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Dutchy
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Study: Trickle Down economics don't work

Wed Dec 16, 2020 4:38 pm

Fifty Years of Tax Cuts for Rich Didn’t Trickle Down, Study Says

Tax cuts for rich people breed inequality without providing much of a boon to anyone else, according to a study of the advanced world that could add to the case for the wealthy to bear more of the cost of the coronavirus pandemic.

The paper, by David Hope of the London School of Economics and Julian Limberg of King’s College London, found that such measures over the last 50 years only really benefited the individuals who were directly affected, and did little to promote jobs or growth.

“Policy makers shouldn’t worry that raising taxes on the rich to fund the financial costs of the pandemic will harm their economies,” Hope said in an interview.


It is a wise lesson to learn for politicians and policymakers. If you want to boost the economy, give tax breaks to the middle class or lower classes, they actually spend their money and spend it in their own community.

Not to hard to understand, but you still find people who believe in the argument of trickle-down even though it has been proven false time and time again.
 
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c933103
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 4:53 pm

The paper http://eprints.lse.ac.uk/107919/1/Hope_ ... lished.pdf didn't imply anything for any tax action on any non-rich group.
 
flyguy89
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 5:55 pm

Dutchy wrote:
Fifty Years of Tax Cuts for Rich Didn’t Trickle Down, Study Says

Tax cuts for rich people breed inequality without providing much of a boon to anyone else, according to a study of the advanced world that could add to the case for the wealthy to bear more of the cost of the coronavirus pandemic.

The paper, by David Hope of the London School of Economics and Julian Limberg of King’s College London, found that such measures over the last 50 years only really benefited the individuals who were directly affected, and did little to promote jobs or growth.

“Policy makers shouldn’t worry that raising taxes on the rich to fund the financial costs of the pandemic will harm their economies,” Hope said in an interview.


It is a wise lesson to learn for politicians and policymakers. If you want to boost the economy, give tax breaks to the middle class or lower classes, they actually spend their money and spend it in their own community.

Not to hard to understand, but you still find people who believe in the argument of trickle-down even though it has been proven false time and time again.

How exactly are they or you defining "trickle-down" policies? I generally believe that taxes should be kept as minimal as possible across the board, and indeed the economic consensus continually demonstrates the benefits of lower/competitive tax rates alongside reasonable and not overly-burdensome regulations.

In the US specifically, we already have one of the most progressive tax systems in the world...50% of taxpayers pay 96% of all taxes. For income taxes alone, more than half pay no or very little income tax. For all federal taxes, the three lowest household quintiles pay an average effective income tax rate of 1.3%, 9.2% and 14% respectively. The top two quintiles pay 17.9% and 29.1% respectively.

https://www.taxpolicycenter.org/statist ... households
 
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Dutchy
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 6:02 pm

Dutchy wrote:
Fifty Years of Tax Cuts for Rich Didn’t Trickle Down, Study Says

Tax cuts for rich people breed inequality without providing much of a boon to anyone else, according to a study of the advanced world that could add to the case for the wealthy to bear more of the cost of the coronavirus pandemic.

The paper, by David Hope of the London School of Economics and Julian Limberg of King’s College London, found that such measures over the last 50 years only really benefited the individuals who were directly affected, and did little to promote jobs or growth.

“Policy makers shouldn’t worry that raising taxes on the rich to fund the financial costs of the pandemic will harm their economies,” Hope said in an interview.


It is a wise lesson to learn for politicians and policymakers. If you want to boost the economy, give tax breaks to the middle class or lower classes, they actually spend their money and spend it in their own community.

Not to hard to understand, but you still find people who believe in the argument of trickle-down even though it has been proven false time and time again.



Forgot the url: link
 
stratosphere
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 6:26 pm

flyguy89 wrote:
Dutchy wrote:
Fifty Years of Tax Cuts for Rich Didn’t Trickle Down, Study Says

Tax cuts for rich people breed inequality without providing much of a boon to anyone else, according to a study of the advanced world that could add to the case for the wealthy to bear more of the cost of the coronavirus pandemic.

The paper, by David Hope of the London School of Economics and Julian Limberg of King’s College London, found that such measures over the last 50 years only really benefited the individuals who were directly affected, and did little to promote jobs or growth.

“Policy makers shouldn’t worry that raising taxes on the rich to fund the financial costs of the pandemic will harm their economies,” Hope said in an interview.


It is a wise lesson to learn for politicians and policymakers. If you want to boost the economy, give tax breaks to the middle class or lower classes, they actually spend their money and spend it in their own community.

Not to hard to understand, but you still find people who believe in the argument of trickle-down even though it has been proven false time and time again.

How exactly are they or you defining "trickle-down" policies? I generally believe that taxes should be kept as minimal as possible across the board, and indeed the economic consensus continually demonstrates the benefits of lower/competitive tax rates alongside reasonable and not overly-burdensome regulations.

In the US specifically, we already have one of the most progressive tax systems in the world...50% of taxpayers pay 96% of all taxes. For income taxes alone, more than half pay no or very little income tax. For all federal taxes, the three lowest household quintiles pay an average effective income tax rate of 1.3%, 9.2% and 14% respectively. The top two quintiles pay 17.9% and 29.1% respectively.

https://www.taxpolicycenter.org/statist ... households


The tax rates are true on paper but how many of the wealthy actually pay those rates? We have way way too many loopholes and the elite hire high priced attorneys and accountants to get around most of it. You know with all the libs crying about what appears to be Trump paying only like what 700 dollars in income tax? Like I said don't hate the player hate the game.. The lawmakers make they laws so they benefit the most from it. it is middle class slobs like me in this country that pay the freight. Like you said the lower half don't pay any tax at all.
 
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casinterest
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 7:02 pm

Trickle down is like a pyramid scheme. if you are close to the top, it works great. if you are close to the bottom, you work, but it isn't great.
 
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c933103
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 7:18 pm

stratosphere wrote:
flyguy89 wrote:
Dutchy wrote:

It is a wise lesson to learn for politicians and policymakers. If you want to boost the economy, give tax breaks to the middle class or lower classes, they actually spend their money and spend it in their own community.

