Pages:
Author

Topic: Why do higher taxes on the rich historically correlate to higher economic growth - page 5. (Read 7827 times)

legendary
Activity: 1400
Merit: 1005
The thing is more like: In any sort of welfare state, (that's the main argument of why to have a state in the first place), why tax the poor at all?

In that case taxes should be negative and there could be other mechanism transposing the slope, like a disability, old age, kids, doing community service (anything falling under state employment for that matter).
When it comes down to it, if you are willing to strip down unnecessary bureaucracy what are now taxes could substitute any governmental mechanism involving money.

At best the thing would be tied to consumption, not income, property, profit or something else. Of course that would require a drastic change in the money system as well, which brings us back to bitcoin...
Negative taxes lessens the need/desire for people to work.  Disabled and old people, and kids, should all be taken care of by family members, relatives, friends, or charities.  They shouldn't be the responsibility of the taxpayer.

Why tax them?  Well, if they're using services that cost money, shouldn't they pay for those services just like everyone else?

If the rich work less because it isn't worth the money after tax, then it does penalize the poor.  That is less money for the rich to loan to the poor or to pay the poor to work for them.  There are consequences.

The contrary argument is: the higher the tax on the rich, the more inclined they are to reduce their tax burden by employing more people.

Both are speculation, the argument I propose might seem to be backed up by the data.
So you're saying the rich would rather lose 100% of their money by paying it to employees instead of losing 40% of it to taxes?  What kind of logic is there in that?
hero member
Activity: 798
Merit: 1000
If the rich work less because it isn't worth the money after tax, then it does penalize the poor.  That is less money for the rich to loan to the poor or to pay the poor to work for them.  There are consequences.

The contrary argument is: the higher the tax on the rich, the more inclined they are to reduce their tax burden by employing more people.

Both are speculation, the argument I propose might seem to be backed up by the data.
legendary
Activity: 1666
Merit: 1057
Marketing manager - GO MP
The thing is more like: In any sort of welfare state, (that's the main argument of why to have a state in the first place), why tax the poor at all?

In that case taxes should be negative and there could be other mechanism transposing the slope, like a disability, old age, kids, doing community service (anything falling under state employment for that matter).
When it comes down to it, if you are willing to strip down unnecessary bureaucracy what are now taxes could substitute any governmental mechanism involving money.

At best the thing would be tied to consumption, not income, property, profit or something else. Of course that would require a drastic change in the money system as well, which brings us back to bitcoin...
sr. member
Activity: 247
Merit: 250
Because high taxes on the rich means overall less taxes.

The lower the overall taxes the higher economic growth, it's as simple as that.

taxing the rich more does work, without penalising the poor

If the rich work less because it isn't worth the money after tax, then it does penalize the poor.  That is less money for the rich to loan to the poor or to pay the poor to work for them.  There are consequences.
sr. member
Activity: 476
Merit: 250
Keep it Simple. Every Bit Matters.
Because high taxes on the rich means overall less taxes.

The lower the overall taxes the higher economic growth, it's as simple as that.

EM brings up a fairly good point. If you tax the 1% (Richest) more, the 99% get to enjoy a tax break.
Of course it doesn't matter that much while loop holes exist, however yes taxing the rich more does work, without penalising the poor.
Economic growth is largely driven by the spending power of the 99%, so if you tax them less, they will have more money to spend.

Why does it help when governments have more money?
- Public sector jobs creation
- More Police, Paramedics, Fireman etc, makes it alot easier to keep crime numbers lower, making for a more peaceful society.
- Public funding, Benefit system, pensions etc.

Yeah I live in a country with a high tax rate and a government which does a lot in the public sector.
I don't like taxes, but I'd not trust the private sector to do a better job.
hero member
Activity: 798
Merit: 1000
The main reasoning from the top comment is that the rich hoard their money preventing it from being re-circulated into the economy.  But wouldn't that decrease the supply & increase demand aka making your money worth more?

Making money scarcer does not help the poor or middle classes. It causes high unemployment (and bankruptcies) due to price stickiness while the economy readjusts.

Quote
Assuming making your money worth more is a bad thing ("then everyone would hoard!"), why is giving it to the government a good thing?  Am I the only skeptic that believes the government is just a bunch of talking heads that give tax revenue to their rich friends?

I don't know what you're reading so I can't verify that the conclusion is that "giving to the government is a good thing", but all government spending eventually goes to the private sector. There is certainly a degree of crony capitalism involved, but what congress does with a budget is certainly public information, so there is only so much that they can get away with.

Quote
And even if the government perfectly reallocated money, what would be the point of working?  If I'm getting money from not working...I'm not going to work.

This is certainly not a valid conclusion. The government doesn't spend money for nothing, they expect work to be performed in return. It may be inefficient, and it may be liberty-depriving, but it (almost always) isn't a hand out.
legendary
Activity: 1666
Merit: 1057
Marketing manager - GO MP
Because high taxes on the rich usually means overall less taxes.

The lower the overall taxes the higher economic growth, it's as simple as that. Some eastern European country had a flat-tax model a few years ago. The economy skyrocketed. However this meant less taxes for the rich (at least according to the socialists who changed it back)
legendary
Activity: 1136
Merit: 1001
sr. member
Activity: 247
Merit: 250
I realize I'm preaching to the choir here - at least for the most part.  But in response to a hot topic on reddit, I figured I'd give non-socialists a chance to answer.  I honestly believe reddit is composed of intelligent people, but I completely disagree when it comes to politics - especially economic policy - on that site.

The main reasoning from the top comment is that the rich hoard their money preventing it from being re-circulated into the economy.  But wouldn't that decrease the supply & increase demand aka making your money worth more?  Assuming making your money worth more is a bad thing ("then everyone would hoard!"), why is giving it to the government a good thing?  Am I the only skeptic that believes the government is just a bunch of talking heads that give tax revenue to their rich friends?  And even if the government perfectly reallocated money, what would be the point of working?  If I'm getting money from not working...I'm not going to work.

So the big question, why have higher taxes on the rich historically correlated to higher economic growth?

Edit:

Here's the link to the reddit comments http://www.reddit.com/r/politics/comments/11ok1e/overall_higher_taxes_on_the_rich_historically

Here's a link to the data http://conceptualmath.org/philo/taxgrowth.htm
Pages:
Jump to: