08 Mar 09
the 35 million hungry american's go without a stable source of food, year after year
what we need to do is tax the rich.
I'm talking 65-80%
people making $1 million or more a year (less than 1% of americans)
to pay for the poor.
this country is so crappy.
how can the rich just go on like that?
knowing their $400,000 bently could feed a whole town for a year?
greed.
08 Mar 09
We do need to tax the rich more but not too much. People would deliberately earn less in some cases. That would not help economic growth.
Obama said he would repeal the bush tax cuts but decided to let them expire next year instead. Now we must wait a year and hope he does not change his mind. It seems like changing his mind is the only meaningful change we will get from him.
http://www.reuters.com/article/topNews/idUSTRE51G5X720090222?pageNumber=1&virtualBrandChannel=10112
We should stop corporations from having tax havens in other countries and eliminate tax loopholes. That alone would bring in extra billions. The biggest banks don't pay much income taxes if any. They have offshore accounts. Taxes are for the little guy struggling to get into the middle class.
08 Mar 09
Originally posted by CombatKarambitIt's called a progressive tax system.
the 35 million hungry american's go without a stable source of food, year after year
what we need to do is tax the rich.
I'm talking 65-80%
people making $1 million or more a year (less than 1% of americans)
to pay for the poor.
this country is so crappy.
how can the rich just go on like that?
knowing their $400,000 bently could feed a whole town for a year?
greed.
Wiki has some good pros and cons.
http://en.wikipedia.org/wiki/Progressive_tax
08 Mar 09
Originally posted by Metal BrainWhy would anyone deliberately earn less? Everyone always wants more money. The existence of positional goods implies that material wealth is largely determined by relative income differences, not by the absolute income differences. Even the lower middle class in the US have access to luxury unimaginable by the upper class in 1800, yet they do not feel rich. Because taxation reduces the consumption of positional goods (which provide zero wealth), especially the consumption in higher classes, HUGE amounts of wealth can be created simply by taxing the rich more, provided the tax spending has at least some purpose. This is what the Scandinavians have understood and it's why they are doing so well. A few months back I spoke with a professor in combustion physics in Sweden, he said "I am not a socialist, but I'd rather pay 60% of my income in tax, earn less than I could in the US and live in a country where the sick, the elderly and the untalented are being taken care of." (he had lived in the US for a few years)
We do need to tax the rich more but not too much. People would deliberately earn less in some cases. That would not help economic growth.
Obama said he would repeal the bush tax cuts but decided to let them expire next year instead. Now we must wait a year and hope he does not change his mind. It seems like changing his mind is the only meaningful cha ...[text shortened]... y have offshore accounts. Taxes are for the little guy struggling to get into the middle class.
08 Mar 09
Originally posted by KazetNagorraThat's not true. Suppose you earn $10.000 pr hour and after you 100 hours of work, you would be taxed $9999 of every hour work, your incentive to work one more hour is almost nonexisting. Further more you have value freedom (not working) in some way in your model. When you have enough money, freedom gives you a greater utility than working one more hour.
Why would anyone deliberately earn less? Everyone always wants more money.
08 Mar 09
1 edit
Originally posted by LundosYes, but that's a ridiculous amount of taxation and as I already pointed out the utility is largely determined by relative income differences, which remain intact through progressive taxation. As long as the marginal income tax rate remains below 75% or so, there is no problem.
That's not true. Suppose you earn $10.000 pr hour and after you 100 hours of work, you would be taxed $9999 of every hour work, your incentive to work one more hour is almost nonexisting. Further more you have value freedom (not working) in some way in your model. When you have enough money, freedom gives you a greater utility than working one more hour.
Also, increasing income tax increases incentive for entrepeneurship because this is unaffected by income tax.
08 Mar 09
1 edit
Originally posted by KazetNagorraOf course it is. I only used the example to prove you wrong. I understand your logic and don't disagree with the progressive tax system, although, a 75% marginal tax is insane too. Who would want to work one extra hour if 3/4 went to the state? In Denmark the marginal tax is around 60% (62,5% ), which is too much.
Yes, but that's a ridiculous amount of taxation and as I already pointed out the utility is largely determined by relative income differences, which remain intact through progressive taxation. As long as the marginal income tax rate remains below 75% or so, there is no problem.
