Eat the Rich -- Why taxing the "rich" more isn't the answer

[sly]

I'm not willing to entertain (or, at least, I won't take seriously) an argument that our government can easily, or should, eliminate programs and agencies that didn't exist in 1913.

I'm not saying we can run the government at 1913 levels, but 1990 would be a great start.

[CurseReversed]

I'd like to see what studies you've read that led to this conclusion.

Do you need studies to show that people spending their own money is better for a countries economic growth, then the government taxing and spending it themselves?

Even if government spending did facilitate economic growth in the short term, in the long term it will only create waste and loss of wealth because it has no financial incentive to succeed at making itself unnecessary.

Any argument to the contrary would seem to support the state spending as much money of the people as possible as a potentially positive thing, wouldn't it?

This may seem like a platitude but to me it is common sense. There is no formula for government success over the long term, it is designed to fail IMO. While it is increasingly necessary in many parts of our life, its necessity is only exceeded by its growing corruption and wastefulness when not in check. This is its very nature from everything that history has taught us. The founders new, we should not forget. Whatever we allow it do do for us or on our behalf should be watched very closely and allowed begrudgingly. For every inch you give it in time it will take a yard, and it will always have good reasons. Has that not been the case?

[boofMcboof]

Do you need studies to show that people spending their own money is better for a countries economic growth, then the government taxing and spending it themselves?

Even if government spending did facilitate economic growth in the short term, in the long term it will only create waste and loss of wealth because it has no financial incentive to succeed at making itself unnecessary.

Any argument to the contrary would seem to support the state spending as much money of the people as possible as a potentially positive thing, wouldn't it?

This may seem like a platitude but to me it is common sense. There is no formula for government success over the long term, it is designed to fail IMO. While it is increasingly necessary in many parts of our life, its necessity is only exceeded by its growing corruption and wastefulness when not in check. This is its very nature from everything that history has taught us. The founders new, we should not forget. Whatever we allow it do do for us or on our behalf should be watched very closely and allowed begrudgingly. For every inch you give it in time it will take a yard, and it will always have good reasons. Has that not been the case?

"Whatever economic growth was obtained over the past years with whatever tax rate, was done in spite of it, and not because of it. The thought should be not whether its possible to be successful as a country with high taxes, the thought should be to imagine what what the growth would have been without those tax rates."

Again, you're talking in huge generalities. You keep talking of history but to ignore where tax burdens are placed and how it affects economic growth is ignoring everything about classical economics and the drivers that led to our prosperity.

[Bliz]

Do you need studies to show that people spending their own money is better for a countries economic growth, then the government taxing and spending it themselves?

Even if government spending did facilitate economic growth in the short term, in the long term it will only create waste and loss of wealth because it has no financial incentive to succeed at making itself unnecessary.

Any argument to the contrary would seem to support the state spending as much money of the people as possible as a potentially positive thing, wouldn't it?

This may seem like a platitude but to me it is common sense. There is no formula for government success over the long term, it is designed to fail IMO. While it is increasingly necessary in many parts of our life, its necessity is only exceeded by its growing corruption and wastefulness when not in check. This is its very nature from everything that history has taught us. The founders new, we should not forget. Whatever we allow it do do for us or on our behalf should be watched very closely and allowed begrudgingly. For every inch you give it in time it will take a yard, and it will always have good reasons. Has that not been the case?

I need those studies, yes. Because while it may seem like common sense, actual experience tell us otherwise.

I offer you the case of Georgia. (stats borrowed from an AJC opinion piece)

– Between 1989 and 2010, revenues from Georgia’s corporate income tax were slashed by 46 percent per capita.

– Between 2000 and 2010, per capita revenue collected through the personal income tax in Georgia fell by 26 percent.

– Between 2000 and 2010, per capita revenue from the sales tax fell by 31 percent.

– Overall, state-generated revenues in Georgia have fallen by 27 percent per capita over the last ten years, making Georgia the number one state in the nation in that regard.

By 2008, Georgia not only ranked last in the nation in state-generated revenue per capita, we were 18 percent below the average even among our fellow low-tax states in the Southeast.

Given that data, if your theory held any water whatsoever Georgia ought to be swimming in jobs and growth. So how are we doing?

