I think the golden age of the US lasted between the beginning of the 30's until the end of the 70's and especially that period was a time of higher taxes for the rich and a rapidly growing middle class. With the current lack of well paying middle class jobs together with high barriers for studying for the jobs that do poor people don't really have a chance to emancipate like they did until the 80's: work hard, earn enough money to send your kids to university and see them doing better than you did.
How the hell is Europe getting by with their high social welfare and limited high knowledge industries (tech)?
They must have wildly different expectations. Do they all expect to be a homeowner and have a nice salary? Our expectations might be out of whack in the states.
Even within the US, it's been the case up until 2020 that the premium for having a worker in SF or NY was absolutely huge. Now that everyone has been forced to manage over Zoom for a bit, is that sustainable? I genuinely don't know.
(I have a 97th-percentile UK salary living in Scotland from an employer based in Austin, but that still probably doesn't compare to SF numbers)
California tech hubs are not a common US thing either. There's only one silicon valley and it comes with its own numerous issues. The actual cost of living and services is also very different. Pointing just at the salaries in SV won't give you a good comparison. (In the same way that pointing out lack of them in Broken Bow, Nebraska doesn't make the US as a whole bad at tech)
Contracting salaries are much more similar. Not the same, but in the same ballpark. The ability to fire people easily, less holidays and less perks leads to higher salaries in the US but contracting jobs pay relatively bad.
The US is a lot bigger than just NY and SF/LA. Further, there is a tremendous amount of poverty and near-poverty in these cities as costs like housing continue to rise. It is a great setup for software engineers at top companies being paid hundreds of thousands. It is less good for the restaurant chef or the retail worker or the car mechanic.
Regular reminder that Europe is huge and diverse, just as the US contains both extreme wealth and extreme poverty. It also has a lot of tech industry in it, just not high-visibility names that dominate the Internet discussion of "FAANG".
It's not so much that everyone expects to be a homeowner as that it's easier to have a nice life without being a homeowner in many places. Long-term secure tenancies, acceptable quality social housing, that kind of thing. American housing tends to be much larger, though, unless right in middle of the very densest cities.
The UK is backsliding on living standards and social welfare to the point that UNICEF have stepped in.
> that period was a time of higher taxes for the rich and a rapidly growing middle class
Tax revenue as a fraction of GDP is flat since the 60's, and the fraction of tax revenue paid by the top 1% was much lower in the 60's than it is today.
Effective tax rate is more important than overall tax percentage here. Remember, the rich keep getting richer. the share of income going to the top 0.1 percent of the income distribution "was around 2.5 of total income in the 1970s and reached a peak above 9 percent of total income in 2000
Anyway, in 2020 payroll taxes make up 1340 billion vs 1620 billion in ‘income taxes’ and 221 billion in corporate taxes. So, overall talking about the percentage of income tax paid by the rich is misleading. https://www.usdebtclock.org/
Largest difference is the vast reduction in corporate taxes and the explosion in payroll taxes. https://www.nbcnews.com/id/wbna29861648. But, critically the burden wasn’t handed to the top 0.01% but rather the top 20% as payroll taxes have a cap.
So you're saying that the rich have gotten so massively richer that despite the ridiculously low taxes, which they often manage to evade as well, their overall contribution is still more.
It’s really hard to draw any conclusions about the 1940’s to 70’s “golden age”, since during this time, the US was the only intact industrial power in the world. Of course this was very profitable, and it was a situation in which American workers had a lot of power. It’s unclear whether taxes had much to do with anything at all.
Well considering, in the past, the the only way to wage war was to pay for it with increased taxes (ie, prior to deficit spending). So high taxes and being the only industrial power are correlated due to the US winning the war.
Correlation vs. causation. The sources I've seen all have said that no one of the rich paid those high taxes, and the same will happen when Biden and his gang will attempt to increase taxes now. There will be loopholes and a million other things the rich can use to reduce taxes.
The problem lies elsewhere, but no one seems to discuss it. It's not for no reason that Islam, Judaism, and Christianity prohibit lending money with interest. We look around us and see a debt heavy and debt ridden society, because it's easy to lend money with interest. The modern usurious economic system is inherently going to favor the rich. Ban interest and other usurious immoral and parasitic practices (e.g. stock shorting) and things will improve quickly.
Might be cruel, but people are on their own anyways and stronger than most people think.
Trickle down healthcare, education, civil rights, jobs, and housing hasn't worked either. Power uses problems for their own gain resulting in command economies and authoritarianism which are miserable compared to self-educated motivated individuals.
Because everyone can mess up, laws declaring no mess-ups are impossible. Might as well plan for the western sunrise or uphill running water.
What works? Respecting others. Leaving people alone. Problems fix themselves regardless of what powerful people do. Political arguments deserve the most cynicism. Violence with words by men in makeup who do very little and it's all only for themselves.
If raising taxes hurts growth, lowering taxes helps growth. That's a fallacy, but take that thought one step further. Bad people get a tax cut too. They horde or harm. Why does that mean we need more intervention and taxes? Federal governments can be corrupted just the same. Often all the same people just putting a cap on the next horrible war.
> Theory is always for someone and for something. All theories have a pespective. Perspectives derive from a position in time and space, specifically social and political time and space ... There is, accordingly, no such thing as theory in itself, divorced from a standpoint in time and space. When any theory so represents itself, it is the more important to examine it as ideology, and to lay bare its concealed perspective
In this case it could not be clearer that the theory of 'trickle down'/supply side/neoliberal economics - that is, liberalisation, privatisation and deregulation - were for the wealthy, and they were for the purpose of capturing a greater share of wealth (upward wealth redistribution). That's why they acquired prominence and political support, and that's why they've been so hard to dislodge in spite of the overall harm they've done.
Personally I think it'd probably be ok to try something else
That's true of the hard sciences as well, not just the soft ones. The types of observations you think to make, the types of experiments you can perform, are "laden" with your theory of what there is in the world:
Scientific revolutions often start with puzzling "errors" in the measurements, and end up re-defining terms so that the new "correct" theory makes the error go away. But you're still theory-laden: the new theory is itself subject to eventual revolution.
Even really fundamental concepts like mass, length, entropy, and temperature undergo redefinition. When they do, the way we measure them changes. The old way, which was considered scientifically solid and sound, seems quaint and backwards in retrospect.
That's even more obvious in soft sciences, where the terms are even less rigorously defined than notions like "mass". I think it's important to recognize it in the hard sciences as well, because it's easy to get complacent thinking that we have all the terms perfectly defined. Scientists are human regardless of their field and are always burdened with assumptions that they don't realize.
It's vitally important to have studies proving things that are "common sense," so that when there are people in positions of power trying to claim the opposite, there's solid science to point to when you tell them they're wrong.
It's even more important when it's things like this, disproving ideas that have been taken as gospel by parts of the political establishment for decades now.
Every heard of Ignaz Semmelweis [1]? He challenged common sense, and lost his life in the end, but eventually it turned out he was right and the common sense was wrong.
There is rarely a reason to not challenge common sense with the scientific method and see if we can poke a hole into it.
For whatever reason, we felt that the techno-elite would be different than the robber barons that came before them and that the internet would lead to greater equality when all it’s done is erode unity, wealth, privacy and security.
...while they duck and dodge taxes through international shell companies and...moving to Texas
Wait til their kids attend the schools only to discover they're being taught creationism. I have a feeling this whole move to Texas thing is not gonna stick.
Presumably they already paid California taxes for when they worked there. The people governing California have decided they want to take more. There's no debt there. "California" isn't owed. There's nothing to "pay back."
Having a hostile tax environment makes people and businesses go elsewhere, if they can.
If the cultural/economical environment present in California is what allows those businesses to exist/be as successful as they are in the first place then in some sense it's reasonable to see California as holding some stake in that success.
Income/Business taxes don't really capture that type of value add. Especially in tech where it's much easier to relocate your business/employees.
