Posted on 08/09/2011 8:12:31 AM PDT by SeekAndFind
President Obama has said that he wants to "spread the wealth". He proposes to raise taxes on "the rich" to get more money for "stimulus" spending, such as longer unemployment benefits. Let's look at how this "spread the wealth" thing would actually work.
Joe Lunchbox works in a factory owned by Reginald Bigbucks III, a billionaire. Obama stops at the factory during a "Jobs" bus tour through the Midwest. Joe and his coworkers assemble in the lunchroom to hear Obama speak.
"Good news," the president tells the workers. "We are going to be spreading the wealth. We are raising taxes on millionaires and billionaires-like Reginald Bigbucks III-and we are going to spend the money to benefit the middle class, people like you."
Joe raises his hand. "What do you mean?" he asks. "I mean, like, what is actually going to happen?"
Obama explains, "To pay my new taxes, Mr. Bigbucks is handing this factory over to the federal government. We are going to tear it down and sell it for scrap. Then we are going to use the money to extend unemployment benefits for another 99 weeks."
"Oh," Joe sighs. "Well, then, I guess that I'm going to be needing those unemployment benefits."
If the above example strikes you as fanciful, consider the following. To "tax" is to take away something from someone and give it to the government. "The rich" are rich because they own a lot of assets. So, what it means to "tax the rich" is to take assets away from rich people and transfer them to the government.
So, what are the assets that the rich own? The rich don't have money bins full of cash, like Scrooge McDuck. Rather, they own things like factories, office buildings, and oil wells, either directly, or indirectly via stocks and bonds.
In other words, the rich own most of the "nonresidential fixed assets" of the nation. These assets certainly count as "wealth", but what they are physically are the tools that workers use to produce America's GDP.
The government doesn't want factories, office buildings, or oil wells. It wants cash. So, taxing the rich forces them to liquidate assets. This liquidation is accomplished financially, rather than by actually tearing down factories and selling them for scrap.
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If you are referring to TEFRA, Reagan swore he regretted that to his dying day, because the Dems bargained in bad faith with no intention of ever cutting spending to match the new taxes.
So you would agree to being cheated, if need be? You must work on Boehner’s negotiating team. When are you going to mail that $1,000,000 you owe that guy?
You have beautifully encapsulated Reagan's legacy. </sarcasm>
She totally missed the point of that little exercise. *snicker*
My Magic Eight Ball predicts a money order for $2,000,000 in your mailbox soon..He drives a hard bargain, that negotiator who works for Boehner!
(the amount went up to $4,000,000 because someone kept moving the goal posts)
Reagan raised taxes in 1982, 1983, and 1986. Tefra was 1982.
High income earners pay most of the taxes collected by our government right now. A very large segment of the population pays no federal income taxes at all, and in fact consume large amounts of tax money. In return for this, they vote for the “right party.”
By using the phrase “trickle-down economics” you identify yourself as an economic illiterate. I hope that doesn’t offend you, and perhaps you are very young and so can use that for an excuse.
We have an economy that generates vast wealth, so much wealth that it’s possible to arrange things so that tens of millions of people don’t have to do any useful work at all to live a very comfortable lifestyle, at least by the standards of the rest of the world. People who do no work (other than filling out government forms or sitting still for a few hours while a government worker fills out their forms for them) are able to afford food, housing, cars (quite nice cars in some cases), cable television, cell phones, internet, large-screen televisions, computers, and air conditioning. In many cases, they’re able to live in suburban neighborhoods in which they don’t fit, and often that results in the value of the whole neighborhood being dragged down as they act out in ways that small-town police forces aren’t equipped to handle.
Our economy generates such a vast stream of wealth that politicans are able to buy the votes of tens of millions of people through this type of deal. These people become, essentially, “vote cows.” They do nothing other than vote, consume, and have children who perpetuate the cycle. They demand ever more, and when they don’t get what they want they create mayhem.
This is the dynamic that “doesn’t work.” It has nothing to do with how much this demographic group is taxed, or not taxed. It has everything to do with political forces taking advantage of the incredible wealth-producing power of our free society to enrich the groups they favor on the backs of the groups that don’t want to go along with the game.
Wasn’t trying to encapsulate anything. Just stating a fact that even Reagan knew that raising taxes sometimes need to happen.
Let me get a quick question in here, so I can see where you’re coming from: What is the purpose of taxes? Are taxes to raise money or to level the playing field?
Sheesh, I used the term “trickle down” instead of supply side and because of that I don’t know anything? Check. What an easy way to disregard everything I said.
One of the main reasons a lot of people do not pay federal income tax is because of the earned income credit tax credit. Are you willing to do away with that so they pay more Federal income tax? They do still however still pay sales tax.