Well, our unemployment rate is 10.2 percent, well above the national average. In 1999, we ranked 21st in the country in per capita income, and were rising fast, up from 35th in 1979. Ten years later, in 2009, we had fallen back to 39th, which is worse than we ranked 30 years earlier.

For the past decade, Georgia has been losing the type of high-paying jobs attracted by good infrastructure, quality schools and an attractive quality of life, perhaps because it hasn’t been investing in good infrastructure, quality schools and an attractive quality of life.

And until 2008, the jobs we had been adding were increasingly low-wage, low-skill jobs of the sort that are most vulnerable in a recession. Once the economy tanked, those jobs disappeared as well.

That does NOT mean the state should spend as much money as possible. As in all things, the answer lies somewhere in the middle, not at the extreme. You have to find that sweet spot.

[CurseReversed]

No joke, you really don't understand the benefit that government provides for every American's life. If you want less government, go to Africa and enjoy "freedom." Government does good things for people, as seen by the fact that every modern and prosperous nation has a powerful federal government. Of course, there is waste in government and it is important to raise issues about the efficiency of certain programs. The question I wonder is before the government made it an issue to clean the environment, keep food healthy, and protect workers, how did the free market solve those issues? It did nothing and let businesses pollute, abuse workers, and release unsafe products. What I'm trying to get at is that a strong government is necessary for a modern, prosperous nation. We can disagree about the extent of its power, but listening to people tell us to just cut everything is foolish, and shows a complete misunderstanding of how government affects everyday life.

But again, I draw your attention to the fact that most "liberals" on this board agree that government can be restructured. But no "conservatives" have budged on taxes, even when posters have shown that higher taxes on the wealthiest Americans keep down the national debt and lead to prosperous conditions. The only conservative solution to taxes is to lower them, ignoring that lower taxes have lead to this economic problem in the first place. When you post in a thread, it is expected that you read the links. Go back and look at the graph that was posted about national debt. Compare when the national debt really started growing to this link http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213. You'll see that our country was prosperous and strong with high taxes on the top bracket, and was arguably, the least communist it has ever been (50s and 60s). I will repeat this again, government needs cuts, but why can't taxes be increased as well when it is shown that tax increases on the top 1% help and do not lead to the downfall of civilization?

Interesting that the graph starts right around when the federal reserve was established.

I understand the necessity for the government I just don't buy into the fact that what we have is anything close to what it should be.

This is not a right or left thing, I think they both are addicted to government and free money, they just like it served on different platters.

I used to look at all our success and progress over the course of our history and think it to be proof of the success of the system.

Now I look at it as a monumental failure.

I think that bigger government and big corporations are near synonymous and at the least symbiotic.

The more money the government has to spend without the reserve of someone who is spending their own money the more inevitable the corruption of

the businesses that feed off of it directly or indirectly.

I think the federal reserve is a scam, that big business and special interest have too much control, that federal law enforcement wields to much unchecked power, that the drug war is a waste, the war of poverty a failure and the opposite of common sense, that our foreign policy of propping up dictators and fighting wars for special interest is wrong, that bases all over the world and foreign aid to every nation is excessive, that the military industrial complex is way to big and is a major player in all wars, that the income tax is unnecessary for anyone making under 100K and should be borderline nothing for those making more, and that our foreign intelligence services are running their own policies across the world without any oversight.

We have allowed things to get way too far out of control, and it most of it started at the same time that graph did.

My idea of freedom is freedom from government. I think most of our founding laws are designed to protect us from it more then each other. I am not advocating anarchy, we need laws, and fair ones. I think the growth of government is always our biggest enemy and its dysfunction and unchecked power is the biggest motivator in causing every conflict.

There were a lot of people in the continental congress who agree with me.

Whatever we want it to do for us, lets watch it carefully, lets not let it grow out of control because of misplaced faith in its benevolence. Lets understand its nature first and go from there.

I agree we need government help with the issues you mentioned, sometime it does need to intervene for the collective good, and sometimes we have to live with its bungling, but lets keep it from destroying us first ok? You notice how nobody in congress is willing to do much more then pay lip service to real solutions, while we are increasing our speed down into the abyss? Thats big government out of control and its a problem that taxing is not going to fix, only postpone. Taxing is like helping a drug addict by helping him steal more money to support his habit.