The alternative point of view is that California isn't special at all, and they should be grateful to have the valley ecosystem. In which case they should reduce the tax burden and focus on reducing cost of living.
I don't know which it is for California, but I do think that society would benefit from a system that provides strong incentives for companies to stay rooted/contribute back to the societies that they benefit from before they're established enough to leverage national/international labour.
If you own stock, you don't pay tax on the stock until you sell them. On the day you sell, you have to pay taxes based on how much the stock went up in value, capital gains. You pay capital gains tax to the federal government, and usually, also to the state you are living in on the day you sell the stock.
For example:
If you bought $10 of stock, and then sold it for $110, you have a capital gain of $100. If you live in California on the day you sell the stock, you have to pay California $13.30. If you live in Texas on the day you sell the stock, you don't have to pay Texas anything.
(I simplified a ton of stuff above such as ignoring dividends, deductions, etc. It's not all the official rules and details, just a high level introduction.)
Like any other good, taxes are subject to basic economics. People adjust behavior based on the tax level. For instance, people can choose to move. Or they can employ different tax avoidance schemes (with their own costs and risks) depending on how high the tax is.
On the extreme, both a 0% tax and a 100% tax rate would result in zero income, so there exists some point in between where an increase tax rate results in lower overall revenue. This is called the Laffer Curve [0]
Framing matters a lot about these discussions where "tax cuts" illicit an image of cash taken out of a vault somewhere and sent directly to wealthy people. But its just a number. What you really want to look at is total revenue. If we think of taxes as a method of paying for things we use collectively, we should try to optimize for revenue.
If you look at federal tax revenue over the last 70 years, you'll see that it was remarkably stable between 15-20% of GDP, with spikes and dips being mostly affected by recessions and booms. And during that period we had significant changes to marginal tax rates.
I think the framing is wrong and is meant to illicit moral outrage about percentages paid when its much more complicated than that. The top marginal rate is meaningless without context or considerations to other things.
Economics is a social science. It's stories we tell each other rather than a fundamental unassailable truth like gravity. That means that no matter how good the economic idea - it's also immeasurably a bit wrong. We can say behaviours and outcomes are extremely likely without ignoring they don't always hold true.
But what does that mean for your suggestion that the framing is wrong here? You've based an opinion based on something potentially untrue.
To make it more concrete, you cite the laffer curve. Where do communists exist on the laffer curve? Right where the curve suggests 0% income they're getting 100% income. What's exactly wrong or off by the full 100% - the laffer curve or that communists exist?
To give another concrete example, you said:
>> People adjust behavior based on the tax level
Irrational actors do exist. They can be irrational (in the economic sense) for more reasons than just a lack of information too.
I've become really concerned by the certainty i see expressed in some economic views, some of them are really persuasive, if you ignore that they're built on a metaphorical foundation of sand.
By economics I don't mean the handwaving macro economics. I'm talking about the core tenant that people respond to incentives, which is a fact that can be both observed and derived through logic. It's not story telling. What's the alternative? People don't react to tax rates or prices more generally? Do they act rationally? Maybe not but the general principal holds that make something more expensive people consume less of it. Make taxes higher people will look to shift their income or assets around to avoid them as the cost of not doing so is much higher.
IMO one of the most important lessons of economics is the idea that prices convey collective information not accessible to any one individual. That's why prices exist and lead to prosperity and communist regimes fail. No committee can pin down exactly a number that encompasses all information. Check out the article I, pencil to appreciate all the complexity and information conveyed through market activity. No person can produce a pencil without a market. Something so trivial for a market to produce that they're essentially given out freely.
So it's not correct to suggest that economics is just stories and we should ignore incentives and prices or anything argued using economic principals
>> So it's not correct to suggest that economics is just stories and we should ignore incentives and prices or anything argued using economic principals
Straw man argument. It's not correct to suggest that incentives, prices & economic principles capture sufficient information to give us rational cause to bestow absolute faith in them.
>> the general principal holds that make something more expensive people consume less of it
Again it's not an absolute, there comes a point where it no longer holds. E.g. if you price water, consumption surely drops until the point where there's only essential usage. Increase price all you want then because instead society will break, as in people will circumvent laws or agreed methods of exchange.
>> What's the alternative?
That we're more cautious about calling out the parts we're uncertain about.
You made the straw man argument by waving off all of economics with a hand wave
> if you ignore that they're built on a metaphorical foundation of sand.
And you're making another strawman by saying we need water regardless of the price. As though water is some substance belonging to one person and a fixed supply (no collection, desalination, etc)
What part are you uncertain about in regards to focusing on my original argument that we should focus on revenue as opposed to idelogical arguments like such and such pays a rate of X and i don't like it
>> You made the straw man argument by waving off all of economics with a hand wave
Not the case at all. "it's also immeasurably a bit wrong" is not the same as "we should ignore [incentives and prices or anything argued using economic principals]".
>> we need water regardless of the price
That seems uncontraversial to me, you can't elect to stop consuming water for your crops, livestock or your personal use for example.
>> water is some substance belonging to one person and a fixed supply
This bit - "What you really want to look at is total revenue."
You'd prefer we ignore the source of the revenue and focus on only the revenue. It's a convenient view for some idealogies but it's most likely to be a bad approach. Especially compared to one alternative which would be to do both - to continue to look at the source of the revenue AND optimise.
>There is a long list of papers from the right and left that say the same.
Each of your links appear to be left biased. From my observations, the right-wing love trickledown. Curious if you could provide me an example where right-wing are against this.
The reality is that the economy is very complex. At the same time as 'trickle down economics' you had hyperglobalization from china's free trade zones and adoption of capitalism. You had global egalitarianism greatly increasing the supply of labour. You also have the reality that trickle down economics never fully implemented.
How can a study control for all of these gigantic variables? If the study cannot, they cannot come to any conclusions.
Lets step back for a second and look at globalization alone. When china implemented capitalism and their free trade zones attracted heavy foreign investment whose goal was to obtain cheap labour in china. Every big corp moved there, remember nike and their slave child labour? Or for that matter all the others as well.
Factories dont exist in north america anymore except for costly transportation markets. In order to attract those jobs back, you must compete with the tax rates of those places with very low taxes. globalization means tax rates must reduce.
In order to attract those jobs back, you must compete with the tax rates of those places with very low taxes. globalization means tax rates must reduce.
No, you need to compete with the labour rates which isn't the same thing.
Interestingly total tax take vs GDP isn't much different between China (20%) and US(24%)[1].
It's somewhat easier to compare two similarly sized countries in Europe. The UK and Germany for instance. Germany has a total tax take of about 45%, the UK is at 35%. Yet German exports are much higher than the UK[2].
globalization means tax rates must reduce.
Globalisation means taxes will shift away from corporations and towards consumption, dividends and land value which are much harder to avoid.
>No, you need to compete with the labour rates which isn't the same thing.
could you point to me 1 government in north america who has lowered minimum wage? That's how you would compete with labour rates.
>Interestingly total tax take vs GDP isn't much different between China (20%) and US(24%)[1].
I'm not sure we're comparing apples to apples here. Tax to GDP while also looking at the entire country. The free trade zones are certainly not 20%. Mainland is around 20% for sure. In fact some of the zones are lower than hong kong on purpose. Which according to that source is 13% but that seems high.
>It's somewhat easier to compare two similarly sized countries in Europe. The UK and Germany for instance. Germany has a total tax take of about 45%, the UK is at 35%. Yet German exports are much higher than the UK[2].
I believe we're missing the forest through the trees though. so many missing factors, for example Germany also has very low debt but they also benefit greatly from the Balkan countries. Germany sits well because Crotia and neighbours are the ones heavily in debt.
>Globalisation means taxes will shift away from corporations and towards consumption, dividends and land value which are much harder to avoid.
they may shift but the balance is what matters. What's more important is what's about to happen. The governments of the world are increasingly bankrupt. No politician will consider dynamically changing the fundamentals of how taxes are collected. If land value taxes come about, it will be a new tax that is in addition. they will be raising taxes. The exact opposite of what they need to be doing.
