Taxing wealthy vs economic growth

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Re: Taxing wealthy vs economic growth

Post by spanky4ever »

@Dolan say
It's not that simple.

Maybe not quite as simple, but not far from the truth. Economist are prolly the profession that are never right in their estimates and prediction, and the more complicated there calculations are, the further away for the "truth" imo.
As we've already discussed here and in other topics, increasing taxes doesn't lead to long-term increased revenue
.
As you know I live in a Scandinavian country, and we have a rather high taxation, but relative to what US ppl spend on taxing, healthcare insurance and medication, affordable and quality Children daycare, higher education, generous parental leave arrangements when you have children etc etc. I think that the higher taxes to fund the welfare state, are something that makes Scandinavian democracies robust. That is why no political party would get many votes if they want to ruin the welfare state. Its pretty robust and solid.

Economic agents simply adapt to increased taxes and funnel the money elsewhere. They don't even need fiscal heavens or illegal means to do that.

We need better regulation, I know. In US the political system is poisoned with corp money, and very broken. But that is political decisions that made it this way, and its political decisions that will reverse it. This is why the US 2020 election is so important.

They just stop investing in creating jobs and do something else with that money. And then it's a lose-lose situation for everyone.


I think you will have to dig hard to find that the 1,8 Trillion in tax cuts that Trump just gave have had any big boom in investments;) There is no incentive to invest because there is no marked for more products, because ppl cannot afford to spend more ;) This is true, not only in USA, but also in China (thanks to Trump taxing imports from China), and EU. The UK is about the only country in the west who are seeing a boom in manufacturing - because they are stacking up goods and preparing for Brexit.
Germany, the biggest economic locomotive in EU, was 0,0000001 % from recession last month.


And you cannot really say that people's purchasing power in developed economies during the last 50 years has not increased at all. That's just not what the economic data show.


That could maybe be right, I have not looked up any statistics today ;) But you have to consider that woman have been entering the labor market, so the family now have 2 incomes, instead of one. In addition, households are stacked with debt to keep up their purchasing power. In addition, ppl work crazy long hours. But now there is pretty much no room for working more or getting deeper into debt. Any stastistic will show you that the production per worker has increased dramatically over 50 years, and all that surplus have gone to the top, and are doing so at an increasing rate every year.

And yeah the trickle-down effect is a fairytale, it doesn't really reliably lead to a continuous and robust effect of big money spending more to create more jobs. That's why I proposed that profit-sharing idea, which might create a real trickledown effect, something that would work perpetually, without having to be at the big capital's beck and call to see some real gains for everyone else too, when profits are increasing.


If I am not wrong, this is called a cooperative arrangement, and it is nothing new. I do think that governments should encourage more cooperatives to be formed. Btw, did you know that Huawei is a cooperative and that the founder of the company only owns 1,46% of the stocks? You are maybe aware that Huawei is one of the most successful companies nowadays?
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Re: Taxing wealthy vs economic growth

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iwillspankyou wrote:Maybe not quite as simple, but not far from the truth. Economist are prolly the profession that are never right in their estimates and prediction, and the more complicated there calculations are, the further away for the "truth" imo.

That's the problem with all "social sciences" not just economics. Psychology too has a problem with predicting human behaviours. You'd be hard-pressed to come up with some predictions made by psychology that always hold, given the same conditions and variables. Because human behaviour can be influenced and affected by so many seemingly random variables, the result itself is nigh impredictable. And when we're talking about aggreggate behaviour, such as we see in a hugely complex phenomenon like the economy, some things become easier to predict and show stable patterns (because behaviours tend to develop more consistent patterns in aggreggates), while others have a more catastrophic type of causation and dynamics (in which causes are not noticed until after the event occurred).
So I wouldn't say economists are incapable of developing useful models to understand the economy, they're just dealing with a very difficult subject: fickle human behaviour.
That still doesn't mean economics as a science is completely useless. You just have to be aware that your models and explanations are based on shifting sands. And seek predictive value where predictive value can be gained.
As you know I live in a Scandinavian country, and we have a rather high taxation, but relative to what US ppl spend on taxing, healthcare insurance and medication, affordable and quality Children daycare, higher education, generous parental leave arrangements when you have children etc etc. I think that the higher taxes to fund the welfare state, are something that makes Scandinavian democracies robust. That is why no political party would get many votes if they want to ruin the welfare state. Its pretty robust and solid.

