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50 years of tax cuts for the rich failed to trickle down, economics study says

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Re: 50 years of tax cuts for the rich failed to trickle down, economics study says

#61

Post by NicoJuicy »

johndevor wrote: post #39
durnygbur wrote: post #32

The rich prefer to hire armies of accountants and lawyers to design the most hermetic pipeline funelling out everything they consider to be an excess. There is not a single droplet dropping, how could anything tricke down?

Cars, computers, cell phones, rockets to mars, etc... all exist because rich people bought the super expensive first versions or funded their development. We all benefit from those things greatly.

Trickle down economy is about paying essentials to other businesses?

That's a first

Re: 50 years of tax cuts for the rich failed to trickle down, economics study says

#62

Post by tsdlts »

commandlinefan wrote: post #26
Someone wrote: post #5

Earlier quoted context omitted.

Indeed. Wikipedia ( https://en.wikipedia.org/wiki/Trickle-down_economics ) say he used it in 1932, and says the idea is even older (“leak through” in 1896; “If you feed the horse enough oats, some will pass through to the road for the sparrows.” in the 1890s)

> If you feed the horse enough oats, some will pass through to the road for the sparrows Funny enough in that analogy: you're feeding the horse because you care about its well-being and it's doing something helpful in return, whereas the sparrows are actually a nuisance providing no value to anybody and just taking without giving anything in return.

As Mao Zedong learned late in his life, sparrows do actually provide value.

Re: 50 years of tax cuts for the rich failed to trickle down, economics study says

#63

Post by umvi »

soared wrote: post #41
11thEarlOfMar wrote: post #36

This is only tangentially on topic, but I genuinely wonder about this. When people state that they want the wealthy to pay their fair share, the first two questions I have are, what constitutes wealthy and what constitutes fair? Let's take a specific person as an example of wealthy (let me know if you don't agree), and I'd be grateful to hear your thoughts: Wealthy Person X: - CEO, 55 years old, University of Illinoi…

This doesn’t seem like a question inviting genuine discussion. Tax laws don’t take into account how hard someone works, where they went to school, or a taxpayers character. Unless your argument is that taxes should be based on factors outside of income/etc, it seems like you might be trying to bait people with some version of “Look how hard Steve works - you can’t possibly support raising taxes on him.”

I think it's a valid question though.

In my mind, the closest thing to a fair tax law is one that applies evenly to everyone, like UBI. Consider a flat 10% income tax applied evenly regardless of socio-economic status. If you made 1M, then you pay $100K. If you made $10K, you pay $1K. If you made $0 or less, you pay 0. That's it.

In some senses that is very fair - everyone pays 10% of their income, no exceptions. It's this ultra-convoluted labyrinthine system of laws/exceptions that has allowed the wealthy people and companies to find so many loopholes. In my mind, just like simple software code is harder to exploit than spaghetti code, so simple laws are harder to exploit than spaghetti laws.

Re: 50 years of tax cuts for the rich failed to trickle down, economics study says

#64

Post by pmoriarty »

11thEarlOfMar wrote: post #36

This is only tangentially on topic, but I genuinely wonder about this. When people state that they want the wealthy to pay their fair share, the first two questions I have are, what constitutes wealthy and what constitutes fair? Let's take a specific person as an example of wealthy (let me know if you don't agree), and I'd be grateful to hear your thoughts: Wealthy Person X: - CEO, 55 years old, University of Illinoi…

I favor a wealth tax over an income tax, as the wealthiest individuals tend to make only a tiny fraction of their money through income.

Start at 50% tax on wealth exceeding one million dollars, and raise it by 1% for every million above that, adjusted for inflation.

Re: 50 years of tax cuts for the rich failed to trickle down, economics study says

#65

Post by dlp211 »

11thEarlOfMar wrote: post #36

This is only tangentially on topic, but I genuinely wonder about this. When people state that they want the wealthy to pay their fair share, the first two questions I have are, what constitutes wealthy and what constitutes fair? Let's take a specific person as an example of wealthy (let me know if you don't agree), and I'd be grateful to hear your thoughts: Wealthy Person X: - CEO, 55 years old, University of Illinoi…

More than what they are paying today. I'll also remind you that the tax burden on every marginal dollar is the same for everyone. That is, that CEO pays the same amount of tax on their first taxable dollar as I do irrespective of what our total income is.