Not to hard to understand, but you still find people who believe in the argument of trickle-down even though it has been proven false time and time again.

How exactly are they or you defining "trickle-down" policies? I generally believe that taxes should be kept as minimal as possible across the board, and indeed the economic consensus continually demonstrates the benefits of lower/competitive tax rates alongside reasonable and not overly-burdensome regulations.

In the US specifically, we already have one of the most progressive tax systems in the world...50% of taxpayers pay 96% of all taxes. For income taxes alone, more than half pay no or very little income tax. For all federal taxes, the three lowest household quintiles pay an average effective income tax rate of 1.3%, 9.2% and 14% respectively. The top two quintiles pay 17.9% and 29.1% respectively.

https://www.taxpolicycenter.org/statist ... households


The tax rates are true on paper but how many of the wealthy actually pay those rates? We have way way too many loopholes and the elite hire high priced attorneys and accountants to get around most of it. You know with all the libs crying about what appears to be Trump paying only like what 700 dollars in income tax? Like I said don't hate the player hate the game.. The lawmakers make they laws so they benefit the most from it. it is middle class slobs like me in this country that pay the freight. Like you said the lower half don't pay any tax at all.

Well, the fact that rich people do have more money after big tax cut for them, as this paper claim, indicates they were indeed paying that tax before, as only this way they would benefits from thise tax cuts
If they weren't paying they shouldn't benefited from it
 
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seb146
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 7:27 pm

Those at the top pay little to no taxes. That has been proven time and again. Look at the billions Bezos and his ex-wife give away. And they are still wealthy beyond belief. Yes, yes, I know: they still pay taxes. But, paying taxes on $1 of income does zero for those of us who work our behinds off and have half taken from us because Bezos et al. are reimbursed for their wealth taxes.

Trickle down does not work. We were told when this fiasco started that we would all be rich beyond belief. We, down at the bottom, are still waiting. And paying more and more in taxes for it.

We got the down, where is the trickle?
 
flyguy89
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 7:37 pm

stratosphere wrote:
flyguy89 wrote:
Dutchy wrote:

It is a wise lesson to learn for politicians and policymakers. If you want to boost the economy, give tax breaks to the middle class or lower classes, they actually spend their money and spend it in their own community.

Not to hard to understand, but you still find people who believe in the argument of trickle-down even though it has been proven false time and time again.

How exactly are they or you defining "trickle-down" policies? I generally believe that taxes should be kept as minimal as possible across the board, and indeed the economic consensus continually demonstrates the benefits of lower/competitive tax rates alongside reasonable and not overly-burdensome regulations.

In the US specifically, we already have one of the most progressive tax systems in the world...50% of taxpayers pay 96% of all taxes. For income taxes alone, more than half pay no or very little income tax. For all federal taxes, the three lowest household quintiles pay an average effective income tax rate of 1.3%, 9.2% and 14% respectively. The top two quintiles pay 17.9% and 29.1% respectively.

https://www.taxpolicycenter.org/statist ... households


The tax rates are true on paper but how many of the wealthy actually pay those rates? We have way way too many loopholes and the elite hire high priced attorneys and accountants to get around most of it. You know with all the libs crying about what appears to be Trump paying only like what 700 dollars in income tax? Like I said don't hate the player hate the game.. The lawmakers make they laws so they benefit the most from it. it is middle class slobs like me in this country that pay the freight. Like you said the lower half don't pay any tax at all.

Those are effective tax rates, not the "on paper" statutory rates, so it includes the deductions.
 
flyguy89
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 7:46 pm

seb146 wrote:
Those at the top pay little to no taxes.

Factually incorrect. If that were the case, some 80% of federal tax revenues wouldn't exist. If you want to have a serious conversation over whether the wealthy should pay more and by how much, I'm game. By and large however it is completely false that the rich pay "little to no taxes." Not that I'm specifically advocating more taxation here, but compared to Europe and other OECD countries, in the US BOTH the middle and upper classes are under-taxed.
 
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Tugger
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 8:48 pm

flyguy89 wrote:
In the US specifically, we already have one of the most progressive tax systems in the world...50% of taxpayers pay 96% of all taxes. For income taxes alone, more than half pay no or very little income tax. For all federal taxes, the three lowest household quintiles pay an average effective income tax rate of 1.3%, 9.2% and 14% respectively. The top two quintiles pay 17.9% and 29.1% respectively.

https://www.taxpolicycenter.org/statist ... households

That is not because of the US tax system, that is a feature of the income disparity and wealth gap:
the richest 10% of U.S. households representing 70% of all U.S. wealth in 2018, compared with 60% in 1989, according to a recent study by researchers at the Federal Reserve.

https://www.marketwatch.com/story/the-r ... 2019-05-24

The wealthiest 10 percent in the world control 88 percent of total wealth while the top 5 percent control more than 76 percent.

https://www.bizjournals.com/phoenix/new ... where.html

The majority of the wealth pays the majority of the taxes. That is to be expected and completely normal and OK.

Tugg
 
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Tugger
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 9:02 pm

flyguy89 wrote:
seb146 wrote:
Those at the top pay little to no taxes.

Factually incorrect. If that were the case, some 80% of federal tax revenues wouldn't exist. If you want to have a serious conversation over whether the wealthy should pay more and by how much, I'm game. By and large however it is completely false that the rich pay "little to no taxes." Not that I'm specifically advocating more taxation here, but compared to Europe and other OECD countries, in the US BOTH the middle and upper classes are under-taxed.

ALL "classes" are under-taxed. That is proven by the fact that the USA is running a deficit EVERY YEAR. And that deficit is somewhere around $1,000,000,000,000.00. That needs to stop. But no one is willing to gore their golden goose (defense or entitlements or welfare or medical care whatever) so that means the public must pay more into the system. It is not that complex.

And to those that only want to raise taxes on the middle and lower class income earners (heck lets throw in the upper-middle class as well) do not understand that it will still not raise enough capital to address the deficit. It would maybe address less than half of the deficit:
https://taxfoundation.org/summary-of-th ... 20-update/
(gee would be great if we could even pretend to imagine to think about looking at the idea of maybe paying down the actual national debt... but HAH! No way, no one has the stomach for that.).

Look I am only advocating that we must PAY OUR BILLS! And we have proven year after year, Democrat or Republican, to NOT be able to reduce the budget. So that leaves one option. And no, wishful thinking of "if only only Republican's controlled everything" or some such will not do it. It never has and won't.

Tugg
 
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seb146
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 9:28 pm

flyguy89 wrote:
seb146 wrote:
Those at the top pay little to no taxes.

Factually incorrect. If that were the case, some 80% of federal tax revenues wouldn't exist. If you want to have a serious conversation over whether the wealthy should pay more and by how much, I'm game. By and large however it is completely false that the rich pay "little to no taxes." Not that I'm specifically advocating more taxation here, but compared to Europe and other OECD countries, in the US BOTH the middle and upper classes are under-taxed.


If you look at strictly one side of the ledger, you are correct. However, the bottom line is what counts. And, the bottom line is, those at the top get back much more than they put in. That is why they say trickle down works so well and why they love trickle down so much.

Those at the top invest in things that benefit them. Like pet projects that need government backing and subsidies for not growing things and fracking. Us working folks do not have that luxury. We pay taxes and get no money in return. Oh, sure we get a few paved roads and the promise of better schools at some point down the road, but we do not get tax breaks and cash pay outs. Look at the millions in covid loans for churches and the very wealthy. Look at the millions the airlines got because they are so poor after saying how much money they had in reserves.

And, don't forget, corporations are people. Some people matter more than others. Those people with big bank accounts.
 
GalaxyFlyer
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 10:06 pm

Tugger wrote:
flyguy89 wrote:
seb146 wrote:
Those at the top pay little to no taxes.

Factually incorrect. If that were the case, some 80% of federal tax revenues wouldn't exist. If you want to have a serious conversation over whether the wealthy should pay more and by how much, I'm game. By and large however it is completely false that the rich pay "little to no taxes." Not that I'm specifically advocating more taxation here, but compared to Europe and other OECD countries, in the US BOTH the middle and upper classes are under-taxed.

ALL "classes" are under-taxed. That is proven by the fact that the USA is running a deficit EVERY YEAR. And that deficit is somewhere around $1,000,000,000,000.00. That needs to stop. But no one is willing to gore their golden goose (defense or entitlements or welfare or medical care whatever) so that means the public must pay more into the system. It is not that complex.

And to those that only want to raise taxes on the middle and lower class income earners (heck lets throw in the upper-middle class as well) do not understand that it will still not raise enough capital to address the deficit. It would maybe address less than half of the deficit:
https://taxfoundation.org/summary-of-th ... 20-update/
(gee would be great if we could even pretend to imagine to think about looking at the idea of maybe paying down the actual national debt... but HAH! No way, no one has the stomach for that.).

Look I am only advocating that we must PAY OUR BILLS! And we have proven year after year, Democrat or Republican, to NOT be able to reduce the budget. So that leaves one option. And no, wishful thinking of "if only only Republican's controlled everything" or some such will not do it. It never has and won't.

Tugg


Maybe we need to bring DOWN the bills to match the available revenue stream.
 
flyguy89
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Re: Study: Trickle Down economics don't work

Wed Dec 16, 2020 10:09 pm

Tugger wrote:
flyguy89 wrote:
In the US specifically, we already have one of the most progressive tax systems in the world...50% of taxpayers pay 96% of all taxes. For income taxes alone, more than half pay no or very little income tax. For all federal taxes, the three lowest household quintiles pay an average effective income tax rate of 1.3%, 9.2% and 14% respectively. The top two quintiles pay 17.9% and 29.1% respectively.

https://www.taxpolicycenter.org/statist ... households

That is not because of the US tax system, that is a feature of the income disparity and wealth gap:
the richest 10% of U.S. households representing 70% of all U.S. wealth in 2018, compared with 60% in 1989, according to a recent study by researchers at the Federal Reserve.

https://www.marketwatch.com/story/the-r ... 2019-05-24

Not exactly. The rates themselves are very progressive.

Tugger wrote:
The majority of the wealth pays the majority of the taxes. That is to be expected and completely normal and OK.

I never claimed otherwise, but the point was that, compared to other OECD countries, the wealthy in the US contribute a greater share of the tax revenue.

Tugger wrote:
Look I am only advocating that we must PAY OUR BILLS! And we have proven year after year, Democrat or Republican, to NOT be able to reduce the budget. So that leaves one option. And no, wishful thinking of "if only only Republican's controlled everything" or some such will not do it. It never has and won't.

Oh I agree completely. Both the Democrats and the Republicans have essentially been trying to sell Groupon government (we can still spend so much more on government without increasing your taxes!). My overall point is that the "tax the rich" crowd needs to understand that they're not going to be able tax the rich enough to pay for the government spending they want. In Europe, they have a lot of government...the middle class also actually pays a decent amount in taxes there, which is not the case in the US. Bernie Sanders has really been the only one to come close to admitting that middle class taxes are going to have to go up as well
 
MaverickM11
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 12:06 am

Has anyone honestly believed it works? Trickle down economics was known to be "voodoo economics" when it was first floated under Reagan--by the Reagan administration. It's always been a ruse to gift wealthy donors more money at the expense of everyone else. And it has largely worked as designed.
 
Sokes
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 1:48 am

What factors are important for an investor:
-functioning legal system
without it there is no investment, high or low tech

-labour regulation
most labour friendly regulation can be compensated if other factors are good. But it can be a show stopper. Indian labour regulation is a nightmare. The British voted Thatcher when they saw the need for change.

-available market
many companies want to invest in India and are willing to make losses. The future prospects are just too great. If India had a population of 50 million, few investors would look at it.
Similar an investor would rather look at Egypt than Tunisia.

-qualified labour
the more qualified, the better jobs will be available. But countries always starts at low qualification. Once the legal system improves, jobs become available. This leads to an interest of parents to educate their children.

-infrastructure

-available credit
high risk, high reward business models like to start in the US. To allow negative equity is just too attractive for investors in high risk business models.

-taxation
just one of many factors. If other factors are unattractive, high taxation doesn't help.

