Taxing those who make money

[Gatekeeper]

A washing machine on itself is also a very economically good product: it increases effeciency (people who buy washing machines have more time to do other things: f.e. working), people with washing machines will be able to work longer (because they spend less time washing clothes) => working longer at a factory will create more products for the company that produce & sell them and the worker will also earn more money to spend (possibly on another washing machine ). Conclusion this investment does not generate money directly, but it does provide you with the means to create make that extra money: time. And as an economist you can say "time = money" (at least if you re a guy who likes to work for his money).

So your contention is that consumers purchase labor saving devices like washing machines so that they can WORK more? In the world I live in end consumers purchase labor saving devices so that they have more leisure time and thus a higher quality of life.

WoW, if so, you've just come up with a fallacious argument that belongs right up there with the broken window fallacy in the annals of inaccurate assumptions about economics.

Let's try a little hypothetical experiment shall we?

You try to make a million dollars by spending and I'll try to make a million dollars by investing and we'll:

*see which one of us gets there first
*see which one of us ends up creating more net economic output

K?

Srry, you misunderstood me: in this case I used "working" as an example (f.e. = for example), I didn't say that people would only work in the time they saved by using this washing machine. But it is true that the combination of all labor saving devices has allowed us to work more, in the past it was impossible for a couple to both have jobs: now this has changed because of labor saving devices! It has effectively doubled the workforce of almost all western countries!

And another thing you overlooked: spending = investing

there is no difference: wether you say that you "spend" your money on stocks or you "spend" it on buying a washing maching OR you say you "invest" your money in stocks or "invest" it in a washing machine is saying the same thing.


Again you make the mistake of only viewing at an individual case (a company) and then generalising it for the whole economy. If there is one thing we should ve learned from the recent economical crisis then it is that an economy depends on consumers! no consumers = no companies, yet you refuse to accept reality ...

housing crisis = consumers went broke (because of the policies of certain companies) -> result: companies that rely on them crash down

That cartoon for the Nobel Prize didn't have the correct picture when opened by BHO.
Nobel Prize credibility is near ZERO anyway, after this fiasco.
It should have been a picture of a giant rectal orifice.

 

[Munin]

I think this whole modern market has confused many people, maybe a very very simple example about "the consumer" and "the supplier" should solve this issue once and for all.

Lets go back to a time when things were not so complicated: back to the time of the cavemen. In this time the cavemen himself was both a consumer and a supplier, what is the motivation for this cavemen to work? Because he has hungry? yes and this implicates that he is a consumer (demand for food is created by his hunger & eating food = consumption). This is an incentive for him to go hunting and become a "supplier", notice that hunting is only the means to an end. So what drives this man to prosper? His motivation to hunt: "consumption".


In general we can say that almost any economy is driven by consumption, because consumption is the goal. Without consumers there is no need for production, why produce something that no one needs?


Imao working/producing is a means to an end, and that goal is "consumption". For those who haven't noticed it: we are a consumption society, we make products for consumtion (not the other way around as some seem to think). Therefor it is ignorant to deny the fact that the economy is driven by consumption.
Why would we farm if people were not hungry? Why would we produce televisions if people didn't watch TV? Why would we make weapons if people didn't want them?

Face it: we create something because we think we need it, the "we think we need it" part of this sentence makes you a consumer (someone that demands something).

 

[The Rabbi]

And another thing you overlooked: spending = investing

there is no difference: wether you say that you "spend" your money on stocks or you "spend" it on buying a washing maching OR you say you "invest" your money in stocks or "invest" it in a washing machine is saying the same thing.

You're kidding, right? People "invest" in a suit of clothes? People invest in new car?
I have news for you: That isn't investing.
When a company buys a new piece of equipment they do so because the new equipment will lower their cost per unit, allowing them to be more profitable. That is investment.
When consumers buy a new sofa that is not doing anything other than getting consumed. No wealth is created that way.
But don't feel bad: The Obama Administration is obviously making the same mistake.

 

[MIPS]

A washing machine on itself is also a very economically good product: it increases effeciency (people who buy washing machines have more time to do other things: f.e. working), people with washing machines will be able to work longer (because they spend less time washing clothes) => working longer at a factory will create more products for the company that produce & sell them and the worker will also earn more money to spend (possibly on another washing machine ). Conclusion this investment does not generate money directly, but it does provide you with the means to create make that extra money: time. And as an economist you can say "time = money" (at least if you re a guy who likes to work for his money).

So your contention is that consumers purchase labor saving devices like washing machines so that they can WORK more? In the world I live in end consumers purchase labor saving devices so that they have more leisure time and thus a higher quality of life.

