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

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

#131

Post by shans » Fri, Dec 18, 2020, 12:33 AM UTC

wing-_-nuts wrote: post #69

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…

And while we are at this, I am very interested in another thought experiment. * Person 1: income $400k per year, lives in California -- must spend $1.5M+ to afford a 4 BR home for a family of 4 -- must spend $15 per hour on child care workers because of minimum wage laws -- spends an average of $20 per person per meal, because of all the costs baked into the price of goods and services in the state -- spends 10 - 12% on state income tax but does not receive any direct benefits from state programs because of their income level (the only point being about the additional expense of it that is not a direct benefit, not that the state tax is unfair). -- spends 9% of all goods purchased on sales tax

* Person 2: income $400k per year lives in TX * spends $700 - 800k on an equivalent or better home * spends an average of $12 - 15 per meal per person * can spend $10 per hour on child care workers because of minimum wage laws * spends 0% on state income tax * spends a 6 - 7% on all goods purchased on sales tax

Ignoring things like what the specific min wage levels should be, etc, etc, is cost of living something that should show up in "fair tax" owed?

If the answer is no... I have a hard time seeing how any specific tax level could be considered fair (even after the argument of "well people should just move to another state").

If the answer is yes, then I have a hard time imagining how any federal income tax system could achieve the goal of "fairness".

And perhaps getting rid of the income tax altogether (perhpas replaced by Universal or partial BI + national sales tax as one idea) would result in a much faire / progressive system.

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

#132

Post by dennis_jeeves » Fri, Dec 18, 2020, 12:34 AM UTC

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…

>When people state that they want the wealthy to pay their fair share,

What they mean is that they are jealous of the rich. They are want the rich to the equally poor through some cosmic egalitarian enforcer.

Anyway personal opinion - all forms of income tax is plain theft.

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

#133

Post by souprock » Fri, Dec 18, 2020, 12:41 AM UTC

Florin_Andrei wrote: post #129

souprock wrote: post #105

Earlier quoted context omitted.

That thinking led to the corruption. Any normal senator, governor, or president has the skills to work at a high level in corporate America. That pays better, counting only the legitimate pay. It should be no surprise that voters are seldom able to hire (elect) anybody non-corrupt. We aren't paying market rate for the desired skills or for the level of responsibility. Senators get about $200,000 and the president get…

> Senators get about $200,000 and the president gets about $400,000. That's a heck of a lot of money for the vast majority of people. If that's the real issue, then we're attracting the wrong kind of people to those jobs. Let them stay at the hedge fund instead, do hopefully more limited damage there. > You get what you pay for. No, not always. And it's precisely this narrow vision, this absolutization of money that'…

You can pretend that money doesn't matter. You'll get corrupt career politicians and the occasional retired billionaire. Lots of people are more than willing to pretend they don't care about money, if that's your qualification, so that their children and siblings can collect foreign "investment" and "work" as board members for companies wanting influence.

The USA is literally at the bottom in terms of salary divided by GDP. At first I thought we beat a few countries, but they have a head of state that is a distinct job from head of government. I'm also leaving out Pope Francis and a few countries for which GDP data isn't available. Singapore pays $3,052,000 yearly, about half to the president and half to the prime minister.

In dollars for one individual, unadjusted for GDP difference, the USA pays less than: Switzerland, Singapore, Austria, and Ireland. Would you say that those countries are attracting the wrong kind of people as leaders? Counting the sum of head of state and head of government, these also pay more: Iceland, Hong Kong, Australia, Canada, Germany, and numerous kingdoms.

Anyway, do you like what you're getting for politicians? Without change, you'll get more of it. You can wish for the most fantastic altruistic leader with no family to support, and just hope that people will recognize that despite the underfunded campaign, or you can recognize that there is no escape from the money issue.

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

#134

Post by apta » Fri, Dec 18, 2020, 12:43 AM UTC

High taxation is a symptom of a broken economic system. Taken from my post on the other thread.

> The problem lies elsewhere, but no one seems to discuss it. It's not for no reason that Islam, Judaism, and Christianity prohibit lending money with interest. We look around us and see a debt heavy and debt ridden society. The modern usurious economic system is inherently going to favor the rich. Ban interest and other usurious immoral and parasitic practices (e.g. stock shorting) and things will improve quickly.

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

#135

Post by souprock » Fri, Dec 18, 2020, 12:47 AM UTC

dragonwriter wrote: post #130

souprock wrote: post #105

Earlier quoted context omitted.

That thinking led to the corruption. Any normal senator, governor, or president has the skills to work at a high level in corporate America. That pays better, counting only the legitimate pay. It should be no surprise that voters are seldom able to hire (elect) anybody non-corrupt. We aren't paying market rate for the desired skills or for the level of responsibility. Senators get about $200,000 and the president get…

So, you want literally every top decision maker in federal government to have a massive financial incentive to, even if honest, strive only to maximize GDP with no concern for distribution or other outcomes, and, if less honest, manipulate and protect the manipulation of GDP data. That’s...a fantastically bad idea.

Compare with the alternative:

Literally every top decision maker in federal government has a massive financial incentive to accept affordable bribes. Honest people have a massive financial incentive to find work elsewhere.

That's our reality. It's not sane or safe to design a system of government around the assumption that a capable person will take a vow of poverty, even if "poverty" is only relative to a large company's CEO.

