[foilist13]

This assumes that what people make is directly correlated to how much they work. What makes you so sure this is accurate?

It isn't accurate at all. The reason to avoid taxing the rich too heavily is to leave them their capital to invest back into the market, causing the economy as a whole to prosper.

[Dr House]

It isn't accurate at all. The reason to avoid taxing the rich too heavily is to leave them their capital to invest back into the market, causing the economy as a whole to prosper.

There are ways to accomplish this without having to untax the rich. One way is to make savings and investment tax deductible, another is to use tax revenue to subsidize capital investing for poorer people, rather than spending it in social services. A third way is central planning, but that one doesn't work too well.

[foilist13]

A third way is central planning, but that one doesn't work too well.

Amen

What is to stop me, a rich guy, from just taking all my money and moving to a foreign country because I don't like your taxes? Now your making a hefty 0% on all my money.

[Dr House]

What is to stop me, a rich guy, from just taking all my money and moving to a foreign country because I don't like your taxes?

Nothing. I can still tax your worldwide income, or even confiscate it as you leave though.

Additionally if the middle class capital investment rate is high enough, such as if say, a 35% forced savings rate is implemented, the need for the rich to invest in the economy is reduced.

[foilist13]

Well what is to stop me, a rich bastard who has payed a lot of guys to hold guns and go boom, to simply say bugger off and leave with all my money?

Also, me being a nice middle class suburbian, maybe I wish to put all my money under my mattress and wait till the economy gets better. Failing that, I too decide to leave.

I looks like your having a hard time keeping all the various versions of me in your country

[Dr House]

That's because you just wanna spite me. Since you're the only you in existence, feel free to leave.

[foilist13]

I can live with that

[guzzipat]

I don't think it is neccessary to tax the rich more.
Just closing down tax havens and making them pay on the same basis as others would be a better idea.

[Dr House]

I don't think it is neccessary to tax the rich more.
Just closing down tax havens and making them pay on the same basis as others would be a better idea.

Not to me. The only reason I want high taxes on the rich (and that is, the very rich only, the working class elite I wouldn't touch) is because I want them out. The amount of political influence they wield is dangerous.

[guzzipat]

Not to me. The only reason I want high taxes on the rich (and that is, the very rich only, the working class elite I wouldn't touch) is because I want them out. The amount of political influence they wield is dangerous.

Then deal with it on that basis and design systems to eliminate or counteract the political influence.
For example ban all private political donations above a small ammount and severely truncate the ammount candidates are allowed to spend on campaigns.
Tax policy should not be used as a tool for excluding people.

[Karl_Bonner_1982]

Taxing the rich more makes sense because you can use the revenue to fund more social programs without having to tax the working classes any more.

Of course if you carry the idea of soaking the rich to an extreme, it can undermine motivation and eventually lead to falling revenue caused by the dampening of the economy. But we are so far from that being a problem that we don't need to worry about adding a few extra percentage points of the taxes of the wealthy.

[Zerogouki]

In response to the OP's claim that economies benefit when the tax burden is shifted more heavily toward the rich...

Said economies do not benefit because taxes on the rich are being raised. They benefit because taxes on the poor and middle-class are being lowered. Most of the money that goes to the government via taxation is wasted on stupid shit. Thus, the lesson that we should take home from this is not "Tax the rich more!", but "tax everyone else less".

[Demosthenes]

I shouldn't get in this, I really shouldn't.

Two reasons though.

One, the idea that empowering the rich empowers everyone else: Trickle down. Obviously doesn't work. The wealthy have increased their wealth over the last forty years enormously, it's not even funny how much more wealth the top 1% are compared to where they were. And yet real wages haven't measurably increased at all. They DO NOT pass increased profits on to their workers.

Two, The rich should pay more becuase the laws are written to favor them overwhelmingly. I doubt anyone can argue against this.

The poor are not necessarily lazy, what are you some 16th century European aristocrat?

Jesus...get real.

[Dr House]

One, the idea that empowering the rich empowers everyone else: Trickle down. Obviously doesn't work. The wealthy have increased their wealth over the last forty years enormously, it's not even funny how much more wealth the top 1% are compared to where they were. And yet real wages haven't measurably increased at all. They DO NOT pass increased profits on to their workers.

That's because the stock of fixed capital assets in the US economy has diminished in the past 40 years. The increase in wealth corresponds mainly to asset-price inflation. Prior to that, the workers have enjoyed continuously increasing living standards (discounting the Great Depression) since the birth if the Republic.

[Demosthenes]

Regardless of the whys are the facts.

The rich need to pay up, they got they way due to laws highly friendly to them.

Pay up boys, pay up or you won't have anyone left to buy your crap.

[RoughandReady]

The problem with taxing the rich more than the poor is that nations must be extremely careful to make sure the financial base is secure, and that the rich won't just continue to dodge the taxes.

A disproportionate amount of government "income" would rest on a very small amount of people. Take America, in example. To increase taxes on the rich could have 2% of the population paying the highest taxes, and financing government. Sounds a bit stupid to me that a very small amount of people would be paying for most the nations operation (income tax is the largest contributor.) Secondly, in the UK, Mr. Gordon Brown and Mr. Darling attempted to raise taxes on the rich, though studies within HM Treasury have stated that the 45% rate increase will yield little because of dodges and disincentives.


In America's case, I would advocate switching over to the Fair Tax system instead.

[Jeff in Kentucky]

I agree with Edward N. Wolff and his February 12, 2001 article:

Most American families have seen their level of well-being stagnate over the last quarter-century--and that's even before the current economic slowdown. Between 1973 and 1998, the real hourly wages of the average American worker fell by 9 percent. (This contrasts with the preceding quarter-century, 1947 to 1973, when real wages grew by 75 percent). In 1974 the richest 5 percent of American families earned 14.8 percent of total U.S. income; by 1998 their share had risen to 20.7 percent.

