Can I call myself a Liberal/Progressive if I support tax cuts for the Middle Class not for the Rich/Wealthy

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Can I call myself a Liberal/Progressive if I support tax cuts for the Middle Class not for the Rich/Wealthy. I know many here would disagree with tax cuts but must Liberals/Progressives agree on every issue ?

liberalprogressivedemocrat's picture
liberalprogress...
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Apr. 20, 2010 7:28 pm

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Wages, ultimately, are based on two things: The supply of labor and take-home pay.

The Danes have a 50% tax rate...and a minimum wage of $16 an hour. More than double ours.

Germans have a 50% tax rate...and the German union scale for auto workers is double that of U.S. workers. $60 per hour vs. $30 per hour.

In both countries, take home is about the same as ours...with added social benefits such as health care, free univ. education, Day Care, etc. Ultimately, social benefits are paid for by the employer through higher wages to cover the higher middle class tax rates..

Corporations would probably delight in lowering taxes on workers. They could lower their wages. Within a few years, take home pay would be about the same as before the tax cuts....minus social benefits.

http://www.youtube.com/watch?v=pOAjFcsI_mI

Retired Monk - "Ideology is a disease"


polycarp2
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Jul. 31, 2007 4:01 pm

An adjustment in the tax code to take more of the burden off the Middle Class and pass it up to those who have taken so much in fraud, or just to prove that they love America if we don't want to go into detail, would help the budget by increasing revenues, and it would be a gain for the Middle Class.

But Poly is correct in the analysis of taxes and wages, and the appeal of tax cuts does not address what we need to invest together to get the best return. Were we not burdened by war and empire, and their support systems here, our taxes could be put to much more efficient use with much greater public benefit. Middle class "tax cuts" are rhetoric without great substance unless they reflect a shift of the tax burden to those who can afford it. That would address the lazy capital in the bloated upper end of our society that does not get invested in the real economy and certainly is not directed where "we, the people," need it.

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DRC
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Jul. 31, 2007 4:01 pm
Quote pol:

Wages, ultimately, are based on two things: The supply of labor and take-home pay.

No. Wages are based on the marginal productivity of the labour in question.

The marginal productivity of the labour is equal to the revenue which the firm earns minus the revenue that the firm would earn if they did not employ that worker.

Take home pay tends to be equal to the marginal productivity of labour minus the expenses the employer bears to employ that labour.

Quote pol:

http://www.youtube.com/watch?v=pOAjFcsI_mI

After watching the video, I would have to say I sharply disagree with Thom. Obviously, if you lower taxes for working people, their income rises. Those evil capitalist coorporate pigs can't just pay ppl what ever they want. Labour is a scarce resource. They have to competitively bid for it.

Also, if you raise taxes on the rich, this reduces the incentive to save and invest. With lower levels of capital accumulation, real wages are lower for workers, than they otherwise would be, holding all other things equal, since additional capital increases the productivity of labour. A big problem with progressives is that they don't recognize the crucial function that capitalists perform for society. They ultimately don't enjoy the majority of the benefits of their accumulated fortunes. The masses do. We live in an age of mass production. And mass production is always production for the masses. By accumulating huge amounts of capital and investing it, capitalists increase the general standard of living by increasing the overall output of consumer goods, for the amount of labour put in. Taxing the hell out of the rich is killing the goose that lays the golden egg.

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Austro-Libertarian
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Apr. 10, 2010 7:31 am
Quote Austro-Libertarian:
Quote pol:

Wages, ultimately, are based on two things: The supply of labor and take-home pay.

No. Wages are based on the marginal productivity of the labour in question.

The marginal productivity of the labour is equal to the revenue which the firm earns minus the revenue that the firm would earn if they did not employ that worker.

Take home pay tends to be equal to the marginal productivity of labour minus the expenses the employer bears to employ that labour.

Quote pol:

http://www.youtube.com/watch?v=pOAjFcsI_mI

After watching the video, I would have to say I sharply disagree with Thom. Obviously, if you lower taxes for working people, their income rises. Those evil capitalist coorporate pigs can't just pay ppl what ever they want. Labour is a scarce resource. They have to competitively bid for it.

Also, if you raise taxes on the rich, this reduces the incentive to save and invest. With lower levels of capital accumulation, real wages are lower for workers, than they otherwise would be, holding all other things equal, since additional capital increases the productivity of labour. A big problem with progressives is that they don't recognize the crucial function that capitalists perform for society. They ultimately don't enjoy the majority of the benefits of their accumulated fortunes. The masses do. We live in an age of mass production. And mass production is always production for the masses. By accumulating huge amounts of capital and investing it, capitalists increase the general standard of living by increasing the overall output of consumer goods, for the amount of labour put in. Taxing the hell out of the rich is killing the goose that lays the golden egg.

No, I think you are wrong and Thom is right.

People base whether to work or not on take-home pay. I know in every job I applied for they provided a salary or hourly rate based on my W-4 along with a detailed record of my tax deductions. They have me fill that form out and then provide me an offer of employment based on what I can expect to take home. Seems always reasonable to me. Of course me being single, and living in my parents house, I would expect to get paid less gross income since I have less deductions. I know that the guy next to me that has like 3 rugrats and a wife and thus gets a lot less gross since he has so many dependents that he claims in his taxes. He even got some of that "make work pay" deductions on his taxes and thus the boss cut his pay for this last year. Seems fair to me.

