1 - a friendly reminder that in the rules you'll find we don't post twice or three times in a row. If you want to respond to three posts, just select "quote" for all three and reply to all of them at once.

2 - Your post above exactly proved my point. Your subjective opinion is that "the wealthy" have disposable income and can afford durable goods. We do not tax wealth in this country, at least for the living. We tax income. A given level of income, even a high one, does not mean someone is wealthy, as they could certainly spend all or even more than they earn. You can accumulate wealth if you spend less than you earn for a long time, but there is no guarantee. Therefore, being wealthy has nothing to do with disposable income.

3 - Your opinion is that owning more stock or owning more property stimulates the economy less than poor people buying groceries. Give me some sources, otherwise it's just subjective. What is the economic impact of buying a house, rehabbing it and selling it? How about buying stock or venture capital in a growing business?

4 - You state it's more likely that "the wealthy" will invest instead of spend - again, why does investment (risk capital) stimulate the economy less than a poor guy's car note? What evidence do you have the "the wealthly" (assuming you mean top earners) will invest and not spend? Please help me understand.

Sure. Thanks, I'll remember that next time.



But certainly someone making a large income is most likely wealthy. I don't have stats, but I can't see why that assumption would be incorrect at least on average.

But you make a good point about not taxing wealth, which is something people intrinsically link to income. And when people talk about pro/regressive tax cuts, I think most people have in mind that it is wealthy vs. less wealthy. For instance, no one who favors a progressive tax system would be so if the majority of high income folks were only making that income for 1 year of their entire lives (and being poor the rest of the time).

So unless you can convince me otherwise, that's an assumption I will make. People with high incomes are most likely wealthy as well although the opposite may not be true (i.e. you can have low income people who are wealthy).



Well, rehabbing a house is not necessarily an "accumulation of wealth" and borders on "investment", IMHO. It's more like a job than an investment. Buying low cost housing and renting them are more like an investment. But even if you rehab a home, spending the money to rehab it may help the economy but other than that, what does it do but make housing more expensive?

I don't have the statistic here, but I read once that stock speculation, for a huge percentage of stock trades is NOT for growing businesses. In other words, it's like trading baseball cards whose value has gone up or down, except the stocks return dividends on occasion.

So the point being, those with disposable income are more likely to accumulate wealth, not create it. Those who are living day-to-day are more likely to create CONSUMPTION in an economy that right now is basically being supported by CONSUMER CONSUMPTION.




Investment in stocks does what for the economy? It's just accumulation of wealth, that's it. Sure, if you're investing in an IPO it MAY help the economy....unless that IPO has a bunch of greedy owners who pocket the money. Companies right now are NOT spending money, it's mostly consumers that are keeping our economy afloat. So why would dumping money into growing companies help, if they won't spend the money?

I don't have any evidence that the wealthy won't spend MORE. It's just a logical assertion. I don't doubt that they will spend more to some degree, but if you are going to target a consumer who will absolutely spend, why would you think it would be the people with disposable income??

Paul Krugman had a great quote about Bush's tax cut. He said the tax cut provided little bang for the buck, but there was plenty of buck. The tax cuts really didn't help THAT MUCH.

It's not an issue of whether they were effective, but HOW effective. If you target consumers who WILL SPEND, and not the consumers who ALREADY ARE LOADED, then you will get more bang for yer buck.

The value of government services is not the same for all people.
Let's take a simple example. Suppose you own a property which is
worth $1,000,000 and someone else in a nearby area owns one which
is only worth $10,000. When you apply for insurance we expect that
your payments should be about ten times as much since the potential
loss is proportionately that much greater.

Now suppose we create a civil guard service to safeguard both
properties. If both properties were destroyed by acts of
civil disturbance, the loss on the more expensive property would be
ten times as much as on the other. Thus, the value of the services provided
by the civil guard is also ten times more valuable for the more
expensive property. However, since the costs of protection
are not assessed directly assessed upon the value of the property the
more valuable property owner gets a greater benefit.

Another example, assume a high priced lawyer who earns $500 per hour
and his secretary who earns $20 per hour both drive
from the same general suburb. A road improvement is planned that will cut
travel time by one hour per day for each of them. They both choose to
use the saved time to increase their income by working the extra hour.
The road improvement is worth 25 times as much to the lawyer as the
secretary, but the gas tax collected to pay for it is the same for each.

So not only are there inequalities in tax collections, but there inequalities in
the value of the services which they provide.

In America, for most workers, the US Government collects the fruit of their labor for almost 1/4 of the year. One quarter of the time you work, you are not working for yourself, but for what the elected officials decide is the 'greater good'. I find this immoral, and against the principles of self-ownership - akin, in a roundabout way, to slavery.

Likewise, the a portion of the fruit of your investments goes to to the USG.

Employees are willing to work for their take-home after tax pay.
Employers are willing to pay employees their pre-tax pay.
The size of the difference reduces overall employment.
Difficulty in finding jobs leads people to work for less than they could potentially work for.
Eliminating this tax wedge would allow employers to either increase employment or reduce human resource costs. Increased productivity & profitability will lead to higher employment. Higher employment leads to higher wages, as employers compete for skilled employees.

Then we are left with how to pay for government services. That road the lawyer and his secretary drove down did not just benefit them, it benefitted every property along that road, as a source of customers and a means for residents to reach jobs and markets. A similar benefit exists for public safety, or even public welfare. Real estate people say the #1 (and #2, #3) criteria for real estate is location, but quality of schools is also a huge driver of real estate values. I've mentioned my opposition to labor taxes, and a tax on a house or building is a tax on the man who built it or bought it. However, a tax on the land taxes value wither created by Nature, or by the development of the community. A tax ond land value encourages folks to build their houses and buildings on as small a piece of land as possible, benefitting others by reducing travel costs to jobs, employees, and markets.