Russia tried socialism. Lenin already wanted to allow a mixed capitalist/ socialist model ( New Economic Policy).
Stalin made the socialist system work with the help of gulags.
Beside that exception I believe most countries industrialized/ got rich under extreme inequality.

How did China 30 years back attract investment?
The surplus value of labour was so great that foreign companies were even willing to give a Chinese partner 51% share in a joint venture.
I suppose companies don't bother if profit at the end is caused by low wages or low taxes.

Was inequality in 1990 good for China? Yes.
Does that mean that Germany should have gone the same way? Difficult to say.
I believe inequality in Germany did increase. Germany did better because of it than most. But I believe Germany overdid it, Greece and Spain failed to allow enough inequality. Though that may be more related to labour laws than taxation.

I always like to look at balance of trade. If trade balance is negative, more inequality has to be allowed. Again, more a question of labour regulation. If trade balance is positive policies to reduce inequality are appropriate.
Since the US $ is reserve currency, this doesn't apply to the US.

There is no "One size fits all" in psychology and economy.
If a study concludes " Trickle down doesn't work", I become suspicious about the methods employed. I would also be suspicious if the study concludes that it does work.

Reagan did defeat stagflation. But Clinton did also do very well.

Trickle down economics and inequality are related discussions.
No inequality, no Tesla, no battery cars for the masses 20 years from now.
Inequality is required for innovation.

Children do not perform well in school if there is no peace in the house. So parents shouldn't be too stressed in life.

Not everything is about economic growth.
A feeling of security is necessary for wellbeing.
 
Pi7472000
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 3:01 am

Reagan has gone down as one of the worst Presidents in modern American history due to the failure of trickle down economics.
 
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c933103
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 5:03 am

seb146 wrote:
flyguy89 wrote:
seb146 wrote:
Those at the top pay little to no taxes.

Factually incorrect. If that were the case, some 80% of federal tax revenues wouldn't exist. If you want to have a serious conversation over whether the wealthy should pay more and by how much, I'm game. By and large however it is completely false that the rich pay "little to no taxes." Not that I'm specifically advocating more taxation here, but compared to Europe and other OECD countries, in the US BOTH the middle and upper classes are under-taxed.


If you look at strictly one side of the ledger, you are correct. However, the bottom line is what counts. And, the bottom line is, those at the top get back much more than they put in. That is why they say trickle down works so well and why they love trickle down so much.

Those at the top invest in things that benefit them. Like pet projects that need government backing and subsidies for not growing things and fracking. Us working folks do not have that luxury. We pay taxes and get no money in return. Oh, sure we get a few paved roads and the promise of better schools at some point down the road, but we do not get tax breaks and cash pay outs. Look at the millions in covid loans for churches and the very wealthy. Look at the millions the airlines got because they are so poor after saying how much money they had in reserves.

And, don't forget, corporations are people. Some people matter more than others. Those people with big bank accounts.

Again, as I have mentioned, this paper proved that riches do get richer after receiving tax cuts. They would have to be paying a somewhat considerable share of tax in the first place in order to get any such measurable benefit on their wealth.
 
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c933103
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 5:09 am

seb146 wrote:
Those at the top pay little to no taxes. That has been proven time and again. Look at the billions Bezos and his ex-wife give away. And they are still wealthy beyond belief. Yes, yes, I know: they still pay taxes. But, paying taxes on $1 of income does zero for those of us who work our behinds off and have half taken from us because Bezos et al. are reimbursed for their wealth taxes.

A successful business can earn a lot of money and make people become rich.
And you think this is not okay?
The one who created Amazon might have earned a lot money than say a person who created his own wholesale store, but that's simply because of their much larger scale operation enabling them to have lower cost on average and be competitive against regular small stores, which results in more profits.
Do you hate people making profit from able to run their own profitable business?
 
flyguy89
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 5:23 am

seb146 wrote:
flyguy89 wrote:
seb146 wrote:
Those at the top pay little to no taxes.

Factually incorrect. If that were the case, some 80% of federal tax revenues wouldn't exist. If you want to have a serious conversation over whether the wealthy should pay more and by how much, I'm game. By and large however it is completely false that the rich pay "little to no taxes." Not that I'm specifically advocating more taxation here, but compared to Europe and other OECD countries, in the US BOTH the middle and upper classes are under-taxed.


If you look at strictly one side of the ledger, you are correct. However, the bottom line is what counts.

And the bottom line is that whichever angle you look at it, between municipal, state, and federal taxes, the rich by and large do pay higher rates and are the biggest contributors to the till. The idea that the rich pay "little to no taxes" is broadly untrue. The data doesn't lie. Like I said, if you want to have a discussion about reforming the tax code and adjusting rates, that's fine, but let's make sure to do so with a full understanding of the facts.
 
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Aaron747
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 5:32 am

There are two charts of relative importance:

The fact that net worth inversely declines for lower classes as it increases for the wealthiest (this is 2013 data but even worse these days):

Image

The fact that the above coincides with four decades of relatively low tax rates compared to growth periods throughout much of 20th century America:

Image
 
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Tugger
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 5:35 am

GalaxyFlyer wrote:
Maybe we need to bring DOWN the bills to match the available revenue stream.

Well sure, of course. But that doesn't happen. Ever. It just doesn't.

In your life, did you succeed by wishing things to be when that had been proven to not be real?

Where do you see cutting $1 trillion dollars? Defense? Medicare? Every single welfare program the US runs? Do you think even $300 billion could be cut from the defense budget? How about shutting down NASA completely? Could chew $25 billion.

It's not going to happen.

Even the automatic 10% across the board cuts were hated and then killed. I support the cut. Don't like them but I want them. But no one else does.

We san afford the additional taxes, if we afford the deficit then we can afford the taxes.

Let's pay for what we use.

Tugg
 
tommy1808
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 6:17 am

Dutchy wrote:
Fifty Years of Tax Cuts for Rich Didn’t Trickle Down, Study Says

Tax cuts for rich people breed inequality without providing much of a boon to anyone else, according to a study of the advanced world that could add to the case for the wealthy to bear more of the cost of the coronavirus pandemic.