Thats what we have in washington now on both sides, something similiar to free money drug addicts. You disagree?

[Prosperity]

Again, it goes back to government philosophy. When you have a huge out of control big federal government system that demands an insane amount of funding, you're stuck in an endless cycle of taxation and spending. How did the government fund itself before 1913?

Medicare, Medicaid, Social Security, and National defense

it's not so much the scope of governmental power (the Fed and government in general have had dramatic increases in regulatory power since 1937) but programs like SS, MAid and MCare, and national defense need to be trimmed and reformed (they make up 2/3 of our spending). It's not like agencies like the FDA, EPA etc are what's causing our money problems. So I guess what I'm saying is that Big Government is NOT the cause of the spending spree... it may be a necessary component of it, but the real causes are 1) identity politics, old people, and cowardly politicians 2) dramatic increase in health care technology (and thus cost) and access... people are living past their productive period, and 3) Reagan wannabees that still think we're fighting a cold war

[zoony]

Of course, it's okay if the Bible Thumpers want to (and do) restrict freedoms. And big government is perfectly okay as long as it involves the military-industrial complex. All corporations and private businesses are noble and good.

But by God, when big government tells industry to stop dumping chemicals into our water supply, they've gone too far! That government is out of control!

[sly]

Of course, it's okay if the Bible Thumpers want to (and do) restrict freedoms. And big government is perfectly okay as long as it involves the military-industrial complex. All corporations and private businesses are noble and good.

But by God, when big government tells industry to stop dumping chemicals into our water supply, they've gone too far! That government is out of control!

I think that's why politics are so confusing and I end up voting across the board. All the electable small government conservatives end up aligning with the crazy religious fundamentalists and I'm just left scratching my head. Two party system is a scam.

[December90]

Except there are many services provided to the citizens, from protection to law enforcement, education health care and pensions, administration, you get many services for the taxes paid.

I hate the mindset you're bringing to the table. The government (the people) create the platform on which all businesses in the US operate. They provide the trade laws, infrastructure, contract enforcement, labor laws, etc etc that without which business simply can not thrive. And then you call their costs associated "confiscated cash"?! Sorry but that's garbage and frankly sounds immature and ungrateful. Take a trip to a failed government if you wanted to be reminded of the value of one that works.

I did not say that the Government did not provide services and I did not say that I didn't use those services. I did say that the amount of money that the Feds confiscate from me is wholly unrelated to the services they provide and/or the services that I use in particular. As an example to show what I mean: At least with a county "car tax" I pay based on the car I choose to purchase so the state can afford to maintain the roads, If I choose to metro around instead of buying a car, then no car tax (there are taxes associated with keeping metro up however.. Etc...

The Federal Government is doing things they should not be doing (and many of those things they cannot afford to be doing) but because those things buy votes from the people who "benefit" from them, they continue.

We tout that our social programs are a 'good thing" but seem to ignore that we cannot afford the ones we have before adding new ones. Just because something is "good" does not make it a government role or responsibility.

[Madison Redskin]

I did not say that the Government did not provide services and I did not say that I didn't use those services. I did say that the amount of money that the Feds confiscate from me is wholly unrelated to the services they provide and/or the services that I use in particular.

Are you arguing that the amount each person pays in taxes should be precisely equal to the benefits that each person receives from government services? If so, it would be rather difficult, or impossible, to construct a tax code that would accomplish that objective. Moreover, even if you just wanted the tax code to be more equitable (i.e., people would pay taxes roughly in proportion to the benefits they derive from government services), one could argue that the government should increase the tax burden on corporations and the richest Americans, i.e., the persons who are deriving many of the benefits of government programs (e.g., “bailouts,” securities laws, subsidies, infrastructural improvements designed to support commerce, wars fought over natural resources, etc.).

The Federal Government is doing things they should not be doing (and many of those things they cannot afford to be doing) but because those things buy votes from the people who "benefit" from them, they continue.

I think everyone agrees that the federal government is doing things it should not be doing. Most people disagree, however, as to what exactly the government is doing that it should not be doing. You might disagree with certain government programs, but, apparently, people have clamored enough to keep those programs alive. You need to do more clamoring.