How's this affect the super-rich?

Well, folks like Bill Gates, who brilliantly came up with DOS before anyone else, has enjoyed the protection, by the USG, of patents on his discoveries. However, had he never existed, someone else would have eventually come up with something similar. Patents encourage discovery of new processes and devices, however, they lead to a government backed monopoly on those products. A balance must be found: either limit patents to ~5 years or so (rather than 20), or auction the patent rights every few years, and use the proceeds for general revenue. Note that Marconi and Tesla, working independently, discovered radio within weeks of each other, a theme that was repeated for many important discoveries / patents prior to instant and cheap world-wide communications.

There is a huge income disparity in this country, try googling the L-curve. Even more severe is the wealth disparity. I am all for more driven, harder working, more intelligent, and better educated people making more money than others, however, the disparity currently exhibited looks nothing like the normal variation in ability between people. When the super-rich continue to get richer, based on property laws, taxation, and monopoly rights, there is no way to look at the system as being fair to the regular person.

Maybe next time I'll tell you why our Treasury-Debt based Federal Reserve Money tends to enrich the super-wealthy.

[SIZE=7]Yes, I believe that the taxes are applied not just to the super-rich but, also just to the rich. I think that Bush is helping this problem become more and more noticed by adding taxes breaks to the rich

The new personalized social security accounts are a load of bull.(pardon my language)All the new accounts do is that they let you put your money in your account. Then when you retire they take money out for taxes and benefits and give you less benefits than we have now. So the only reason for these accounts is that the government makes money by taking in your money and giving you less benefits, which in turn gives the goverment money.

Discussions such as these are when party lines become blurred!

Middle class Americans undoubtedly bear the brunt of the tax burden, while the rich and the poor pay nearly nothing in comparison. Why can't we just approve a flat tax?

I agree that Capitalism typically rewards hard work and motivation more than other theories such as Socialism or Communism. However, the idea that the percentage of my income taken for taxes is markedly higher than that of anyone's in our nation is ridiculous. Being a relatively young, educated professional with an above avg income is an enormous tax burden.

Well, Ideally, I prefer taxes on the use value of natural resources, for which the taxation of has no deleterious effects, other than the economic use thereof.

In the absense of (or perhaps in conjunction with) such taxes I prefer a Negative (flat) Income Tax.

Another option would be a National Retail Sales Tax, but some means of capturing capital gains, esp. unearned capital gains from land appreciation.

But aren't all these just different methods of ideally collecting the same amount of money? Shouldn't more focus be put on making less money required (lowering federal spending). I know I bring that up a lot, but it kills me to hear so many discussions on how to collect the tax but so few on how we spend it.

Also, at the root, it is very evident there are two modes of though in reference to what people consider to be a fair amount of tax collected from the different classes. It is usually either assessed by percentage or by total amount paid...the problem being that these are extremely different ways of assessing what is fair. We need to come to one conclusion of what we all think is fair, and stick to that.

For instance, you could Joe Poor paying $1000 in tax which represents 5% of his $20k annual income and Mike Rich paying $10,000 which represents 1% of his $1 million annual income. You could argue both sides of the arguments with this...as one one hand you have the poor fellow paying 1/10 the amount of taxes as the rich fellow, and on the other you have him paying 5 times as much by percentage. So until we can all decide that we think either the total amount paid or the total percentage paid is the way to go, we are all NEVER going to agree on whats fair, and further more, both sides will use both approaches to make their points.

Then there is the issue of what you are assessing the percentages on. If you tax income, you can assess as a percentage of what one makes. However, if you tax consumption, you can assess as a percentage of what one spends. Whatever the case, we have to resolve what variables we are going to use to assess fairness before we should even approach the subject of what would be considered fair. Otherwise, the discussion is ridiculous.

I'm for taking less money, however there is a BIG difference on how it is assessed. It's an easy mistake to think that the HOW doesn't matter nearly as much as the HOW MUCH...I think there are some well connected people who make it their business to keep the populace confused in this matter.

As for assessing taxes against income, there are two major faults with this. 1st: how do we define income? Net of expenses? How do we define expenses? There are thousands of loopholes here, and more made just about every day. 2nd: assessing against income is a disincentive to making income, or at least an incentive not to report the income, or otherwise avoid the tax. On a related note, a tax on income, especailly wage income, increases the price of labor, and keeps people out of work, and wages low. Similarly, taxes on investment income raise the price of capital, and keep capital (machines) from being created.

As for assessing taxes against sales, there are also two major faults with this: 1st, how do we define sales? To the final consumer? To other legal entities? If we tax all sales, we encourage vertical integration and lessen competition, with the effect of raising prices. 2nd, a tax on sales dampens the rate of commerce, and slows the economy. It is in fact, a levy assessed against a voluntary exchange between two parties. As a tax on commerce, it is an indirect tax on labor and capital.

As for assessing taxes against wealth, there are again, two major faults: identification, and the indirect tax against labor and capital.

However, there is a remedy: it is correcting the identification problem of assessing tax against wealth. By defining taxable wealth as value not created by labor (or stored labor - capital), we are left with a tax that cannot reduce the supply of the things taxed. For a given amount of wealth, labor, capital, and natural resources, raising government revenue from NATURAL wealth / capital/ resources, by encouraging the economic use of natural wealth, and by untaxing labor and capital, provides the largest and most equitable economy.