Discussion in 'Economy' started by Annie, Oct 11, 2010.
Explaining the why and wherefore of raising or lowering taxes.
The New York Times > Log In
People make decisions on the margin. you move the margin, you change the decisions they make.
Lower income people have no real choice in the matter. They have to produce to the limit of their time, or they lose.
At the level of income that the Tax cuts are at, increases in taxes result in less economic activity, which means those who need the services do without, and the government looses income.
Exactly. Right now those with money just don't know where 'all this' is going, so gold and silver keep rising. When the investor class decides the economy has bottomed, those commodities will begin to fall, right now? Nope, they don't think bottom's hit yet.
Same with this class warfare. The poor and middle class, they'll keep working and paying, no choice. The high earners? They have choices. Oftentimes like doctors, they work many, many hours. They could choose to work less and fall below to the other side of no man's land.
but none of those people couldve become wealthy without society and government protecting their wealth. if there was no government to create law and order, there would be no security, and anyone could have come around to seize their fortune. taxes are essentially a citizen's fee to be a citizen and enjoy (theoretically) protection, justice, public roads, public parks, public everything. that is why wealthy people dont deserve tax cuts. but hell, wouldnt you rather live in squallor in a shack paying no taxes than live in a mansion paying alot of taxes, wondering if perhaps you shouldnt buy another ferrari?
Yep, but the guy that can remain in his mansion and take time to enjoy it and family becomes more likely when the opportunities to actually make more decline. Read the article, it's something that one wishes Obama and his economic team would read. Just once, not making the wrong choices.
It's kind of a give and take: The government needs the money generated by taxes to provide that protection and environment that is friendly to individuals becoming wealthy. As for your postulation that anyone could seize their fortune, where there's a power vacuum, there is always someone to take that place. The rich in 3rd world countries hire private armies to protect them. No one "seizes" their fortune.
So is this Mankiw's way of announcing he's giving up his column at the NYT because the pay for that extracurricular won't be worth it anymore?
If they work less and there is a demand for their work, someone else, some younger whipper snapper, will come in and fill the void.
In fairness, he's relying pretty heavily on his being dead in his example. Reduced incentive to earn because, you know, someday he'll be dead.
Separate names with a comma.