Fairness vs Economic Logic

Discussion in 'Politics' started by Wiseacre, Sep 23, 2011.

  1. Wiseacre
    Offline

    Wiseacre Retired USAF Chief Supporting Member

    Joined:
    Apr 8, 2011
    Messages:
    6,025
    Thanks Received:
    1,192
    Trophy Points:
    48
    Location:
    San Antonio, TX
    Ratings:
    +1,194
    Below is a snippet from an opinion by Charles Krauthammer in today's WAPO. Clearly, Obama wants to raise the tax rate on capital gains and dividends, perhaps only on amounts over a certain ceiling. The details are a bit murky, as is usually the case with anything Obama says, but the overall question remains: at a time like this when the economy is definitely faltering, should we raise the tax rate on investments, when most economists agree that such an action could be detrimental to economc growth? Even Obama himself has said so, yet he is now proposing exactly that. How can anybody look at this and think it's anything else but a purely political tactic to improve his standing with his base rather than making a serious attempt to offer something constructive?


    snippet:
    In a 2008 debate, Charlie Gibson asked Barack Obama about his support for raising capital gains taxes, given the historical record of government losing net revenue as a result. Obama persevered: “Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.”
    A most revealing window into our president’s political core: To impose a tax that actually impoverishes our communal bank account (the U.S. Treasury) is ridiculous. It is nothing but punitive. It benefits no one — not the rich, not the poor, not the government. For Obama, however, it brings fairness, which is priceless.
    Now that he’s president, Obama has actually gone and done it. He’s just proposed a $1.5 trillion tsunami of tax hikes featuring a “Buffett rule” that, although as yet deliberately still fuzzy, clearly includes raising capital gains taxes.
    He also insists again upon raising marginal rates on “millionaire” couples making $250,000 or more. But roughly half the income of small businesses (i.e., those filing individual returns) would be hit by this tax increase. Therefore, if we are to believe Obama’s own logic that his proposed business tax credits would increase hiring, then surely this tax hike will reduce small-business hiring.
    But what are jobs when fairness is at stake? Fairness trumps growth. Fairness trumps revenue. Fairness trumps economic logic.

    Return of the real Obama - The Washington Post
     
  2. Grampa Murked U
    Offline

    Grampa Murked U Diamond Member

    Joined:
    Jun 13, 2011
    Messages:
    47,682
    Thanks Received:
    8,796
    Trophy Points:
    2,055
    Location:
    Kansas City
    Ratings:
    +23,927
    [ame=http://www.youtube.com/watch?v=WpSDBu35K-8&feature=player_detailpage]Obama: Raise Taxes, Capital Gains - "For Purposes of Fairness" - YouTube[/ame]

    [ame=http://www.youtube.com/watch?v=8glbYVk3WSo&feature=player_detailpage]Obama: "The LAST THING We Want to Do Is Raise Taxes During a Recession" - YouTube[/ame]


    Will the real Obama please stand up.................................
     
  3. Oldstyle
    Offline

    Oldstyle Gold Member

    Joined:
    Jul 19, 2011
    Messages:
    20,624
    Thanks Received:
    3,070
    Trophy Points:
    280
    Location:
    Florida
    Ratings:
    +7,315
    As usual, Krauthammer has nailed it. Obama does believe in "leveling". What he constantly refers to as "fairness" is in reality just a call for drastic income redistribution. And if you think Obama was bad in his first term? Just think about what he'll try to do if he gets a second.
     
  4. Dragon
    Offline

    Dragon Senior Member

    Joined:
    Sep 16, 2011
    Messages:
    5,481
    Thanks Received:
    578
    Trophy Points:
    48
    Ratings:
    +579
    There is no conflict between fairness and economic logic. The two go hand in hand. There is, however, a conflict between fairness and right-wing economic ILlogic. That much I can see.

    The period of highest economic performance in the history of the U.S. also saw the highest top marginal income tax rates and the strongest support for labor unions in government policy. That's because investment is NOT driven by how much money the rich have lying around to invest. It's driven by how much demand is for the products and services the investment produces. And that, in turn, is driven by how much money the average Joe has in his pocket, not by how much money Mr. Moneybags has.