Funny you say that, because if I'm checking out any world rankings on taxation burden, Norway is not even among the first 25 countries with the highest taxes in the world. Argentina has one of the highest corporate taxes. Belgium, Austria and Italy also have higher taxes than Norway (and other Scandi countries). So, I think it's doubtful that the "secret" to the Scandinavian social-capitalist model lies in higher taxation. Maybe it's a question of how money are spent, that's possible. Other countries may collect more money from taxes, but spend it on different priorities. And this is where what I said once about Scandinavian societies having been modelled by a communalist, tribal mentality comes into play. Norway has "always" had such an equalitarian economic system, even before you struck gold in the 1970s, by discovering those rich oil reserves in the North Sea. So it's a question of mentality which is typical for a particular culture. China has higher taxes, but most of their people live in poverty, they're not even considered a developed country because of that. And what would your (spanky's) recommendation for China be? That they should try be more like Norway... When their society has always been heavily controlled by a centralised government and when their culture emphasises the importance of the collective to the detriment of individual freedom. In general, Asian societies exhibit such a pattern of diminishing the importance of the individual compared to that of the family, state, community, group. This has even been observed in brain studies: Asians process geometrical shapes differently compared to people from countries where individualistic values are praised (much of the Anglophone world + Europe), they tend to focus on holistic recognition of patterns, rather than on individual parts of a shape. If cultural differences are so strong you can even see it in how people process such basic acts of cognition, what do you think would happen if you tried to tell them they should be more like Norway? :chinese: Nothing.

Economic agents simply adapt to increased taxes and funnel the money elsewhere. They don't even need fiscal heavens havens or illegal means to do that.

We need better regulation, I know. In US the political system is poisoned with corp money, and very broken. But that is political decisions that made it this way, and its political decisions that will reverse it. This is why the US 2020 election is so important.

Yes, the political system in the US and elsewhere is "poisoned with corp money" but that's beside the point. Even if it wasn't, companies or rich people could still choose to save their money/property in ways which would be untaxable. And then, it would be a lose-lose situation.
And again, countries like Argentina have one of the highest level of taxation and look how developed they are... As I previously said, taxation per se is not an economic panacea, it's not a silver bullet that magically solves everything. You don't solve every problem by just throwing more money at it. You can take steps to solve it in many ways, including managing what you already have in better ways. Or prioritising things differently. A poor person can improve their health a lot without incurring any huge expenses, by just avoiding over-eating, eating a healthy diet, losing weight if necessary, dropping smoking and heavy drinking etc etc. None of these cost a fortune or need a high income. And yet many lack the discipline to go through it. They'd rather plunge into brainless consumption and then complain they have huge health problems they can't afford to treat because healthcare is expensive. But what did you do to prevent yourself from getting there in the first place? The USA has one of the highest obesity rates in the world. It's ironic that many of them complain about huge healthcare costs, when they're stuffing themselves with junk food. How can you have compassion for a walking mountain of fat who complains about high costs of healthcare in the USA, when they brought diabetes and fatty liver disease unto themselves by overeating and eating a lot of crap?

Image

They just stop investing in creating jobs and do something else with that money. And then it's a lose-lose situation for everyone.


I think you will have to dig hard to find that the 1,8 Trillion in tax cuts that Trump just gave have had any big boom in investments;) There is no incentive to invest because there is no marked for more products, because ppl cannot afford to spend more ;) This is true, not only in USA, but also in China (thanks to Trump taxing imports from China), and EU. The UK is about the only country in the west who are seeing a boom in manufacturing - because they are stacking up goods and preparing for Brexit.
Germany, the biggest economic locomotive in EU, was 0,0000001 % from recession last month.

Yeah companies don't invest that much anymore compared to pre-2008 levels, they've all become super-careful with spending. The 2008 crisis has been such a shock, it even killed Ensemble Studios, simply because Microsoft, much like most other companies, panicked their whole business could go bankrupt if they continued to bleed money on projects that were very risky, such as game development. So, they quickly proceeded to cut losses and stop spending money wastefully. This thrifty spending behaviour has become ingrained in most companies' culture in the post-2008 world. And apparently not even tax cuts can change their minds. Everyone seems obsessed with building a huge cash fortress and locking themselves inside, while waiting for better times.

And you cannot really say that people's purchasing power in developed economies during the last 50 years has not increased at all. That's just not what the economic data show.


That could maybe be right, I have not looked up any statistics today ;) But you have to consider that woman have been entering the labor market, so the family now have 2 incomes, instead of one. In addition, households are stacked with debt to keep up their purchasing power. In addition, ppl work crazy long hours. But now there is pretty much no room for working more or getting deeper into debt. Any stastistic will show you that the production per worker has increased dramatically over 50 years, and all that surplus have gone to the top, and are doing so at an increasing rate every year.

