41–50 of 64 posts
Has there really been lack of capital for investments in recent years? Shouldn't all of the western economies be in excellent shape with all possible investments avenues done now? As isn't entire point of trickle down increase availability of capital?
Sigh. Trickle-down doesn't work. Lowering taxes on the wealthy helps the wealthy. It does not help the economy. Consumer spending is not increased, so the lost tax income by lowering taxes is not earned back through a larger economy to tax. The predictable result is more income inequality, which already is higher than it ever has been since the second world war.
I don't think wealthy are paying much taxes, percentage-wise (significant in dollar value though). There are simply too many tax minimization instruments that they have at their disposal. It's the middle class that is carrying the brunt of taxation. So when they say "tax the rich", what they really mean is "tax the middle class and small business owners". Eventually, you would run out of "other people's money" and yo…
But the examples we do have include USA in the 1950s (top tax bracket 91%) and Sweden in the 1970s (top tax bracket 87%). Those are some of the most successful societies ever, especially in comparison to their peers at the time. Even the extreme right in these countries sees those eras as national high points.
I don't think there's evidence that taxation on its own creates stratified societies of super-rich and super-poor. For example, the problems of Brazil are largely unrelated to the tax rate.
UK has no place to lecture anyone else on economic management. The country has one of the lowest growth rates in Europe, has crashed exports to its biggest market, maintained imports by simply waiving customs checks opening up the domestic market for all kinds of fraud, has signed one-sided free trade deals for the newspaper headlines, introducing competition to those domestic producers for no equivalent gain for exp…
> also deciding to escalate hostilities with China, the world second largest economy After what Russia has done to Ukraine, I sincerely hope more democracies put values before trade. UK is doing what everyone else should be doing, but don't have the courage to. Not something to be ashamed of.
Sigh. Trickle-down doesn't work. Lowering taxes on the wealthy helps the wealthy. It does not help the economy. Consumer spending is not increased, so the lost tax income by lowering taxes is not earned back through a larger economy to tax. The predictable result is more income inequality, which already is higher than it ever has been since the second world war.
I don't think wealthy are paying much taxes, percentage-wise (significant in dollar value though). There are simply too many tax minimization instruments that they have at their disposal. It's the middle class that is carrying the brunt of taxation. So when they say "tax the rich", what they really mean is "tax the middle class and small business owners". Eventually, you would run out of "other people's money" and yo…
https://commonslibrary.parliament.uk/research-briefings/cbp-...
The top 1% of earners pay roughly 30% of all income tax. The top 10% pay roughly 50% of all income tax. Meanwhile, the bottom 50% pay roughly 10% of income tax.
That leaves to 50-90th percentile, who you might call "middle class" (although it's debatable whether someone in the 80-90 range is truly middle class) who pay approximately 30% of all income tax. So the whole middle class only pays as much tax in total as the 90-99 range, although their total of pre-tax income is double.
[1] https://www.businessinsider.com/most-millionaires-dont-think...
Earlier quoted context omitted.
Democracies never put values before trade - UK is at this very moment selling arms to Saudi Arabia, who are currently prosecuting a genocidal war against Yemen. China has been remarkably uninvolved in military conflict for the past 50 years, unlike many democracies
I can think of a large democracy that fairly recently started two wars for bullshit reasons and fucked up two countries that, admittedly, were already well fucked up. But probably a large number of people died that wouldn't have died otherwise.
Has there really been lack of capital for investments in recent years? Shouldn't all of the western economies be in excellent shape with all possible investments avenues done now? As isn't entire point of trickle down increase availability of capital?
In Britain alone the Government has borrowed half a trillion pounds (roughly 25% of GDP) in 2020-21. Most of that went into the hands of normal people via furlough (paying people 75% of salary to stay at home during Covid), support for the self-employed and loans (up to £50k) for small businesses. It would be fascinating to see a study into where this money ended up. As you say, it should have found its way into the…
Sigh. Trickle-down doesn't work. Lowering taxes on the wealthy helps the wealthy. It does not help the economy. Consumer spending is not increased, so the lost tax income by lowering taxes is not earned back through a larger economy to tax. The predictable result is more income inequality, which already is higher than it ever has been since the second world war.
Increased taxes do a number on those and make it easier for non finance parasites to compete for assets.
Has there really been lack of capital for investments in recent years? Shouldn't all of the western economies be in excellent shape with all possible investments avenues done now? As isn't entire point of trickle down increase availability of capital?
In Britain alone the Government has borrowed half a trillion pounds (roughly 25% of GDP) in 2020-21. Most of that went into the hands of normal people via furlough (paying people 75% of salary to stay at home during Covid), support for the self-employed and loans (up to £50k) for small businesses. It would be fascinating to see a study into where this money ended up. As you say, it should have found its way into the…
Those people who received furlough got it instead of their salary, and they weren't working while they received it (not counting fraud and edge cases). The economic value of their work temporarily disappeared, and that value probably exceeds the amount paid in furlough by some reasonable measures.
Among the self-employed, transitioning-between-jobs-at-the-time and edge-case people, a lot didn't get anything. I didn't receive a penny via furlough or similar payments, nor did I qualify for any kind of loan. The one client I had who owed me also decided to stop paying everyone in April 2020, telling all suppliers "we have no money to pay anyone", and that was that. They owed me for a long period of services provided and not yet paid, so I was counting on it. In normal circumstances a supplier might petition for their client's bankruptcy, but special rules were in place to stop that at the time. I still haven't been paid by them though.
So I couldn't afford my rent during most of 2020, or food. Luckily my landlord let me defer rent for 6 months (I still had to pay it later), and local volunteers provided food for a while. It was a rough time but unusually communitarian. The last part of the year ended with some surprisingly good contracts though, and 2021 was my best year financially ever. Which isn't as good as it sounds, because there was a big hole to fill, and now I'm back to where I was in 2019, roughly. Except with more skills :-)
That's a lot of lost economic value from people not doing any work or not being paid, and a lot of people who were left with a big financial hole, which later acts as a drain on the rest of the economy even when they start earning again, because what they earn later goes to filling the hole more than on new goods and services. I'm glad all the people who received furlough and loans were helped; it could have been much worse.
As for where the money went, in 2021 the reports were that a large share of the population gained savings or paid off their long-term credit, due to working at home in well paid jobs while having not much to spend it on. That suggests a lot of people likely still have a large amount of savings, and a lot of people likely have paid off more of their home mortgage than they would if the pandemic had not happened. Those two factors might turn into spending on the rest of the economy during more confident times, but even people with savings are worried about the future, so would rather hold onto it for now.