WoW, if so, you've just come up with a fallacious argument that belongs right up there with the broken window fallacy in the annals of inaccurate assumptions about economics.

Let's try a little hypothetical experiment shall we?

You try to make a million dollars by spending and I'll try to make a million dollars by investing and we'll:

*see which one of us gets there first
*see which one of us ends up creating more net economic output

K?

Srry, you misunderstood me: in this case I used "working" as an example (f.e. = for example), I didn't say that people would only work in the time they saved by using this washing machine. But it is true that the combination of all labor saving devices has allowed us to work more, in the past it was impossible for a couple to both have jobs: now this has changed because of labor saving devices! It has effectively doubled the workforce of almost all western countries!

Where do you derive the assumption that labor saving devices "have allowed for a couple to both have jobs?", this overlooks all the other shifts in society that have facilitated such opportunities like the move from a primarily agrarian society to an industrialized/metropolitan one, the change in attitudes with respect to women in the workforce, the growth of a robust services sector of the economy and a greater availability of higher education for women, just to name a few.

Your contention that spending on consumer labor saving devices increases economic output in any significant way because "it allows people to work more" would get you laughed out of any serious discussion with credible economists and is, as I already said, a fallacy that belongs right up there with the broken window fallacy.

And another thing you overlooked: spending = investing

No spending and investing are NOT the same thing, I don't spend my money on investment vehicles, I transform it from one asset class to another asset class in anticipation of gaining a return that makes it worthwhile for the risk I take when I do it. Investment is geared toward increasing economic OUTPUT while "spending" in the context of this discussion increases economic CONSUMPTION.

there is no difference: wether you say that you "spend" your money on stocks or you "spend" it on buying a washing maching OR you say you "invest" your money in stocks or "invest" it in a washing machine is saying the same thing.

I don't buy stocks to consume them, I buy stocks to invest in companies to increase their output in hopes of seeing a return on my investment (i.e. a slice of that increased output), there's a big difference.

Again you make the mistake of only viewing at an individual case (a company) and then generalising it for the whole economy. If there is one thing we should ve learned from the recent economical crisis then it is that an economy depends on consumers! no consumers = no companies, yet you refuse to accept reality ...

Apparently you do not understand a good analogy when you see one, either that or are willfully choosing to ignore the implications of it. I cannot make it any simpler for you than what I already wrote , so either you don't understand or refuse to try, in either case I cannot help you.

housing crisis = consumers went broke (because of the policies of certain companies) -> result: companies that rely on them crash down

The root cause of the housing crisis had little to do with the "policies of certain companies" and much more to do with a global glut of free capital seeking safe fixed income investments and being steered into mortgage backed securities because of loose monetary policy (low treasury returns), Fannie and Freddie lowering lending standards and a system (put in place by the actions of the Federal Government) that allowed mortgage lenders to sell off risk in obscure chunks in the form of mortgage backed securities and derivatives, while at the same time having a monetary policy that drove huge demand into those investment vehicles.

 

[Soggy in NOLA]

Confiscatory tax policies are the mark of every great society!!!

Earn a dollar, keep forty cents!!!! PERFECT!!!!!!!!!!!!!

Earn nothing..... get a dollar TAX FREE!!!!! YIPPEE!!!!!!!!!

 

[Soggy in NOLA]

housing crisis = consumers went broke (because of the policies of certain companies) -> result: companies that rely on them crash down

You probably believe this too....

 

[uscitizen]

Confiscatory tax policies are the mark of every great society!!!

Earn a dollar, keep forty cents!!!! PERFECT!!!!!!!!!!!!!

Earn nothing..... get a dollar TAX FREE!!!!! YIPPEE!!!!!!!!!

Yep so we can give that .60 to those who build homes below sea level.

 

[Munin]

And another thing you overlooked: spending = investing

there is no difference: wether you say that you "spend" your money on stocks or you "spend" it on buying a washing maching OR you say you "invest" your money in stocks or "invest" it in a washing machine is saying the same thing.

You're kidding, right? People "invest" in a suit of clothes? People invest in new car?
I have news for you: That isn't investing.
When a company buys a new piece of equipment they do so because the new equipment will lower their cost per unit, allowing them to be more profitable. That is investment.
When consumers buy a new sofa that is not doing anything other than getting consumed. No wealth is created that way.
But don't feel bad: The Obama Administration is obviously making the same mistake.

No, I m not kidding. Yes investment is often used in terms of gaining money after you buy something. But if you look at it from up close you will notice that everything you buy is an investment, it will have a certain value in money and can possibly be profitable.