And incentives don't matter. In the Marxist tradition, people work just for enjoyment and helping out their fellow man. It, in essence, is a public good. Chinese communes proved that incentives do not matter.

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quaestorchickpea
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May. 12, 2010 7:02 pm

Austro wrote: "By accumulating huge amounts of capital and investing it, capitalists increase the general standard of living by increasing the overall output of consumer goods, for the amount of labour put in. Taxing the hell out of the rich is killing the goose that lays the golden egg."

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Actually, that hasn't happened...with the lowest tax rates on capital in many, many decades. Theory is one thing...what actually occurs is quite another.

We should be in the biggest economic boom in history according to theory. We aren't. Without wages, without consumer demand, there is no productive use for capital. It winds its way into the financial sector...bringing down one economy after another speculating on nonsense and gambling on financial paper that has no tangible value.

The U.S. currently guarantees $11 trillion in what is in effect toilet paper.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm
Quote polycarp2:

Austro wrote: "By accumulating huge amounts of capital and investing it, capitalists increase the general standard of living by increasing the overall output of consumer goods, for the amount of labour put in. Taxing the hell out of the rich is killing the goose that lays the golden egg."

---------

Actually, that hasn't happened...with the lowest tax rates on capital in many, many decades. Theory is one thing...what actually occurs is quite another.

We should be in the biggest economic boom in history according to theory. We aren't. Without wages, without consumer demand, there is no productive use for capital. It winds its way into the financial sector...bringing down one economy after another speculating on nonsense and gambling on financial paper that has no tangible value.

The U.S. currently guarantees $11 trillion in what is in effect toilet paper.

Retired Monk - "Ideology is a disease"

I'm just going to point out several things.

1) Correlation is not causation. If two variables, A and B, are highly correlated, it may be that A causes B, B causes A, or that the two are just coincident without any cause and effect relationship.

2) To interpret data, on must rely on theory. And apodictic theory can never be proven false by data. If capital accumulation is high and incomes are low, we do not draw the conclusion that capital accumulation does not increase wealth. Instead we must assume some third variable that is not accounted for is responsible for decreasing wealth. From the law of returns, the physical productivity of a factor must either rise or remain the same when there are additional complementary factors.

3) It is not the tax level on capital that determines the rate of savings and investment, it is the overall tax rate.

Austro-Libertarian's picture
Austro-Libertarian
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Apr. 10, 2010 7:31 am

Austro wrote: "If capital accumulation is high and incomes are low, we do not draw the conclusion that capital accumulation does not increase wealth. Instead we must assume some third variable that is not accounted for is responsible for decreasing wealth."

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Funny. As Friedman noted in "Money Mischief"...the money supply at any given time is finite. For some to have more, others have to have less.

According to Austrtrian and Chicaago Schools of Economics, we should be in the biggest boom ever. Capital accumulationa at the top have never been higher in this country...except maybe just prior to the Great Depression. . Maybe banksters aren't getting large enough bonuses. Give 'em two billion instead of one.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

We've discussed issues like this on this board ever since I got here (now over 3 years ago--no where near the longevity of people like polycarp, DRC, ren, sawdust ((?)), meljomur, mattnapa, and others). Ravi Batra, an economist from Southern Methodist University, has pointed out that 'disparity of wealth distribution' is the primary reason behind all economic depressions--and he has some statistics to prove that--and, unlike just the 'statistics believers', a rationale behind it. Batra's point was rather simple, if the average person can't afford what is produced, if the worker, himself, cannot afford what his labor is producing, production will eventually slow down or stop. And, if economies are gauged by production, the economy will slow down or stop. All of this is based on whether the worker can afford what he or she is producing.

Henry Ford realized this when he started the first assembly line production of cars for the masses--his workers were paid much higher wages than the 'average wage' at the time. Henry Ford wanted those workers to be able to afford what they were producing--it was actually good for the country and the economy....

Nowadays, with all the outsourcing to 'race to the bottom' for wages for workers, with all these 'transnational corporations' searching out the 'lowest paid working class' in the world in its vast reach for 'profitability at all costs', it has abandoned any concept of that sort. When it does so, even in many instances its 'target consumer group' cannot afford what it produces (they lost all their jobs to their cheaper overseas competitors). When that happens, the company will contract what it can to maintain its 'profit share'--and, as Ravi Batra explains, in doing so, it actually makes the problem worse--cutting out more salaries and, consequently, cutting out more consumers--which, as Ravi Batra explains, gets the cascading of 'lay-offs because of less purchasing of production leading to more people unable to purchase that production leading to more lay-offs because of less purchasing of production' that, in the end, means less production. And, if an economy is based on production, that's shit.....but, not many other economists (orthodox as they may be) seem to follow that 'heretical' line of thought.....so, you see, it all gets back to 'faith' and 'religion' in some way....:)......

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Kerry
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Who Should an Economy Serve?

The top one percent own half of all the world's assets. In stark contrast, the bottom fifty percent of the world owns less than one percent. According to the 2014 Global Wealth Report from Credit Suisse, global inequality has surged since the 2008 financial collapse. The report explains that while global wealth has more than doubled since the year 2000, the vast majority of overall growth has gone to those who were already wealthy.

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