Can We Just Get The Revolution Started Already?

[Tani Coyote]

Yuck, just yuck.

This is why a flat tax will never work. Talk NIT, and maybe it can.

Taxing the very poor not only is immoral, but also eliminates their ability to consume. Let's say we each eat cereal for breakfast.

You have 1000 poor people and 1 rich person. Who should be taxed more? The rich person can take a lot of fire before they are no longer able to consume the cereal. The poor people can only take a little bit before you lose 1000/1001 cereal consumers.

Sorry, but in the nature of things, it just makes more sense to favor the poor - their larger numbers mean most things will enjoy better consumption if the poor can buy it.

Of course there's also driving the prices down, but that doesn't just happen, unlike manipulation of tax rates.

---

Conservatives sometimes say we should run the government like a corporation. I agree! Henry Ford paid his workers very well, so they were able to consume his goods and give him a regular consumer base. Likewise, we should pay the "Workers" - citizens - pretty good too. The rich stay rich, the poor get richer, and the rich will eventually get richer due to a stronger consumption base.

Even if the rich don't get richer... maybe they'd like it if the poor finally get fed up and take everything.

Losing 10% is better than losing 100%.

 

[kochman]

Yuck, just yuck.

This is why a flat tax will never work. Talk NIT, and maybe it can.

Taxing the very poor not only is immoral, but also eliminates their ability to consume. Let's say we each eat cereal for breakfast.

You have 1000 poor people and 1 rich person. Who should be taxed more? The rich person can take a lot of fire before they are no longer able to consume the cereal. The poor people can only take a little bit before you lose 1000/1001 cereal consumers.

Sorry, but in the nature of things, it just makes more sense to favor the poor - their larger numbers mean most things will enjoy better consumption if the poor can buy it.

Of course there's also driving the prices down, but that doesn't just happen, unlike manipulation of tax rates.

---

Conservatives sometimes say we should run the government like a corporation. I agree! Henry Ford paid his workers very well, so they were able to consume his goods and give him a regular consumer base. Likewise, we should pay the "Workers" - citizens - pretty good too. The rich stay rich, the poor get richer, and the rich will eventually get richer due to a stronger consumption base.

Even if the rich don't get richer... maybe they'd like it if the poor finally get fed up and take everything.

Losing 10% is better than losing 100%.

I agree with this, except for a couple of things...
1) Everyone should pay something (the rich can obviously deal with a larger percentage due to a greater disposable income)...
2) Handouts can be good, but can also create dependency, etc... and lead to greater problems over time (I know you said tax policy should favor the poor, but we must consider entitlements, etc too).

 

[Traitorfish]

Do you not think that the denigration of those benefiting from social welfare programs as the recipients of "handouts" might play into this dependency? That rejecting a shared value of social solidarity and instead constructing these programs as a grudgingly admitted necessity might encourage a similar rejection on their part, thus making your claims something of a self-fulfilling prophecy?

 

[amadeus]

Dachs used History!

RASISTER

It's not very effective...

If in the view of the OP, higher income taxes on the poor mean fewer jobs, so why wouldn't higher buisness taxes mean the same thing? When a business is taxed, what does it do in place of the lost money? It must either raise prices or cut production.

 

[Ahovking]

I weep for America.

Its america what else do you expect, but to be serious things like this are happening a lot more recently, something isn't right in america.

 

[squall78]

sounds like a right to work tax.

 

[Tani Coyote]

1) Everyone should pay something (the rich can obviously deal with a larger percentage due to a greater disposable income)...

Well, while the poor paying in would seem to make sense, most of them collect it through some modicum of benefits, resulting in a net tax rate of zero.

To me, that sounds like a waste of spending - the taxes need to be collected and then the welfare needs to be dispensed - so could just be cut as part of a larger government simplification package.

We won't have an NIT for a long time, which utterly annihilates welfare altogether.

2) Handouts can be good, but can also create dependency, etc... and lead to greater problems over time (I know you said tax policy should favor the poor, but we must consider entitlements, etc too).