Anything you spend money on has a certain value, this makes it an investment no matter how low the value. If you re able to buy something with a low value and get more out of it than you payed for than this is a good investment.

An example: You buy a car for 20 000 $ and you see that you can rent the same car for 5000 $ a year (assuming that the renting prices stay the same: so I don't make this example to complicated), you will have done a good investment if you re able to drive the car for 7 years ( 7 x 5000 $ = 35 000 $ and 35 000 $ > 20 000 $ . You may have saved 15 000 $).

 

[Nosmo King]

Obviously yu cant tax people who dont make money. They dont have it.
But your point is good. Taxes set up incentives. And if your incentives punish productive people then they will stop being productive.
This isn't terribly complicated. But you would think the current administration would have realized this by now.

And yet production continues to rise, wages continue to fall. Those who get the absolute most in capital complain, yet they neither sow nor toil. Thank God for big multi-million dollar bonuses!

 

[Soggy in NOLA]

Confiscatory tax policies are the mark of every great society!!!

Earn a dollar, keep forty cents!!!! PERFECT!!!!!!!!!!!!!

Earn nothing..... get a dollar TAX FREE!!!!! YIPPEE!!!!!!!!!

Yep so we can give that .60 to those who build homes below sea level.

Or build homes on a fault line or the side of a mud hill or in tornado ally....

Dumbfuck.

 

[uscitizen]

Confiscatory tax policies are the mark of every great society!!!

Earn a dollar, keep forty cents!!!! PERFECT!!!!!!!!!!!!!

Earn nothing..... get a dollar TAX FREE!!!!! YIPPEE!!!!!!!!!

Yep so we can give that .60 to those who build homes below sea level.

Or build homes on a fault line or the side of a mud hill or in tornado ally....

Dumbfuck.

good you are catching on.

Is it time for annual federal money for california for mudslides or brush fires yet?

 

[MIPS]

And another thing you overlooked: spending = investing

there is no difference: wether you say that you "spend" your money on stocks or you "spend" it on buying a washing maching OR you say you "invest" your money in stocks or "invest" it in a washing machine is saying the same thing.

You're kidding, right? People "invest" in a suit of clothes? People invest in new car?
I have news for you: That isn't investing.
When a company buys a new piece of equipment they do so because the new equipment will lower their cost per unit, allowing them to be more profitable. That is investment.
When consumers buy a new sofa that is not doing anything other than getting consumed. No wealth is created that way.
But don't feel bad: The Obama Administration is obviously making the same mistake.

No, I m not kidding. Yes investment is often used in terms of gaining money after you buy something. But if you look at it from up close you will notice that everything you buy is an investment, it will have a certain value in money and can possibly be profitable.

Anything you spend money on has a certain value, this makes it an investment no matter how low the value. If you re able to buy something with a low value and get more out of it than you payed for than this is a good investment.

You substitute arbitrage for investment in a way which is clearly not applicable in the context of the current discussion because it has been made clear by the poster you're responding to (as well as others) that he's talking about investment in terms of pursuing a net increase of the output of goods and services via capital formation not investment in terms of increasing personal wealth.

 

[beowolfe]

Who benefits the most from taxing those who work for their money? How will Americans work hard to produce wealth if they are going to loss nearly half their money every April 15th? Moreover, why?

Considering that you can't tax those who have no money, I'd say everyone benefits from taxing those who do.

 

[Munin]

housing crisis = consumers went broke (because of the policies of certain companies) -> result: companies that rely on them crash down

The root cause of the housing crisis had little to do with the "policies of certain companies" and much more to do with a global glut of free capital seeking safe fixed income investments and being steered into mortgage backed securities because of loose monetary policy (low treasury returns), Fannie and Freddie lowering lending standards and a system (put in place by the actions of the Federal Government) that allowed mortgage lenders to sell off risk in obscure chunks in the form of mortgage backed securities and derivatives, while at the same time having a monetary policy that drove huge demand into those investment vehicles.

No, it re "CDOs or collateralized debt obligations" that caused the housing crisis combined with other factors (wich include gov policies: the deregulation allowed the companies to make those products). And I would describe the creation, buying and selling of these kind of products by companies as a company policy. The rating agencies also failed (they gave the CDO's AAA ratings).

 

[MIPS]

Who benefits the most from taxing those who work for their money? How will Americans work hard to produce wealth if they are going to loss nearly half their money every April 15th? Moreover, why?

Considering that you can't tax those who have no money, I'd say everyone benefits from taxing those who do.

Well except for "those who do."

Not to mention that having money is not a precondition for being taxed, you can be broke and still be obligated to pay applicable property taxes or face forfeiture of your property, right?

