Tax cuts lower wages

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Quote FreeMarketeer:

I was only using 90% because that number has been kicked around this board for several years. Use any number you want - although I am not sure why you think 50% is magic.

The point, jim, is that if most of an investor's profit has to be re-invested back into the business every year to save that profit from being taxed, and the investor doesn't see a return they like, then investment will just stop. It's no longer worth doing.

At least you admit that taxes can be "too high".

Wow... you just don't get it!

You can't see why it has to be more than 50%?

And you think that it means that most of the profits will go elsewhere?

You should study mathematics a bit more, because these matters of confusion to you are shocking!

First of all, If you make a million dollars in a year, and the top bracket starts at one million dollars as our earlier example (the real top bracket is at $370,000), then all that money is taxed at the lower rate. It isn't until you make two million that the higher tax bracket is applied, and only on that amount OVER that first million. If you already made a million dollars, and suddenly you make even more, one has to thank the system that made it possible, and return the favor! When people make "sick" money, it is entirely because of the system that made it possible. NO ONE works so hard to deserve so much more than others. And are you telling me that you wouldn't work as hard because you'd only make $400,000 out of that second million? Isn't $400,000 enough? Isn't that $600,000 a reasonable payment that you should pay for the opportunity to be able to make that much "sick" money?

And the reason it should be over 50%, is because it encourages the entrepreneur to invest the profits in the business or the people, rather than just give himself huge pay raises. In other words, it is precisely BECAUSE most of it will disappear to the government that makes it work to help the state and the people. If he can keep most of the profits to himself, rather than share it with his labor who made it all possible, then it all goes to a select few. This leads to economic "royalty", and they don't work any harder. In fact, they work LESS! They live the life of the extreme elitist. And all because the CEO and the Board can write their salaries off as a tax break, encouraging them to give him a non-deserved pay raise rather than build the business, which is good for both the state and the workers!

If the CEO is encouraged to invest in the business, then it helps everyone, and he is less likely to pompously pay himself more, but possibly even do some PROFIT-SHARING with the workers, which is the RIGHT thing to do!

A top bracket that is designed to catch those "sick" money recipients and encourage profit-sharing and re-investment is the right thing to do.

Why do you think that the average bureaucrat in business now makes so much more than the workers? In 1950, top executives earned 24 times the average worker's pay**, 122 times in 1990 and 550 times in 2009. This is all related to the rightwing's manipulation of the tax system, and it is leading to economic "royalty" which is further attacking America by the way they use the money to propagandize, lie, cheat and lobby for whatever they want (and get away with it).

It is very Un-American, and the top bracket being over 50% would fix this. If you don't support this, then you are just trying to take all the profits for yourself, and are selfishly contributing to what caused the Bush recession for letting him continue his economic policy of lower taxes on the rich, and less programs to help others get a start. It's almost as if the top elitists don't appreciate the infrastructure that we made ... which made them rich faster simply because they already had money in the family to establish the connections and the college degree that daddy bought them. Don't be selfish.

jim of Binghamton's picture
jim of Binghamton
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Jul. 23, 2010 12:38 pm
Quote FreeMarketeer:
Quote DRC:

FM, if the rich were any good at getting the money back into the productive economy so it would be a stable system, we would not be having this discussion. We would be celebrating the wonderful order of the market and how it orchestrates a wonderful human society.

I submit that it's the government that has caused the problems, not "the rich".

"The market" is neither wonderful nor horrible. It just is. Stop demonizing it. The market is nothing more than people buying and selling. A free market ought to be nothing more than people with liberty, going about their business, within the limits of regulation, enforced by the government to keep force and fraud at bay.

You can argue, like Poly does, that the evil rich bought our government and then wrecked the economy. OK, fine. It's still the government causing all the problems.Straighten government out, fix the problems. Don't blame freedom and liberty, that's dumb. Under your twisted logic, the atmosphere would be evil because it's causing global warming.

You would be submitting wrongly, to say that the government is causing the problem, not the rich.

The government just is... and it depends on the people who run it. If that person is a greedy son of a bitch that just wants to change government into his own private piggy bank, then it isn't the government's fault.... the government is not alive, so how can you blame it? How absurd!

Secondly, the market just is... and it depends on the rules and the infrastructure set up from which business can be conducted. Government's role is to properly maintain those rules and infrastructure, but it is the people who run government that mess it up, and often by being the super-rich who buy themselves that presidency just so they can use the government as their own little piggy bank. Sure, they run as a "good little person", but then they enact legislation that ruins the nation, leaving a select few at the top. They'll even use their millions to make billions, and use millions to brainwash the idiots into following them, enabling them to rob the US treasury, just like Bush did. When Bush caused the Recession, he siphoned off billions to defense contractors, CEOs at prescription companies and health care monopolies. He even borrowed money from China just to give it to the rich, and then make the rest of us pay for it.