Most people own all of the things you mentioned because of they buy these things on credit that like this country do not pay back.
If we are talking people just on welfare we are talking like $600 a month max and I think that is in California. I don’t know what Suburban areas you can pay rent much less a mortage for whatever is left over from $600 a month.
I do think welfare is a huge problem in this country. I think there are people that leech off of welfare all of their lives and they are the lowest form of human being. That being said, they are far from comfortable.
Raise money.
I actually meant Mr. Bigbucks would just take his money and move to another country to live...I know he would have to declare and likely pay something- but then he is out of our system, forever. I forget when it was but at one time this country was taxing the rich a lot and I read a biography of a movie star that said the biggest stars just up and moved to Europe and hung out, might have been in the 20s not sure of the time frame.
Good.
I redirect your attention to the article at the top of this thread. The premise is “Raising tax rates will not raise more money, but will instead reduce the revenues collected.”
Notice that at no time (that I have seen) does it suggest that raising tax rates was a good idea because Regan did it.
If you want to stay credible in this discussion, I encourage you to address the issues raised in the original article, instead of arguing Reagan raised taxes too. As an additional bit of advice, I recommend you refrain from using disproved leftist phraseology such as “trickle-down economics” when making your arguments, because it disqualifies you as a leftist tool, even if that characterization of you is inaccurate.
You may not agree, but I thought the guy dunning you for a million bucks was a funny argument, and you missed his point entirely when you referred to it as a “straw man.” It was not, but it was a good example of using an extreme to point out the foolishness of a less-extreme position.
What first world country would you suggest he move to?
Long story made shorter: If you want to maximize revenue, any kind of hike on high-earners will have the opposite effect. I got carried away with being a meanie.
:^P
I’d rather see Mr. Bigbucks stay here and help make this a first-world country....He didn’t get the big bucks by fleeing at every opportunity.
I didn't disregard everything you said. I disagreed with most of what you said, but I didn't disregard it. If you come on FR and spout a lot of nonsense, you have to be ready for people to disagree with you, and to post their disagreements. If that bothers you, don't post such blatant stupidity.
One of the main reasons a lot of people do not pay federal income tax is because of the earned income credit tax credit. Are you willing to do away with that so they pay more Federal income tax? They do still however still pay sales tax.
I have no idea what you're talking about here. Whatever the reason "a lot of people do not pay federal income tax," the result is the same: people who do not pay federal income tax have a vested interest in keeping the tax rates high for those who do pay federal income tax. They constitute a built in perpetual constituency for high taxes, which is what politicians want.
Most people own all of the things you mentioned because of they buy these things on credit that like this country do not pay back.
What is your point here? You're just jabbering.
If we are talking people just on welfare we are talking like $600 a month max and I think that is in California. I don’t know what Suburban areas you can pay rent much less a mortage for whatever is left over from $600 a month.
What is "$600 a month max"? Public assistance in California? Yeah, right.
I do think welfare is a huge problem in this country. I think there are people that leech off of welfare all of their lives and they are the lowest form of human being. That being said, they are far from comfortable.
How "comfortable" is the right degree of "comfort" for people who don't work, can't work, have children, don't educate them, can't educate them, won't keep track of them, won't make them do homework, won't stop them from trashing their neighborhoods, won't stop them from engaging in criminal behavior... How much "comfort" do these people need? What's the "right" amount of comfort? Are they owed a certain degree of comfort by the people who do live responsibly? If so, why?
I wasn’t addressing the article in general. I was addressing you saying, “I have a dollar here that says there’s a tax increase somewhere in that package of rational thinking you have”. Now that I answered your question and provided you with the fact Reagan, my favorite President ever by the way, raised taxes you came back with how half of the country doesn’t pay taxes. Which I also refuted. Now you are telling me to stick to the article in question instaed of refuting what I said is an easy way to not address anything I said.
Another easy way to not address anything I said is to attack me for using a term. Trickle down Trickle Down Booga OOga! It’s in the American lexicon. I have heard many a right wing pundit use it. I guess they are leftists tools too!
I was addressing your statement about concerning a large percentage not paying Fed Income Tax. EIC is the reason they do not pay that tax. Are you willing to do away with EIC?
You said that those that don’t pay the federal income tax could afford a plethora of things. I stated that they pay for that on credit and do not pay that back. Has nothing to do with the fact they pay no Fed Tax.
I am actually not going to justify welfare recipients with you. That even I can’t do. They are a scurge but they aren’t the only economical problem this country has.
If you wish to cede the language to the leftists, you go on ahead. Lose the argument to them while you are at it. I choose not to. As do many others, as you have learned.
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