[DRSmith]

Either people have asked for those programs or the courts have deemed them as constitutional, at some point in time people need to grow up and realize the government is there for all people not just them or their group

[JMS]

JMS you have never worked for the government have you? I have. I've probably seen over a billion dollars of waste and I've only worked for two agencies....we definitely need to do TONS of slashing.

Dude we spend more on defense than the rest of the world combined. Bush inherited a defense budget where we had out spent the next 16 largest defense spending economies combined and he nearly trippled that budget. I think you could start slashing right there.... I mean what 14 of the 16 largest defense spending economies are strong American allies... Canada, Britian, France, Italy, Germany etc.... We aren't expecting any of them to attack us are we? Likewise the two largest defense spending countries who aren't in defensive alliances with us already are China and Russia and both of those countries enjoy permanent most favored trade status with us....

I didn't say we couldn't slash spending... I just said if you look at why the deficite is so out of whack, historically low income tax taking a page from Herbert Hoovers economic playbook is a huge reason why.

Hell look at California... entirely broke... can't afford to pay for their prisons or public school systems. It's becomeing the 3rd world before our eyes experiencing energy brown outs and the like.... Why? A stupid unrealistic tax policy. California's economy would rank #8th in the world if it were a country. The place is stinking filty rich. The sole reason their in such dire strates is their taxes which are also at historically low levels are set too low... Just like our national income taxes...

Could we, should we shave waste where we find it... certainly... but that takes us back to the architects of our economic problems.... They view such things as schools infrastructure regulation etc as waste to be cut. Our safty net for the poor as waste. The program which keeps 50% of the elderly above the poverty line as waste. Thats the kind of thinking which says the solution to a bullit hole in the left foot is to shoot yourself in the right foot.

The only thing I agree with you on is defense spending is out of control. how many agencies do we have with the word "intelligence" in them? Do we really need all this redundancy....I doubt it.

Our problem is definitely the government though; they are sooo inefficient and wasteful it is absolutely ridiculous...pisses me off just thinking about it. Last thing we should be doing is giving them more money to screw around with. We need smaller government, less spending, kill 50% of these agencies and the spending....contract the needed jobs to the private sector.

Anyone who has actually worked for or with the government knows that the contractors actually get held accountable for the job they do (for the most part) and work much harder and more efficient than government workers. This isn't a dig at all government workers, but lets be real...we've got 80 year old government employees that don't do a damn thing but come into work and drink coffee all day.....we have government employees who go into work and sit on extremeskins all day and don't do ****.....we have government employees that do about 5 hours of work in a 40 hour work week....and then we have congress......

---------- Post added April-7th-2011 at 08:09 PM ----------

My only assertion was that governments should not be greedy or take advantage of any minority even if that minority happens to be rich or they were taken advantage of in our past history

Let's not be greedy or take advantage of any minorities!!!!.....

And my only observation to you was you are entirely wrong speaking historically. The tax rate on the wealthy are at historic lows. Lowest since the Hoover Administration. If we don't have the will to tax folks at a reasonable rate... and yes reasonable would be above historic lows.... Then we don't have the will to be a great nation anylonger...

Greedy? Where do you get that trype? Again Historically low taxes for the last decade and you are saying the government is greedy to raise their taxes by 2-3-4% WHICH STILL WOULD BE HISTORICALLY LOW TAXES!!

---------- Post added April-7th-2011 at 08:19 PM ----------

The problem with this logic and much of the other reasoning voiced by many such as JMS as you are refusing to identify and acknowledge the severity of the problems of our big government.

The problem with statement is you are failing to acknowledge reality... Reality is we already have historically low taxes and have for ten years and we aren't enjoying any of the economic benifits such a policy promised to yeild us. Rather this policy has demonostrated historically over and over again a consistant economic behavior.. Economic decay, stagnation, and decline; coupled with high deficites and casting our economic furture into peril.....

So what does the conservative architects of this policy perscribe? Double down.. cutting taxes further on the wealthiest Americans while slashing the safety net under the most vulnerable americans.

The root of our economic troubles are really that we are listening to the wrong folks for economic advice. The folks who created these massive deficits are now saying they have found their fiscal conservative roots and we should listen to them. They guys who got stuck with these massive deficits not of their makring are saying we need to understand where we are in the economic recovery before we cut....