 

[beowolfe]

Who benefits the most from taxing those who work for their money? How will Americans work hard to produce wealth if they are going to loss nearly half their money every April 15th? Moreover, why?

Considering that you can't tax those who have no money, I'd say everyone benefits from taxing those who do.

Well except for "those who do."

Not to mention that having money is not a precondition for being taxed, you can be broke and still be obligated to pay applicable property taxes or face forfeiture of your property, right?

So, you think those who are taxed don't get any benefit from it. Interesting.

As for property taxes, you can avoid those easily.....don't buy property!!!

 

[MIPS]

housing crisis = consumers went broke (because of the policies of certain companies) -> result: companies that rely on them crash down

The root cause of the housing crisis had little to do with the "policies of certain companies" and much more to do with a global glut of free capital seeking safe fixed income investments and being steered into mortgage backed securities because of loose monetary policy (low treasury returns), Fannie and Freddie lowering lending standards and a system (put in place by the actions of the Federal Government) that allowed mortgage lenders to sell off risk in obscure chunks in the form of mortgage backed securities and derivatives, while at the same time having a monetary policy that drove huge demand into those investment vehicles.

No, it re "CDOs or collateralized debt obligations" that caused the housing crisis combinde with other factors (wich include gov policies: the deregulation allowed the companies to make those products). And I would describe the creation, buying and selling of these kind of products by companies as a company policy. The rating agencies also failed (they gave the CDO's AAA ratings).

Er... CDO's are mortgage backed security derivatives....... try reading what I wrote again since you are mistaking end results with root causes here. Perhaps you need to do some research into mortgage backed securities markets paying particular attention to where it started, who it was that created the entities that started it and how it evolved into the major player in the current crisis.

The "companies" you refer too neither created the MBS markets nor created the enormous demand that saw the collapse of the U.S. Housing market.

 

[MIPS]

Considering that you can't tax those who have no money, I'd say everyone benefits from taxing those who do.

Well except for "those who do."

Not to mention that having money is not a precondition for being taxed, you can be broke and still be obligated to pay applicable property taxes or face forfeiture of your property, right?

So, you think those who are taxed don't get any benefit from it. Interesting.

The net benefit is of less value than the current cost to most, equal to some and of greater value to a few, all in all the current state of affairs is a raw deal to the majority.

As for property taxes, you can avoid those easily.....don't buy property!!!

Yeah I suppose that's one solution, not very practical and beside the point, but at least you tried.

 

[Munin]

You're kidding, right? People "invest" in a suit of clothes? People invest in new car?
I have news for you: That isn't investing.
When a company buys a new piece of equipment they do so because the new equipment will lower their cost per unit, allowing them to be more profitable. That is investment.
When consumers buy a new sofa that is not doing anything other than getting consumed. No wealth is created that way.
But don't feel bad: The Obama Administration is obviously making the same mistake.

No, I m not kidding. Yes investment is often used in terms of gaining money after you buy something. But if you look at it from up close you will notice that everything you buy is an investment, it will have a certain value in money and can possibly be profitable.

Anything you spend money on has a certain value, this makes it an investment no matter how low the value. If you re able to buy something with a low value and get more out of it than you payed for than this is a good investment.

You substitute arbitrage for investment in a way which is clearly not applicable in the context of the current discussion because it has been made clear by the poster you're responding to (as well as others) that he's talking about investment in terms of pursuing a net increase of the output of goods and services via capital formation not investment in terms of increasing personal wealth.

Obviously we re debating the meaning of the word investment, maybe this is easier:

Investment
Definition: The laying out of money in the purchase of some species of property; the amount of money invested, or that in which money is invested.

Definition: Investment (Meaning of Investment)

 

[MIPS]

No, I m not kidding. Yes investment is often used in terms of gaining money after you buy something. But if you look at it from up close you will notice that everything you buy is an investment, it will have a certain value in money and can possibly be profitable.

Anything you spend money on has a certain value, this makes it an investment no matter how low the value. If you re able to buy something with a low value and get more out of it than you payed for than this is a good investment.

You substitute arbitrage for investment in a way which is clearly not applicable in the context of the current discussion because it has been made clear by the poster you're responding to (as well as others) that he's talking about investment in terms of pursuing a net increase of the output of goods and services via capital formation not investment in terms of increasing personal wealth.

Obviously we re debating the meaning of the word investment, maybe this is easier:

No YOU are debating the meaning of the word investment, when the context of it's usage here has been made very clear to you, however your insistence on playing word games only emphasize the weakness of your arguments and does you no service here.

This after I was kind enough to further clarify the meaning of the term in the context of the ongoing discussion for you (i.e. capital formation).