The rich are very useful

Originally posted by rwingett
There is a difference between what you need and what you want. And you do not need the rich, regardless of your ideological predisposition.

That is for me to decide, if you do not need rich folk I would not claim to speak for you, you would do well to return that same respect.

Originally posted by no1marauder
Living as humans means living in societies for the mutual benefit of all those in society. This is hardly compatible with your hermit philosophy.

Your 'hermit' line has no traction, it has been blown clear out of the water, there are any number of people that choose to deal with me by consent and vice versa, so no danger of becoming a hermit.

Originally posted by no1marauder
Your religion is impervious to historical facts. But when there was little government regulation and taxation in the late 1800's, the growth of monopoly was enormous.

In contrast, when the government taxed the rich at far higher rates than it does now in the period roughly from WWII to before Reagan, the country was relatively prosperou ...[text shortened]... been tossed the rich's way in the last 25 years has failed to increase overall prosperity.

I've presented you with economic realities. The fact that you prefer "analysis by loose historical correlation" better than thinking about mechanisms is simply that -- your preference.

Comparing the post-Civil War era to the post WWII era is fallacious because one period was immediately after a war was fought on US soil, and the other not.

Second, US tax policy after WWI and WWII was primarily based on "paying for the war". Looking at the fact that the US did OK under high taxes at the same moment when the rest of the world's manufacturing capacity lay in ruins -- and then claiming that high taxes were producing prosperity -- well, again, those correlations can be awfully misleading if you don't look at what is behind them.

We are not talking about religion here. We are talking about facts and rational analysis.

Originally posted by spruce112358
I've presented you with economic realities. The fact that you prefer "analysis by loose historical correlation" better than thinking about mechanisms is simply that -- your preference.

Comparing the post-Civil War era to the post WWII era is fallacious because one period was immediately after a war was fought on US soil, and the other not.

Second, ...[text shortened]... We are not talking about religion here. We are talking about facts and rational analysis.

Not so many facts in this thread, yet. Do you have any factual analysis of the impact of income taxation, and specifically taxation of the rich, on competition in the free market?

Originally posted by spruce112358
I've presented you with economic realities. The fact that you prefer "analysis by loose historical correlation" better than thinking about mechanisms is simply that -- your preference.

Comparing the post-Civil War era to the post WWII era is fallacious because one period was immediately after a war was fought on US soil, and the other not.

Second, We are not talking about religion here. We are talking about facts and rational analysis.

Your attempts at analysis are laughable. Trying to claim that wars fought up to 30 years in the past are the prime determinants of economic conditions is ludicrous. You claimed that low taxes and lax governmental regulations were necessary to avoid the growth of monopolies, but that combination utterly and abysmally failed to stop monopoly growth in the late 1800's. Therefore, your premise is at odds with the facts.

Nor did I claim that high taxes "were producing prosperity". I responded to YOUR claim that taxing the rich at "high" levels lead to economic ruin by pointing out it has no basis in historical reality. It doesn't. So the entire premise of your OP is false.

Originally posted by KazetNagorra
But you have not made the case that inverse redistrubution will allow more efficient investment.

No, because I didn't say anything about inverse redistribution.

Originally posted by spruce112358
No, because I didn't say anything about inverse redistribution.

"not to tax the rich disproportionately" is intentionally rather vague, I guess. How much should the rich be taxed, who counts as rich, and what activities should be taxed? And can you cite any research or figures which support your hypotheses?

Originally posted by spruce112358
No, because I didn't say anything about inverse redistribution.

You argued against progressive taxation in the OP, did you not? As, at present, the tax system is at least somewhat progressive making it non-progressive would inversely redistribute income.

Originally posted by spruce112358
[b]The rich are the mechanism that ensures strong competition in the free market.

I realize this is point so many socialists on RHP simply don't get -- I guess no one has ever explained it properly. It is important not to tax the rich disproportionately because of a number of facts:

- competition is necessary to force efficient use of resource working class hard -- and which the government will be effectively powerless to prevent.[/b]

rich people are also constantly sniffing out relatively ucompetitive firms and either running them out of business, or buying them so as to add to their existing empires.

Businesses that are smaller or newer tend to have trouble competing against larger, more established businesses - even if the new business has a better product. The established business has the advantage of the efficiency that comes from large-scale production - and most importantly, they have an established brand.