Also, increasing income tax increases incentive for entrepeneurship because this is unaffected by income tax.
Are you sure you understand positional goods?
08 Mar 09
Originally posted by LundosWhy is it too much, and what don't I understand about positional goods?
Of course it is. I only used the example to prove you wrong. I understand your logic and don't disagree with the progressive tax system, although, a 75% marginal tax is insane too. Who would want to work one extra hour if 3/4 went to the state? In Denmark the marginal tax is around 60% (62,5% ), which is too much.
Are you sure you understand positional goods?
08 Mar 09
Originally posted by Rajk999Small entrepeneurs pay income tax, but those that manage to create large businesses can become very rich either by selling their business or taking it to the stock market, and they benefit from higher income tax.
Entrepreneurs then dont pay income tax?
I think they are subject to both income tax and profit taxes.
08 Mar 09
Originally posted by KazetNagorraBecause freedom becomes more important than working more. Either that or people start being paid in other non-taxable ways.
Why is it too much, and what don't I understand about positional goods?
Examples of positional goods include high social status, exclusive real estate, a spot in the freshman class of a prestigious university, a reservation at the "hottest" new restaurant, and fame.
How is that related to the current discussion?
08 Mar 09
Originally posted by LundosIs there are reason to suggest this is actually the case? Marginal tax rates are much higher in Norway than they are in the US, but unemployment is much lower in Norway. How do you explain this?
Because freedom becomes more important than working more. Either that or people start being paid in other non-taxable ways.
Examples of positional goods include high social status, exclusive real estate, a spot in the freshman class of a prestigious university, a reservation at the "hottest" new restaurant, and fame.
How is that related to the current discussion?
As for positional goods: there are material and non-material positional goods. Taxation doesn't affect the non-material ones, obviously, but it reduces the waste caused by the purchase of expensive holidays abroad, Rolexes, Ferraris etc. Now these goods are not 100% positional in the sense that a Rolex does tell the time, for example, but the production factors spent to make a device which tells the time are extravagant. As positional goods do not increase the wealth of a society, the production factors spent making the goods and services are completely (or largely, in the case of goods which are largely positional) wasted. Gone. Destroyed. Poof.
08 Mar 09
Originally posted by KazetNagorraYes there is. Norway has a much bigger public sector, and there's something called 'overførselsindkomst', which translates to transfer payment, but doesn't quite explain it. You can in the Scandinavian countries receive welfare benefits without appearing in the unemployment statistics.
Is there are reason to suggest this is actually the case? Marginal tax rates are much higher in Norway than they are in the US, but unemployment is much lower in Norway. How do you explain this?
As for positional goods: there are material and non-material positional goods. Taxation doesn't affect the non-material ones, obviously, but it reduces the w ...[text shortened]... (or largely, in the case of goods which are largely positional) wasted. Gone. Destroyed. Poof.
I know what postional goods are. I'm just not entirely sure what your arguement is.
By the way I live in a Scandinavian country, and I too would rather pay a high tax and earn less, if that meant taking care of the sick, the elderly and the untalented, and getting an education for everybody. Of course the problem is that a lot of the taxmoney isn't spent on that.
08 Mar 09
Originally posted by LundosOf course you can receive benefits without being unemployed. People who retire before 65, people who cannot work, lazy housewives, students etc. are not counted as unemployed because they are not looking for work. I don't know if the hidden unemployment is higher in Scandinavian countries than elsewhere, perhaps it's better to look at the percentage of the total population 20-60 who are working but I don't have those figures at hand.
Yes there is. Norway has a much bigger public sector, and there's something called 'overførselsindkomst', which translates to transfer payment, but doesn't quite explain it. You can in the Scandinavian countries receive welfare benefits without appearing in the unemployment statistics.
I know what postional goods are. I'm just not entirely sure what your ...[text shortened]... on for everybody. Of course the problem is that a lot of the taxmoney isn't spent on that.
I know what postional goods are. I'm just not entirely sure what your arguement is.
Positional goods give no utility, therefore their production causes waste of money. Increasing taxation reduces this waste.
Of course the problem is that a lot of the taxmoney isn't spent on that.
No, but it's still a pretty large portion of it. And of course there is plenty of room to improve the efficiency of government expenses.