Bitcoin Forum

I realize I'm preaching to the choir here - at least for the most part.  But in response to a hot topic on reddit, I figured I'd give non-socialists a chance to answer.  I honestly believe reddit is composed of intelligent people, but I completely disagree when it comes to politics - especially economic policy - on that site.

The main reasoning from the top comment is that the rich hoard their money preventing it from being re-circulated into the economy.  But wouldn't that decrease the supply & increase demand aka making your money worth more?  Assuming making your money worth more is a bad thing ("then everyone would hoard!"), why is giving it to the government a good thing?  Am I the only skeptic that believes the government is just a bunch of talking heads that give tax revenue to their rich friends?  And even if the government perfectly reallocated money, what would be the point of working?  If I'm getting money from not working...I'm not going to work.

So the big question, why have higher taxes on the rich historically correlated to higher economic growth?

Edit:

Here's the link to the reddit comments http://www.reddit.com/r/politics/comments/11ok1e/overall_higher_taxes_on_the_rich_historically (http://www.reddit.com/r/politics/comments/11ok1e/overall_higher_taxes_on_the_rich_historically)

Here's a link to the data http://conceptualmath.org/philo/taxgrowth.htm (http://conceptualmath.org/philo/taxgrowth.htm)

Data please.

Because high taxes on the rich usually means overall less taxes.

The lower the overall taxes the higher economic growth, it's as simple as that. Some eastern European country had a flat-tax model a few years ago. The economy skyrocketed. However this meant less taxes for the rich (at least according to the socialists who changed it back)

Making money scarcer does not help the poor or middle classes. It causes high unemployment (and bankruptcies) due to price stickiness while the economy readjusts.


I don't know what you're reading so I can't verify that the conclusion is that "giving to the government is a good thing", but all government spending eventually goes to the private sector. There is certainly a degree of crony capitalism involved, but what congress does with a budget is certainly public information, so there is only so much that they can get away with.


This is certainly not a valid conclusion. The government doesn't spend money for nothing, they expect work to be performed in return. It may be inefficient, and it may be liberty-depriving, but it (almost always) isn't a hand out.

EM brings up a fairly good point. If you tax the 1% (Richest) more, the 99% get to enjoy a tax break.
Of course it doesn't matter that much while loop holes exist, however yes taxing the rich more does work, without penalising the poor.
Economic growth is largely driven by the spending power of the 99%, so if you tax them less, they will have more money to spend.

Why does it help when governments have more money?
- Public sector jobs creation
- More Police, Paramedics, Fireman etc, makes it alot easier to keep crime numbers lower, making for a more peaceful society.
- Public funding, Benefit system, pensions etc.

Yeah I live in a country with a high tax rate and a government which does a lot in the public sector.
I don't like taxes, but I'd not trust the private sector to do a better job.

If the rich work less because it isn't worth the money after tax, then it does penalize the poor.  That is less money for the rich to loan to the poor or to pay the poor to work for them.  There are consequences.

The thing is more like: In any sort of welfare state, (that's the main argument of why to have a state in the first place), why tax the poor at all?

In that case taxes should be negative and there could be other mechanism transposing the slope, like a disability, old age, kids, doing community service (anything falling under state employment for that matter).
When it comes down to it, if you are willing to strip down unnecessary bureaucracy what are now taxes could substitute any governmental mechanism involving money.

At best the thing would be tied to consumption, not income, property, profit or something else. Of course that would require a drastic change in the money system as well, which brings us back to bitcoin...

The contrary argument is: the higher the tax on the rich, the more inclined they are to reduce their tax burden by employing more people.

Both are speculation, the argument I propose might seem to be backed up by the data.

Negative taxes lessens the need/desire for people to work.  Disabled and old people, and kids, should all be taken care of by family members, relatives, friends, or charities.  They shouldn't be the responsibility of the taxpayer.

Why tax them?  Well, if they're using services that cost money, shouldn't they pay for those services just like everyone else?

So you're saying the rich would rather lose 100% of their money by paying it to employees instead of losing 40% of it to taxes?  What kind of logic is there in that?

No, what I am saying is that taxes should only be charged on consumption.
As far as employing goes that would be consumption of a service.

I was talking about the possibility of keeping the welfare state operating, which imo is possible, and desirable.


In the end a disabled person isn't paying for consumption one way or the other, except for the social-darvinistic approach where you let em die. I don't believe in the concept of charities and social support inside the family and friends only goes so far, there would still be cases where people end up with nothing.

I'm saying the benefit could easily outweigh the costs. If the choice is to expand the company or to cut costs at every turn, cost-cutting becomes less and less viable as a profitable measure the higher the tax is. And the tax would probably have to be higher than 40%, that is about what it is now in the US and most of europe. The US has had taxes in the 90s for a short period, as well as in the 50s and 60s for extended periods. The scary, untenable, uncapitalistic thought is that economies run better the more evenly that wealth is distributed. It makes a pretty logical form of sense when it is the 99% that move the economy.

Well that makes even less sense.  If you only had taxes on consumption, then the rich could keep 100% of a given pool of money by not hiring people, but would have to pay 140% of said pool if they hired people with it.

And in those cases where people end up with nothing, those people die off.  What's the big deal?

Regardless, we obviously have different ideas of how helping those who cannot help themselves should work, so we're not going to agree on that.  ;)


On the contrary, people are already complaining about too many US jobs moving overseas.  With the modern globalization of the world's economy at this point, do you really think it is viable and smart for the US to alienate corporations with higher tax rates?  The higher the tax rates, the less incentive a company has to conduct business in the US, and it is a lot easier for a company to operate internationally based in a different country today than it was in the 50's and 60's.

I still don't quite understand why hiring people would be better than saving money, even at a 90% tax rate.  Surely a rich person would rather save 10% than 0%?  Or are you saying that hiring people would "expand the company," resulting in greater profitability down the road?  Even in that case though, it's essentially the same incentive.  Right now, it is invest 100% in new employees for 65% of future profits or take 65% now, but with a 90% tax rate, it would be invest 100% in new employees for 10% of future profits or take 10% now.  Where is the extra incentive to hire people if a higher tax rate is in play?

Exactly, that's the beauty of it, wealth is not affected as long as you don't spend it. And that case if your consumption is taxed at 40% you could only get 60% out of it.
But then for the system I am proposing 40% would be an extreme example. I don't think it would even get that high, but if it does it would still be less than most people currently pay, and even if they are not very wealthy, healthy, young, etc...



Well at least we can agree to disagree  :D

Arguably part of the reason for outsourcing is the need for lower pricing within the US where wages have not kept up with economic growth. And arguably the US does not maintain any kind of international dominance over any sectors other than financial, anymore. The simplest way to force companies to maintain a US presence with high taxes is tariffs.


I was just making a potential argument to the contrary. I don't know why there is a correlation between higher taxation and economic growth, I was speculating, as I said.

Unless the tax is greater than 100%, any increase in pre-tax income should still result in an increase in income after tax.

But you still must account for opportunity costs.

Would you work for $1/hr instead of $10/hr?  Probably not.  Why not?  Because your time is worth more than that.  That is your opportunity cost.

Would a rich person put in effort and risk investment to build a company from the ground up if they stand to lose 90% of any profits they manage to make?  Probably not nearly as often as they would do the same if they stood to only lose 35% of any profits they managed to make.

Now, I can agree that there is some disparity between the two examples, and rich people are going to continue chasing at least some profits no matter the tax rate, but it is only logical that any tax rate hike is going to be met with more conservative investing on the part of the wealthy.

Most people like to do things and cooperate.  The only people who just work for money are wage slaves.

Well, as far as classical libertarian ideology goes that is a good thing.
One of the many reason not to be a Libertarian.  ;)

Keep believing the party line all you want, it's what they want you to believe, that is why so many loop holes exist in the first place.
You really think any of the fortune 500 companies actually pay total taxes of 40, 30 or even 20%? No, they don't.
In the past 10 years, a good portion of those, have paid from total tax in single digits, to tax rebates, worth millions or even billions.
Doesn't sound like they are paying their fair share to me. Especially if they are suppose to be some of the most profitable companies in the world.

Fact is, the super rich, boast massive million or even billions of Net profits when it comes to pleasing their shareholders.
However, when it comes to taxing season, will find any way possible to make out they companies profits are low or obscured so can't be taxed or are owed a refund etc.