Fortunately, many of the poor seem to find welfare degrading. At least, all the low income individuals I've met, even the liberal ones, don't seem to like the idea of collecting it. Most only collect if they absolutely have to.

Dependency on it is indeed a big factor to consider. That's why benefits should scale down as income rises, so there's no effective difference. This would work akin to an NIT. Say, you're unemployed and get 500 dollars over a period. If you start bringing in 100, you get 400. Bring in 200, get 300, etc.

Not having collected welfare myself, I know the benefits can get cut as your income increases, but does it revolve around a set GMI? If not, it actually creates incentive to work less.

Now, you will naturally get people who will milk the system and reason that they shouldn't work at all when they get the same amount of cash either way. But when you've been unemployed for say, ten years, it's pretty obvious you're not trying. It's hard to be lifelong unemployed; many go through cycles of employment and unemployment.

Though, as for a GMI, it need only be so the bare minimum is attained. Our natural desire for more will provide incentive. Who wants to eat ramen all day, roll over in bed to hit a wall, wear the same shirt and pants every day, etc.?

 

[EnglishEdward]

When a business is taxed, what does it do in place of the lost money? It must either raise prices or cut production.

OR

Improve productivity.

Reduce dividends.

Stop bloating chief executive renumeration.

 

[kochman]

Well, while the poor paying in would seem to make sense, most of them collect it through some modicum of benefits, resulting in a net tax rate of zero.

To me, that sounds like a waste of spending - the taxes need to be collected and then the welfare needs to be dispensed - so could just be cut as part of a larger government simplification package.

We won't have an NIT for a long time, which utterly annihilates welfare altogether.



Fortunately, many of the poor seem to find welfare degrading. At least, all the low income individuals I've met, even the liberal ones, don't seem to like the idea of collecting it. Most only collect if they absolutely have to.

Dependency on it is indeed a big factor to consider. That's why benefits should scale down as income rises, so there's no effective difference. This would work akin to an NIT. Say, you're unemployed and get 500 dollars over a period. If you start bringing in 100, you get 400. Bring in 200, get 300, etc.

Not having collected welfare myself, I know the benefits can get cut as your income increases, but does it revolve around a set GMI? If not, it actually creates incentive to work less.

Now, you will naturally get people who will milk the system and reason that they shouldn't work at all when they get the same amount of cash either way. But when you've been unemployed for say, ten years, it's pretty obvious you're not trying. It's hard to be lifelong unemployed; many go through cycles of employment and unemployment.

Though, as for a GMI, it need only be so the bare minimum is attained. Our natural desire for more will provide incentive. Who wants to eat ramen all day, roll over in bed to hit a wall, wear the same shirt and pants every day, etc.?

I've met tons of folks who abuse the system, either by claiming benefits illegally or by purposely not working more lest they lose their benefits...
Our system is screwy as it gets...

I get what you are saying about their net tax being zero... but they don't, often times. They will still think they own a stake if they see money coming out of their paychecks.

 

[Tani Coyote]

I've met tons of folks who abuse the system, either by claiming benefits illegally or by purposely not working more lest they lose their benefits...

Oh, my cousin abused the system, I would know.

As for not working more - can you blame them? In the sense of self-interest, it makes no sense to work harder for less, apart from some ideal of not getting other people's money.

This is what an NIT or at least a GMI would address - you are guaranteed x amount of money. If you work harder, you merely receive less in benefits, but still make the exact same amount. You merely need to put in more hours, and most people have no issue with that.

There are the genuinely lazy, of course.

I get what you are saying about their net tax being zero... but they don't, often times. They will still think they own a stake if they see money coming out of their paychecks.

While I can see the logic behind the poor paying taxes - they own a stake - at the same time, it just increases government bureaucracy. Because chances are, whatever we take from them will merely be given back through some form of benefits. Why not cut the fat and not tax them at all?

Of course, that means that if their situation improves, they'll have to learn how to pay taxes. Which might be a bit painful(given how overly complicated the crap can get) at first and even be a disincentive to move up.

