Economists admit that tax cuts for the rich fail to trickle down

[Stevicus]

I suppose the question then is, does increasing taxes on the rich help the poor?

I wonder if any studies have been done on that?

Interestingly, the link posted by @Audie in post #15 might shed some light on this.

From the article:

The Revenue Act of 1913 had a top rate of just 7%. It was raised to 77% by Democrat Wilson, then brought down to 25% by Republicans Harding and Coolidge, then raised to 63% by Republican Hoover, then even higher under Democrats Franklin Delano Roosevelt and Truman to 94%. Democrat Kennedy’s ideas brought the top rate down to 70% and then Republican Reagan dropped it to the high 20s. After Reagan, it was raised again and has been hovering in the high 30s ever since.

Overall, just 2% of American households were subject to the original 1913 income tax. Over time, that percentage increased until FDR extended that burden to 85% with his Victory Tax for World War II. Since then, politicians have reversed course and slowly but surely reduced that 85% figure to the point where 45% of American households pay no federal income tax at all. The new income tax law will likely increase those who do not.

I think it can be said that the period from 1945 to 1970 was probably the most prosperous and productive era in US history, and the standard of living improved by leaps and bounds far beyond anything Americans had ever seen before. At the very least, it shows that having a high rate of taxes does not bring about economic doom, as many conservatives would have us believe.

 

[Audie]

IMO, it doesn't work for everyone. It works for those who understand it and participates. It doesn't work for those who don't.

What this means to me is that our education system has done a ****-poor job of educating people about capitalism. Math, science, world history etc... Nothing about how to succeed at capitalism.

Those that don't understand how a system works are those most susceptible to being taken advantage of.

Those who can't throw a ball don't get 40 million dollar NFL
contract.

Interestingly, the link posted by @Audie in post #15 might shed some light on this.

From the article:



I think it can be said that the period from 1945 to 1970 was probably the most prosperous and productive era in US history, and the standard of living improved by leaps and bounds far beyond anything Americans had ever seen before. At the very least, it shows that having a high rate of taxes does not bring about economic doom, as many conservatives would have us believe.

Kind of depends how high under
what circumstances.

The usa did so well in those days
because they were the last man
standing after WW2.

You about couldn't kill an economy like that.

 

[Audie]

Employees are a necessary evil for a company, they are the most expensive part of any business and most liability. Employers do not want to help anyone that can't benefit them times 5. What happens when there are 20 billion people and most of the world is automated via robotics and AI?

What a dark sad and unrealistic view.

 

[Audie]

Not quite.



Well, for one thing, it's fiscally irresponsible. We've been on deficit spending, and our national debt is out of control.

No kidding. Spray money in all directions
and guess what happens.
Richest country ever and going bankrupt.

 

[Revoltingest]

How does capitalism maintain a pool of unemployed people?
What is the mechanism behind this?

Some companies die or contract, eg, IBM currently reducing
its Watson workforce, restaurants regularly going under.
This is useful to new & expanding companies, who have
a pool of available workers. It's a buffer.

 

[Revoltingest]

No kidding. Spray money in all directions
and guess what happens.
Richest country ever and going bankrupt.

Not at all. The consequent inflation (currency devaluation),
reduces the debt....not by reducing the amount of dollars,
but by reducing the value of those dollars.

 

[Stevicus]

Money that goes into anything but a sack under the bed has economic impact affecting everyone

I don't approve of slush funds, tho I still don't get your reference.

But if the money is spent it goes to someone then someone else etc. Fat cat buys big cigars, cigar store pays the window washer

Most anything beats letting the government get the money.

Even when the government gets it, they're paying for personnel, services, equipment, and many other things. All that circulates back into the economy as well. Among the largest employers in my area are the US military and a major defense contractor.

In fact, every time there's talk of the Pentagon wanting to close military bases, it raises up quite a howl in districts where there's a base upon which the local economy has become dependent for their bread and butter.

It's not as if the government gets to keep the money or send it to some offshore account for private use. Or at least, they're not supposed to do things like that. No doubt there are some who do. We do have some problems in our government.

 

[Audie]

IMHO, anyone that hasn't studied Karl Marx's theories of capitalism, are lacking a good understanding of how capitalism works.

Resd a book from Charles Dickens day
Right.
I kind of think doing it is the way to understand .
Cooking or love may be like that too.

 

[Audie]

Not at all. The consequent inflation (currency devaluation),
reduces the debt....not by reducing the amount of dollars,
but by reducing the value of those dollars.

Keep it up and see what happens.

 

[Audie]

Even when the government gets it, they're paying for personnel, services, equipment, and many other things. All that circulates back into the economy as well. Among the largest employers in my area are the US military and a major defense contractor.

In fact, every time there's talk of the Pentagon wanting to close military bases, it raises up quite a howl in districts where there's a base upon which the local economy has become dependent for their bread and butter.

It's not as if the government gets to keep the money or send it to some offshore account for private use. Or at least, they're not supposed to do things like that. No doubt there are some who do. We do have some problems in our government.

That's kind of what I was saying.

 

[Revoltingest]

Keep it up and see what happens.

Within reason....a continuing economy can pay off
debt that's declining. If inflation rises to 10%, then
the economic obligation would fall to half in 7 years.
Ameristan would face some unhappy lenders.

 

[Audie]

Within reason....a continuing economy can pay off
debt that's declining. If inflation rises to 10%, then
the economic obligation would fall to half in 7 years.
Ameristan would face some unhappy lenders.

Nobody is buying your bonds now.

 

[Stevicus]

Misleading to call it "admit", for lo, to admit
is to reluctantly confess.

Well, I've been arguing with Reaganites and other pro-conservative/capitalist types for a very long time now - nearly 40 years, possibly more.

One point I would make here is that economics, as stated upthread, is a social science, not much different than history, political science, sociology, gender studies, or philosophy. Not that there's anything wrong with that, but it's the main reason I might get put off by those who argue comparative economic systems as if it's some sort of "science."

 

[Revoltingest]

Nobody is buying your bonds now.

Well, fiscally irresponsible behavior does scare away
lenders...or cause them to demand higher returns.

 

[Nakosis]

Some companies die or contract, eg, IBM currently reducing
its Watson workforce, restaurants regularly going under.
This is useful to new & expanding companies, who have
a pool of available workers. It's a buffer.

Well, not on purpose. Ideally, we ought to have a shortage in workforce. Wages go up, we can import workers from other countries.

There are ways to fix a workforce shortage without forcing unemployment.

 

[Revoltingest]

Well, not on purpose. Ideally, we ought to have a shortage in workforce. Wages go up, we can import workers from other countries.

There are ways to fix a workforce shortage without forcing unemployment.

I'm just observing what happens.
It's stochastic...not by design.

 

[Nakosis]

Poisoning the well applies there? That's a new one on me. Can you lay out for me the logic of that?

Nah, you can look it up if you're interested.
And, even correct me if you like.

 

[Audie]

Well, fiscally irresponsible behavior does scare away
lenders...or cause them to demand higher returns.

Higher interest.
Add one percent to the interest rate and your
debt incresses a trillion per year.

 

[Audie]

Nah, you can look it up if you're interested.
And, even correct me if you like.

Boys, stop it!

 

[Revoltingest]

Higher interest.
Add one percent to the interest rate and your
debt incresses a trillion per year.

Spoiler: The secret

Fiat currency