So no, when a company can make out business is booming, I don't see anything wrong with taxing them properly and getting rid of all these loop holes.

Who cares how much the rich/businesses are taxed?  As someone that does not own a business, I have to rely on someone fronting me the money to work for them.  Whether that is a millionaire or a billion dollar corporation, it doesn't matter to me.  What does matter is the number on my paycheck.  If taxes increase for that person or business, that is less money to go around & smaller numbers on my paycheck. 

The only people that pay taxes (no matter how high or low) are the people that can't pass it off - poor & middle class.

Rich people have tend to spend a smaller proportion of their income than poor people (its called the marginal propensity to consume). Presumably because the poor people can't afford to save...

Anyway, by taxing the rich and giving to the poor, you are taking money from people who only spend say 70% of their income to give to people who spend 99% of their income. That is going to have the effect of increasing consumption. Western economies are heavily dependent on consumer spending, so increasing consumption increases economic growth. It's probably not the only factor, but it might contribute to it.

It then gets more complicated because an economy that consumes too much and doesn't save enough will have lower consumption in the long run because it becomes less productive through under-investment. But then China is saving too much and is exporting its savings to the US, which increases investment despite high consumer spending. In the best traditions of economics, it could probably be argued either way.

It would not make your money worth more. You need to look at it in this view, someone who is mega rich, they're going to buy huge 10 million dollar yachts. Lets do some hypothetical here.. These companies might only employ 5 people for 20 orders a year. Say there is 50 yacht companies doing equal work.
If the rich stop hoarding money, and they buy yachts, and now these 50 companies are making 40 boats a year, thus needing to double their staff.
Now there is need for 250 more college graduates who have studied the field of making yachts.. Who are getting a very good pay, they cant afford to buy a Ferrari, but they can afford to buy a 4-wheeler/quad/atv type deal from a guy working off commission.


In between all that, hundreds of other people will benefit, the people who make the yacht parts, truck drivers, the atv parts, then the people who who those people spend their money on. The government taxes them all when they get paid, and when they spend the money, thus making the government more on the money the rich are holding. In Florida taxes are 6.5%, (1) 10m boat will make 650k in revenue.

I don't think it will be worth more, because it will be spread around, and the guys at the bottom still wont be able to buy everything the rich can.

That's actually some pretty solid reasoning...

Still not convinced that taxing only consumption instead of income, profit, property and consumption is a good thing?

Yes, I am still not convinced.

You are not arguing about it either?  
Even while income taxes are considered illegal and were only implemented during draconian periods and kept. Even while property taxes are a relic out of pre-republic times.
Even while profit taxes applied selectively to those who aren't in with the cronies.

Another point: If the states only income comes from consumption which is by definition the motor of economic health it's main incentive becomes to keep the economy healthy.

It would equate to the rich and the wealthy paying a smaller percentage of their income in taxes vs the middle class and poor.  Doesn't make much sense to me.

I really don't care what the history of various taxes are.  Just because income taxes were only implemented during draconian periods doesn't mean they are a bad way to tax people.

Well, most people on earth realize that our society can only exist if we take care of everyone.
We are social animals and thus feel compassion for others because everyone knows that there is a good chance that they themselfs may need help at some point.
If everyone thought like you then we would not live in this relatively nice and stable world.
It would be dog eat dog and only assholes would survive.
Now, would you want to live in a world composed primarily out of assholes or is it enough for you to look in the mirror in the morning?

Again I suggested taxing wealthy people higher than the middle class and a negative tax for the poor. The extent could be governed by either by the amount of total consumption (including employing people and what is now usually written of as "investment") or the accumulative wealth (just add).
And only because rich people consume less of their total wealth doesn't mean they aren't still the biggest consumers per person, either way they would still pay the highest taxes in absolute value. And wealth can only be expressed by consumption, if not it's just money.

The reason why I am so argumentative about this is that is a simple system which allows for a reduction of bureaucracy otherwise not archive able.

I don't see how society depends on taking care of EVERYONE.  Please elaborate.

You misunderstand me.

I do not believe individuals should be FORCED to help other individuals.  I believe they should do it out of the kindness of their heart.  I make donations to local organizations and give to individuals to help them out.  Especially if a family member or friend needs some help, I give it to them.  I make donations to charities that help people in other countries too.

