thanks for the reply. i gotta be brief today, but...
Hoarding?
Tell me who today puts their money in a mattress. Money invested in stocks and bonds or put in a savings account is not being hoarded. In all cases that money is used for something. granted it is not used on direct spending but it still makes its way into the economy. The broken window fallacy is a basic example and that is all it is meant to be.
And why don't you post something from these economists?
hoading, yes. where economies dont have robust domestic expenditure, the wealthy resort to foreign investment. there simply isnt as much opportunity for domestic investment without domestic consumption. the US is, for example the leading manufacturer, but certainly not the leading exporter on the planet. taxes play a role in distributing wealth to the sweet-spot in the economy where wealth is created on several tiers. can trickle-down really claim to do the same? does investment really constitute capitalist commerce?
"It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion." - from
On the Wealth of Nations, Adam Smith (the jesus of capitalism) on progressive tax.
theres a quote for what thats worth.
And countries with high taxation have chronic unemployment
Examples?
looking at the developed world, id say that we are dealing with deindustrialization and capitalization, which can lead to greater unemployment. being a business person myself, i could appreciate the tax shelter that employees, particularly new employees, present come april-time. can it really be said that lower taxes improve the job outlook?
a major difference between the reagan recovery and the clinton recovery was the tax policy. reagan cut taxes, but struggled to recover the labor market despite the economy turning around, soaring even. the clinton recover included an increase in tax, and labor statistics followed economic growth, in contrast. while there are merits to conservative tax policy, it is clear that the 'jobless recovery' is a symtom associable with that approach. targetted tax policy can be very, very effective. the republican cut taxes 'cross the board' or flattening of taxes seems to promote foreign investment, often times taking the jobs overseas, rather than to the domestic labor market. no tax incentive. you do get your stock market booms, though. is that really capitalism, or just overinvestment?
it takes being an employer through a few different tax policies to appreciate the difference, and the counterintuitive nature of conservative tax policy on employment. when i hear folks saying 'cut taxes and they'll hire', i suspect they dont have this insight and have not tracked these policies historically. i suspect theyre parroting pundits on the topic.
here's some examples of countries without progressive tax and social spending exporting their factors, rather than using them for domestic consumption...
the middle east are fine examples of countries that dont give a shit about their citizens. like the US, these countries are energy-based economies. unlike the US, they export all of their energy (oil) to the extent that they have energy crises. there is no domestic market for manufactured goods, there's no universal education, medicine, income, nada.
there is no coincidence that countries without a safety net, welfare, universal subsistence, whatever you want to call it, have economies like this with a rich few and poor, stupid masses, with marginal domestic consumption. countries that affect these programs through tax (not communism) are like the US... every last one which has adopted these policies for a reasonable amount of time.
you could see our economy make a considerable transition from this direction from the moment the 16th was passed. mexico did not follow suit. we were both oil producing countries with world leading economies at the time. que paso?, they ask. i argue that it is the tax and social policy and expenditure choices they made which attracted investment and fostered commerce in the US, rather than down there... of course plenty of private factors at play, but thats the biggest divergence when it comes to the role of government in the equation.
gotta flight to catch, man....