A tax cut that isn't matched by a spending cut translates to more government borrowing, where the rich take that money they save on taxes, and lend it to the government.
That paper is funny. In economics, it's possible to create a mathematical model that demonstrate anything you want. How was what John Von Newman said? "Give me four parameters and I will fit an elephant" or something like that.
The private sector invest to get profits. If it doesn't get profits it will not invest.
If the private sector investment fall, and nothing compensate it, the GDP will fall.
If the GDP fall the population will suffer.
So, in order to keep the economy going, the government share of GDP will grow (we can see a good example now with the pandemic).
When those think tanks, like the one of your link, ask for a reduction of the government spending, normally what they are asking is put my profits before the welfare of the population. As they can't say it that way, because it would be too obvious, they say: "trickle down economics".
Ah yes, studies like the one on tax cuts for the rich are fine, but not ones on government spending levels.
Any way, you're over-simplifying how an economy works.
If there are not enough profitable investments to maintain current investment levels, then investment levels should decline. The government should not invest unprofitably just to maintain current levels.
And no, GDP will not drop. Current productive capital will generate the same value of goods/service, and prices will drop to clearing level until everything produced is consumed. It's better for the population to enjoy higher consumption levels, or to create stockpiles for the future, than have their labor and capital output diverted to projects that will provide them with less resources than they put in.
"And no, GDP will not drop. Current productive [..]"
I don't understand what you are saying there. GDP is a function of spending in the economy. If there is a fall in investment there is a fall in spending. If it's not compensate somehow, GDP will fall.
"[..] than have their labor and capital output diverted to projects that will provide them with less resources than they put in."
I don't understand that neither. Is better to have people unemployed than put those people to work?
My country, Portugal, is the best example how that "tax the rich" mentality clearly didn't worked.
First of all you have to consider what in your country is considered as "rich". Here people who's wage is above average are taxed as "rich"... so yeah that creates another issue.
Also, the rich are rich because they offer very need services to the middle class. You tax the rich and they increase the prices of their products, which means you're basically increasing taxes on the lower classes instead of the rich.
You tax the rich and they increase the prices of their products
So why didn't they do that before? If there is one thing I know about the rich it's that they won't pass up an oportunity to earn more. The reality is prices are driven by supply and demand, someone can't expect to magically increase prices just because their tax burden is higher. The market won't support that.
The point was: If they have the power to increase prices because taxes increased, then why do they not increase prices because they want to earn more? If they do have the power, they should get as much as possible! And that's the thing: Their power is limited to what is possible. That's the free market at work actually.
Increasing taxes would certainly increase prices, but not fully compensate.
The answer to your query is supply and demand; if taxes go up, then (ceteris paribus) the supply curve shifts upward. It costs more money to make the same product, so either the price must go up, the quantity sold must go down, or some combination of the two.
In the case of a redistributional policy, that upward supply shift is matched with an upward demand shift, and prices will definitely rise to at least partially reverse the effects of the taxation-based redistribution.
> So why didn't they do that before? If there is one thing I know about the rich it's that they won't pass up an oportunity to earn more.
There is some number x that is the minimum net profit after tax that entrepreneurs/investors will accept depending on how much pain in the butt the business is to take on.
This number stays the same whether taxes and wages go up or not. People just don't take on new projects unless what they can put in their pockets at the end of the day is actually worth their time and effort.
If taxes or wages go up, the prices must go up in kind for x to stay the same. If that doesn't happen, then entrepreneur/investor interest declines and eventually competition and supply decreases along with it. If that happens, then again, prices go up.
First of all..this is a political hit piece. Secondly, it is untrue. The world has eradicated crippling poverty due to trickle down capitalism. Anyone who denies this is purposefully being dishonest.
Having said that..why it’s political..
> That will be comforting news to U.K. Chancellor of the Exchequer Rishi Sunak, whose hopes of repairing the country’s virus-battered public finances may rest on his ability to increase taxes, possibly on capital gains -- a levy that might disproportionately impact higher-earning individuals.[..]
Rishi Sunak is the husband of Akshata Murthy and son-in-law of Narayan Murthy.
[..] Akshata Murthy, who married Sunak in 2009, is the daughter of one of India's most successful entrepreneurs. Her father co-founded the technology giant Infosys, and her shares in the company are worth £430 million, making her one of the wealthiest women in Britain, with a fortune larger than the Queen's, The Guardian reported.[..]
[..] But Sunak's entry mentions no family members other than his wife, and only refers to her ownership of a small, UK-based venture capital company.
Research by the Guardian shows that Murthy and her family hold many other interests, including: * A combined £1.7bn shareholding in Infosys, which employs thousands of staff in the UK and has held contracts with government ministries and public bodies.[..]
[..] The Guardian reported that after becoming chief secretary to the Treasury in July 2019, Sunak revealed for the first time that he was the beneficiary of a blind trust. He also included Murty for the first time, stating: "Mr Sunak's wife owns a venture capital investment company, Catamaran Ventures UK Ltd."[..]
While the wealth of the Murthy clan is staggering and Akshata Murthy(and the Sunak family by extension)‘s inherited riches are impressive making her ‘richer than the queen’, Infosys has also created a new middle class for the millions of educated youth who came out of educational institutions and ended up being gainfully employed. Everyone climbed a couple of rungs in India due to companies like Infosys. I don’t think anyone can deny this. What a bafflingly blatantly dishonest article/study.
If we tax the rich, the taxes go straight to the government. A thriving economy needs CHURN. Please note: it’s not about the taxes..plain old taxation creates stale economies..it’s about how much people spend and buy and produce and keep money in circulation. The economic churn. More churn, more prosperity because we are creating movement of spending money that came from capital to keep alive a thriving economy.
Taxing the rich ..those few amongst us..will result in a welfare state with no vibrant economic activity and everyone being dependent on the state because if there is no income, there is no movement. No small businesses, no new start ups, no way to spend money in all those conspicuously consumptive ways.
While it’s fun to act shocked at the number of billionaires amongst us..most of it is tied up in stocks that can’t be liquidated. The high stock price determines dividends..pension funds, investment firms, wealth funds, retirement funds, universities, everyone invests in these stocks that allows people to retire and spend and splurge and buy homes etc.
The hypocrisy of the outrage is laughable. Case in point: Chicago teachers Union protested in front of Jeff Bezos home with a guillotine because he became the first man to be worth 200 billion. [1]
The same Chicago teachers Union owned 45k AMZN shares which brought its investment in amazon to ..wait for it.. $86 million+. In year ending 2019. Trickle down capitalism doesn’t work? .. right then!
[..] The Chicago Teachers Union sparked controversy Thursday when it said it was "completely in support" of demonstrators who built a guillotine outside of Amazon CEO Jeff Bezo's home.
The union tweeted a video of the guillotine and wrote, "We are completely frightened by, completely impressed by and completely in support of wherever this is headed." The tweet generated both support and outrage online.
The controversial tweet came as Bezos reportedly became the first person to acquire a personal $200 billion fortune.[..]
[..] The Chicago Teachers’ Pension Fund owned 45,754 shares of Amazon stock worth $86,641,147 at the end of fiscal year 2019, according to its 2019 Comprehensive Annual Financial Report.
The pension fund is governed by a 12-member board of trustees. Active teachers elect six of the pension board's trustees.
The report showed the pension fund's Amazon stock was its second-largest domestic equity holding behind Microsoft in 2019. In addition to Microsoft and Amazon., the funds top 10 domestic equity holdings included Apple, Facebook, Alphabet, Chevron, Visa, Berkshire Hathaway and Johnson & Johnson, according to the report.[..]
> The economic churn. More churn, > more prosperity because we are > creating movement of spending
> money that came from capital to > keep alive a thriving economy.