    So fairness -- narrowing income gaps, keeping wages high, making sure most people have good opportunities to make good money by doing ordinary work -- is also good economic sense. And the opposite puts us in the kind of bind we're in now.
     
    • Thank You! Thank You! x 2
  5. signelect
    Offline

    signelect BANNED

    Joined:
    Dec 10, 2010
    Messages:
    1,863
    Thanks Received:
    216
    Trophy Points:
    0
    Location:
    Houston, TX
    Ratings:
    +216
    If Mr. Moneybags, as you call him does not invest in making what ever is in demand there will be no job and I don't care how bad you want it, it will not be produced. I can not name one job the labor unions have ever created that was needed. They created a lot of crony job but they were totally unnecessary to the final success of the business. Life is not fair, if you are lazy and won't work or in a lot of cases, even show up then you are not going to have the things that people who roll out of bed early in the morning and put in a full day at their job. Get used to it.
     
  6. Wiseacre
    Offline

    Wiseacre Retired USAF Chief Supporting Member

    Joined:
    Apr 8, 2011
    Messages:
    6,025
    Thanks Received:
    1,192
    Trophy Points:
    48
    Location:
    San Antonio, TX
    Ratings:
    +1,194

    Do you realize that the world we live in now is totally different from the 1950s when we had marginal tax rates of 91%? It's a global economy now, back then we were the only game in town. And we didn't have the massive debt, the American spirit was quite different, it was a very different world then. So, to suggest we could return to those high tax rates under present day circumstances is very unrealistic. If you raise tax rates on investments today, you will see a lot of money going elsewhere, and even less demand than what we've got now.

    Same argument for returning to the Clinton era tax rates, what worked then will not work now.
     
  7. Kuros
    Offline

    Kuros BANNED

    Joined:
    Jun 25, 2011
    Messages:
    550
    Thanks Received:
    64
    Trophy Points:
    0
    Location:
    Louisville
    Ratings:
    +64
    International trade is 20 times today what it was then. The flow of capital is perhaps even more flexible and free than the stream of trade.

    History affirms the free trading, reasonable spending, light safety net Clinton years, but not the tax-cutting, big war and spending Bush years.
     
    • Thank You! Thank You! x 1
  8. boedicca
    Offline

    boedicca Uppity Water Nymph Supporting Member

    Joined:
    Feb 12, 2007
    Messages:
    41,834
    Thanks Received:
    12,786
    Trophy Points:
    2,250
    Location:
    The Land of Funk
    Ratings:
    +22,858


    All you are doing is proving your economic illiteracy and blind ideology.

    The ONLY valid definition of Fairness is one of Equal Treatment Under The Law.

    The Left has twisted this into equality of situation and outcomes, leading to a degraded economy.
     
  9. Listening
    Offline

    Listening Gold Member

    Joined:
    Aug 27, 2011
    Messages:
    14,989
    Thanks Received:
    1,641
    Trophy Points:
    260
    Ratings:
    +2,044
    I don't believe that economics has a "fairness" metric associated with it. To you second point, I look forward to your argument.

    Is there evidence to support this proposed correlation. Timing does not mean anything.

    To try and separate the two seems a little silly.

    If there is a demand for a product, then Mr. Moneybads is going to invest in a profitable scheme to satisfy that demand. Which goes along with your statement that it starts with demand.

    At the same time, there are plenty of examples of what the Japanes call "latent" demand being satisfied by companies who introduce new products the public had not even thought of.

    In other words, it works both ways.

    But the only way that a profitable firm works is if there are people with enough money to buy products. So, it really isn't in the interest of corporations to see people become poor.

    What kind of a bind are we in now ?

    Narrowing an income gap ? Please provide me with a numerical example of what you mean. I have worked some of this on spreadsheets and don't see how this kind of fairness does anything for us.

    Now, if you are talking about weath, that is a different story. But you are focused on wages, so I'll ask you to stay with that.
     
  10. Dragon
    Offline

    Dragon Senior Member

    Joined:
    Sep 16, 2011
    Messages:
    5,481
    Thanks Received:
    578
    Trophy Points:
    48
    Ratings:
    +579
    lf there is not demand for the products to be produced, then Mr. Moneybags will not invest and there will be no job.

    The stopping point is demand, which is driven not by how much Mr. Moneybags has, but how much the average person has.
     

Share This Page