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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

#91

Post by otikik »

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…

The answer is always the same: a gradual tax on his income. So the first, say, 40k he pays is taxed at, say 10%. The next 60k at 15%. And so on. Don't concentrate on the numbers, concentrate on the concept: As brackets go up, the higher the taxed percentage. It never comes to 100% but it should be quite high after the first million.

Why I think this is fair?

Because it is no longer possible for people to "put themselves over" University by "college working". The group that Wealthy Person X belongs to has managed to extract a lot of wealth from the society, making it worse for everyone else. It's time to give back.

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

#92

Post by standardUser »

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.

Sure, having a few million bucks kicking around lets a small class of people contribute to the commercial development of some types of products.

Having a few billion dollars kicking around does not yield such benefits.

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

#94

Post by beloch »

Naive question:

When talking about taxes on the wealthy, the metrics people seem to really care about are employment rates and wages for people the wealthy employ.

So why not increase tax rates on the wealthy significantly, close loopholes, and then introduce big tax credits for every head employed and every dollar spent on employee salaries? i.e. Instead of slashing taxes so the rich have more money and then hoping that they will spend it on their employees, incentivize the desired behaviour directly.

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

#95

Post by dlp211 »

umvi wrote: post #76
dlp211 wrote: post #65

Earlier quoted context omitted.

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…

> there is no reason that the top marginal tax rate shouldn't be 90% But why should the government get to essentially steal 90% of wealth generated by a person above an arbitrary threshold? Because "there's no reason someone needs that much money"? I would argue that if you do this, you'll get less things like SpaceX and Tesla, which required a person with much more than 25MM to decide to create them.

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. These levels of tax rates don't in any way make that person worst off because everyone making that amount of money are subject to the same tax levels.

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

#96

Post by standardUser »

zthrowaway wrote: post #38

This will not be a popular thing to point out, but trickle down theory was never an actual theory. As far as I understand nobody actually advocates for this theory on a serious level. Plenty of contemporary economists such as Joseph Stiglitz, Alan Blinder, and Paul Krugman denounce this as a non-existant theory.

Isn't "trickle down" just a politicized label for supply-side economics?

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

#97

Post by UnpossibleJim »

AnimalMuppet wrote: post #14
dragonwriter wrote: post #11

Earlier quoted context omitted.

> Wouldn't trickle up economics work better? It depends on what you mean by “work better”. If your goal is to further enrich the capitalist class while building a quasi-religious doctrine that results in failure of the working classes to see progress resulting in popular pressure to even further enrich the capitalist class, no. If you have a different goal than the people promoting trickle-down theory, then, sure, ma…

You could think of UBI as "trickle up". The money starts at the bottom, not at the top. Mind you, I'm not necessarily sold on UBI. But I think this is an interesting way to look at it.

I watched Andrew Yang's proposal on UBI with great interest. Not necessarily for the UBI section on it, which I wasn't sold on at the time, though I have mostly come around on, but more for how he intended to pay for it.

While cutting social security and welfare by the same amount that the UBI that goes out, there would be an even amount there. I didn't realize how much that would cut down the cost off the top. He went into more specifics and I don't want to butcher it, so I'll link it. As he is no longer trying for any government position, I don't feel like I'm stumping for anyone:

https://www.yang2020.com/what-is-freedom-dividend-faq/

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

#98

Post by jacques_chester »

0x6862 wrote: post #90
pmoriarty wrote: post #25

Earlier quoted context omitted.

"It obviously doesn't work because the wealthy don't have to invest into domestic jobs. They can also use their money abroad." They can also just hoard most of it and pass it on to their descendants -- this is how you get dynasties. Tax havens and creatively constructed foundations are another way of making sure the government never gets ahold of their money.

Sure the rich hold some gold & BTC but most of their wealth is in investments (stocks, bonds, infrastructure etc.) to generate positive real returns - given inflation. This is far from hoarding

What the paper shows is that the increment in potential investments by the wealthiest don't seem to improve growth, but does worsen inequality.

The individually wealthy are not required for the aggregation and allocation of capital. Governments and financial systems are typically more capable at achieving this requirement in a welfare-maximising manner.

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

#99

Post by jonathankoren »

zthrowaway wrote: post #38

This will not be a popular thing to point out, but trickle down theory was never an actual theory. As far as I understand nobody actually advocates for this theory on a serious level. Plenty of contemporary economists such as Joseph Stiglitz, Alan Blinder, and Paul Krugman denounce this as a non-existant theory.

You're looking in the wrong place. It's proponents call it "supply side economics". It is a discredited theory, but it is still popular idea among many serious people in public policy.

If you want want a name of one (in)famous proponent, I'll give Arthur Laffer, inventor of the Laffer Curve. The curve says that as tax rates fall, government income goes up due to economic growth. You may have heard of this as, "Tax cuts pay for themselves." He famously invented the curve while drawing on a napkin. The napkin is now housed at the Smithsonian.

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

#100

Post by inthewoods »

exabrial wrote: post #55

That's because the problem is Taxation, not tax cuts, not the rich. If the USA Government was on Charity Navigator, it'd have a 0 star rating for overhead and delivery. I'm 100% for gutting taxes until we measure results with what we spend. Every business measures their spend for efficiency and every financially savvy person also calculates the rate of return. Why we willy-nilly throw gazillions of dollars at the gov…

I broadly agree with you but measuring the results of some initiatives strikes me as very challenging. Two examples jump to mind.

I remember reading about early childhood education investments. When the program was completed they saw no measurable results so the program was cut. Researchers picked up the study years later and did follow-up and found dramatic improvements in the children that were a part of the program. Now if the measurement endpoint was set to the 2nd point, the program would have been viewed as a success, but we have, as a country, an incredibly short term view. It would be extremely challenging to find anyone in the US government that would have invested in the program if they were told the results wouldn't be known for 40 years (positive or negative).

The second example is military spending. This spend is done to keep us "safe" (others would argue it has other purposes e.g. to fund the military industrial complex or as a tool for stimulus). But if we take it at face value that military spend is supposed to keep us safe, what would be the measurable goal?

I get the need for goals, but I think you need to understand the limitations. And I think we also need to focus on long term planning in this country.

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