And then you claim that taxing the rich will not work.
Why would that also be churn? If they have to divest, sell things or buys things that is churn.
You welfare state argument, falls flat when you consider the high taxes for people located in Nordic countries.
Let me try. Enumerating because it’s easier for me:
1. High taxes on the rich won’t work as well as tax cuts as long as job creation is incentivized. Trickle down economics is based on the notion that as corporations are encouraged to participate in job creation by way of tax cuts, more people in the economy will be employed.
2. When people are employed, they spend. When unemployment index falls, consumer spending increases.
3. Hence tax cuts ..across the board..increases employment and consumer spending. This has a stimulating effect on the economy. Because there is a cycle of buying goods and services.
4. Rich man gets a tax rebate for buying a yacht as business expenditure. The yacht guy makes a sale. He gets a commission. A yacht gets sold and those who worked on it keep their jobs. He spends money decorating the yacht, he spends money on it. He parks it somewhere, he pays fees and someone keeps their job. He hires a chef. Chefs buys food.
5. One rich person’s conspicuous consumption creates a chain reaction of spending and buying leading to a little froth in the economy.
6. Vs if he paid it as tax. How will the govt create jobs? What kind of jobs will they create? Where is the market for fancy birthday cakes and expensive body spa treatments when tax money is distributed to pension funds, road improvements and social services. The state ends up being a nanny providing the basic necessities. The govt by its nature cannot engage in production or businesses. It cannot create consumer goods. It cannot offer services. The govt cannot run a restaurant or a hotel. Businesses do this. They need capital for this.
7. An economic transaction needs two parties, the buyer and the seller. The more economic transactions occur, the more thriving the economy. So more spending per person, more economic transactions. But without injection of money in the economy through wages, none of this will occur.
8. Taxes tie up capital. It doesn’t allow for movement of capital, transformation of capital into goods and services or encourage consumption of goods and services.
9. I don’t know what you mean by ‘divest’? You can’t buy or sell without jobs. If you keep taxing people, they won’t spend. If you keep taxing only the rich, consumer spending won’t increase. Because it goes to the govt, only welfare spending be increased.
10. Businesses are started by those with capital. It is started to generate profit and jobs. I don’t know if you have run a business, but every business needs liquidity and credit lines. They need capital. When capital is sent as taxes, businesses can’t thrive and jobs won’t be created and consumer spending will dwindle.
11. My ‘welfare argument’ doesn’t fail because ‘Nordic countries’ with mixed economies have much smaller population than capitalist countries like USA. Norway’s population is 5 million vs America’s 350 something. California’s population is 40 million. Also..Norway has massive oil reserves and is a rich country. The middle class is highly taxed and the rich are few. I don’t know how much I can explain but companies there have intricate shell corporation structure that you will have to work very hard to even find out who actually owns some of the companies. Google for Panama Papers and Mossack Fonesca for the last news item about shell corporations. It’s not that difficult and many do it.
12. Generally, my rule of thumb is that as countries become more populous, they should lean towards capitalism. Less populous countries can provide everyone with social welfare net, but the same policy would kill economic activity in a big country. You can’t keep 100s of millions of people under welfare. A kick ass economy and consumer spending is like the pump motor that will keep aerating the pond. You need that. Welfare states will eventually become duller and duller and die. Most Nordic countries are mixed economies but are also rich due to oil etc.
I don’t know where you are from, but while quality of life is better in Europe, economically it...
I don't see how the investments relate here. Pension funds exist to ensure pensions. Unless you're ready to sacrifice the gain to use ethical investment, the fund may earn on your enemy's success.
Please google for macro economics, consumer spending index, impact of tax changes on consumer spending , consumer spending and GDP.
If I have to reword my above comment in a concise manner. 1. More consumer spending stimulates economy. 2. Consumer spending increases with tax cuts. 3. Consumer spending increases when there is less savings and more income. 4. These indices are directly proportional to size of population.(a tax cut in Finland has a lesser impact on economy and consumer spending than a tax cut in USA which has a lesser impact than a tax cut in India etc)5. All this is tied to interest rates.
If I have to explain everything, I will have to condense three semesters of macro economic theory in one comment. I am sure an online search of key words will do a better job and you can learn at your leisure.
I'm not sure why you're mixing customer spending with the high tax bracket discussion. Income tax for the median person can remain low while you kill tax incentives for high earners. There's only so much "consumer spending" the top bracket will do in practice and very little of it will affect local economy. (I remember reading about this but can't find it now, I'd love to cite it)
Then we need to account for how much the cost even matters to a given bracket. I'm nowhere near the top and when I buy an appliance, I wouldn't care if it was 20% more expensive. Meanwhile I know people in more common jobs who would need to save another month for that difference. So yeah, tax me more and I'll have a little bit less savings, but my spending will be barely affected.
Do you really believe that if you are taxed more, someone else will be able to buy an appliance cheaper than you? Your taxes make literally zero dent in anyone’s miserable lives. However if you contribute towards buying someone a computer to help their child study or take over a young person’s college tuition, their lives will change for ever.
We pay a lot of taxes. Why are there homeless people and hungry people. Why isn’t our taxes enough? Because what is needed is individual attention and meaningful contribution. Outsource your work. Do what you can. Don’t expect results that pleases you. Not your business or responsibility. You have to act if you have empathy or sympathy. Do you bit and completely detach yourself from your action. It’s the only way. It’s more difficult to do than offer to pay more taxes, but it is super effective...much more than the govt can do.
I have a gardener, cleaning person, a handyman on call and a cook who delivers food twice a week. I have hired and trained female juvenile offenders in half way homes, young people from prison rehab at my farm and taught cooking to a person on parole. I KNOW for a fact that me hiring them and training them is more valuable than my taxes going to give them food stamps or a govt phone. Some of them are so smart and even better than me. There was this kid who needed a job till his upcoming court date and I was struggling with some paperwork while he was weed whacking at the farm.
He saw me frowning at the paper and then rattled off the legalese of the contract law. Like..verbatim. Turns out he has a photographic memory, but he didn’t actually know what to do with it.(case in point: tax payer funded public school failure) He was having trouble at work because the other workers were teasing him, making him angry and when he broke a bottle, they called the cops on him. One day he brought his violin that his father paid for long before he was thrown out of home. And played beautifully. Maybe that was his thing. Eventually he went back to community college because I asked him to... I don’t know what he is doing now but I know that if paid more taxes to the govt, it wouldn’t have made any difference to him.
Maybe he will still only be in a minimum wage job and never going to be a millionaire.. but I know I made a difference that my taxes never could...these folks are like my little brothers and sisters..they could very well be my own kids of a certain age.
I make money and I spend money like I want to and not because I am forced to hand it over to Big Gov. Fuck that. Every year, I donate my orchard fruits to be made into jams. And I demand special flavor combinations made for me. Because it’s not freebies. Each jar sells for $7.00 or something. Seasonally, someone who doesn’t make anything at all now makes a few thousand. There is no tax that can give someone that without any strings. And when you have a job, you have self worth. Some people can never be employed. They don’t have the skills or the aptitude to be hired. I pay them to charge all my tools and to be a greeter at the farm shed. They are bored shitless otherwise and then they get into trouble.
Of course..I am just sharing what I feel. YMMV. Maybe you feel like paying taxes is easier or more productive. But it’s still your opinion. Only your opinion. And that’s my point. There is no valid reason or nor has it been proven that higher taxes eradicated poverty or made the lives of bottom most rungs of society better. Like minimum wage and rent control and subsidies, these are instruments and policies that keep people where they are so they can never get out of their holes. Jobs and consumer spending ..otoh..is guaranteed to create a vibrant and thriving economy raising standard of life for everyone.
If you hired someone to drive you around instead of paying taxes, you made one person’s life better. You don’t even know what your taxes do. It probably pays a school administrator 240k salary from his previous year’s 200k salary while the person below poverty line...
