Warren Buffet on Bush Tax Cuts and "Trickle Down"Follow

ITT gbaji's definition of wealth is lulzy.

How do you raise taxes on the "nonproductive" wealth accumulation? Don't we run into the "let's just make the blockbusters" problem? That wealth accumulation *is* the investment money spent on new things that may or may not result in useful and valuable products down the line. Of course, we don't know which ones will result in useful things and which wont, so I'm not sure how you plan on creating a tax that will only hurt the wasteful investments, while keeping the funding for the useful stuff intact.

This is *exactly* why what you're proposing will result in a slow down of new/better products entering the market.



You're taxing the profits that end out in R&D budgets though. No matter how you structure your taxes you are reducing the total amount of money available for R&D. So any tax will cut into R&D budgets.



And I already said before, that what actually happens is that you increase the incentive to make more of the same products instead of inventing new products. The demand is increased in terms of raw dollars, but the R&D money is reduced, and the profits to those who invest speculatively in those new products is reduced. Why on earth would I spend scarce profits researching some really new product, when I could focus on maxing out the quantity of existing products that I can sell to a captive audience with government subsidized spending dollars burning a hole in their pocket?


Look at the whole equation. Ask what you'd do if you were in each position. Don't just hope that what you want to do will result in the wonderful things you want to have happen.




I think you're dancing around this. What exactly would we tax more to put that extra demand money in consumers hands? Would we raise taxes on the sale of goods to the same people you handed the extra money to? Or would you raise taxes on capital gains? Raise taxes just on big business profits?

You're being vague and then jumping around from one possible method to another in order to avoid the problems inherent in each of them. No matter where you take the money from, you will induce a negative effect on the market. It'll vary, but it'll be there. And in each case, it offsets the extra demand to some degree, and in some cases causes additional unforeseen consequences as well.

Examine each option completely. You'll find that this ideal solution doesn't really work when you go through the whole process.



I'm frankly not sure what you're talking about here. Instead of repeating assumptions about what will happen, could you explain exactly what you are advocating and then take the time to explain *why* a given result will occur? Because it seems like you're speaking in incredibly broad generalities and then just listing off a set of benefits, but I don't see any logical connection between what you are talking about and the benefits you claim will occur.

Edited, Dec 22nd 2010 5:21pm by gbaji

ITT Bard's brain is sucked into a black hole.

It still affects your thinking though, doesn't it?

Which, to gbaji's credit, he understood and replied in kind.

Do you honestly not see how consumerism differs depending on demand-side vs. supply-side economics?



I guess if you're talking about the demand that is manufactured through supply-side economics.



No, it's based on eliminating huge markets of complete crap. Not even downright eliminating them-- just not giving them economic benefits that should be going to essential markets. The TV is arguably a great invention that has, at least, theoretical value. If the electronics industry wants to compete in a multi-billion dollar industry so that we can replace our old CRT TVs-- which are in virtually every important way just as good-- with a 1080p flatscreen LED, that's perfectly fine. And people will still buy them. But why should they be privy to the same taxation system as actually productive businesses?

Value =! demand. If you can't tell the difference, you're more hopeless than I thought.

Not going to address every asinine thing you say, but to a couple of points:



No, not really. Television has some benefits, and at least theoretically, the idea of inventing a television is a great idea (though so are a lot of drugs that have some medicinal value only to later become medically obsolete and recreationally abused), but "improvements" to the TV have extremely little value compared to the cost to make them; however, people still pay absurd amounts of money for them. If that same money were to go to something like healthcare or education, it would be exponentially more productive and generate more value.



Ok gbaji-- what's more valuable...? An iPhone, or ten bottles of penicillin? Because one of them costs more, and it's not the one that a person with any sense would choose if they had to have one or the other.

That actually perfectly exemplifies my point.

And there's the problem with your argument. People choose to spend that money. Who are you to tell them they are wrong? I'll ask again: What method should we use to determine "value"? Is there a better one than to let those who are trading their labor for things make the choice as to what things they trade for and how much of their labor they're willing to trade for each thing?


How would you do it? Get a big panel of "experts" together to decide the value of an HDTV compared to a teachers time and set prices accordingly? How would they make that determination? And if the results they come up with don't match what people would choose if they had a choice, aren't we both being inefficient *and* infringing on people's rights?




Would it? Why? Isn't the only way better health and education provides any additional productivity and/or value is if the people with the health and education do things with it like making better televisions (or cell phones, computers, rocket ships, etc)? Aren't you damaging the end result in order to make better the process used to get there in the first place? Can't we then conclude that it's quite possible to spend too much on these things (from a purely economic point of view anyway)?



Had to look up the cost of penicillin on this one. So 10 bottles of penicillin costs less than an iPhone. And? What is your point? I honestly have no clue what you are getting at here.