So stop demonizing the government! Demonize the selfishness of a FREE MARKET! There is NO such thing! By your very moniker, it is obvious that you attack government in favor of the free market, thus you are partly responsible for letting Bush destroy our economy... not the government, but greedy people who believe in the same thing you do. Bush himself said that he did nothing about the recession, even though he knew it started a year before anyone else did, because he thought (like you do) that the free market would take care of itself. Ignorant! Stupid! And now here we are... thanks a lot!

A free market does not mean give free money to the rich, stab the poor in the back, and destroy the middle class! It means tax the rich for they are benefitting the most of the infrastructure that other people built up for them, and they are also using the infrastructure the most. SOmeone has to pay for the police and firemen that protect their belongings. Renters don't really benefit from that! They use the roads the most, driving from meeting to meeting, transporting goods from factory to store. They use the courts the most, begging for more tax exemptions. They use the banking system the most, made safe by our inspectors, regulators and detectives. Someone has to pay for it... and you "free marketers" seem to think that its' free! LOL... what a bunch of ingrates!

But it is this part of your post that really shows how you have no clue: "

You can argue, like Poly does, that the evil rich bought our government and then wrecked the economy. OK, fine. It's still the government causing all the problems.Straighten government out, fix the problems. Don't blame freedom and liberty, that's dumb. Under your twisted logic, the atmosphere would be evil because it's causing global warming."

Who is blaming freedom and liberty? Does freedom and liberty mean you can walk all over the rest of us, whom you probably just think of as "peons"? Does freedom and liberty mean that you get all the tax breaks, even though you are already rich and getting paid extravagantly? Does freedom and liberty mean you can LIE to the nation, like in Wisconsin where they are blaming the teachers, nurses and snowplow drivers instead of the extravagant tax cuts that the rich don't deserve? Do you think freedom and liberty means that you can lie and say that it isn't a revenue problem but a spending problem, despite the fact that you could cut all day, and still not balance the budget?

But to say that we are like saying "the atmosphere would be evil because it's causing global warming."" kind of proves how you aren't even thinking! First of all... the atmosphere is not causing global warming, so that right there proves you don't know what the hell you're talking about. You can't argue your way out of a paper bag! Even if it is natural, it is the changes to the environment that is causing global warming! In the same way, it is the "free market" philosophy that ruined our economy, thanks to all the republican changes to the system! The constant tax giveaways to the rich to drain the treasury and revenues, the constant suppression of the workers so that they can never get ahead, indeed the workers make less and less while the rich make more and more. It used to be that the rich and the poor were always getting richer, until Reagan and his stupid "trickledown" economics. Now, since the poor are just getting poorer, and the rich are getting insanely richer, it is proven beyond a doubt that the elitists have rigged the system to re-distribute the riches of this nation to just a select few. That isn't a "free market". And a free market will never exist, so just give it up. "Free market" philosophies are just naive logic designed by the greedy to fool the masses. So are you one of the duped masses? Or are you one of the traitorous thieves that is trying to usurp this nation?

jim of Binghamton's picture
jim of Binghamton
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Jul. 23, 2010 12:38 pm
Quote FreeMarketeer:

You can argue, like Poly does, that the evil rich bought our government and then wrecked the economy. OK, fine. It's still the government causing all the problems.Straighten government out, fix the problems.

Also exactly my point, hehehe

Cheesebone's picture
Cheesebone
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Sep. 1, 2010 9:18 am

It's pretty hard to straighten out government when it's been sold to the highest bidder. You'd have to out-bid them.

Whenever large concentrations of wealth are encouraged, government gets captured by those with the means to do so. When in history has this not been so?

A revolution undoes it from time to time, and then the whole process begins all over again.

Encouraging large concentrations of wealth puts you on a merry-go-round.

Retired Monk - "Ideology is a disease"

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

A revolution undoes it from time to time, and then the whole process begins all over again.

Have at it, then.

FreeMarketeer's picture
FreeMarketeer
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Oct. 11, 2010 11:00 am
Quote jim of Binghamton:

The government just is... and it depends on the people who run it.

No shit.

Quote jim of Binghamton:

... the government is not alive, so how can you blame it? How absurd!

Absurd? The "government" (among other things) is a set of laws and the people who created them. I can sure as hell blame them. You do. Ever blame Bush for anything?

Quote jim of Binghamton:

Government's role is to properly maintain those rules and infrastructure, but it is the people who run government that mess it up,

Wait. You just said we can't blame government for anything, that it just IS.