As an analogy, we can look at something all of us here are familiar with -- think of the Democrats and the Republicans as businesses whose product is political services. Now consider the steep uphill battle that an independent or third party candidate faces in trying to win an election. The new candidate may indeed have a much better message, and he/she may have impeccable character and a charismatic personality -- but the Republicans and Democrats have repeatedly shown that they can use their superior size, extensive organization, and wealth to overwhelm any of these upstarts - and most voters (even when extremely angry like this year) still prefer the familiar brand of "Republican" or "Democrat" over something unfamiliar. When you look for compelling independent candidates, you hear a lot of crickets chirping. Even the Tea Party has chosen to work within the established GOP machine. The only independents who seem to have any chance are people like Crist who until very recently were members of one of the established parties.

This is the case even when a third party or independent effort is being financed by someone who is rich and already has a following. It's simply an extremely difficult task for a newcomer to challenge the established players in any business.

Originally posted by no1marauder
You argued against progressive taxation in the OP, did you not? As, at present, the tax system is at least somewhat progressive making it non-progressive would inversely redistribute income.

but spruce wants a negative income tax -- wouldn't that be an example of an extremely progressive type of taxation? -- of course, spruce would need to find a way to pay for this and you can only cut major programs so much before the natives start to revolt -- so funding an ambitious negative income tax (while also balancing the budget) will most likely require raising taxes significantly on those who are rich.

Originally posted by no1marauder
Your attempts at analysis are laughable. Trying to claim that wars fought up to 30 years in the past are the prime determinants of economic conditions is ludicrous. You claimed that low taxes and lax governmental regulations were necessary to avoid the growth of monopolies, but that combination utterly and abysmally failed to stop monopoly growth in the ...[text shortened]... has no basis in historical reality. It doesn't. So the entire premise of your OP is false.

It is laughable that wars affect economic conditions? Hmmmm.

Go back to the OP. I claimed that privately held wealth is often used to fund start-ups that compete with existing corporations -- and that this is a good thing all round (except for the existing firms. But if the existing firms are truly efficient, the start-up will fail and no harm done.)

Further that having competing firms is so good for wages and prices that tax policy should not discourage this sort of activity (source: any basic economics textbook).

I'm struggling as to what exactly you think I am saying that is controversial. Oh, I realize it is not "ideologically correct" by your standards and it also doesn't "win Democratic/Labor votes" because it doesn't make the rich the scapegoats for the world's problems. I realize that.

But objectively -- what about this mechanism do you think is false?

Originally posted by spruce112358
It is laughable that wars affect economic conditions? Hmmmm.

Go back to the OP. I claimed that privately held wealth is often used to fund start-ups that compete with existing corporations -- and that this is a good thing all round (except for the existing firms. But if the existing firms are truly efficient, the start-up will fail and no harm done.) ...[text shortened]... . I realize that.

But objectively -- what about this mechanism do you think is false?

As I said, your assumption that private wealth from high-income wage earners contributes heavily to startups is false - most of this capital comes from banks and institutional investors.

Originally posted by spruce112358
It is laughable that wars affect economic conditions? Hmmmm.

Go back to the OP. I claimed that privately held wealth is often used to fund start-ups that compete with existing corporations -- and that this is a good thing all round (except for the existing firms. But if the existing firms are truly efficient, the start-up will fail and no harm done.) ...[text shortened]... . I realize that.

But objectively -- what about this mechanism do you think is false?

First, what KN said.

Second, most jobs are created by small businesses. Most small business owners are not rich. Ergo, taxing the rich at a lower rate than now would be comparatively disadvantageous to small business.

Third, "basic economics textbooks" are a poor guide to economic reality. The basic models are filled with unrealistic assumptions like perfect competition, complete information, no barriers to entry, etc. etc. They also ignore externalities and market failures. Thus, though your memorization of the basic models might get you a C in ECO 101 it is completely insufficient to explain economic reality.

Originally posted by KazetNagorra
As I said, your assumption that private wealth from high-income wage earners contributes heavily to startups is false - most of this capital comes from banks and institutional investors.

Again, I'm not fussed about who is holding the money -- whoever "the rich" are, they have money. And someone goes about investing it for them.

Institutional investors are going to be more risk-averse, so I don't see them backing a lot of risky, competitive ventures.

Originally posted by spruce112358
Again, I'm not fussed about who is holding the money -- whoever "the rich" are, they have money. And someone goes about investing it for them.

Institutional investors are going to be more risk-averse, so I don't see them backing a lot of risky, competitive ventures.

On the contrary, institutional investors are less risk-averse than individuals because they can spread risks more effectively and tend to have more knowledge about the market. Also, they are often not investing with their own money, e.g. a pension fund employee does not invest his own money.