The paper, by David Hope of the London School of Economics and Julian Limberg of King’s College London, found that such measures over the last 50 years only really benefited the individuals who were directly affected, and did little to promote jobs or growth.

“Policy makers shouldn’t worry that raising taxes on the rich to fund the financial costs of the pandemic will harm their economies,” Hope said in an interview.


It is a wise lesson to learn for politicians and policymakers. If you want to boost the economy, give tax breaks to the middle class or lower classes, they actually spend their money and spend it in their own community.

Not to hard to understand, but you still find people who believe in the argument of trickle-down even though it has been proven false time and time again.


That was the scientific consensus before "trickle down" was wished to be reality. Look for economic papers from the 70th about the idea and you will quickly find some clearly stating "it doesn´t work, it will never work, no serious economist would suggest it would".

best regards
Thomas
 
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fallap
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 6:41 am

Is this news? I thought trickle down economics as an effective measure of economic stimulus was disproven many years/decades ago.
 
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seb146
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 6:49 am

flyguy89 wrote:
seb146 wrote:
flyguy89 wrote:
Factually incorrect. If that were the case, some 80% of federal tax revenues wouldn't exist. If you want to have a serious conversation over whether the wealthy should pay more and by how much, I'm game. By and large however it is completely false that the rich pay "little to no taxes." Not that I'm specifically advocating more taxation here, but compared to Europe and other OECD countries, in the US BOTH the middle and upper classes are under-taxed.


If you look at strictly one side of the ledger, you are correct. However, the bottom line is what counts.

And the bottom line is that whichever angle you look at it, between municipal, state, and federal taxes, the rich by and large do pay higher rates and are the biggest contributors to the till. The idea that the rich pay "little to no taxes" is broadly untrue. The data doesn't lie. Like I said, if you want to have a discussion about reforming the tax code and adjusting rates, that's fine, but let's make sure to do so with a full understanding of the facts.


So if one person puts $1 into a pot and four people each put $.25 in, the person who put in $1 takes $1.75 and leaves. But, let's not focus on the $1.75 they took because, for some reason that does not matter but, let's simply focus on that they put three times as much in. That is, apparently, all that matters.
 
flyguy89
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 7:19 am

seb146 wrote:
flyguy89 wrote:
seb146 wrote:

If you look at strictly one side of the ledger, you are correct. However, the bottom line is what counts.

And the bottom line is that whichever angle you look at it, between municipal, state, and federal taxes, the rich by and large do pay higher rates and are the biggest contributors to the till. The idea that the rich pay "little to no taxes" is broadly untrue. The data doesn't lie. Like I said, if you want to have a discussion about reforming the tax code and adjusting rates, that's fine, but let's make sure to do so with a full understanding of the facts.


So if one person puts $1 into a pot and four people each put $.25 in, the person who put in $1 takes $1.75 and leaves. But, let's not focus on the $1.75 they took because, for some reason that does not matter but, let's simply focus on that they put three times as much in. That is, apparently, all that matters.

Where are you getting that they take money back? We're talking effective rates and contributions here, which include any and all deductions.
 
Sokes
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 8:20 am

seb146 wrote:
So if one person puts $1 into a pot and four people each put $.25 in, the person who put in $1 takes $1.75 and leaves. But, let's not focus on the $1.75 they took because, for some reason that does not matter but, let's simply focus on that they put three times as much in. That is, apparently, all that matters.

Do you suggest rich people get more subsidies than they pay taxes?
 
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Dutchy
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 8:36 am

flyguy89 wrote:
seb146 wrote:
flyguy89 wrote:
And the bottom line is that whichever angle you look at it, between municipal, state, and federal taxes, the rich by and large do pay higher rates and are the biggest contributors to the till. The idea that the rich pay "little to no taxes" is broadly untrue. The data doesn't lie. Like I said, if you want to have a discussion about reforming the tax code and adjusting rates, that's fine, but let's make sure to do so with a full understanding of the facts.


So if one person puts $1 into a pot and four people each put $.25 in, the person who put in $1 takes $1.75 and leaves. But, let's not focus on the $1.75 they took because, for some reason that does not matter but, let's simply focus on that they put three times as much in. That is, apparently, all that matters.

Where are you getting that they take money back? We're talking effective rates and contributions here, which include any and all deductions.


In most, if not all developed countries, the tax rate on capital gain is much lower than on labor. The Rich and the very rich are capital gain a much higher proportion of their income than an income from labor. Proportionally they pay way fewer taxes than the average bloke, hence the rich and very rich have gained a larger proportion of the economy in the last 40-45 years. Hence trickle-down economics-theory is wrong and the distribution of wealth is becoming less and less equal.
 
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Aesma
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 9:47 am

Tax cuts for the "not rich" isn't the solution. In modern societies with developed public services, infrastructure, advanced healthcare, everyone should be paying "high" taxes. Not the same rate for everyone, but a big impact relative to income for all. For example someone not earning anything still pays sales tax/VAT : that's huge when you have no money. In the US on top of the various tax loopholes, the capital gains tax is clearly too low. Inheritance taxes are also huge loopholes.

Also in the US specifically you have a huge deficit, even when the economy is booming, so clearly not enough taxes are paid, that's pretty obvious !
 
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Aaron747
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Re: Study: Trickle Down economics don't work

Thu Dec 17, 2020 10:22 am

Aesma wrote:
Tax cuts for the "not rich" isn't the solution. In modern societies with developed public services, infrastructure, advanced healthcare, everyone should be paying "high" taxes. Not the same rate for everyone, but a big impact relative to income for all. For example someone not earning anything still pays sales tax/VAT : that's huge when you have no money. In the US on top of the various tax loopholes, the capital gains tax is clearly too low. Inheritance taxes are also huge loopholes.

Also in the US specifically you have a huge deficit, even when the economy is booming, so clearly not enough taxes are paid, that's pretty obvious !


Huge deficits, yes, but worse is that excellent performance does not prevent job losses or negligible wage gains.

Another very important chart illustrating how anemic wage growth in the US absolutely cannot keep up with burgeoning health care and housing costs:

Image
 
Sokes
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Re: Study: Trickle Down economics don't work

Fri Dec 18, 2020 12:12 am

Dutchy wrote:
In most, if not all developed countries, the tax rate on capital gain is much lower than on labor.

