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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

#141
post #102

Earlier quoted context omitted.

Flat taxes are often criticized for failing to be progressive and that argument has some merit. As an example, 1 dollar in tax means more to someone making 10k than it does to someone making 100k.

That's true, one drawback is that it isn't progressive, but I would argue that the massive simplification of the tax law would allow the government to bring in much more money than it currently does, which it can then divert to social services for those who most need it. As an example of a working implementation of this system, The Church of Jesus Christ of Latter Day Saints effectively taxes all their members at a f…

Are you familiar with the "Rules for Rulers" video by CGP Grey on YouTube? [1]

In this video, it is argued that complicated tax law is the method by which democracies reward their particular "keys to the kingdom" - so the complexity is a feature, not a bug, and will be very difficult to undo; so "would all the government to bring in much more money than it currently does" may not be the goal.

[1] https://www.youtube.com/watch?v=rStL7niR7gs

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

#142
post #110
post #95

Earlier quoted context omitted.

1. Taxes are not theft. 2. No man/woman is an island. They did not create their success on their own. 3. Marginal utility of dollars. Taking 90 cents from that person and giving it to someone that is not as well off is better for the economy and our society. 4. Marginal propensity to spend. Again, that $.90 is far more valuable being spent today than in capital investment. Capital is no longer a scarce resource. 5. T…

Not legally theft, but conceptually the same thing. If I pass a law that says you and only you get taxed at a 100% rate, technically it's not theft because it's legal (I just passed it as a law), but conceptually it is theft because I take every dollar you earn against your will. Also aren't you essentially saying: "People that have hundreds of millions or billions can keep their wealth, but starting now we don't rea…

Your first is an appeal is an appeal to the extreme fallacy. A law like that would never pass in a functioning democracy, and if our democracy isn't functioning, then I would say we have bigger problems than a single person be taxed of all their earnings.

Your second point would matter if making income is that was how people became billionaires. That simply isn't the case. The vast, vast, majority of people with a 9-digit or more net wealth did not get there by income.

I also advocate for other taxes and methods of taxation that would handle high net-worth individuals/families.

I'm not looking for a perfect system, nor am I looking for a system that appeases everyone's idea of fairness, I'm advocating the system that I think is best for America moving through the 21st century and the threats it will face this century.

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

#143

> 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…

I can't for the life of me understand how people get the misconception that this one factoid equates to a tax rate equivalent in some magical vague way.

1. If it closed any loopholes it only did so to open more convenient ones we are currently still struggling with that go to wealthy individuals and companies far more than the middle class, which most of those loopholes you are taking about were for prior to reagan. They were less loopholes and more accurately social safety nets put in place after the great depression.

2. The "effective" tax rate is a more or less meaningless number contrived to hide the nature of what is actually occuring. It's a way of obviscating the raw revenue but you can very easily cut through it by simply counting the currency in circulation and determining how much of it is in the hands of the wealthy vs regular people. When you do that you find that raw inequality is on par with what it was on the eve of the great depression and there are plenty of papers to support that this is no coincidence.

Secondly you conveniently lock the rate at regan without pointing out that immediately prior to regan there were significant changes in taxation. In the 50s for example it wasn't uncommon to tax a CEO and their company at 90%, which is widely different than the tax rates we see now even if we use the arbitrarily designed "effective" qualifier.

3. This makes assumptions that the tax rate reflects actual taxation which it doesn't. You are correct that if you look at the books quickly the effective tax rate seems on the level but look even a bit more closely and things quickly don't add up.

Many companies corporations and individuals pay nothing yearly in taxes by using the location of their business to avoid having to be taxes in one country vs another or one state/province over another. They flood vast sums of money to shell companies and then report themselves as only having earned 300,000 (as bezos has done for the last 5 years) in order to present this falsehood that he doesn't take the money, but instead he gets paid in stock which can be far more flexible with taxation and isn't accounted for in your "effective tax rate"

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

#144

Earlier quoted context omitted.

> 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…

> They will not discover, publicize, and punish other's bribes.

You know, that would be more convincing if it weren't shortly after investigations spiralling out from opposition research conducted by a political campaign unearthed the funnelling of foreign government money to campaigns through a notionally grassroots advocacy group that had long been influential in partisan politics, among other political corruption involving that organization, while retaliation for other political blowback growing out of the same source also focussed major attention expanding into a criminal investigation of foreign corruption allegations touching close to politicians on the other side of the aisle.

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

#145
post #67

Earlier quoted context omitted.

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.

Whether or not that was their stated intent, it isn't what they actually did. Here's the effective rate table going back to before Regan: https://www.taxpolicycenter.org/statistics/historical-averag... Not exactly huge differences before and after. And compare the recent effective rates to the ones at the start of the table. About the same for the top quintile, significantly lower for all the others. So we should be…

Those are the rate charts before deductions. Most deductions are meaningless at the low end of the income spectrum. Find a chart of % payment by quintile and you'll get a different picture. Apologies that I can't find one in a quick search before running to dinner but there was good work done by the NBER on this.

Edit: by % payment by quintile I mean what percentage of total income is paid by each quintile, not what percentage of total taxes is paid by each one.

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

#146

Earlier quoted context omitted.

If he makes $1.5m/ year and his net worth is only $8m, he's not very good with money. My feeling on taxes is likely overly simple. Take the median price of a home in the area and divide it by 4. If people make less than that, they shouldn't pay any taxes. Then people should pay flat rate for every dollar above that.

That's interesting. The median home price in the US (it varies dramatically by region, I need to simplify first) is $295,000. Divided by 4 is about $74,000. The median household income (using household since you're using house prices) is $69,000. The actual numbers would need to change for this to work, maybe it needs to be 1/10th the median home price as the threshold, for example. But it's interesting to think thro…

I was going off the top of my head. What I was intending was for people to not get taxed until they can afford to buy a home in their locale. A mortgage payment should be 1/4 of your income which is where I came up with 1/4, but I commingled ideas here and said the home price.

It was a seat of the pants attempt to make taxation based on actual living costs. (and in retrospect not great for a variety of reasons). The big point is people who can't afford basic living expenses shouldn't be taxed.

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

#147
I work for the uber wealthy trickle down directly affects me and actually works for my business we always notice an uptick in jobs and work whenever the economy is doing great which is usually directly affected by how much our clients are being taxed.

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

#149
post #82

Earlier quoted context omitted.

The actual paper where you can read their analysis for yourself: http://eprints.lse.ac.uk/107919/1/Hope_economic_consequences... That's a nice just-so story, but it's not supported by the evidence. You can read for yourself in the original paper, but the authors used a pretty sophisticated approach to measuring taxes: " We propose an encompassing approach that utilises Bayesian latent variable analysis on a range of…

> That's a nice just-so story, but it's not supported by the evidence. Here is the evidence: https://fred.stlouisfed.org/series/FYFRGDA188S It is supported by the evidence. > You can read for yourself in the original paper, but the authors used a pretty sophisticated approach to measuring taxes: So sophisticated a model that it can measure the impact of a change in tax revenues that didn't meaningfully occur?

That chart says absolutely nothing about tax rates on the rich.

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

#150
post #128

Earlier quoted context omitted.

>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…

Why is $400K the morally correct number?

Rough ballpark for the 1% income in the US.
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