Why a tax cut for some rich dude is better for me than money for government programs

[Quantum Windbag]

Here is the problem Baruch; the rich are investing their money overseas, not in the US. They are not investing in businesses that will lead to the creation of all kinds of new jobs. American companies are already sitting on over $2 trillion in cash that they will not invest because they realize nobody is buying. Until people start buying, the economy is going nowhere. And guess whom it is that must start buying? Yea, the vast majority of Americans, most of which happen to no longer earn enough to afford fucking groceries. So cutting taxes even more for those who already have more than they know what to do with is going to do exactly what it has done for the last ten years, nothing at all except take more money out of the economy. Simply put, your plan sucks.

The rich are not investing their money overseas. Even if they are, they still pay taxes on any money they make overseas so I don't understand why anyone thinks this is an issue. The rest of your post makes even less sense. Exactly how will raising taxes on the rich induce people to start buying, if we actually assume that the problem is that no one is buying. Considering that many retailers are reporting positive trends in sales I just don't see a lack of demand as being the driving force behind your imaginary hoarding of cash by businesses.

Why are the rich wiling to pay a Swiss bank interest to hide their money?

You should learn about current law before you interject yourself into a conversation. US law forces all banks to report any deposits by Americans. This was accomplished by the war on drugs and the war on terror. Why do you think Obama supports the PATRIOT ACT now that he knows what it really does?

 

[editec]

Which is the better use of money for the US society?

Money spent on some valuable government social service, say money spent on the military as one example, or money invested in a factory in China?

There is no singlem this will always be right answer to such a question.

The answer depends on the state of the economy at the time.

Leave it to a not so very bright ideogue to think that there is a single formula for how society works best.

People who cannot stand uncertainty ought to stick to areas of study where there are right answers and strict formulas that can alway be right.

But once one enters the world of social sciences, and economics is most defintiely one of those, there are no permanently right answers.

There are only right answers of the MOMENT.

 

[Sunshine]

I believe that it is true that the wealthy earn a higher rate of return in a strict accounting sense on their investments than the poor. However, this rate of return is a measure of the benefit to the individual, not to society. There are industries that are quite profitable but which are (in my opinion) positively harmful to society. A wealthy individual investing in such an industry would earn a high rate of return while destroying the overall wealth of society.

You mischaracterize the economic literature in a number of ways. First, Keynesian economics supports stimulative fiscal policies during times of economic depression. These include tax cuts (when not balanced with spending cuts). Second, the good economic research into multiplier effects does not assume that wealthy individuals put tax refunds in their mattresses (see eg, http://elsa.berkeley.edu/~cromer/RomerDraft307.pdf). Finally, your statement that "government spending just results in waste at best" is absurd. Plenty of government spending, including your own examples of military and police spending, results in clearly identifiable social benefits.

Also, I don't see how a tax cut that does not apply to you directly could possibly be more in your economic interests than a useful social program that does apply to you directly.

"The poor" don't invest. But if they did, the rate of return on their money would be the same as anyone else's. My mother is the only poor person I ever knew to save money. But then, she understood compound interest. And real hunger.

 

[Sunshine]

Did Romney build factories with his own millions last year? maybe he did? i just am not certain? I know obama didn't build any factories here in the USA with his money....

Gates might have....not certain on him either.....?

Buying stock in companies is helping to fund those entities.

Here, you can do it too:

http://www.scottrade.com/

 

[Baruch Menachem]

Yea, I agree with these right wingers. Who needs bridges and roads and sewers and an electrical grid and dams and NASA and safe food and safety rules. It's all a waste. Better rich people have it than waste it on the American middle class. What are they good for anyway?

Your usual dishonest piece of crap posting. Nice to know you are so reliable.

I didn't say we don't need government functions. I was arguing whether spending more on government was better stimulation to an economy than a tax cut. Not that we don't need government functions at all. If we need a bridge, we build what we need.

The electrical grid and dams are often in the private sector. They do a good job of maintaining it themselves as it pays them good money to do so. Here in the Northwet, the government is at war with dams for the rational reason that they kill off wildlife. You many not have noticed but what is going on with dams these days is that under goverment pressure they are mostly coming down, not being built. Don't worry, facts never get in the way of your arguments any way.

As for the great middle class, these folks are the entrepreneurs that don't depend on government anyway. Under no regime do they get any stimulus money. Under a tax break system they have extra cash to expand their businesses. Your argument is circular and backwards. In your view it seems that the best thing to do to support the middle class is to tax it out of existence.

 

[Baruch Menachem]

Did Romney build factories with his own millions last year? maybe he did? i just am not certain? I know obama didn't build any factories here in the USA with his money....

Gates might have....not certain on him either.....?

Your point is taken. Neither did Paris Hilton or Lindsey Lohan.

When you talk in glittering generalities there are special cases (and there are a lot of them I admit) where the argument goes splat into the hard concrete of reality.