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

#136

Post by apta » Fri, Dec 18, 2020, 12:48 AM UTC

vinhboy wrote: post #75

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.

I've been trying unsuccessfully to sell this idea to my cohorts with regards to the stimulus check. My argument is, giving poor people money is a guarantee win for the community, because poor people live paycheck to paycheck and that money will be spent immediately. No one buys my idea because it's always something like, "I don't trust them", or "why does that lazy guy deserve any money".... I am not sure how to win…

Islam solved this problem a long time ago. It has a built-in "charity tax" called Zakat whereby a portion of people's wealth (as long as they make more than a minimum threshold) is donated to charity each year. The portion depends on what kind of wealth it is (e.g. for gold and silver have a different rate from produce, the former being only 2.5% per Hijri year). This ensures lifting up the poor and stimulating the economy by discouraging people from hoarding wealth, yet, it is not a socialist system because it heavily discourages people from being needy and relying on others. There were many rich and wealthy Muslims across history, and it is not frowned upon one bit.

It is historically established that there was a time, when everyone committed to paying their Zakat, that there were no more poor people left to take it!

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

#137

Post by apta » Fri, Dec 18, 2020, 12:56 AM UTC

kmlevitt wrote: post #60

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…

To answer that, let’s look at what his rate would have been during America’s greatest expansion of prosperity, when possibly more people of humble means were pulling themselves up from their bootstraps than at any other point in history. Let’s go with say 1960 and adjust for inflation. https://web.stanford.edu/class/polisci120a/immigration/Feder... 1,500,000 in 1960 dollars is about 180,000. Which means his maximum t…

Except that is a misconception because no one paid anywhere close to that 87% rate back in the day. The rich will always find loopholes and deductions to lower their tax rates.

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

#138

Post by dragonwriter » Fri, Dec 18, 2020, 1:09 AM UTC

souprock wrote: post #135

dragonwriter wrote: post #130

Earlier quoted context omitted.

So, you want literally every top decision maker in federal government to have a massive financial incentive to, even if honest, strive only to maximize GDP with no concern for distribution or other outcomes, and, if less honest, manipulate and protect the manipulation of GDP data. That’s...a fantastically bad idea.

Compare with the alternative: Literally every top decision maker in federal government has a massive financial incentive to accept affordable bribes. Honest people have a massive financial incentive to find work elsewhere. That's our reality. It's not sane or safe to design a system of government around the assumption that a capable person will take a vow of poverty, even if "poverty" is only relative to a large comp…

> Compare with the alternative

That's not the alternative. You are constructing a false dichotomy.

The current pay structure and a GDP-indexed pay structure aren't the only alternatives.

But, Even ignoring the false dichotomy, this...

> Literally every top decision maker in federal government has a massive financial incentive to accept affordable bribes.

...is clearly better, since the intereses of bribers conflict, and it this becomes in the interests of politicians to discover, publicize, and punish others bribes, even if it means putting into place systems that also limit the bribes they themselves will be able to get away with. Whereas, with all government officials having aligned incentives for identical deceit, you make unified corruption more likely.

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

#139

Post by dlp211 » Fri, Dec 18, 2020, 1:27 AM UTC

profile53 wrote: post #114

dlp211 wrote: post #103

Earlier quoted context omitted.

We are a nation of laws, not men. Everyone should be treated the same under the law. Every person in your example should pay the same amount of tax.

I mostly agree on that. How do you feel about current estate taxes, which, in effect, mean the third person has paid more tax than the first two?

Estate taxes are on the estate, not a person. Also, there is a built in assumption that taxes have been paid. This is almost always not true, see step-up cost basis.

Estate taxes serve a purpose, though I would argue that a lack of will has caused them to not serve that intended purpose. That doesn't mean that estate taxes aren't the right tool, just that it has been sabotaged. That also doesn't mean that they are the correct or best tool, but until we can see what the full force of estate taxes are, it is impossible to say.

The type of tax that you just described is called an inheritance tax, and I am perfectly ok with them as well. Income is income, it doesn't matter whether it comes from your employer, a rental company, self-employment, or otherwise.

Something I would be against is both an Estate and Inheritance tax being levied by the same entity. That doesn't serve any real purpose.

I'd actually prefer an inheritance tax combined with a more progressive tax system over an estate tax.

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

#140

Post by souprock » Fri, Dec 18, 2020, 1:27 AM UTC

dragonwriter wrote: post #138

souprock wrote: post #135

Earlier quoted context omitted.

Compare with the alternative: Literally every top decision maker in federal government has a massive financial incentive to accept affordable bribes. Honest people have a massive financial incentive to find work elsewhere. That's our reality. It's not sane or safe to design a system of government around the assumption that a capable person will take a vow of poverty, even if "poverty" is only relative to a large comp…

> Compare with the alternative That's not the alternative. You are constructing a false dichotomy. The current pay structure and a GDP-indexed pay structure aren't the only alternatives. But, Even ignoring the false dichotomy, this... > Literally every top decision maker in federal government has a massive financial incentive to accept affordable bribes. ...is clearly better, since the intereses of bribers conflict,…

Unfortunately for that theory of conflicting bribes, much of the world is foreign. Bribes from foreign nations are mostly against the interest of country the politician is supposed to be running. Those bribes are incredibly cost-effective in the USA.

The currency of DC is blackmail. They will not discover, publicize, and punish other's bribes. They use the threat of that to keep each other in line. This is bipartisan collaboration.