You...know the Internet came out of government projects (DARPANet), right? It wasn't something that was developed by private companies out of the goodness of their hearts...
Most of what "capitalism and capital investment" have done for the Internet are the things I, and many others, hate about it.
The original protocols and specifications still lie at the core of most of the Internet, and the infrastructure was, in large part, paid for by government subsidies to the telecom companies, the full terms of which many of them never fulfilled.
Even if one could realistically claim that "capitalism and capital investment" made significant positive contributions to the modern internet, the idea that any significant amount of those contributions would not have happened without the utter failure that is "trickle-down economics" doesn't hold water, either.
Then setup your own private virtual network. I think what you are actually complaining about Is human nature to profit which will always exist no matter what government type there is. Since profit is a zero sum game it’s pretty dangerous in a society built around the commune. The people in charge of distribution always end up with a little bit more
No I would Google Facebook Twitter Amazon Snapchat TickTock LinkedIn we’re all built my capitalist investments on top of a very basic system that would be useless without users creating things
The presumption is that the amount taxed is needed. This is absurd and is a false dichotomy. We should reduce taxes fairly and cut staffing and military spending and provide free health care. It's all possible, we just don't have good fiduciary representation in govt.
If government coffers are a barrel with a bunch of holes in it, and taxes are water pouring into the barrel, why are we constantly fixated on increasing the rate of water entering the barrel, and not on plugging the holes water is spilling onto the ground on? The government is notoriously wasteful with tax money, so why are we unable to incentivize more efficient usage of existing taxes vs. increasing tax income?
It's like a software developer who always adds more and more RAM to their PCs and always frames the problem in terms of how much more RAM they need to make things work instead of taking some time to close a couple thousand chrome tabs.
The government is notoriously wasteful with tax money
In comparison to what, exactly? The burn rate of SV startups? You say "notoriously" like it's just a given. I turn that around and ask, "fine, what examples of spending in large organizations do you have that a government should follow?" Because at the couple of large corporations I've worked at, waste was plentiful as well.
In truth, the current US administration has had pretty good marks in these departments. I'd love to see the next administration better them. But I'd also like to see the metrics provided before the judgement is made on what works or doesn't work.
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[ 3.0 ms ] story [ 230 ms ] threadThey must have wildly different expectations. Do they all expect to be a homeowner and have a nice salary? Our expectations might be out of whack in the states.
Huh, where’d you get that idea?
Even within the US, it's been the case up until 2020 that the premium for having a worker in SF or NY was absolutely huge. Now that everyone has been forced to manage over Zoom for a bit, is that sustainable? I genuinely don't know.
(I have a 97th-percentile UK salary living in Scotland from an employer based in Austin, but that still probably doesn't compare to SF numbers)
It's not so much that everyone expects to be a homeowner as that it's easier to have a nice life without being a homeowner in many places. Long-term secure tenancies, acceptable quality social housing, that kind of thing. American housing tends to be much larger, though, unless right in middle of the very densest cities.
The UK is backsliding on living standards and social welfare to the point that UNICEF have stepped in.
Yeah right. [1]
[1]: https://en.wikipedia.org/wiki/Great_Depression
Tax revenue as a fraction of GDP is flat since the 60's, and the fraction of tax revenue paid by the top 1% was much lower in the 60's than it is today.
Anyway, in 2020 payroll taxes make up 1340 billion vs 1620 billion in ‘income taxes’ and 221 billion in corporate taxes. So, overall talking about the percentage of income tax paid by the rich is misleading. https://www.usdebtclock.org/
Largest difference is the vast reduction in corporate taxes and the explosion in payroll taxes. https://www.nbcnews.com/id/wbna29861648. But, critically the burden wasn’t handed to the top 0.01% but rather the top 20% as payroll taxes have a cap.
So you're saying that the rich have gotten so massively richer that despite the ridiculously low taxes, which they often manage to evade as well, their overall contribution is still more.
There is undoubtedly more to the end of this golden age but it's a credible factor.
Correlation vs. causation. The sources I've seen all have said that no one of the rich paid those high taxes, and the same will happen when Biden and his gang will attempt to increase taxes now. There will be loopholes and a million other things the rich can use to reduce taxes.
The problem lies elsewhere, but no one seems to discuss it. It's not for no reason that Islam, Judaism, and Christianity prohibit lending money with interest. We look around us and see a debt heavy and debt ridden society, because it's easy to lend money with interest. The modern usurious economic system is inherently going to favor the rich. Ban interest and other usurious immoral and parasitic practices (e.g. stock shorting) and things will improve quickly.
Might be cruel, but people are on their own anyways and stronger than most people think.
Trickle down healthcare, education, civil rights, jobs, and housing hasn't worked either. Power uses problems for their own gain resulting in command economies and authoritarianism which are miserable compared to self-educated motivated individuals.
Because everyone can mess up, laws declaring no mess-ups are impossible. Might as well plan for the western sunrise or uphill running water.
What works? Respecting others. Leaving people alone. Problems fix themselves regardless of what powerful people do. Political arguments deserve the most cynicism. Violence with words by men in makeup who do very little and it's all only for themselves.
If raising taxes hurts growth, lowering taxes helps growth. That's a fallacy, but take that thought one step further. Bad people get a tax cut too. They horde or harm. Why does that mean we need more intervention and taxes? Federal governments can be corrupted just the same. Often all the same people just putting a cap on the next horrible war.
> Theory is always for someone and for something. All theories have a pespective. Perspectives derive from a position in time and space, specifically social and political time and space ... There is, accordingly, no such thing as theory in itself, divorced from a standpoint in time and space. When any theory so represents itself, it is the more important to examine it as ideology, and to lay bare its concealed perspective
In this case it could not be clearer that the theory of 'trickle down'/supply side/neoliberal economics - that is, liberalisation, privatisation and deregulation - were for the wealthy, and they were for the purpose of capturing a greater share of wealth (upward wealth redistribution). That's why they acquired prominence and political support, and that's why they've been so hard to dislodge in spite of the overall harm they've done.
Personally I think it'd probably be ok to try something else
https://en.wikipedia.org/wiki/Theory-ladenness
Scientific revolutions often start with puzzling "errors" in the measurements, and end up re-defining terms so that the new "correct" theory makes the error go away. But you're still theory-laden: the new theory is itself subject to eventual revolution.
Even really fundamental concepts like mass, length, entropy, and temperature undergo redefinition. When they do, the way we measure them changes. The old way, which was considered scientifically solid and sound, seems quaint and backwards in retrospect.
That's even more obvious in soft sciences, where the terms are even less rigorously defined than notions like "mass". I think it's important to recognize it in the hard sciences as well, because it's easy to get complacent thinking that we have all the terms perfectly defined. Scientists are human regardless of their field and are always burdened with assumptions that they don't realize.
It's even more important when it's things like this, disproving ideas that have been taken as gospel by parts of the political establishment for decades now.
There is rarely a reason to not challenge common sense with the scientific method and see if we can poke a hole into it.
[1] https://en.wikipedia.org/wiki/Ignaz_Semmelweis
There is a long list of papers from the right and left that say the same.
- https://theamericanleader.org/problems/income-wealth-inequal...
- https://nymag.com/intelligencer/2020/09/rand-study-how-high-....
- https://www.americanprogress.org/wp-content/uploads/2013/12/...
For whatever reason, we felt that the techno-elite would be different than the robber barons that came before them and that the internet would lead to greater equality when all it’s done is erode unity, wealth, privacy and security.
...while they duck and dodge taxes through international shell companies and...moving to Texas
The implication is that they do this to avoid having to continue paying back California for the wealth they amassed there.
Having a hostile tax environment makes people and businesses go elsewhere, if they can.
If the cultural/economical environment present in California is what allows those businesses to exist/be as successful as they are in the first place then in some sense it's reasonable to see California as holding some stake in that success.
Income/Business taxes don't really capture that type of value add. Especially in tech where it's much easier to relocate your business/employees.
