Tax the Rich?

Discussion in 'Economy' started by Wry Catcher, Dec 11, 2012.

  1. Wry Catcher
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    Wry Catcher Platinum Member

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    No! They need it to grow the economy.

    Or, maybe not:

    Winners and

    Looks like one more in a long line of bullshit promulgated by the GOP and their surrogates in the echo chamber has been exposed by the greed of the super rich.
     
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  2. Wry Catcher
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    Wry Catcher Platinum Member

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    Has anyone added up the hundreds of million of dollars these scofflaws have manipulated into their own pockets? Too unsure to invest in America are they? That talking point is one more pile of GOP bullshit.
     
    Last edited: Dec 11, 2012
  3. Jimmy_Jam
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    Jimmy_Jam Senior Member

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    You mean the rich don't pay taxes?
     
  4. oldfart
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    oldfart Older than dirt

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    With real interest rates pushing the zero bound and major corporations and wealthy individuals sitting on trillions of excess cash, traditional economic theory would suggest that there is a shortage of low-risk, adequate return investments. At least that is what the capital markets are saying. In such an environment, the amount of expected increase in physical investment and employment due to increasing the the amount of monetary capital in the hands of business is precisely zero.

    Until something increases demand, there will be no economic growth; we can be stuck at 1% for decades. Our range of possible policy choices are devalue the dollar (increase exports), promote inflation (lower real interest rates below zero to promote investment), or increase consumer or government spending. The last two imply borrowing by the public or government. Unless of course you believe in confidence fairies and bond vigilantes.
     
  5. Jimmy_Jam
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    Jimmy_Jam Senior Member

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    Valid. Anybody looking into investing their money safely will quickly run into this miserable reality. Who the hell wants to bother investing in a less than 1% gain, which is what is typical of low-risk investments these days.

    I was reading in a couple of places that dividend-yielding stock is when more investors are shifting their investment dollar, mostly in response to the investment market. If this trend continues, companies will be forced to provide dividends as a means of attracting investors, money which would normally be used for expansion. So, while this may provide some temporary reprieve to some investors, it ultimately hurts economic growth.
     
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  6. Skull Pilot
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    Skull Pilot Platinum Member

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    We all know throwing money hand over fist into the black hole that is government is much better than letting people keep their own money.
     
  7. S.J.
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    S.J. Gold Member

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    A tax increase on the rich can't possibly raise anywhere near the amount of money needed to balance the budget, or even make a significant dent in the deficit (let alone the debt). The only thing it's likely to do is increase unemployment, and subsequently reduce revenue.
     
  8. oldfart
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    oldfart Older than dirt

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    I'm sorry, but I don't see that conclusion. Could you walk me through how a tax increase on the wealthy will cause unemployment? Be careful now, if you argue that they will spend less, you just admitted that government stimulus works. If you argue that tax increases will reduce investment, you will have to explain the mechanism.
     
  9. S.J.
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    S.J. Gold Member

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    Easy question. Let's say I have 100 employees and I pay them each $2,000 a month salary. I get a tax increase that amounts to $120,000 a year. I can take that loss, or I can fire 5 employees and my profits stay the same. When I fire them, they receive no check, and they pay no taxes on that income they're no longer receiving. 5 people out of work and paying no income tax. Not only that, but they will go on unemployment and stay on unemployment until it runs out (they always do), and if we're lucky, they won't go on welfare and food stamps.
     
  10. oldfart
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    oldfart Older than dirt

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    I would say that you are either a remarkably generous employer or a remarkably inefficient one to have five employees who are apparently completely unnecessary, if you can lose them and your profit stays the same!

    In my world employers only hire workers whose marginal addition to net revenue exceeds the cost of their labor. When I have an increase in my personal income taxes, my unit labor costs are not affected, so I do not change employment.
     

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