But I do NOT believe in using tax dollars to "help" people.  It should be voluntary.  And yes, some people need to die off to avoid being too much of a burden on the people.  I'm not trying to be an asshole, that's just reality.

Let me ask you this - how much is it worth paying, out of taxpayer dollars, to save a person's life?  $5?  $10?  $1,000?  $1M?  $100M?  Think about it...

I don't understand... how would you tax people on sales based on income levels?  That doesn't make any sense... why not just tax them based on income levels to begin with?

Because savings shouldn't be taxed, at least not on an individual basis. This happens with inflation or demurrage, or in case of bitcoin: NONE!

And why shouldn't savings be taxed?

Because I don't think the state has any business issuing money, or supplying money or even have information on the amount of money I own. The system I am proposing would even work with bitcoin, see the colored coins concept.

To be honest I'm not fond of the idea of tying it to the accumulated wealth (not income, but it is affected), I find the system where only consumption is taxed by the amount over time as of demising returns much more beautiful.

Income tax != savings tax.

And I have no idea what you were trying to say with your second paragraph.

Well, the problem is that you say these things standing on the shoulders of society.
A lot of people that you don't care about helped the world get to this place.
Most charities are there to help wealthy people get rid of their guilt and are actually artrociously inefficient.

In our current society noone has to die because they are a burden. There is enough room to take care of these people.

The point is also that the world economy turned for the better when we started to take care of people as an integral part of society.
As i said before, we are social animals so once you start this kind of stratification there is no end.
Paris Hilton would propably shit on your head whenever she felt like because, you know, she is clearly the better human because she is in a better position than you. What would be her motivation to not put a bullet in your sorry head for not being as successfull in society as her?
So you have to realise that there are even greater assholes than you and they would think the same way about you as you about the people you want to leave for dead.

Fortunately this is not how most people think and actually most people realize we need each other. Economy is highly connected.
But what's even more crucial is that genetics are highly connected.
The whole pure genes/perfect human thing is a myth.
In our daily life we as a species completely fail at judging people on this level of connectedness altho it plays a major role in social dynamics.

If you want to look at humanity strictly as a tool for creating an economy then you can swap them out like light bulbs. But that is a groce oversimplification as the economy has a lot of symbiotic caracteristics that can only happen in these highly connected meshes of social relations.
A single idea from a disabled person can start a whole industry.

So the very least i can say is that things are not so simple that you can just say "let them die".
Of course you can have your opinion but i'm just telling you that it is not a healthy one for society.
What do you think will happen to the mental health of people that are for some reason near to the survival barrier? They will live under constant stress and think about their survival all the time. These people will have a much harder time participating in society because of the angst that may not have any food the next day.

'let them die' is just a very crude and uneducated opinion.

The more money you tax, the more government jobs can be made, which in turn makes more jobs because those government workers are standing in line at walmart in turn making walmart hire more people, which in turn makes more tax revenue for the government as each get paid and taxed, then taxed when they spend their pay.

Wrong, you think if your boss is making 50k a month profit, and he gave 4k extra in taxes, it will hurt your paycheck? Probably not.

Moreover, these people now gain working experience and pull society to a higher overall level of productivity.

You make a lot of bold assumptions here...

If by "standing on the shoulders of society", you mean I am wealthy, you are completely wrong.  I have a net worth in the neighborhood of n negative $50k.

I agree charities are inefficient.  You are saying the government IS?   :D

Citation needed for the economy turning better after "caring for each other" (as if that wasn't happening before among family/friends, as it should be?)

I never said anything about success or about people putting bullets in another person's head - not sure where you pulled that from.

I never said anything about perfect genes.

I never said that a disabled person couldn't change the world.

Likely, someone who is "near the survival barrier" would have friends and family to live with and take care of them, or charities/organizations that take care of people in homes dedicated to the purpose.  That's how society has worked for so long, why can it not still work that way today?

You are acting like I am saying anyone who isn't healthy should be shot to death.  I do not understand that, because it is not what I am saying at all.  I am simply saying that people should not be supported by the government.  People should be supported by their friends, family, and/or charities.

Because you can take more from people who are doing better without them removing your insides.