Ultimately though we should really be taking a page for the 1990's to deal with our deficites. The answer is not to revert to a third world country in both social programs and infrastructure.. that is merely a race to the bottom. The answer is to hold spenidng relatively constant, raise taxes to a responsible level, and grow our way out of these problems over time.

[alexey]

The problem with this logic and much of the other reasoning voiced by many such as JMS as you are refusing to identify and acknowledge the severity of the problems of our big government. Instead you argue about whether or not are current top tax rate is high enough relative to history. Instead you build the strawman of what we essentially need the government for and assume that justifies all of its domestic monstrosity. Just because we want our food healthy, our environment clean, and our people safe, does not mean that CIA, DEA, DIA, FDA, NSA, FEMA, Homeland security...etc.. etc... are good to go, and we just need to tax to fund them.

...

Why do you think that we disagree? I am not denying any problems with the US Government. I just don't have much turst for corporate ability to self-regulate dangerous chemicals... so yeah, some things I want my government to do. For the record, I want my government to do these things very effectively and for very little money. I hope that we can find some coommon ground there.

[SkinsHokieFan]

Why do you think that we disagree? I am not denying any problems with the US Government. I just don't have much turst for corporate ability to self-regulate dangerous chemicals... so yeah, some things I want my government to do. For the record, I want my government to do these things very effectively and for very little money. I hope that we can find some coommon ground there.

I have fallen much more into the I am willing to accept greater regulation if taxes and spending are lower.

I also do realize in the near term, being the next decade, that taxes need to be higher and our expectations of all government services lower. I'll take it for this coming decade as my peak (hopefully) earning years will be in the 20s and 30s, and low taxes would be nice to have

[Destino]

Do you need studies to show that people spending their own money is better for a countries economic growth, then the government taxing and spending it themselves?

Even if government spending did facilitate economic growth in the short term, in the long term it will only create waste and loss of wealth because it has no financial incentive to succeed at making itself unnecessary.

Any argument to the contrary would seem to support the state spending as much money of the people as possible as a potentially positive thing, wouldn't it?

This may seem like a platitude but to me it is common sense. There is no formula for government success over the long term, it is designed to fail IMO. While it is increasingly necessary in many parts of our life, its necessity is only exceeded by its growing corruption and wastefulness when not in check. This is its very nature from everything that history has taught us. The founders new, we should not forget. Whatever we allow it do do for us or on our behalf should be watched very closely and allowed begrudgingly. For every inch you give it in time it will take a yard, and it will always have good reasons. Has that not been the case?

I've heard this scary story before and I find it incredibly unconvincing. The evil government is out to get us all. It would be more effective if told over a campfire. The government has to be controlled by the people there is no doubt, however supporting policy that concentrates wealth, sends jobs over seas, depresses middle and lower class wages, and creates MASSIVE deficits is absurd. Since the 1980's and the adoption of bat**** crazy economic policy that saw slashed tax rates has the government shrank? NOT AT ALL.

Tax rates from the 1930 to the 1980 were 50% or higher at the top level. The nation's economy grew large enough to become the premier economic and military might. Since then have we have seen explosions of debt, a widening wealth gap, and an increasingly fragile economy.

The concept of slashing taxes and trusting supply side nonsense has failed entirely. It's time to abandon it.

[The 12th Commandment]

I've heard this scary story before and I find it incredibly unconvincing. The evil government is out to get us all. It would be more effective if told over a campfire. The government has to be controlled by the people there is no doubt, however supporting policy that concentrates wealth, sends jobs over seas, depresses middle and lower class wages, and creates MASSIVE deficits is absurd. Since the 1980's and the adoption of bat**** crazy economic policy that saw slashed tax rates has the government shrank? NOT AT ALL.

Tax rates from the 1930 to the 1980 were 50% or higher at the top level. The nation's economy grew large enough to become the premier economic and military might. Since then have we have seen explosions of debt, a widening wealth gap, and an increasingly fragile economy.

The concept of slashing taxes and trusting supply side nonsense has failed entirely. It's time to abandon it.

Bravo!

[SkinsHokieFan]

Tax rates from the 1930 to the 1980 were 50% or higher at the top level. The nation's economy grew large enough to become the premier economic and military might. Since then have we have seen explosions of debt, a widening wealth gap, and an increasingly fragile economy.