With that said, there is no reason that the top marginal tax rate shouldn't be 90%, and that should apply to incomes in 10's of millions. And the marginal tax rate should progress up from the current 37%@$622+k income to 90% at say $25MM. The CEO in your example's marginal tax rate should be coming in probably in the 45-50% range. That's marginal, not effective.

Capital gains tax should be eliminated and cap gains should be counted as income.

Re: 50 years of tax cuts for the rich failed to trickle down, economics study says

#66

Post by marcosdumay »

pkaye wrote: post #6

Wouldn't trickle up economics work better? Poor people have more unmet needs and more likely to spend any extra they get into the economy.

Isn't the answer of this one known since the time of Keynes?

That's basically what pulled the rich countries out of the Great Depression.

Re: 50 years of tax cuts for the rich failed to trickle down, economics study says

#67

Post by gumby »

AnthonyMouse wrote: post #59

> The study compared countries that passed tax cuts in a specific year, such as the U.S. in 1982 when President Ronald Reagan slashed taxes on the wealthy, with those that didn't, and then examined their economic outcomes. All of these studies consistently miss one thing. Effective tax rates haven't really changed since before Reagan. Prior to Reagan, the tax code was riddled with loopholes. Not like how it is now wh…

They did a third thing which was to make the tax system more regressive.

That was by deliberate design: there is a specific argument for it going back to Burke at least. I strongly disagree with it but I understand the argument.

Re: 50 years of tax cuts for the rich failed to trickle down, economics study says

#68

Post by partiallypro »

mikestew wrote: post #4

Perhaps I'm having a Mandela Effect moment, but hasn't "trickle down" been debunked before this study...repeatedly? Not just "no shit", but actual studies and stuff? Regardless, Will Rogers is credited with the phrase "trickle down" to refer to supply-side economics, so it has gone on longer than 50 years. Mr. Rogers also did not mean the turn of phrase to be complimentary.

"Trickle down" is an economic slur, it's not something economists believe. It's just what some people call a certain policy set.

Re: 50 years of tax cuts for the rich failed to trickle down, economics study says

#69

Post by wing-_-nuts »

11thEarlOfMar wrote: post #36

This is only tangentially on topic, but I genuinely wonder about this. When people state that they want the wealthy to pay their fair share, the first two questions I have are, what constitutes wealthy and what constitutes fair? Let's take a specific person as an example of wealthy (let me know if you don't agree), and I'd be grateful to hear your thoughts: Wealthy Person X: - CEO, 55 years old, University of Illinoi…

>put self through college working

>Works 60 hour weeks, most Saturdays, some Sundays ...

I don't give a damn about the 'pull yourself up by your bootstraps and work hard' virtue signaling.

Half. He should pay half. So should everyone else above 400k / yr. The rich are able to succeed by virtue of the fact that we have schools, roads, other infrastructure. If you're in the top 1% of income, you should pay in the top 1% of taxes to help pay for all that.

Mad about that? Maybe we should stop spending ~ 700B / yr on defense. We're surrounded by two friendly nations and large oceans. There's zero chance of conventional total war against Russia or China, and we can't defend against a nuclear exchange. Our military is a giant welfare program.

Re: 50 years of tax cuts for the rich failed to trickle down, economics study says

#70

Post by dlp211 »

umvi wrote: post #63
soared wrote: post #41

Earlier quoted context omitted.

This doesn’t seem like a question inviting genuine discussion. Tax laws don’t take into account how hard someone works, where they went to school, or a taxpayers character. Unless your argument is that taxes should be based on factors outside of income/etc, it seems like you might be trying to bait people with some version of “Look how hard Steve works - you can’t possibly support raising taxes on him.”

I think it's a valid question though. In my mind, the closest thing to a fair tax law is one that applies evenly to everyone, like UBI. Consider a flat 10% income tax applied evenly regardless of socio-economic status. If you made 1M, then you pay $100K. If you made $10K, you pay $1K. If you made $0 or less, you pay 0. That's it. In some senses that is very fair - everyone pays 10% of their income, no exceptions. It'…

It only seems fair if you don't understand the marginal utility of dollars (some dollars are in fact far more valuable than others) and marginal propensity to spend.
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