Are you sure?
In Germany a landlord's rent is added to income and attracts income tax.
If one owns shares of company A, company A already pays taxes on profits (lower than the top income tax rate). On top of that dividends are added to income and attract income tax.

Another discussion is if capital gains should contribute to social insurance.
But then a flat can't become unemployed and if the roof leaks health insurance isn't going to pay.
 
tommy1808
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Re: Study: Trickle Down economics don't work

Fri Dec 18, 2020 6:24 am

Sokes wrote:
seb146 wrote:
So if one person puts $1 into a pot and four people each put $.25 in, the person who put in $1 takes $1.75 and leaves. But, let's not focus on the $1.75 they took because, for some reason that does not matter but, let's simply focus on that they put three times as much in. That is, apparently, all that matters.

Do you suggest rich people get more subsidies than they pay taxes?


Yes, they absolutely do. Can´t get rich without country, infrastructure, government, law enforcement, laws and everything else paid for by taxes, but you can absolutely life at Subsistence level without any of that. In fact, without all of that, ~20.000 years ago hunter gatherers worked ~4 days a week for about 30 hours to make a living, and could expect to make it to their 70th birthday. Luxuries aside, they had a better life than the vast majority of people alive today.

best regards
Thomas
 
flyguy89
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Re: Study: Trickle Down economics don't work

Fri Dec 18, 2020 7:22 am

Dutchy wrote:
flyguy89 wrote:
seb146 wrote:

So if one person puts $1 into a pot and four people each put $.25 in, the person who put in $1 takes $1.75 and leaves. But, let's not focus on the $1.75 they took because, for some reason that does not matter but, let's simply focus on that they put three times as much in. That is, apparently, all that matters.

Where are you getting that they take money back? We're talking effective rates and contributions here, which include any and all deductions.


In most, if not all developed countries, the tax rate on capital gain is much lower than on labor. The Rich and the very rich are capital gain a much higher proportion of their income than an income from labor. Proportionally they pay way fewer taxes than the average bloke, hence the rich and very rich have gained a larger proportion of the economy in the last 40-45 years. Hence trickle-down economics-theory is wrong and the distribution of wealth is becoming less and less equal.

True to an extent. Capital gains rates are lower because they are double-taxed. So anyone deriving their primary income from traded assets are taxed at the corporate level and then again when they sell, although the former is more indirect.

Also an interesting chart to consider is how the population sizes of the various income brackets have changed over time, suggesting some of what we're seeing is people moving upward into higher income classes as over the past 50 years the portion of the population in the middle class or higher has grown from 53% to 71%:
Image
 
tommy1808
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Re: Study: Trickle Down economics don't work

Fri Dec 18, 2020 8:33 am

flyguy89 wrote:
Capital gains rates are lower because they are double-taxed. So anyone deriving their primary income from traded assets are taxed at the corporate level and then again when they sell, although the former is more indirect.


Nope, the company gets taxed once, and the person receiving income from it is taxed once. The company is its own legal entity, "incorperated" literally means given its own body.

best regards
Thomas
 
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c933103
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Re: Study: Trickle Down economics don't work

Fri Dec 18, 2020 9:33 am

Aaron747 wrote:
Aesma wrote:
Tax cuts for the "not rich" isn't the solution. In modern societies with developed public services, infrastructure, advanced healthcare, everyone should be paying "high" taxes. Not the same rate for everyone, but a big impact relative to income for all. For example someone not earning anything still pays sales tax/VAT : that's huge when you have no money. In the US on top of the various tax loopholes, the capital gains tax is clearly too low. Inheritance taxes are also huge loopholes.

Also in the US specifically you have a huge deficit, even when the economy is booming, so clearly not enough taxes are paid, that's pretty obvious !


Huge deficits, yes, but worse is that excellent performance does not prevent job losses or negligible wage gains.

Another very important chart illustrating how anemic wage growth in the US absolutely cannot keep up with burgeoning health care and housing costs:

Image

So it turns out to be similar to situation in other developed countries as mentioned in my previous post about Europe and Japan, but is merely distorted by Quantitative Easing, as in the growth have not been occurring in developed countries over the past decade but are instead taken by developing countries?
 
LCDFlight
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Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 3:45 am

Dutchy wrote:
Fifty Years of Tax Cuts for Rich Didn’t Trickle Down, Study Says

Tax cuts for rich people breed inequality without providing much of a boon to anyone else, according to a study of the advanced world that could add to the case for the wealthy to bear more of the cost of the coronavirus pandemic.

The paper, by David Hope of the London School of Economics and Julian Limberg of King’s College London, found that such measures over the last 50 years only really benefited the individuals who were directly affected, and did little to promote jobs or growth.

“Policy makers shouldn’t worry that raising taxes on the rich to fund the financial costs of the pandemic will harm their economies,” Hope said in an interview.


It is a wise lesson to learn for politicians and policymakers. If you want to boost the economy, give tax breaks to the middle class or lower classes, they actually spend their money and spend it in their own community.

Not to hard to understand, but you still find people who believe in the argument of trickle-down even though it has been proven false time and time again.


Well I think two issues are being confused here.

First: do rich people spend less money, as a fraction of their wealth, than middle or poor people? The answer is yes. Poor people spend the highest fraction of their wealth.

Second: should governments handle the allocation of money, because rich people don't spend enough? The results on this are much more mixed. Governments generally do not have the expertise to allocate resources as well as the private market. Put simply, if the government is in charge of farming, people will not have food to eat, and malnutrition will set in. If the government is in charge of shoes, most people will be shoeless. It is better to let the private market handle most tasks.

People mix these two situations and go too far in one way or the other.
 
Sokes
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Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 6:25 am

LCDFlight wrote:
Governments generally do not have the expertise to allocate resources as well as the private market. Put simply, if the government is in charge of farming, people will not have food to eat, and malnutrition will set in. If the government is in charge of shoes, most people will be shoeless. It is better to let the private market handle most tasks.

That's a generalisation.
Water supply and garbage collection in Germany is usually done by socialist companies. It works well.