But special cases aside, a businessman looking over his profit and loss statement, the state of his cash, and the level of profit, and will expand his business if he feels that his profits will expand, and will cut production to preserve the profit he has already.

 

[Baruch Menachem]

First of all, I have no confidence in any gov't program. They are always rife with fraud and corruption, a lot of money intended for good uses doesn't end up with the people that it was intended for.

Second, there's no getting around the fact that if you raise taxes there are consequences. Liberals dismiss this, but the reason why capital gains tax rates are so low is because as an economy you want to encourage investment rather than discourage it. At a time like this when we're hurting for jobs and we have a lot of money sitting on the sidelines, it makes no sense to do anything to discourage investments. Rich people will find ways to make money some other way or in some other country; we ain't the only game in town any more. In some cases, they flat out leave the country altogether.

I know that lib/dems like to say that all we need is increased demand, which you get by raisng taxes on the rich and distributing it to the less well off. The problem is, you can't get enough revenue that way; The CBO said if you raise the marginal tax rate from 35% to 40%, which you get if the Bush tax cuts expire on the rich, you only end up with 70-80 billion a year in more revenue. Spreading that across the bottom half or quarter percentile won't go very far.

What you're doing is fostering a greater dependency on the gov't, which I think is counter productive for everybody. Some say you get more jobs that way, but you also get fewer people willing to go to work.

Look, American companies are sitting on over $2 trillion in cash. We don't need to tax them to put that money to use; all we need do is threaten to tax them if they don't put it to use. It really is that simple. If companies do not want all that money they are sitting on to be taxed, then they must put it to good use, right here in the good ole US of A. At this point, we need to think of working somewhat in reverse and outside of the box. Instead of waiting for an increase in demand in order to expand the economy, we need to force companies to expand the economy by creating new jobs first. Under most circumstances this would not be possible, but because companies are sitting on so much cash, it is more than possible.
<snip>

It is not the level of cash they have but how much profit can be produced with that cash that matters to a business. If they spend that money on producing inventory that rots on the shelves, they aren't doing anyone any favors. If they put the money into a production line that rusts away from disuse, that isn't a good deal either.

What matters here is the magic point where the producer gets more money from producing additional product than he spends in making it. As long as that number is positive, he will keep going. Right now, in far too much of the economy, that number is negative.

 

[Baruch Menachem]

Here is the problem Baruch; the rich are investing their money overseas, not in the US. They are not investing in businesses that will lead to the creation of all kinds of new jobs. American companies are already sitting on over $2 trillion in cash that they will not invest because they realize nobody is buying. Until people start buying, the economy is going nowhere. And guess whom it is that must start buying? Yea, the vast majority of Americans, most of which happen to no longer earn enough to afford fucking groceries. So cutting taxes even more for those who already have more than they know what to do with is going to do exactly what it has done for the last ten years, nothing at all except take more money out of the economy. Simply put, your plan sucks.

The rich are not investing their money overseas. Even if they are, they still pay taxes on any money they make overseas so I don't understand why anyone thinks this is an issue. The rest of your post makes even less sense. Exactly how will raising taxes on the rich induce people to start buying, if we actually assume that the problem is that no one is buying. Considering that many retailers are reporting positive trends in sales I just don't see a lack of demand as being the driving force behind your imaginary hoarding of cash by businesses.

Why are the rich wiling to pay a Swiss bank interest to hide their money?

Because it provides the highest rate of return. If you set up a enterprise climate where that money produces more money by making widgets than by being invested in debt, then that money will go into factories producing widgets. If it looses value by being in the US producing stuff at a loss, it will run away to where it can be put to better use.

 

[Quantum Windbag]

I believe that it is true that the wealthy earn a higher rate of return in a strict accounting sense on their investments than the poor. However, this rate of return is a measure of the benefit to the individual, not to society. There are industries that are quite profitable but which are (in my opinion) positively harmful to society. A wealthy individual investing in such an industry would earn a high rate of return while destroying the overall wealth of society.

You mischaracterize the economic literature in a number of ways. First, Keynesian economics supports stimulative fiscal policies during times of economic depression. These include tax cuts (when not balanced with spending cuts). Second, the good economic research into multiplier effects does not assume that wealthy individuals put tax refunds in their mattresses (see eg, http://elsa.berkeley.edu/~cromer/RomerDraft307.pdf). Finally, your statement that "government spending just results in waste at best" is absurd. Plenty of government spending, including your own examples of military and police spending, results in clearly identifiable social benefits.

Also, I don't see how a tax cut that does not apply to you directly could possibly be more in your economic interests than a useful social program that does apply to you directly.

"The poor" don't invest. But if they did, the rate of return on their money would be the same as anyone else's. My mother is the only poor person I ever knew to save money. But then, she understood compound interest. And real hunger.

Those were the days. I remember the days banks used to pay around 10% on a savings account, now you are lucky to get 2%.