Quote jim of Binghamton:

brainwash the idiots into following them


Pompous comment.

Quote jim of Binghamton:

He even borrowed money from China just to give it to the rich, and then make the rest of us pay for it.

Congress authorizes this. It's been going on for decades. We need a new money system in the US. You won't hear any argument from me about debt.

Quote jim of Binghamton:

So stop demonizing the government!

I am demonizing the current crop of polititicans (from the last 50 years or so). Time for a revolution.

Quote jim of Binghamton:

Demonize the selfishness of a FREE MARKET! There is NO such thing!

You're funny. First you call something selfish, then say it doesn't exist. Maybe you better take a deep breath. You seem angry and it's causing you to blabber.

Quote jim of Binghamton:

By your very moniker, it is obvious that you attack government in favor of the free market,

Nope. I love government, it's essential for society and I have stated it in this very thread. It has it's place, but one place it doesn't belong is setting prices, giving corporate handouts and the like.

Quote jim of Binghamton:

thus you are partly responsible for letting Bush destroy our economy...

So are you. Ever bought something from China? Ad homs don't carry much weight.

Quote jim of Binghamton:

the free market would take care of itself. Ignorant! Stupid! And now here we are... thanks a lot!

I thought the free market doesn't exist. Wait...here you go again:

Quote jim of Binghamton:

A free market does not mean give free money to the rich, stab the poor in the back, and destroy the middle class!

Quote jim of Binghamton:

It means tax the rich for they are benefitting the most of the infrastructure that other people built up for them, and they are also using the infrastructure the most. SOmeone has to pay for the police and firemen that protect their belongings. Renters don't really benefit from that!

Amen. Tax the rich, just like everybody else. Where did you read that I said don't tax the rich?

Quote jim of Binghamton:

They use the roads the most, driving from meeting to meeting, transporting goods from factory to store. They use the courts the most, begging for more tax exemptions. They use the banking system the most, made safe by our inspectors, regulators and detectives. Someone has to pay for it... and you "free marketers" seem to think that its' free! LOL... what a bunch of ingrates!

More ad homs, more assumptions, this is getting ridiculous. Go find someone else to argue with. Are you 12 years old?

Quote jim of Binghamton:
But to say that we are like saying "the atmosphere would be evil because it's causing global warming."" kind of proves how you aren't even thinking! First of all... the atmosphere is not causing global warming, so that right there proves you don't know what the hell you're talking about.

Yeah, that was my point. You clearly have either no reading comprehension, or you're just a windbag. I suspect both.

FreeMarketeer's picture
FreeMarketeer
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Oct. 11, 2010 11:00 am

LOL... that was your point? That blaming the market for the economic crisis is like blaming the atmosphere for global warming? But it is NOT what I said, Einstein!

You show perfect adherence to the principles of a liar, by taking just a tidbit of a quote out of context and trying to make it look like what you said! In other words, you're a liar!

I said it wasn't that at all, because NO ONE is saying that the market is responsible for the economic crisis... we're blaming FREE MARKET IDEOLOGY! It is the rightwing conservatives/tea partiers who are ruining the market for their own gain, with their stupid "free market philosophy"!

The free market philosophy caused and extended the Great Depression, thanks to both Coolidge and Hoover! Then it ruined the world economy thanks to Bush following "free market philosophy". Reagan had a recession too, as soon as he started his first tax cuts to the rich!

But you don't get it, because you can't even understand ENGLISH!

I write:

Demonize the selfishness of a FREE MARKET! There is NO such thing!

and you say:

You're funny. First you call something selfish, then say it doesn't exist.

Again! Twisting the truth and twisting what others say! THERE IS NO SUCH THING AS A FREE MARKET! And you knew EXACTLY what was being said, but you'd rather be a "smart-ass" than smart or honest!

To believe in a "free market" is a DELUSION! STOP BEING DELUSIONAL! The problem is that selfish people LIKE YOU use the lies about an idiotic "free market" to fleece the people!

As Abraham Lincoln wrote:

"These capitalists generally act harmoniously and in concert, to fleece the people!"

Only a TRAITOR would manipulate the market for private gain at the expense of the national economy. How does it feel to be a traitor, coming here with your subversive philosophy designed to ruin the nation, just as it did with Bush and did with Coolidge? The facts speak for themselves! NEVER has your free market ideology EVER worked. It has ALWAYS failed!