I think most of the productivity gains in the post-WW2 era are due to huge advances in technology. It's not so much that people work more or harder, it's that they can get more stuff done when they employ technology in their workflow. And frankly not all people work equally hard and they don't work equally hard every hour. If you put together the work they get done in 8 hours per day, you probably get around 2 hours of real productive work.

And yeah the trickle-down effect is a fairytale, it doesn't really reliably lead to a continuous and robust effect of big money spending more to create more jobs. That's why I proposed that profit-sharing idea, which might create a real trickledown effect, something that would work perpetually, without having to be at the big capital's beck and call to see some real gains for everyone else too, when profits are increasing.

If I am not wrong, this is called a cooperative arrangement, and it is nothing new. I do think that governments should encourage more cooperatives to be formed. Btw, did you know that Huawei is a cooperative and that the founder of the company only owns 1,46% of the stocks? You are maybe aware that Huawei is one of the most successful companies nowadays?

Nah, that's hogwash, Huawei was "founded" by a guy with strong links to the Chinese military. The real power in Huawei is controlled by a Communist party committee which operates inside the firm. Those "workers-shareholders" are actually just window dressing to legitimise a business model whose purpose is to spread Chinese influence around the world and gather intelligence data, where possible. They don't decide anything and they can't keep their "shares" once they leave the company. And it's not the entire workforce that owns such shares, it's about 60% if I'm not mistaken.
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Re: Taxing wealthy vs economic growth

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Asians process geometrical shapes differently compared to people from countries where individualistic values are praised.

@Dolan link please?
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Re: Taxing wealthy vs economic growth

Post by Dolan »

@deleted_user

https://onlinelibrary.wiley.com/doi/ful ... cogs.12490
Press release: https://www.sciencedaily.com/releases/2 ... 095013.htm

The subject has been researched for quite a while and it probably originated in questionnaire-based psychological research, which was later confirmed by brain research:
https://pdfs.semanticscholar.org/9c52/c ... 8b7e94.pdf

Another study which replicated these findings with including UK research subjects:
https://journals.sagepub.com/doi/abs/10 ... lCode=peca

Study which replicated these findings in a Chinese sample:
https://www.pnas.org/content/102/35/12629

These researchers even suggest that conducting brain studies in mixed samples may actually lead to results which are not generalisable to the whole species, since the patterns observed might simply be different in different racial groups:
https://www.sciencedirect.com/science/a ... 8910002312

Meta-analysis of 35 studies which identifies the brain network which underlies cultural differences in visual processing:
http://cscn-pku.com/pubs/2014%20Han%20a ... eprint.pdf

Some researchers hypothesised that this may be caused by differences in cultural content which could have a biasing effect on visual processing:
https://journals.plos.org/plosone/artic ... ne.0050282

Other researchers doubt that there is such a link or find weak evidence for it:
https://www.sciencedirect.com/science/a ... 8907002234
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2668147/

Others have researched and found neurobiological, structural differences between Asians' and non-Asians' brains, which might underlie these cognitive differences in visual processing:
http://www.cogneuro-lab.org/UserFiles/P ... ckness.pdf

A surprising finding related to theory-of-mind ability differences in processing between Japanese and Caucasian study participants:
https://www.tandfonline.com/doi/abs/10. ... 011.620763

Even more surprising findings have come out of research which investigated differences in processing same-race/other-race faces in 4 to 9-month old babies:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3740558/
These researchers put this down to learning that takes place in the first months of life:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2566511/
The effect was confirmed in adults:
https://www.sciencedirect.com/science/a ... 8914000984

Another paper that analyses the implications of these findinds:
https://www.nature.com/articles/nrn2456
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Re: Taxing wealthy vs economic growth

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Re: Taxing wealthy vs economic growth

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How did you even connect these lines of research with eugenics? Especially considering that they have been conducted by mixed teams of researchers from the USA and China or by Chinese teams of researchers?
There's no mention of any genetic effect in any of these studies. If you actually bothered to read the short descriptions, some of these effects are hypothesised to be at least partially caused by early learning. There even is a hypothesis which puts the effect down to differences in writing systems.

The moralising Redditor mentality is stupefying sometimes.
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Re: Taxing wealthy vs economic growth

Post by spanky4ever »

@Dolan said this, in response to my post;
Asians process geometrical shapes differently compared to people from countries where individualistic values are praised (much of the Anglophone world + Europe), they tend to focus on holistic recognition of patterns, rather than on individual parts of a shape.