No i'm saying that you apparently have a computer and an internet connection and that you could not possibly have that if there was realy poor chinese juvenile in some underlit factory that helped making one for you.
Most people just don't realize just how much privileges they enjoy that are made possible by other people organised into a society.
I would say that 99.99% of the people on this forum live on the shoulders of society.
Things like food distribution, roads, rails, etc are all due to a big effort of lots and lots of people you don't know and part of those people you may have wished dead.
And in fact during the industrial revolution many people died becasue they worked under sub-human conditions. And today we still enjoy these works.
Take a look at how many people got disabled while building the Hoover dam. And Vegas until today uses the power that was generated there.

Ok, now I understand what you meant.  What does that have to do with the discussion?

Citation needed?
Dude, look outside!
We have been fighting poverty for the past couple of hundred years because it has a direct detrimental effect on society.
Every country has this problem and every country is fighting it. It is an economic fact that if you let society just run that you will be leaving people out that could otherwise be very productive members of society.

Well, here's a citation: http://www.lisdatacenter.org/wps/liswps/188.pdf (http://www.lisdatacenter.org/wps/liswps/188.pdf)
You can find a table there on page 37 where you see poverty changes due to introduction of taxation.
A lot of these countries got rid of poverty in as much as 20% of the population.
Poor people cannot pay for school, for clothes, housing, healthy food etc etc. They are a detriment to society as a whole and there is no way they can reasonably crawl out of the hole that was created around them.
Well, putting a bullet through a persons head would be more humane than just letting them die. I thought i'd make your suggestion more humane, that's all.

An i'm using the word success because that is the biggest difference between you and people you want to leave to die. They were apparently not successful in something and that lead to them being in that situation.
So short, what you effectively say is that they don't deserve any of the fruits you pick from society because they did not manage to be as successfull in society as you. You found the golden tree (which has been in a big part provided to you by society (sholder standing)) and now you say "It's mine, mine.. my precious. What, you want a piece? Fuck off, i don't know you so i don't care".

I think you are just blind to the fact of how much of what you have now is provided by others.
If we all thought like you then maybe your grandparents would have never been able to raise a family successfully enough to get you where you are now.

No, but you do think that you are in some ways superior to others (that you don't care about and what to let die).
This inevitably leads to eugenetics and such. That is the end station of your train of thought. I thought i'd mention it early so you can think about it.
What you propose is a sort of evolutionary race and that is about genetics first and foremost. Dog eat dog, the strongest survives etc etc.
But you dismiss a lot of them as not worthy of societies attention.
You want to throw them at the mercy of charity where the chance that they get to develop these world changing ideas is minimal.
'Likely' just means you don't know how it works.
I can show you lots of people without a social circle (or a circle that is in a negative spiral) that will never be able to get out of the hole they are in by themselfs.
Want to get a job? Need clean clothes. So what do you do if you have no money to buy clothes?
But not all people are in a situation where they have friends or family that are able to help them and charities are not enough to take care of that problem on a big scale.
To fix this you need society wide structural solutions, not something uncertain like charity or friends and family.

Edit: messing up ma quotes  ;D

It is relevant because you aparently have no idea how society works.
So it's a bit strange actually that you're arguing taxes when you show no understanding of why they are there and how they help society.

I'm not sayig it all rosey and everything is going ok, but just denying their function is crude thinking (pre-industrialisation crude).

I think you need to answer this question:

How much is a person's life worth?  If you could use $5 of taxpayer (or people who pay for healthcare) money to do it, would you?  $10?  $1,000?  $1M?  $1B?  $1T?

At what point is the drain on society as a whole too much to bear to save a single life?

never

But you are missing the point. With todays level of technology that sum is so marginal that it doesn't affect society more than random fluctuations in the market.
It truly is negligible.

Never?  Really?  So you would have taxpayers pay $1T to save someone's life?  100 lives later, and you've increase the national debt to 7 times what it is now, forever indebting your descendents to live a life of slavery in vain attempt to pay off said debt?  And somehow, that is ok with you?

Individual instances do not add much, but unpaid healthcare costs as a whole are a huge burden on society.  The general attitude seems to be that every life is priceless, and everyone should be forced, via taxes or increased healthcare costs, to pay these priceless prices, but I think that is an inappropriate way to look at it.  There are other concerns at play, such as opportunity cost and quality of life.  Some procedures or series of procedures or ongoing health care can cost millions of dollars.  Most people won't make more than a million dollars (present value) in their lifetime.  And how many lives could be saved in third-world countries with the money spent on one procedure here in the US?  Is it appropriate for us to deem the lives of our countrymen that much more valuable than the lives of other people around the world?

If government is forcing us to "help" people in the way that they deem appropriate, then we have less funds available to help people the way we see fit, which, in some cases, might include saving a hundred lives of people in a third world country instead of one life in the US.  Why does the government get to make such a judgement call on an issue of morality like this?

This conversation seems to be hijacked. If I understood correctly, the original question was "Why have higher taxes on the rich historically correlated to higher economic growth?"  I didn't click through either of the original links, so I'm not sure if the OP presented reliable evidence to support the proposition as fact.  Regardless, none of the recent posts on this discussion thread seem to be attempting to answer or even discuss the question any longer.  Perhaps these posts belong in some other thread, or in a new thread of their own?

In my humble opinion (though many don't agree with me), threads/conversations are meant to wander.

+1.

Your explanation worth taking count. I believe the same way, we are a society that holds on social connections and thus helping each other in small ways can bring everyone up.
We slowly crawled to this point and if we wouldn't  then we would still live in era of poverty, wars and dictatorship.

As I said before you are missing the point.



Isn't that what countries are supposed to do? But for the sake of argument: Lets say we spend as much as threat everybody in Zimbabwe for Aids and Malaria. And which point do you think the production methods would be efficient enough that costs per person are down one order of magnitude, two, three or four orders?
Why should that efficiency be lost for western patients for which the treatment costs would be negligible?


There are enough resources available to do it. The only reason why the current system isn't able to provide a good live for everybody is that it is inefficient. Heck if we switch to Thorium power every man woman and child could live a very high energy lifestyle, we could make the Sahara into an oasis, and there would still be enough time and resources to colonize motherfuckin space.

This discussion is getting stale.  I'm just going to agree to disagree with you at this point.

The basic issues I have with taxation is that it isn't fairly done. The secondary issue I have that it put barriers to growth in the worst places.

Why is there any sort of payroll taxes that an employer pays - this builds a barrier to growth into every business. Why does the percentage of income we pay increase (percentage-wise) as we make more money - this puts a barrier against growth.

Ideally we need a flat tax on sales and/or a flat tax on income - junk the payroll taxes entirely - and a flat tax on profit via capital gains.  Get rid of property tax entirely as part of the bargain. Ideally each tax would have the same percentage rate for everyone.

At about 10% we'd see gains on the money that's actually collected while at the same same removing the dis-incentives to business. Then we'd see some massive wealth creating and gdp growth in this country.

For the record, i agree on this.

I don't think it's 'the government' that made this choice, it is society.
If there is a too big political steering then things go bad. It would be ideal if government only diverted a stream of funds to this cause and let more knowledgeable people decide on how to spend it.
But as an institution such basic care is very valuable to any society.
And i agree that there may be a limit to what procedures should be supported by society.
I mean i would not want to pay tax money because someone wants a nose correction or something like that.
These are indeed hard ethical questions. Where do we draw a line.
But i think that it is good if there is at least some basic care.

I can't believe nobody has as yet pointed out the glaringly obvious: correlation does not imply causation (http://en.wikipedia.org/wiki/Correlation_does_not_imply_causation).

Meh, it doesn't exclude it either., :)

Some high productivity people have small spending while low productivity people have no spending power. High productivity people are only a few, and their needs have mostly fulfilled, they will not generate enough consumption,  move some of those spending power from high productivity people to low productivity people will make the total consumption more even

In this process, those talent people might leave this country or move his operations abroad, so unless the same concept is applied everywhere in the world, it is difficult to set higher tax on rich people

Anytime a topic mentions correlation, this needs to be the first reply.

He's asking what the cause of the correlation is.  I don't see a problem with his subject.

Taken at face value, it is a legitimate question, but the correlation is never really the subject. Perhaps I am wrong in this case. It really depends on the replies, I guess.