Yet more reason for an NIT, since that's probably the simplest tax system. You can literally calculate your taxes in seconds.

 

[Cutlass]

Dachs used History!

It's not very effective...

If in the view of the OP, higher income taxes on the poor mean fewer jobs, so why wouldn't higher buisness taxes mean the same thing? When a business is taxed, what does it do in place of the lost money? It must either raise prices or cut production.

We've been giving businesses and the rich tax cuts for the past 10 years. Number of private sector jobs created as a result: 0

 

[Defiant47]

When a business is taxed, what does it do in place of the lost money? It must either raise prices or cut production.

Prices are set by the market. If the business could raise prices to bolster income, it could have done so previously as well (and would have already done that). The reason prices are where they are is mainly because of demand. The equilibrium is already set, and changing prices will shift to an sub-optimal price-volume situation.

Production is determined by profitability (for value firms... you can say that growth firms are constrained by capacity, but that's a different, irrelevant issue). If it is profitable to produce 10 more widgets, then it will still be profitable to produce them even if the profits are slightly smaller. Taxes are based on profit, not as a flat amount.

When a business is taxed, that simply means less returns available for the shareholders (either through stock price or dividends).

We could get into advanced corporate finance issues and discuss total firm value, but then we'd have to expand the situation from a simple "just raise taxes" framework as well.

 

[Tani Coyote]

Me personally, I just wish "tax cuts for the wealthy stimulate the economy" stopped being the mantra of the economic right.

They should stick to the idea of people having more of their hard-earned money in their pockets.

Now, that completely denies the benefits of government spending and regulation in areas, but it at least doesn't fly in the face of reality.

Tax cuts for the poor and middle class, I can see as having benefits, especially for the poor, because the absolute number of consumers increases. More people with more money = more production = more jobs. I bet anything it outpaces the number of jobs created by luxury goods(which the wealthy will likely spend money on instead).

For the wealthy, I imagine it's a hit and miss. If they expand production with the freed up cash, it definitely will have benefits. (Makes conditional tax cuts based on employment seem like a good idea) Now, if they just sit on it, theoretically that money helps us out because it assists in consumption and start up businesses, but that means nothing if the demand isn't there - no businesses will be started, so the rich really are the only ones gaining benefits from the pooled wealth.

Creating demand should be the economic priority above all else from what I can see.

 

[GenMarshall]

I doubt taxing the ritch will be palpable to the Republicans on Capital Hill. They will aways side n he tax the poor, cuts to the rich.

 

[Commodore]

Dachs used History!

It's not very effective...

If in the view of the OP, higher income taxes on the poor mean fewer jobs, so why wouldn't higher buisness taxes mean the same thing? When a business is taxed, what does it do in place of the lost money? It must either raise prices or cut production.

Except that we have been giving tax cuts to the rich and the number of available jobs has only marginally increased. It seems businesses are more keen to the idea of hoarding their untaxed money rather than reinvesting it to create more jobs.

 

[uppi]

Dependency on it is indeed a big factor to consider. That's why benefits should scale down as income rises, so there's no effective difference. This would work akin to an NIT. Say, you're unemployed and get 500 dollars over a period. If you start bringing in 100, you get 400. Bring in 200, get 300, etc.

That's a bad idea, because it encourages people to reject any job that earns less than 500. Because commuting to work will incur some costs, they might even have less money by taking a small job. You need to subtract less than the wage to have an incentive to work. E.g. if you bring in 100, you would get 450 so you have 50 more than you would have if you wouldn't work at all.

 

[Tani Coyote]

Fair enough, I hadn't considered commute costs.

Wages do need to not only replace the benefits, but also cover the costs of work. Possibly a little bit on top, as well, to make work more rewarding that benefits.

 

[Tani Coyote]

Edit: Double Post

 

[Masada]

victory for the union

death to traitors

 

[Hygro]

Michigan is such a disaster, I guess they have resorted to random policy to see if that can break them out of their funk...

hey why not?