The concept of slashing taxes and trusting supply side nonsense has failed entirely. It's time to abandon it.

Lets be completely honest here. There were quite a few more loopholes, including credit card interest, that have been closed since the 1980s. And lets not make the 1970s look like a utopia of economic growth, we were stuck in a decade of mediocrity and stagflation.

Reagan's tax cuts were simply a deepening of the Kennedy tax cuts.

As for today, besides the 19 percent solution written by Reason Mag, taxes need to go up, and spending must go down. Both sides get a bit of what they want, and a bit of what is needed

[Destino]

Of course, it's okay if the Bible Thumpers want to (and do) restrict freedoms. And big government is perfectly okay as long as it involves the military-industrial complex. All corporations and private businesses are noble and good.

But by God, when big government tells industry to stop dumping chemicals into our water supply, they've gone too far! That government is out of control!

Where people got the idea that capitalism worked well for a nation prior to strong government regulation I will never know.

[The 12th Commandment]

http://www.cnn.com/2011/CRIME/04/07/georgia.iverson.police/index.html?hpt=T2

I think Allen Iverson needs to be et.

[Destino]

Lets be completely honest here. There were quite a few more loopholes, including credit card interest, that have been closed since the 1980s. And lets not make the 1970s look like a utopia of economic growth, we were stuck in a decade of mediocrity and stagflation.

Reagan's tax cuts were simply a deepening of the Kennedy tax cuts.

As for today, besides the 19 percent solution written by Reason Mag, taxes need to go up, and spending must go down. Both sides get a bit of what they want, and a bit of what is needed

Kennedy was a demand-side economist and his tax cuts and economic policy was geared towards impacted demand. While he did cut the top income tax rate he did so from 90 to 70. They went from 70 to 28% in the 80s. Not to mention the supply side cuts and the "trickle down theory" that have been an unmitigated disaster. None of it has benefited the US and every problem conservatives complain about has gotten worse during the same period of time.

[SkinsHokieFan]

Kennedy was a demand-side economist and his tax cuts and economic policy was geared towards impacted demand. While he did cut the top income tax rate he did so from 90 to 70. They went from 70 to 28% in the 80s. Not to mention the supply side cuts and the "trickle down theory" that have been an unmitigated disaster. None of it has benefited the US and every problem conservatives complain about has gotten worse during the same period of time.

I don't think it was the tax rate at all. There was incredible prosperity from late 1982 to mid 2000, during an era of very low tax rates.

What was killer was the 1999 Glass Steagel Repeal and the dismantling of the regulatory structure in the late 1990s into the Bush 2 era (Sarbanes-Oxley being a huge exception)

At this point I have no problem with a raise in cap gains (so we don't have paper movers avoiding taxes) estate tax, and highest 1 percent going back up

On capital gains, I have flipped from where I was 5 years ago. I think keeping it higher, or taxed at income tax levels, keeps more money in the market and gives incentive for a long term view. Having them below 20 percent is begging for a bubble

[Hubbs]

I didn't say we couldn't slash spending... I just said if you look at why the deficite is so out of whack, historically low income tax taking a page from Herbert Hoovers economic playbook is a huge reason why.

I've seen you toss out this reference numerous times in this thread, so I just wanted to be clear: Are you actually suggesting that Herbert Hoover, who took office in 1929, somehow laid enough groundwork via his policies to cause the Great Depression, which started later in 1929?

[zoony]

I've heard this scary story before and I find it incredibly unconvincing. The evil government is out to get us all. It would be more effective if told over a campfire. The government has to be controlled by the people there is no doubt, however supporting policy that concentrates wealth, sends jobs over seas, depresses middle and lower class wages, and creates MASSIVE deficits is absurd. Since the 1980's and the adoption of bat**** crazy economic policy that saw slashed tax rates has the government shrank? NOT AT ALL.

Tax rates from the 1930 to the 1980 were 50% or higher at the top level. The nation's economy grew large enough to become the premier economic and military might. Since then have we have seen explosions of debt, a widening wealth gap, and an increasingly fragile economy.

The concept of slashing taxes and trusting supply side nonsense has failed entirely. It's time to abandon it.

There are bodies everywhere. The carnage, unspeakable. Destino stands alone in a room with a bloodied baseball bat in hand.