What can be done to help American workers? Here are some remedies that could help alleviate disparities in both income and wealth:

Restore the minimum wage to its 1968 level. Adjusted for inflation, the minimum wage in 1998 was down 32 percent from its peak in 1968. Restoring the minimum wage to its golden-age level (when, I should point out, the unemployment rate was only 3.6 percent) will help increase the earnings of low-wage workers.

Extend the Earned Income Tax Credit (EITC). The EITC provides supplemental pay to low-wage workers in the form of a tax credit on their federal income tax return. An expansion of this credit will further raise the (after-tax) income of poor working families.

Make tax and transfer policies more redistributional. Comparisons between the United States and other advanced industrial countries (including Canada), which face similar labor-market conditions, indicate that tax and capital-transfer policies can be effective in reducing inequality and increasing after-tax income.

Tax wealth directly. Almost a dozen European countries--Denmark, Germany, the Netherlands, Sweden, and Switzerland, among others--have a wealth tax in place. A very modest tax that affects only households with more than $500,000 in assets, at marginal tax rates running from 0.05 to 0.30 percent, would have a minimal impact on the tax bills of 90 percent of American families--yet would raise $50 billion in additional revenue. While this is not a large amount (about 3 percent of total federal tax receipts), the additional revenue could fund capital-transfer programs for the poor and middle class. (I feel so sorry for some guy who tells the IRS he makes a million dollars a year (the real number is probably 5 million), who then cries that he cannot possibly live on $666,000 a year after taxes.)

Helping the needy to build their assets will not only increase their economic security but will also restore their participation in the community and reverse their political disenfranchisement.

The longer source:

http://www.prospect.org/cs/articles?art ... get_richer

[Dr House]

Restore the minimum wage to its 1968 level. Adjusted for inflation, the minimum wage in 1998 was down 32 percent from its peak in 1968. Restoring the minimum wage to its golden-age level (when, I should point out, the unemployment rate was only 3.6 percent) will help increase the earnings of low-wage workers.

It will also make the unskilled unemployment rate higher than ever. If you wanna help the working class you need to restore the economic health we had in the 60s, which made that minimum wage sustainable. Since then labor productivity has greatly declined due to a massive influx of unskilled immigrants from Mexico and an overall decline of industry, attributable to various structural flaws within the economy. Basically, a $9.50 an hour minimum wage is a much worse idea now than it was in the 60s because there are many more unskilled workers and a much lower availability of skilled labor (or highly productive unskilled labor such as construction).

Extend the Earned Income Tax Credit (EITC). The EITC provides supplemental pay to low-wage workers in the form of a tax credit on their federal income tax return. An expansion of this credit will further raise the (after-tax) income of poor working families.

Agree.

Tax wealth directly. Almost a dozen European countries--Denmark, Germany, the Netherlands, Sweden, and Switzerland, among others--have a wealth tax in place. A very modest tax that affects only households with more than $500,000 in assets, at marginal tax rates running from 0.05 to 0.30 percent, would have a minimal impact on the tax bills of 90 percent of American families--yet would raise $50 billion in additional revenue. While this is not a large amount (about 3 percent of total federal tax receipts), the additional revenue could fund capital-transfer programs for the poor and middle class. (I feel so sorry for some guy who tells the IRS he makes a million dollars a year (the real number is probably 5 million), who then cries that he cannot possibly live on $666,000 a year after taxes.)

I agree with this only under the condition that all revenues collected from said tax (as well as all income taxes collected from the wealthy above 20% of income) funds capital transfer programs, as well as that fixed capital assets (think industrial machinery, office space, etc.) be exempt from said tax or taxed at a lower rate (other assets and foreign-owned assets can be taxed at a higher rate). I also think that a minimum of $500,000 is too low. I'd set a minimum of $5 million, and a higher rate, and I would also implement a forced savings program for the poor and middle class so they build up assets faster.

[Todd D.]

One, the idea that empowering the rich empowers everyone else: Trickle down. Obviously doesn't work. The wealthy have increased their wealth over the last forty years enormously, it's not even funny how much more wealth the top 1% are compared to where they were. And yet real wages haven't measurably increased at all. They DO NOT pass increased profits on to their workers.

As House noted, "real wages" are not the only metric of success. The price of food as a percentage of income has dropped to ludicrous levels, less than half of what it was just 30 years ago. Even with today's crisis, home ownership is more accessible to the general public than at any period in our past. Until January, the unemployment rate had stayed constant at previously unheard of levels near 4%. Life expectancy has increased and infant mortality has dropped for all Americans significantly over the last 40 years. You'd be hard pressed to find anyone, even a poor person, that would honestly rather live in 1955 than 2009.

The claim that the benefits don't trickle down is pure ignorance. Lower marginal tax rates mean more capital investment, savings, or consumption. Investment, which we've seen, and allows businesses to thrive, hire MORE workers (even if being paid the same level). Savings provides increased capital to the banks, allows interest rates to fall, and provides liquidity to homeowners, small businesses, etc. Consumption has obvious benefits.

I have yet to hear a decent defense why lowering income inequality should be a goal. Just because someone else is better off, why does that mean you are worse off? That's a fixed-wealth view of the economy, something that hasn't been in vogue since Adam Smith.

Two, The rich should pay more becuase the laws are written to favor them overwhelmingly. I doubt anyone can argue against this.

Or we could just remove such protections.

[Demosthenes]

Or we could just remove such protections.

That's been tried under present and similar situations for about 2000 years.

Hasn't worked yet.