I believe the majority of employees need to be employed in capitalist enterprises to ensure a certain work ethic as part of culture.

However 10 percent or so people employed in socialist companies helps to establish more social working class salaries.
I limit my statement to technical monopolies and government administrative jobs only.
 
Sokes
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Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 6:37 am

What are tax cuts for rich people?

A man owns a private limited that employs 10.000 people.
Let's assume the private limited has a yearly profit of 10 mio. $.

The owner can
-a) spend the money on research of new products
-b) expand business and employ more people
-c) pay back debt of the company= increase equity

-extract the profit from the company, pay income tax and
d) invest the money in flats. That increases housing and is a wealth insurance in case his business ever faces a black Swan and goes bankrupt.
e) spend the money on a holiday villa or other wasteful consumption.

Only e) is bad for the society. However rich people taking flights when nobody else was able to afford financed innovations in aviation.
Money spent on a villa is a waste for society. Money spent on an electric car isn't.

I also don't believe in trickle down economics. But then the US is too successful to dismiss it.
It's complicated.

Anyway capitalism creates enormous wealth. There should be enough for all, unless people unable to work are allowed unlimited children.

I suppose if the rich grow their wealth fast one can conclude that rather little of the surplus value of labour is spent on private consumption.

It is better if 1% owns 30% of assets than if 5% own 30% of assets. The more owners, the more will be spent on private consumption.

Does tax cut for rich refer to tax cuts for the Pvt. Ltd or for private income tax rate?
 
Drafran
Posts: 78
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Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 4:36 pm

GalaxyFlyer wrote:
Tugger wrote:
flyguy89 wrote:
Factually incorrect. If that were the case, some 80% of federal tax revenues wouldn't exist. If you want to have a serious conversation over whether the wealthy should pay more and by how much, I'm game. By and large however it is completely false that the rich pay "little to no taxes." Not that I'm specifically advocating more taxation here, but compared to Europe and other OECD countries, in the US BOTH the middle and upper classes are under-taxed.

ALL "classes" are under-taxed. That is proven by the fact that the USA is running a deficit EVERY YEAR. And that deficit is somewhere around $1,000,000,000,000.00. That needs to stop. But no one is willing to gore their golden goose (defense or entitlements or welfare or medical care whatever) so that means the public must pay more into the system. It is not that complex.

And to those that only want to raise taxes on the middle and lower class income earners (heck lets throw in the upper-middle class as well) do not understand that it will still not raise enough capital to address the deficit. It would maybe address less than half of the deficit:
https://taxfoundation.org/summary-of-th ... 20-update/
(gee would be great if we could even pretend to imagine to think about looking at the idea of maybe paying down the actual national debt... but HAH! No way, no one has the stomach for that.).

Look I am only advocating that we must PAY OUR BILLS! And we have proven year after year, Democrat or Republican, to NOT be able to reduce the budget. So that leaves one option. And no, wishful thinking of "if only only Republican's controlled everything" or some such will not do it. It never has and won't.

Tugg


Maybe we need to bring DOWN the bills to match the available revenue stream.


Sure. Let's start with our insanely bloated military budget and work our way down from there, shall we?
 
flyguy89
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Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 7:05 pm

tommy1808 wrote:
flyguy89 wrote:
Capital gains rates are lower because they are double-taxed. So anyone deriving their primary income from traded assets are taxed at the corporate level and then again when they sell, although the former is more indirect.


Nope, the company gets taxed once, and the person receiving income from it is taxed once. The company is its own legal entity, "incorperated" literally means given its own body.

best regards
Thomas

The value represented by those gains certainly are taxed twice. That the burden is paid by both the company and the person with shares in that company doesn't change the fact that the tax man is double-dipping on that same value. Additionally, in the US, the capital gains tax rate you pay is tied to your income. The top income bracket pays the max rate of 20%, and then on top of that there's the 3.8% net investment income tax as well as state level capital gains taxes imposed by most states which can result in a marginal long-term capital gains tax rate as high as 37%.

Drafran wrote:
GalaxyFlyer wrote:
Tugger wrote:
ALL "classes" are under-taxed. That is proven by the fact that the USA is running a deficit EVERY YEAR. And that deficit is somewhere around $1,000,000,000,000.00. That needs to stop. But no one is willing to gore their golden goose (defense or entitlements or welfare or medical care whatever) so that means the public must pay more into the system. It is not that complex.

And to those that only want to raise taxes on the middle and lower class income earners (heck lets throw in the upper-middle class as well) do not understand that it will still not raise enough capital to address the deficit. It would maybe address less than half of the deficit:
https://taxfoundation.org/summary-of-th ... 20-update/
(gee would be great if we could even pretend to imagine to think about looking at the idea of maybe paying down the actual national debt... but HAH! No way, no one has the stomach for that.).

Look I am only advocating that we must PAY OUR BILLS! And we have proven year after year, Democrat or Republican, to NOT be able to reduce the budget. So that leaves one option. And no, wishful thinking of "if only only Republican's controlled everything" or some such will not do it. It never has and won't.

Tugg


Maybe we need to bring DOWN the bills to match the available revenue stream.


Sure. Let's start with our insanely bloated military budget and work our way down from there, shall we?

I'm all for taking a scalpel to all parts of federal spending, including the Pentagon; however, you'll likely be disappointed at the amount of savings defense budget cuts would net you. Military spending, while certainly worthy of scrutiny, just isn't the debt and deficit driver many perceive it to be.
 
Drafran
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Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 8:33 pm

flyguy89 wrote:
tommy1808 wrote:
flyguy89 wrote:
Capital gains rates are lower because they are double-taxed. So anyone deriving their primary income from traded assets are taxed at the corporate level and then again when they sell, although the former is more indirect.


Nope, the company gets taxed once, and the person receiving income from it is taxed once. The company is its own legal entity, "incorperated" literally means given its own body.

best regards
Thomas

The value represented by those gains certainly are taxed twice. That the burden is paid by both the company and the person with shares in that company doesn't change the fact that the tax man is double-dipping on that same value. Additionally, in the US, the capital gains tax rate you pay is tied to your income. The top income bracket pays the max rate of 20%, and then on top of that there's the 3.8% net investment income tax as well as state level capital gains taxes imposed by most states which can result in a marginal long-term capital gains tax rate as high as 37%.

