DebateGate
General Category => 3DHS => Topic started by: kimba1 on May 18, 2011, 09:08:26 PM
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http://truthout.org/actually-rich-dont-create-jobs-we-do/1305380742 (http://truthout.org/actually-rich-dont-create-jobs-we-do/1305380742)
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Well, this is accurate, except for what he says about Atlas Shrugged.
Perhaps the most vivid description of what happens to a society where the parasites become so numerous and powerful that they destroy their productive hosts is Ayn Rand’s classic novel “Atlas Shrugged.” ...
What happens in Atlas Shrugged is that the creative people, who are also tycoons, go on strike and deprive the proles of their genius, wages and benefits, and live in "Galt's Gulch" until a speech by John Galt, who invented an engine that runs on ambient static electricity, convinces the country in one speech, that he is right and all the evil FDR-lovers are wrong. Then everyone recognizes that "It's Morning In America" and the book closes with a happy ending.
I am not sure I would call "Atlas Shrugged" a classic novel. Perhaps a popular novel, maybe a classic thousand page screed.
Rand, by the way, did not show that she believed in capitalism. She did, it is true, had cigarettes made with dollar signs on them and smoked them until she contracted cancer. But she did not invest. Not in shiny wondrous blue "Reardon metal", not in cars that ran on static electricity, not in Xerox, Polaroid, IBM, Kodak, DuPont, Brillo, LIquid dish detergent, synthetic rubber, plastics, Coca-Cola, nothing. She kept her money in a bank passbook, and when she was old and ill, she signed up for Social Security and Medicare. Yay, Ayn.
Getting back to the main point: rich people can build companies that make wondrous things. They can invent Segways. But for Segway manufacture to create a lot of jobs, a lot of people have to buy a Segway. It seems to me that Segways probably did not create a lot of jobs. One could make a lot more with a much cheaper innovative skateboard, I am sure.
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Just more class warfare rhetoric from the other side.
The author does have a point that consumers drive demand, but investors provide the capital to meet that demand.
Think about it. Ford doesn't sell direct. They sell to dealers, who buy the product wholesale and then turn around and sell to the end user. So the jobs created by the demand for a Ford happen at two levels, manufacturing and the dealerships. And that in turn creates jobs in the secondary markets for parts accessories and repair. At each step in the chain money needs to be invested to be able to provide the goods or services that that one car sale triggers.
Investors do not have to be rich to invest, but they do need to be able to afford the loss of their investment, which the poor usually can not afford to do, what with being concerned with more immediate needs like food, shelter and clothing.
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Investors do not have to be rich to invest, but they do need to be able to afford the loss of their investment, which the poor usually can not afford to do, what with being concerned with more immediate needs like food, shelter and clothing.
The rich need to invest, the middle class might or might not , the poor are not likely to invest .
So is there a social requirement for the rich? Would there be enough investment without them?
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Would there be enough investment without them?
Possibly if you include institutional and pension investments.
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Would there be enough investment without them?
Possibly if you include institutional and pension investments.
Looks like neither of us have measured this , how would we know what "enough " is?
Arn't institutions uniformly conservative investors?
Do we need a few gamblers?
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I think it smart business to let your capital work for you, whether it be in real estate or the stock market.
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Would less capitol gains tax be a social good or a loss to the government?
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Would less capitol gains tax be a social good or a loss to the government?
Those are good questions. But doesn't it depends upon our expectations of our government as to realistic revenue requirements?
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There is an ideal rate of taxation, perhaps. If the rate is raised, revenue will be less and if it is lowered revenue will be raised as well. It is the economic equivalent of finding a balance point.
This is likely to vary depending on the economic climate, and certainly depends on tax rates in other places and ways by which taxes can be avoided profitably for the investor.
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or you tax income as well as capital gains at one low flat tax rate.
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The government costs too much for one low tax rate.
I don't see why capital gains should not be taxed the same.
I am opposed to a flat tax. Taxes should be progressive, I believe.
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Taxes should be progressive, I believe.
Why?
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Would less capitol gains tax be a social good or a loss to the government?
Those are good questions. But doesn't it depends upon our expectations of our government as to realistic revenue requirements?
Not absolutely.
We could quite possibly expect more from the government than our taxes could support , without being ruinous to the economy that the tax base depends on. If we have expectations in that range they won't be met and harm will result from the attempt.
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history has taught the lesson that great wealth opposes democracy, so democracy must oppose the accumulation of great, disproportional wealth
I wish that the author had included refrence for this , I am absolutely ignorant of the history that has taught him this.