Since this is obvious from lessons in history, it is obvious that you are about one thing... being a traitor who wants to fleece the people. We need to STOP the TEA PARTY and the REPUBLICANS from doing more damage to this country. So I am glad that more and more people are agreeing with us that there is NOT a "spending" problem causing this recession, but a "REVENUE" problem! The rich are NOT being taxed enough for how much they cost the infrastructure, and the only way to fix it is to add more tax brackets and tax the highest bracket MORE than 50%. It is the ONLY way to fix it. We could "cut" all day every day of the year, and we still won't have enough money, unless you want to abandon the American people like the traitor you present yourself to be.

Do you really believe that we should stop programs to feed babies just to give more tax breaks to the rich? Animal!

Do you really believe that we should take our children's school money away and give it to the rich in more tax breaks? Monster!

And why? Because you think the "free market" (one where the tax system was rigged to give free money to the rich, and rob the poor) will decide who lives and dies! Evil! That is what your are... based on the way you betray Americans.

Either you believe in raising taxes on the rich, and believe that it is wrong to keep blaming the workers for the deficit, or you are that monster described above! Here's your chance to redeem yourself and swear off your "free market" idiocy!

But I'll bet you're not even mature enough to admit that 85% of the National Debt has been made by "free marketers" like yourself, in the form of JUST THREE PAST PRESIDENTS! Yes, 85% of the National Debt were made by Reagan, Bush, and Bush Jr!... your ideology must really be stupid! Either that, or it is all a SCAM to rob the treasury to give to the rich!

You won't swear off your "free market ideology" though because you were born with a silver spoon, and you're just too damn afraid that you might have to work for a living. Not just a traitor, but a LAZY one as well.

Disgusting!

jim of Binghamton's picture
jim of Binghamton
Joined:
Jul. 23, 2010 12:38 pm
Quote stwo: Anyone know of any evidence that supports the assertion that lower tax rates lead to lower wages?
I'm also searching for evidence that lower tax rates (on workers) lower their wages. Anyone? Given how often I've heard Thom say "when taxes go up, wages go up. When taxes go down, wages go down", I just can't find any evidence to use to defend his statement.

coyote2
Joined:
Jul. 31, 2007 4:01 pm

There are two reasons. One is labor supply (what wages workers will supply their labor) and demand (what influences the demand for workers).

In terms of Labor Supply:

The theory is that workers who have little 'clout' tend to compete wages down to the bare minimum to survive.

So, a tax cut will mean workers will compete down wages to a lower level.

In practice this 'survivial' wage is not bare survival, but may include what people expect to make for whatever class they think they are in. So, when there are tax cuts, workers will accept lower wages, especially for entry level jobs.

In terms of Labor Demand, tax cuts mean that very wealthy people have lots more cash. Before, if they put it back in their business, it was not taxed. Now that taxes are low, there is an incentive to plat the stock market. This creates a 'Bubble' type economy. We saw early with the S&L scandal, the merger mania in the 80's, the internet and housing boom in the 90's. So, instead of rich people expanding their businesses, they gamble. Some make huge gains.

As to the empirical record, I will leave that to others. But it does seem to fit recent experience, plus explain the 20's boom and bust. But there are lots of exceptions.

Dr. Econ's picture
Dr. Econ
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Jul. 31, 2007 4:01 pm
Quote FreeMarketeer:

Common sense says that employers have to compete for employees. Sometimes the market is tight, sometimes it's not. But we all have to pay people enough so we can hold on to our valuable employees. That's how wages are determined. The downward pressure on wages the last couple of decades has been competition from overseas. Not the threat of "lower taxes".

You can't write an article like this based on "common sense." If you have so much data, you should be able to easily back up your claims. Otherwise, I'm afraid you don't have any more authority on the matter than anybody else.

It's YOUR job to offer evidence to back up your hypothesis, not mine. Didn't you attend journalism school?

Where is your common sense that you can't see that you don't have to compete for employees in this country anymore? Not when you have a billion starving candidates in the lobby. Many of you (American employers) don't give a rats ass about your employees. Even the mom and pop shop I work for, who does all of their business in the US would gladly import a cheap asian employee if they could. Every legally allowable penny is squeezed. And, though the loss of American common sense, with regard to taxing the wealthy and protecting jobs will surely effect their own business more than it already has, which is considerably, they continue to cling to the voo doo (economics) that the right does so well. It's almost a cult mentality amongst the upper middle class that they worship and aspire to be and think like the filthy rich so much, even though they are-with their fancy cars and country club memberships- little more than a slightly more interesting variety of insect to the objects of thier devotion. It's a little ironic.

Your argument about the employers valuing their employees is a flash from the past, when the best socialist policies of this nation were still keeping the labor pool shallow and the peoples' bellies full. I'm sure, though, that the high taxes and high wages of the fifties and sixties are not even written into the republican version of history. You probably didn't have that chapter in the Idiot's guide to Reganomics.

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D_NATURED
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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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