The alternative point of view is that California isn't special at all, and they should be grateful to have the valley ecosystem. In which case they should reduce the tax burden and focus on reducing cost of living.
I don't know which it is for California, but I do think that society would benefit from a system that provides strong incentives for companies to stay rooted/contribute back to the societies that they benefit from before they're established enough to leverage national/international labour.
Capital gains tax in Texas - 0%
If you own stock, you don't pay tax on the stock until you sell them. On the day you sell, you have to pay taxes based on how much the stock went up in value, capital gains. You pay capital gains tax to the federal government, and usually, also to the state you are living in on the day you sell the stock.
For example: If you bought $10 of stock, and then sold it for $110, you have a capital gain of $100. If you live in California on the day you sell the stock, you have to pay California $13.30. If you live in Texas on the day you sell the stock, you don't have to pay Texas anything.
(I simplified a ton of stuff above such as ignoring dividends, deductions, etc. It's not all the official rules and details, just a high level introduction.)
On the extreme, both a 0% tax and a 100% tax rate would result in zero income, so there exists some point in between where an increase tax rate results in lower overall revenue. This is called the Laffer Curve [0]
Framing matters a lot about these discussions where "tax cuts" illicit an image of cash taken out of a vault somewhere and sent directly to wealthy people. But its just a number. What you really want to look at is total revenue. If we think of taxes as a method of paying for things we use collectively, we should try to optimize for revenue.
If you look at federal tax revenue over the last 70 years, you'll see that it was remarkably stable between 15-20% of GDP, with spikes and dips being mostly affected by recessions and booms. And during that period we had significant changes to marginal tax rates.
I think the framing is wrong and is meant to illicit moral outrage about percentages paid when its much more complicated than that. The top marginal rate is meaningless without context or considerations to other things.
[0] https://en.wikipedia.org/wiki/Laffer_curve
[1] https://www.taxpolicycenter.org/briefing-book/what-are-sourc...
[2] https://en.wikipedia.org/wiki/Progressivity_in_United_States...
Economics is a social science. It's stories we tell each other rather than a fundamental unassailable truth like gravity. That means that no matter how good the economic idea - it's also immeasurably a bit wrong. We can say behaviours and outcomes are extremely likely without ignoring they don't always hold true.
But what does that mean for your suggestion that the framing is wrong here? You've based an opinion based on something potentially untrue.
To make it more concrete, you cite the laffer curve. Where do communists exist on the laffer curve? Right where the curve suggests 0% income they're getting 100% income. What's exactly wrong or off by the full 100% - the laffer curve or that communists exist?
To give another concrete example, you said:
>> People adjust behavior based on the tax level
Irrational actors do exist. They can be irrational (in the economic sense) for more reasons than just a lack of information too.
I've become really concerned by the certainty i see expressed in some economic views, some of them are really persuasive, if you ignore that they're built on a metaphorical foundation of sand.
IMO one of the most important lessons of economics is the idea that prices convey collective information not accessible to any one individual. That's why prices exist and lead to prosperity and communist regimes fail. No committee can pin down exactly a number that encompasses all information. Check out the article I, pencil to appreciate all the complexity and information conveyed through market activity. No person can produce a pencil without a market. Something so trivial for a market to produce that they're essentially given out freely.
So it's not correct to suggest that economics is just stories and we should ignore incentives and prices or anything argued using economic principals
https://en.m.wikisource.org/wiki/I,_Pencil
Straw man argument. It's not correct to suggest that incentives, prices & economic principles capture sufficient information to give us rational cause to bestow absolute faith in them.
>> the general principal holds that make something more expensive people consume less of it
Again it's not an absolute, there comes a point where it no longer holds. E.g. if you price water, consumption surely drops until the point where there's only essential usage. Increase price all you want then because instead society will break, as in people will circumvent laws or agreed methods of exchange.
>> What's the alternative?
That we're more cautious about calling out the parts we're uncertain about.
> if you ignore that they're built on a metaphorical foundation of sand.
And you're making another strawman by saying we need water regardless of the price. As though water is some substance belonging to one person and a fixed supply (no collection, desalination, etc)
What part are you uncertain about in regards to focusing on my original argument that we should focus on revenue as opposed to idelogical arguments like such and such pays a rate of X and i don't like it
Not the case at all. "it's also immeasurably a bit wrong" is not the same as "we should ignore [incentives and prices or anything argued using economic principals]".
>> we need water regardless of the price
That seems uncontraversial to me, you can't elect to stop consuming water for your crops, livestock or your personal use for example.
>> water is some substance belonging to one person and a fixed supply
Not fixed supply but restricted supply in some locations at some times. https://en.wikipedia.org/wiki/Water_conflict
>> What part are you uncertain about
This bit - "What you really want to look at is total revenue."
You'd prefer we ignore the source of the revenue and focus on only the revenue. It's a convenient view for some idealogies but it's most likely to be a bad approach. Especially compared to one alternative which would be to do both - to continue to look at the source of the revenue AND optimise.
Each of your links appear to be left biased. From my observations, the right-wing love trickledown. Curious if you could provide me an example where right-wing are against this.
The reality is that the economy is very complex. At the same time as 'trickle down economics' you had hyperglobalization from china's free trade zones and adoption of capitalism. You had global egalitarianism greatly increasing the supply of labour. You also have the reality that trickle down economics never fully implemented.
How can a study control for all of these gigantic variables? If the study cannot, they cannot come to any conclusions.
Lets step back for a second and look at globalization alone. When china implemented capitalism and their free trade zones attracted heavy foreign investment whose goal was to obtain cheap labour in china. Every big corp moved there, remember nike and their slave child labour? Or for that matter all the others as well.
Factories dont exist in north america anymore except for costly transportation markets. In order to attract those jobs back, you must compete with the tax rates of those places with very low taxes. globalization means tax rates must reduce.
No, you need to compete with the labour rates which isn't the same thing.
Interestingly total tax take vs GDP isn't much different between China (20%) and US(24%)[1].
It's somewhat easier to compare two similarly sized countries in Europe. The UK and Germany for instance. Germany has a total tax take of about 45%, the UK is at 35%. Yet German exports are much higher than the UK[2].
globalization means tax rates must reduce.
Globalisation means taxes will shift away from corporations and towards consumption, dividends and land value which are much harder to avoid.
[1] https://en.wikipedia.org/wiki/List_of_countries_by_tax_reven...
[2] https://en.wikipedia.org/wiki/List_of_countries_by_exports
could you point to me 1 government in north america who has lowered minimum wage? That's how you would compete with labour rates.
>Interestingly total tax take vs GDP isn't much different between China (20%) and US(24%)[1].
I'm not sure we're comparing apples to apples here. Tax to GDP while also looking at the entire country. The free trade zones are certainly not 20%. Mainland is around 20% for sure. In fact some of the zones are lower than hong kong on purpose. Which according to that source is 13% but that seems high.
>It's somewhat easier to compare two similarly sized countries in Europe. The UK and Germany for instance. Germany has a total tax take of about 45%, the UK is at 35%. Yet German exports are much higher than the UK[2].
I believe we're missing the forest through the trees though. so many missing factors, for example Germany also has very low debt but they also benefit greatly from the Balkan countries. Germany sits well because Crotia and neighbours are the ones heavily in debt.
>Globalisation means taxes will shift away from corporations and towards consumption, dividends and land value which are much harder to avoid.
they may shift but the balance is what matters. What's more important is what's about to happen. The governments of the world are increasingly bankrupt. No politician will consider dynamically changing the fundamentals of how taxes are collected. If land value taxes come about, it will be a new tax that is in addition. they will be raising taxes. The exact opposite of what they need to be doing.
It’s down to the individual shopper to think twice before buying the imported product manufactured with unethical labour.
https://web.archive.org/web/20170821004405/http://ime.bg/upl...