Here is my suggestion for a cause (assuming there is one, of course) of the correlation: During times of higher economic growth, the rich get richer; the general population sees that as unfair and insists on raising taxes on the rich. As a result of the increased taxes, the economic growth ends and taxes are rescinded to try to return to economic growth. There you have it - higher economic growth begets higher taxes on the rich, lower economic growth begets lower taxes on the rich.

From OP:
http://conceptualmath.org/philo/taxgrowth.htm

First of all this correlation is only shown for maximum marginal tax rate, which almost noone pays and generates a very small percentage of total tax revenue.
Second of all the correlation is almost entirely due to 6 years all occurring before 1945.
Third of all why does this chart only go to 2003 when the data source used goes to 2008. It also skips 1946.
Fourth of all this only looks at the US.
Fifth of all what correlation?


Yes, indeed this author should look at the data more thoroughly.

http://i47.tinypic.com/14w6iv.png
http://www.usgovernmentspending.com/spending_chart_1902_2015USd_13s1li011mcn_30f_Defense_Spending_In_20th_Century
http://www.irs.gov/uac/SOI-Tax-Stats---Historical-Table-23
http://www.bea.gov/national/xls/gdplev.xls

I see little to no correlation, any that does exist looks like it is completely explained by wartime defense spending. Is he suggesting we should have more wars?

How about everyone give me ALL their money, and I'll look after everyone with it.  FREE HOUSES, FREE FOOD, FREE TV, FREE DRUGS.  What else could a country want?

</THREAD>

I'll just leave this here:

http://www.youtube.com/watch?v=Z0YTY5TWtmU

I think that is the right conclusion. The data show that reducing/increasing taxation of high income earners has little effect on economic growth performance. Obviously this would not apply with say 99% taxation, but within the limits of US historical experience it seems valid.

Therefore, if you believe in diminishing marginal utility, governments improve national welfare by taxing the rich heavily and redistributing the proceeds. That seems right to me. Governments are failing to tax sufficiently. Vote Obama if you care about the US as a whole.

If you do not believe in diminishing marginal utility, then governments cannot make people better off on average through redistribution. In this case, governments can do whatever they like and it doesn't really affect national welfare. Vote Obama if you are poor and Romney if you are rich.
 

http://thepathtotyranny.files.wordpress.com/2011/05/taxes-gdp.gif

That's interesting dependent on where it comes from the charts tell different stories.
But if you look at the description on top what do you say to the term "All Taxes" and that, mostly, growth rates were declining over time.

That's an interesting graph.  I'm not sure I trust the source. I'd like to see an independent review of his math. I tried following the links at the blog, but couldn't find the numbers being reported in the graph.

I don't follow this, "utility" is subjective and I would like to see some support for the idea that every individual's utility maximizing behavior is good for the society as a whole. If I get small amount of more money I will spend it on beer. If I get a large amount I will invest in something I don't understand and be slowly robbed. The concept only works when there is sufficient negative feedback.

I might have a poor economical background, but I don't get your points: Why would money or taxes matter?

Money is not wealth. It's not a resource. If you have people starving in your country because of food shortage, then taxing the rich 100% won't solve it. Growing food for the next year will do the thing. Certainly, in a global world this is different since you can buy food from outside. But again, taxing the rich won't resolve your trade deficit issue.

In my simple vision, what an economy needs is:

1. Full (or almost full) usage of its human and material resources.
2. A sane trade balance.
3. Technology and productivity growth, which will lead to a progress in our living standards over time.

So why our we in a crisis? Well, in my opinion, we handled the economy very badly. We are now in a huge global mess and it'll take time and effort to get clean.

Corporations are not people they don't pay tax.  However small investors pay about 80% in tax.

35% corporate
15% capital gains/dividend going up to 23.7%/40% with fiscal cliff
30% inflation (cash, capital expenditure/depreciation,capital gains tax)
income tax is really paid by investors as people work for after tax wage.
sales tax 10%
15% paperwork and misc taxes.
================
80% small investors
40% Romney.

high taxes can redistribute wealth gained from monopoly.

Millions of people survive in the USA by taxing the rich to provide food stamps.  Farmers monopolizing land plant fields based on these food stamps.  So money can cause action.

The U.S. dollar can not be considered money according to wikipedia, because it is not a store of value.

