want to address investment, then lets look at capital gains taxes and how they affect that. We can also look at income taxes since they might affect how much money someone has left over to invest.

If we want to address how lowering taxes on working and middle class people would help increase demand, then let's do that. But that happens whether we also lower the taxes on "the rich" doesn't it? They are not exclusive. The issue being asked was whether it's a good idea to extend the tax cuts for everyone *except* the top 2% of earners. I'm not sure how talking purely about how extra money could be spent by consumers to help the economy helps us make a decision here.

If we want to talk about small versus large businesses, then we first really ought to define what we mean by those things. And then we ought to look at how money is spent and how it is taxed. I'll point out that partnerships, sole proprietorships, and S-corps all result in profits filed as personal income (and thus subject to changes in income tax rates). Similarly, dividends paid out to corporate shareholders count as income. There's a lot more interconnection between business and private incomes than most people think.


But it would be better if people would explain *why* they think a given point is relevant instead of just throwing words and phrases out there and hoping something sticks.




It was an analogy. In this particular case, I was addressing the broad concept of taking money from the "supply side" of an economy and moving it to the "demand side". The specifics of each dollar aren't as important when looking at the issue at that level. The broad idea of "taxing the rich so we can fund things for the poor" is often supported on the left with the silly idea that each dollar we give to the "poor" will come back to us because that's a dollar that can be spent in a store. My analogy was intended to point out that this is fallacious since every dollar we gave them had to come from the collective whole of all the stores and rich people (and the businesses they own and invest in) we taxed in the first place.


It's one of those things that simply doesn't make a lick of sense if you actually stop and think about it, but so many people have been told this for so long that they just keep on assuming it must be true anyway. Don't be one of those people. Think for yourself.

You are *really* close there. Let me modify your statement to what it really is though:

"If you don't know if you'll be able to make a profit selling something, then there's no point making it, there's no point in opening other locations, and there's no point in even paying operating costs.".

I'll add that there's no point hiring more people to make the thing you aren't making a profit on.

Selling isn't enough. You have to make a profit on it. And part of that profit calculation is the taxes and other regulatory costs associated with your business. Anything that affects the total profitability of a business is going to affect expansion decisions.



So if the consumers are so strapped that they need to get tax cuts and/or entitlements in order to survive, so much so that we must borrow money to do this and/or raise taxes on "the rich" to do this, then why are they buying all that stuff they don't need? Sounds like you're contradicting yourself here.

Um... I will give you a hint though. Those things don't increase GDP, for reasons you already sorta hinted at (but failed to grasp the importance of). There is a limit to demand for consumer products because there is a limit to how much money people have to buy things. They make choices with that money. All the fighting and advertising and competition for those dollars doesn't actually affect the total end GDP figure much at all.

It's not that I don't understand economics, but that I understand it on a level that you (and most people) don't even grasp. You actually think that what products you buy make a difference in the bigger economic picture. It doesn't. In the same way that all those rich people buying and selling and other wise playing the market doesn't. It might affect who wins and who loses in the short run, but the total volume of productivity is largely unchanged. Yes, you can get short term dips if people choose to save their money instead of spend it. And you can get short term drops in growth rate if people choose to hold their money instead of risk it via investment, but those are always just trends (and they point to why we want people to use their money in one way or the other insteaad of just tucking it away).

Real sustained GDP growth comes as a result of process improvements and/or increase resource utilization. If you really understood economics, you'd know why this is true. Remember. All "value" is relative. Don't think in terms of dollars. Think in terms of relative quantities of goods in relation to population and relative labor output (which itself is measured in terms of the quantity of goods produced, which makes the whole thing tricky). That's your "real GDP". Everything else is just the illusion of the moment based on usually artificially manipulated currency valuations.



It's not about the money though. Money isn't the source of prosperity. It's a measurement of it. Taking the dollars away doesn't change that. The person who has more of it than you do is doing something economically which produces greater value than what you are doing. The dollars he has are just a measurement of that, nothing more. Taking the dollars from one person and giving it to another doesn't magically make the former less productive and the latter more. It just removes the measurement (and to some degree, reward) for productivity from those who produce. And that will tend over the long term to reduce total production and thus total prosperity for the whole.


You don't understand this because you *don't* really understand economics. You've never been taught this. It's probably never even occurred to you to ask about it. But it's why you're wrong and I'm right.


I'll leave you with a simple thought experiment. I have a pencil and you need it. You write me a note saying you owe me a pencils worth of value and I give you the pencil. Now you have the pencil and I have a note. Which of us benefited by this transaction? What does the note indicate and measure? Now, replace the IOU with a "dollar" and you might just start to grasp why most of your assumptions about economics and the meaning of wealth are flat out wrong. People don't have wealth because they took it. They have wealth because they gave things of real value to others and took an IOU in return. An economic policy which attempts to punish them for this and make the IOUs worth less than what they gave away for them would seem not only unfair but also monumentally stupid.


Think it through. Slowly. Your assumptions about wealth are wrong.

Edited, Oct 6th 2010 3:58pm by gbaji

Yes, it should be obvious why your analogy doesn't work. Somehow, though, it's not sinking in.

Yeah, I tried that. Maybe not in twenty five blocks of text like you use, but I still showed how it's flawed. You're response was, essentially, "Nu-uh. My analogy is perfect. You just don't understand."



If only you could sometimes read what you're writing and ingest it. Understand that this applies to you as well. That would be nice.

Edited, Oct 6th 2010 7:55pm by Belkira

Where did anyone suggest we should be raising the taxes on businesses?

I did that. You even responded to it and told me I didn't understand your analogy. Which is untrue. I don't see the point in explaining it again. We obviously disagree on your level of intelligence. That's not much of a surprise.

Oh, and it's cute that "it's obvious" isn't a valid argument when someone disagrees with you. Adorable, that.