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There is an ideal rate of taxation, perhaps. If the rate is raised, revenue will be less and if it is lowered revenue will be raised as well. It is the economic equivalent of finding a balance point.
This is likely to vary depending on the economic climate, and certainly depends on tax rates in other places and ways by which taxes can be avoided profitably for the investor.
The ideal rate must be the lowest rate that can support the optimum government.
Since that government governs best that governs least the optimum of government is the smallest one that can perform all functions that only the government (and no agency other than the government) can make happen.
Persons who are paying more for the government than they receive in benefit from being governed should have sales resistance.
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The government costs too much for one low tax rate.
I don't see why capital gains should not be taxed the same.
I am opposed to a flat tax. Taxes should be progressive, I believe.
Yes , money itself is progressive.
The less income one has , the less of that income is liable to be discretionary, so that a really poor person might be using 99% of his income on necessities while a wealthy one can make his life continue useing 5% or less income.
A flat tax is not an equal injury to the whole population ,it would tax the weak to injury before it taxed the strong enough to notice.
A simple progression should be sufficient not much diffrent from what we have now, with a smaller percent for the lower earner and a few stepsto bite deeper into the greater discretionary spending of the wealthy.
But not too many steps nor too great a progression elese you produce a frequent paradox of someone looseing income by earning too much, a problimatic disincentive to being productive and thrifty.
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A flat tax is not an equal injury to the whole population ,it would tax the weak to injury before it taxed the strong enough to notice.
And at that point of injury wouldn't the poor man want to know why that tax money was needed? And perhaps cast his vote against any expenditures that were not absolutely necessary?
And isn't that the cause of government bloat, the fact that the poor are protected from the pain of knowing the true cost of government.
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A flat tax is not an equal injury to the whole population ,it would tax the weak to injury before it taxed the strong enough to notice.
And at that point of injury wouldn't the poor man want to know why that tax money was needed? And perhaps cast his vote against any expenditures that were not absolutely necessary?
And isn't that the cause of government bloat, the fact that the poor are protected from the pain of knowing the true cost of government.
All right , how about a less progressive tax?
So that no one is getting a free ride or being protected from bad decisions?
But the harvesting of the fattest feilds isn't shorted.
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All of human history indicates that when you have most of the wealth in the hands of the few, then education, health, and nutrition are also in the hands of the few. Development follows all of these. Disparity of income causes lack of progress and innovation and stagnation.
The history of every country in South America indicates this. The same is true of every country in which there is a huge disparity of wealth.
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If progressive taxation is such a good idea , why aren't all taxes progressive?
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can anyone tell me does progressive tax still stop people from doing overtime?
10 years ago I see alot of folks turning down overtime out of fear of getting to the next tax bracket,but have no problem getting a raise.
does this thinking still exist?
I always thought this is the difference between a successful person and the rest of us.
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If progressive taxation is such a good idea , why aren't all taxes progressive?
Because it is not possible. How do you make a sales tax progressive? Give every citizen an ID with his tax bracket on it that must be shown at every cash register, toll booth, vending machine everywhere?
It is physically impossible to make all taxes progressive, and that is why it is not done.
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10 years ago I see alot of folks turning down overtime out of fear of getting to the next tax bracket,but have no problem getting a raise.
does this thinking still exist?
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It is stupid thinking by people who as a rule, do not understand how tax brackets work. If you ask people who say they are avoiding overtime, you will find that they never do their own taxes, and think that they will pay a higher rate on ALL income if they make enough to have their overtime income put them in a higher bracket.
A simplified example: You pay 15% of the first 20,000, and 20% of the amount between $20,000 and $40,000.
So if you make $20,000, you pay $3000. If you make $25,000, you pay 15% of the $20,000, and 20% on the $5000 ($1000), so the total bill is $4,000.
The net result is you make $20,000, and you keep $17000. You make $25,000 and you keep $21,000. (not $20,000). It is clearly worthwhile to earn overtime, all other things being equal.
What a lot of people think, however is that they will have to pay 20% on the entire $25,000, or $5000, so they avoid making that $5000 in overtime, because they simply do not understand.
The problem occurs when the deductions on overtime pay are inadequate or nil, and the poor schmuck has to pay more in taxes rather than getting a small refund.
There are a lot of people who do not understand percentages. Add the concept of brackets to it and they are utterly baffled.
I spent almost as much office time when I was teaching telling how to figure grades to students than teaching Spanish.
I imagine a good place to look for such people would be on Friday, in line to purchase Powerball tickets.
The lottery is basically a voluntary tax on people who do not understand math.