Drafran wrote:
GalaxyFlyer wrote:

Maybe we need to bring DOWN the bills to match the available revenue stream.


Sure. Let's start with our insanely bloated military budget and work our way down from there, shall we?

I'm all for taking a scalpel to all parts of federal spending, including the Pentagon; however, you'll likely be disappointed at the amount of savings defense budget cuts would net you. Military spending, while certainly worthy of scrutiny, just isn't the debt and deficit driver many perceive it to be.


It isn't going to happen as long as a single Republican draws breath. Besides, the Pentagon is a HUGE employer, both directly and ancillary. Still it gripes my ass that they just throw money at it willy-nilly.
 
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DarkSnowyNight
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Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 9:06 pm

Drafran wrote:


It isn't going to happen as long as a single Republican draws breath. Besides, the Pentagon is a HUGE employer, both directly and ancillary.


Absolutley true. But Democrats are not allergic to this either.

Military spending will always be ridiculous as long as the industrial model of spreading itself across every district in the nation remains the status quo.


Drafan wrote:
Still it gripes my ass that they just throw money at it willy-nilly.


Yep. It is pretty incredible how virtually no project is actually at risk of being shut down for running over budget and time anymore.

I think this is actually more an issue with industrial consolidation in the vendor private sector, but still inexcusable just the same.
 
737307
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Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 9:44 pm

"Trickle Down" is just a sales tactic.
 
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Tugger
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Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 10:38 pm

flyguy89 wrote:
The value represented by those gains certainly are taxed twice. That the burden is paid by both the company and the person with shares in that company doesn't change the fact that the tax man is double-dipping on that same value. Additionally, in the US, the capital gains tax rate you pay is tied to your income. The top income bracket pays the max rate of 20%, and then on top of that there's the 3.8% net investment income tax as well as state level capital gains taxes imposed by most states which can result in a marginal long-term capital gains tax rate as high as 37%.

Why is it OK to tax property every year then? Couldn't the same be applied to other existing wealth assets?

Tugg
 
737307
Posts: 2945
Joined: Tue Dec 26, 2017 6:27 pm

Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 11:03 pm

Tugger wrote:
flyguy89 wrote:
The value represented by those gains certainly are taxed twice. That the burden is paid by both the company and the person with shares in that company doesn't change the fact that the tax man is double-dipping on that same value. Additionally, in the US, the capital gains tax rate you pay is tied to your income. The top income bracket pays the max rate of 20%, and then on top of that there's the 3.8% net investment income tax as well as state level capital gains taxes imposed by most states which can result in a marginal long-term capital gains tax rate as high as 37%.

Why is it OK to tax property every year then? Couldn't the same be applied to other existing wealth assets?

Tugg


Convert your property into a "church". Problem solved! :D ;)
When people finally understand that the prime function of a "church" is that of a TAX SHELTER, and in second instance a House of Worship, lot's of things will start to make sense. Unfortunately, the majority of the people don't get it.
Last edited by 737307 on Sun Dec 20, 2020 11:09 pm, edited 1 time in total.
 
GalaxyFlyer
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Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 11:09 pm

First, stockholders are the OWNERS of the company and their PROFITS are taxed at the corporate level BEFORE those profits are distributed as dividend or buybacks and then taxed again. Dividend money is easily taxed at marginal rates exceeding 60% to the owners. Which is why debt is immensely advantaged in the US—interest is deductible but dividends are after tax money.

Second, back to budget—the real driver of the US deficit is not discretionary spending, it’s the $3 trillion in various transfers AND the future unfunded promised benefits.
 
flyguy89
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Joined: Tue Feb 24, 2009 6:43 pm

Re: Study: Trickle Down economics don't work

Sun Dec 20, 2020 11:19 pm

Tugger wrote:
flyguy89 wrote:
The value represented by those gains certainly are taxed twice. That the burden is paid by both the company and the person with shares in that company doesn't change the fact that the tax man is double-dipping on that same value. Additionally, in the US, the capital gains tax rate you pay is tied to your income. The top income bracket pays the max rate of 20%, and then on top of that there's the 3.8% net investment income tax as well as state level capital gains taxes imposed by most states which can result in a marginal long-term capital gains tax rate as high as 37%.

Why is it OK to tax property every year then? Couldn't the same be applied to other existing wealth assets?

Tugg

It definitely could, although if you're talking about a wealth tax, from a pure efficacy and executional standpoint, most countries have abandoned that approach given how, compared to property, the composition and value of people's wealth changes so drastically that the revenue raised and cost to administer the tax aren't worth it.
 
flyguy89
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Re: Study: Trickle Down economics don't work

Mon Dec 21, 2020 6:28 am

Another important driver of income inequality that should not be overlooked is declining and persistently low interest rates:

Image

https://tradingeconomics.com/united-sta ... 0of%202008.

These declining rates overwhelming benefit the wealthy while penalizing saving and, over time, flow capital and valuation to assets completely detached from Main Street.
 
tommy1808
Posts: 14689
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Re: Study: Trickle Down economics don't work

Mon Dec 21, 2020 6:45 am

flyguy89 wrote:
tommy1808 wrote:
flyguy89 wrote:
Capital gains rates are lower because they are double-taxed. So anyone deriving their primary income from traded assets are taxed at the corporate level and then again when they sell, although the former is more indirect.


Nope, the company gets taxed once, and the person receiving income from it is taxed once. The company is its own legal entity, "incorperated" literally means given its own body.

best regards
Thomas

The value represented by those gains certainly are taxed twice. That the burden is paid by both the company and the person with shares in that company doesn't change the fact that the tax man is double-dipping on that same value.


So? You don´t need to incorporate your business, hence everyone doing that with their business decides to have it as a separate legal person that pays its own taxes, Seems the liability shield is worth the money.

The gain is just taxed once as well, as the shareholder doesn´t create any gains, only the company does If gains where the actual taxable item than one could argue that working income should have any income tax attached to it, since the company that pays them already pays taxes on the gains.

best regards
Thomas

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