It's a store of value, it's just doing a shitty job of it. Is a bucket not a water container any more because someone punched a hole in the bottom? It still contains water, just not for very long.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/11/Federal%20Spending%2C%20Revenue%20And%20Net%20Deficit%20%25%20of%20GDP.jpg

Relevant Zerohedge Chart, especially for comparing to electric mucuses.

Because you can take a higher % from richer people without them disassembling your body.

If the people you control are generally poor they have hardly anything that you can take without causing them great pain. If they would still be the most comfortable people in the world with half of their wealth you can take quite a large fraction of it without them risking their lives to try to end yours.

"Rob the rich because they won't fight back as much" is hardly a justification for tax inequity. I think that each person should be taxed the same amount regardless of their income or wealth. There is no logical reason for taxing a person more if they are more productive, and taxing a person less if they are lazy. Both the cost and benefit of government should be the same for everyone.

Too bad that:
Wealth!= productive
Poor!=lazy

You know what? I actually agree 100% with this... 0% across the board matches your definition.

That would really simplify things.  Too bad it's easy for the wealthy to believe those are equal.

Then who is gonna enforce your contracts? You know that thing which I said shouldn't backed by law which makes me an evil person ;)

http://bit.ly/PTgJSJ

hehe, ok I've earned that ;D

I'll read it, thanks.

There are two major problems with utilitarianism:
1) Utility monster (http://en.wikipedia.org/wiki/Utility_monster)
2) Mere-addition paradox (http://en.wikipedia.org/wiki/Mere_addition_paradox)

If you are arguing for a social system such as universal health care on utilitarian grounds you must account for both of these or the system will fail. Each of these is why countries that have such systems also tend to have rationed health care (http://www.nytimes.com/2012/08/22/business/economy/rationing-health-care-more-fairly.html?_r=2&pagewanted=all) (sometimes referred to as "death panels") and birth regulations (like in China), respectively.

Because you are messing with inflation.

GDP (or AD)= C + G + I + (X - M)

higher taxes on the rich, means more G (Government spending) that will lead to more C (consumption) and less I (Investment) but more X...

In other words, inflation. Money will worth less, prices will rise, so your  gross domestic product will look higher, but real salary will be decreasing.

Your assumption of a 'higher economic growth' comes from the fact that the gross domestic product is calculated by multiplying the output of each sector by their respective market price. Because inflation leads to higher demands, market price will artificially rise.

(Sorry if i'm using the keynesian model, but so are you.)

Some excellent commentary on the topic:

http://www.tomwoods.com/blog/how-to-refute-the-91-tax-rates-are-awesome-argument/

Actually, In the USA - poor does equate with lazy... or crazy. There literally isn't anyone who is sane and poor unless they choose to be.

This whole debate comes down to the same thing it always does - why do some people want a nanny state?

13 states revolted over a ~15% teatax. Isn't it ironic that 200 years later we've got people paying between 30% and 80% - and half of us think we aren't paying enough.

Ah this thread.

On that contracts without government thing: It proposes that when I enter a restaurant and am really unsatisfied with it I should pay and never return, while in hindsight under anarchism I'd just leave without paying.

In a serious scenario I'd more likely would be asked for payment when the food is served not after I have eaten, which would make a contract, again unnecessary.
I would propose that for almost all transaction instant payment is preferable to a contract. And while this would make credit impossible I think we don't need credit.

That's one of the rare things where I would agree with some of the popular religions: Profiting from interest is usury.

Actually, that isn't true.  It is what would generally be considered a prejudiced, or bigoted, opinion. Poverty has many causes.  While laziness and mental instability can lead to poverty, they are by no means the only two reasons that poverty exist.

Perhaps I've been mislead.  It was my understanding that the "Boston Tea Party" and the American Revolution had more to do with lack of representation than with taxation.

On Bigotry: Poverty isn't a persistent (like a genetic disorder) or a permanent (like death) condition. It's a situation, the 'cause' doesn't matter in the slightest. Everyone has been down and out at some time or another. The will to change the situation is all that is needed. The people who live in poverty in this nation do so because they choose to... the only reasonable explanation for that choice is mental disorder or laziness.

On the American Revolution: http://www.americassurvivalguide.com/declaration-of-independence.php

Just read that, then tell me it was about lack of representation. Really it was about defending the colonies from tyrannical rule that was generally abusing, killing and plundering what they were building.