A tax cut that isn't matched by a spending cut translates to more government borrowing, where the rich take that money they save on taxes, and lend it to the government.
The private sector invest to get profits. If it doesn't get profits it will not invest.
If the private sector investment fall, and nothing compensate it, the GDP will fall.
If the GDP fall the population will suffer.
So, in order to keep the economy going, the government share of GDP will grow (we can see a good example now with the pandemic).
When those think tanks, like the one of your link, ask for a reduction of the government spending, normally what they are asking is put my profits before the welfare of the population. As they can't say it that way, because it would be too obvious, they say: "trickle down economics".
Any way, you're over-simplifying how an economy works.
If there are not enough profitable investments to maintain current investment levels, then investment levels should decline. The government should not invest unprofitably just to maintain current levels.
And no, GDP will not drop. Current productive capital will generate the same value of goods/service, and prices will drop to clearing level until everything produced is consumed. It's better for the population to enjoy higher consumption levels, or to create stockpiles for the future, than have their labor and capital output diverted to projects that will provide them with less resources than they put in.
I don't understand what you are saying there. GDP is a function of spending in the economy. If there is a fall in investment there is a fall in spending. If it's not compensate somehow, GDP will fall.
"[..] than have their labor and capital output diverted to projects that will provide them with less resources than they put in."
I don't understand that neither. Is better to have people unemployed than put those people to work?
First of all you have to consider what in your country is considered as "rich". Here people who's wage is above average are taxed as "rich"... so yeah that creates another issue.
Also, the rich are rich because they offer very need services to the middle class. You tax the rich and they increase the prices of their products, which means you're basically increasing taxes on the lower classes instead of the rich.
The solution? An overall decrease of taxes.
So why didn't they do that before? If there is one thing I know about the rich it's that they won't pass up an oportunity to earn more. The reality is prices are driven by supply and demand, someone can't expect to magically increase prices just because their tax burden is higher. The market won't support that.
Rich people have power, they can go take those taxes money from whatever they want:
- Price of their products - Their employees wages - Whatever the hell they want to.
And this is happening in a socialist country. If I'd guess any better in countries like the US this would be way worse for everyone.
Taxes aren't the answer for all problems like many people like to think they are.
Increasing taxes would certainly increase prices, but not fully compensate.
In the case of a redistributional policy, that upward supply shift is matched with an upward demand shift, and prices will definitely rise to at least partially reverse the effects of the taxation-based redistribution.
There is some number x that is the minimum net profit after tax that entrepreneurs/investors will accept depending on how much pain in the butt the business is to take on.
This number stays the same whether taxes and wages go up or not. People just don't take on new projects unless what they can put in their pockets at the end of the day is actually worth their time and effort.
If taxes or wages go up, the prices must go up in kind for x to stay the same. If that doesn't happen, then entrepreneur/investor interest declines and eventually competition and supply decreases along with it. If that happens, then again, prices go up.
First of all..this is a political hit piece. Secondly, it is untrue. The world has eradicated crippling poverty due to trickle down capitalism. Anyone who denies this is purposefully being dishonest.
Having said that..why it’s political..
> That will be comforting news to U.K. Chancellor of the Exchequer Rishi Sunak, whose hopes of repairing the country’s virus-battered public finances may rest on his ability to increase taxes, possibly on capital gains -- a levy that might disproportionately impact higher-earning individuals.[..]
Rishi Sunak is the husband of Akshata Murthy and son-in-law of Narayan Murthy.
https://www.tribuneindia.com/news/diaspora/narayana-murthys-...
[..] Akshata Murthy, who married Sunak in 2009, is the daughter of one of India's most successful entrepreneurs. Her father co-founded the technology giant Infosys, and her shares in the company are worth £430 million, making her one of the wealthiest women in Britain, with a fortune larger than the Queen's, The Guardian reported.[..]
[..] But Sunak's entry mentions no family members other than his wife, and only refers to her ownership of a small, UK-based venture capital company.
Research by the Guardian shows that Murthy and her family hold many other interests, including: * A combined £1.7bn shareholding in Infosys, which employs thousands of staff in the UK and has held contracts with government ministries and public bodies.[..]
[..] The Guardian reported that after becoming chief secretary to the Treasury in July 2019, Sunak revealed for the first time that he was the beneficiary of a blind trust. He also included Murty for the first time, stating: "Mr Sunak's wife owns a venture capital investment company, Catamaran Ventures UK Ltd."[..]
While the wealth of the Murthy clan is staggering and Akshata Murthy(and the Sunak family by extension)‘s inherited riches are impressive making her ‘richer than the queen’, Infosys has also created a new middle class for the millions of educated youth who came out of educational institutions and ended up being gainfully employed. Everyone climbed a couple of rungs in India due to companies like Infosys. I don’t think anyone can deny this. What a bafflingly blatantly dishonest article/study.
Nothing to see here. Ok to move on.
Taxing the rich ..those few amongst us..will result in a welfare state with no vibrant economic activity and everyone being dependent on the state because if there is no income, there is no movement. No small businesses, no new start ups, no way to spend money in all those conspicuously consumptive ways.
While it’s fun to act shocked at the number of billionaires amongst us..most of it is tied up in stocks that can’t be liquidated. The high stock price determines dividends..pension funds, investment firms, wealth funds, retirement funds, universities, everyone invests in these stocks that allows people to retire and spend and splurge and buy homes etc.
The hypocrisy of the outrage is laughable. Case in point: Chicago teachers Union protested in front of Jeff Bezos home with a guillotine because he became the first man to be worth 200 billion. [1]
The same Chicago teachers Union owned 45k AMZN shares which brought its investment in amazon to ..wait for it.. $86 million+. In year ending 2019. Trickle down capitalism doesn’t work? .. right then!
[1] https://www.thecentersquare.com/illinois/ctu-sparks-controve...
[..] The Chicago Teachers Union sparked controversy Thursday when it said it was "completely in support" of demonstrators who built a guillotine outside of Amazon CEO Jeff Bezo's home.
The union tweeted a video of the guillotine and wrote, "We are completely frightened by, completely impressed by and completely in support of wherever this is headed." The tweet generated both support and outrage online.
The controversial tweet came as Bezos reportedly became the first person to acquire a personal $200 billion fortune.[..]
[..] The Chicago Teachers’ Pension Fund owned 45,754 shares of Amazon stock worth $86,641,147 at the end of fiscal year 2019, according to its 2019 Comprehensive Annual Financial Report.
The pension fund is governed by a 12-member board of trustees. Active teachers elect six of the pension board's trustees.
The report showed the pension fund's Amazon stock was its second-largest domestic equity holding behind Microsoft in 2019. In addition to Microsoft and Amazon., the funds top 10 domestic equity holdings included Apple, Facebook, Alphabet, Chevron, Visa, Berkshire Hathaway and Johnson & Johnson, according to the report.[..]
> The economic churn. More churn, > more prosperity because we are > creating movement of spending > money that came from capital to > keep alive a thriving economy.
And then you claim that taxing the rich will not work.
Why would that also be churn? If they have to divest, sell things or buys things that is churn.
You welfare state argument, falls flat when you consider the high taxes for people located in Nordic countries.
1. High taxes on the rich won’t work as well as tax cuts as long as job creation is incentivized. Trickle down economics is based on the notion that as corporations are encouraged to participate in job creation by way of tax cuts, more people in the economy will be employed.
2. When people are employed, they spend. When unemployment index falls, consumer spending increases.
3. Hence tax cuts ..across the board..increases employment and consumer spending. This has a stimulating effect on the economy. Because there is a cycle of buying goods and services.
4. Rich man gets a tax rebate for buying a yacht as business expenditure. The yacht guy makes a sale. He gets a commission. A yacht gets sold and those who worked on it keep their jobs. He spends money decorating the yacht, he spends money on it. He parks it somewhere, he pays fees and someone keeps their job. He hires a chef. Chefs buys food.
5. One rich person’s conspicuous consumption creates a chain reaction of spending and buying leading to a little froth in the economy.
6. Vs if he paid it as tax. How will the govt create jobs? What kind of jobs will they create? Where is the market for fancy birthday cakes and expensive body spa treatments when tax money is distributed to pension funds, road improvements and social services. The state ends up being a nanny providing the basic necessities. The govt by its nature cannot engage in production or businesses. It cannot create consumer goods. It cannot offer services. The govt cannot run a restaurant or a hotel. Businesses do this. They need capital for this.
7. An economic transaction needs two parties, the buyer and the seller. The more economic transactions occur, the more thriving the economy. So more spending per person, more economic transactions. But without injection of money in the economy through wages, none of this will occur.
8. Taxes tie up capital. It doesn’t allow for movement of capital, transformation of capital into goods and services or encourage consumption of goods and services.
9. I don’t know what you mean by ‘divest’? You can’t buy or sell without jobs. If you keep taxing people, they won’t spend. If you keep taxing only the rich, consumer spending won’t increase. Because it goes to the govt, only welfare spending be increased.
10. Businesses are started by those with capital. It is started to generate profit and jobs. I don’t know if you have run a business, but every business needs liquidity and credit lines. They need capital. When capital is sent as taxes, businesses can’t thrive and jobs won’t be created and consumer spending will dwindle.
11. My ‘welfare argument’ doesn’t fail because ‘Nordic countries’ with mixed economies have much smaller population than capitalist countries like USA. Norway’s population is 5 million vs America’s 350 something. California’s population is 40 million. Also..Norway has massive oil reserves and is a rich country. The middle class is highly taxed and the rich are few. I don’t know how much I can explain but companies there have intricate shell corporation structure that you will have to work very hard to even find out who actually owns some of the companies. Google for Panama Papers and Mossack Fonesca for the last news item about shell corporations. It’s not that difficult and many do it.
12. Generally, my rule of thumb is that as countries become more populous, they should lean towards capitalism. Less populous countries can provide everyone with social welfare net, but the same policy would kill economic activity in a big country. You can’t keep 100s of millions of people under welfare. A kick ass economy and consumer spending is like the pump motor that will keep aerating the pond. You need that. Welfare states will eventually become duller and duller and die. Most Nordic countries are mixed economies but are also rich due to oil etc.
I don’t know where you are from, but while quality of life is better in Europe, economically it...
Citation needed. It's not a cheap shot. You're basing your whole post on it, but where's the proof of that? Looking at https://en.m.wikipedia.org/wiki/List_of_countries_by_tax_rat... I can't see any obvious correlation. High tax countries of significant size seem to be doing quite well. GDP seems to have positive correlation with the highest tax rate too http://politicsthatwork.com/graphs/gdp-growth-vs-tax-rate (yes, potential issues are described)
I don't see how the investments relate here. Pension funds exist to ensure pensions. Unless you're ready to sacrifice the gain to use ethical investment, the fund may earn on your enemy's success.
Please google for macro economics, consumer spending index, impact of tax changes on consumer spending , consumer spending and GDP.
If I have to reword my above comment in a concise manner. 1. More consumer spending stimulates economy. 2. Consumer spending increases with tax cuts. 3. Consumer spending increases when there is less savings and more income. 4. These indices are directly proportional to size of population.(a tax cut in Finland has a lesser impact on economy and consumer spending than a tax cut in USA which has a lesser impact than a tax cut in India etc)5. All this is tied to interest rates.
If I have to explain everything, I will have to condense three semesters of macro economic theory in one comment. I am sure an online search of key words will do a better job and you can learn at your leisure.
Then we need to account for how much the cost even matters to a given bracket. I'm nowhere near the top and when I buy an appliance, I wouldn't care if it was 20% more expensive. Meanwhile I know people in more common jobs who would need to save another month for that difference. So yeah, tax me more and I'll have a little bit less savings, but my spending will be barely affected.
We pay a lot of taxes. Why are there homeless people and hungry people. Why isn’t our taxes enough? Because what is needed is individual attention and meaningful contribution. Outsource your work. Do what you can. Don’t expect results that pleases you. Not your business or responsibility. You have to act if you have empathy or sympathy. Do you bit and completely detach yourself from your action. It’s the only way. It’s more difficult to do than offer to pay more taxes, but it is super effective...much more than the govt can do.
I have a gardener, cleaning person, a handyman on call and a cook who delivers food twice a week. I have hired and trained female juvenile offenders in half way homes, young people from prison rehab at my farm and taught cooking to a person on parole. I KNOW for a fact that me hiring them and training them is more valuable than my taxes going to give them food stamps or a govt phone. Some of them are so smart and even better than me. There was this kid who needed a job till his upcoming court date and I was struggling with some paperwork while he was weed whacking at the farm.
He saw me frowning at the paper and then rattled off the legalese of the contract law. Like..verbatim. Turns out he has a photographic memory, but he didn’t actually know what to do with it.(case in point: tax payer funded public school failure) He was having trouble at work because the other workers were teasing him, making him angry and when he broke a bottle, they called the cops on him. One day he brought his violin that his father paid for long before he was thrown out of home. And played beautifully. Maybe that was his thing. Eventually he went back to community college because I asked him to... I don’t know what he is doing now but I know that if paid more taxes to the govt, it wouldn’t have made any difference to him.
Maybe he will still only be in a minimum wage job and never going to be a millionaire.. but I know I made a difference that my taxes never could...these folks are like my little brothers and sisters..they could very well be my own kids of a certain age.
I make money and I spend money like I want to and not because I am forced to hand it over to Big Gov. Fuck that. Every year, I donate my orchard fruits to be made into jams. And I demand special flavor combinations made for me. Because it’s not freebies. Each jar sells for $7.00 or something. Seasonally, someone who doesn’t make anything at all now makes a few thousand. There is no tax that can give someone that without any strings. And when you have a job, you have self worth. Some people can never be employed. They don’t have the skills or the aptitude to be hired. I pay them to charge all my tools and to be a greeter at the farm shed. They are bored shitless otherwise and then they get into trouble.
Of course..I am just sharing what I feel. YMMV. Maybe you feel like paying taxes is easier or more productive. But it’s still your opinion. Only your opinion. And that’s my point. There is no valid reason or nor has it been proven that higher taxes eradicated poverty or made the lives of bottom most rungs of society better. Like minimum wage and rent control and subsidies, these are instruments and policies that keep people where they are so they can never get out of their holes. Jobs and consumer spending ..otoh..is guaranteed to create a vibrant and thriving economy raising standard of life for everyone.
If you hired someone to drive you around instead of paying taxes, you made one person’s life better. You don’t even know what your taxes do. It probably pays a school administrator 240k salary from his previous year’s 200k salary while the person below poverty line...
The original protocols and specifications still lie at the core of most of the Internet, and the infrastructure was, in large part, paid for by government subsidies to the telecom companies, the full terms of which many of them never fulfilled.
Even if one could realistically claim that "capitalism and capital investment" made significant positive contributions to the modern internet, the idea that any significant amount of those contributions would not have happened without the utter failure that is "trickle-down economics" doesn't hold water, either.
It's like a software developer who always adds more and more RAM to their PCs and always frames the problem in terms of how much more RAM they need to make things work instead of taking some time to close a couple thousand chrome tabs.
In comparison to what, exactly? The burn rate of SV startups? You say "notoriously" like it's just a given. I turn that around and ask, "fine, what examples of spending in large organizations do you have that a government should follow?" Because at the couple of large corporations I've worked at, waste was plentiful as well.
How about a study that tries to predict what will happen under the next administration, and by the way, include the relevant metrics?
Something like: Unemployment rates Stock market rise/fall Worker's wages
In truth, the current US administration has had pretty good marks in these departments. I'd love to see the next administration better them. But I'd also like to see the metrics provided before the judgement is made on what works or doesn't work.
Sort of like 'the scientific method'.