As always, you will find some studies that will confirm this, and I suspect just as many others that do not. I bet you will find "studies" that will confirm almost anything, but to conduct solid scientific studies, and finding the same "things" over many studies, is just another thing. Btw, the way you are raised, and the environment you live in, will shape the brain, should not be a surprise to anyone.
What significance this "findings" have to the broader picture, is another question, and frankly, I doubt it is very significant in predicting human behaviour or explaining why there are different political systems in China than in Western countries, in general. It seems to me that you are using this kind of odd findings, to try to explain things that are not related in any way, by overstretching the significance of the findings.
You should bear in mind, that before the revolution in China, they lived under very different economic an political systems, and I doubt that the Chinese brain has changed very much in 2-3 generations. As we all recognize that evolution takes a lot of generations, and most likely 10s of millions of years.

Yes, the political system in the US and elsewhere is "poisoned with corp money" but that's beside the point. Even if it wasn't, companies or rich people could still choose to save their money/property in ways which would be untaxable. And then, it would be a lose-lose situation.

I do not buy that, at all. That is why I brought the Scandinavian model into the discussion - just to show you that it doesn't necessarily have to be this way.

A poor person can improve their health a lot without incurring any huge expenses, by just avoiding over-eating, eating a healthy diet, losing weight if necessary, dropping smoking and heavy drinking etc etc. None of these cost a fortune or need a high income. And yet many lack the discipline to go through it. They'd rather plunge into brainless consumption and then complain they have huge health problems they can't afford to treat because healthcare is expensive. But what did you do to prevent yourself from getting there in the first place? The USA has one of the highest obesity rates in the world. It's ironic that many of them complain about huge healthcare costs, when they're stuffing themselves with junk food. How can you have compassion for a walking mountain of fat who complains about high costs of healthcare in the USA, when they brought diabetes and fatty liver disease unto themselves by overeating and eating a lot of crap?



this way of arguing that taxes don't solve anything and that the individual could just "man-up", is what we usually call argumentation that wants to privatize a systemic problem in the society. In other words, drag yourself up by the bootstraps.

This thrifty spending behaviour has become ingrained in most companies' culture in the post-2008 world. And apparently, not even tax cuts can change their minds. Everyone seems obsessed with building a huge cash fortress and locking themselves inside while waiting for better times.

and that is at the core of the problem imo. stacking away money, and not spending it in the economy, are damaging the economy. As simple as that, and the reason that there should be heavy taxation on money that is being exempt from the economy. I bet that would incentive the super-rich to spend more in the economy. It should not be "secure" to hoard money in Tax havens. It will take political decisions to turn this around, and that is at the core of my argumentation.

And this is where what I said once about Scandinavian societies having been modelled by a communalist, tribal mentality comes into play. Norway has "always" had such an equalitarian economic system, even before you struck gold in the 1970s, by discovering those rich oil reserves in the North Sea. So it's a question of mentality which is typical for a particular culture.

I have no clue to what you are saying here about Tribal mentality ;) I only know that the Scandinavian model is probably the best in the world. It is not communist, nor is it pure socialist, but it is a blended economy model, just like most western economies are. The only difference is that in Scandinavia they tax rich ppl more and have a more fair system, and the welfare state is one of the main pillars of its success. It also constitutes the example that Bernie Sanders is using, when he is speaking about a political revolution in USA.
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Re: Taxing wealthy vs economic growth

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Dolan wrote:The original argument you made said that it is worth for the government to spend more because that will lead to a suplus in the private sector and thus growth. When I say that some of that public spending might actually lead to increased savings, I mean it won't get in the economy, it won't be in circulation, it won't be invested.

Surplus = savings, essentially. We want a private sector surplus. It provides for a stronger middle-class and reduces poverty. It also provides more stability to the economy, since less people are one paycheck away from ruin. Of the three sectors - government, private, and foreign - the private sector is the only one we have a vested interest in seeing an increase in savings.

"Theoretically" is not what happens. And they couldn't, because as I said, the Fed cannot directly credit governmental accounts, if we're talking about deficit spending (and not about day-to-day operations that need to secure the government's cashflow for regular budgetary allotments that have already been approved under the current budgetary law). It needs to operate through private agents, aka primary dealers.
And again, as I said, if that were the case and your government could spend to infinity, and thus increase the GDP to infinity and avoid inflation, then why aren't they simply doing it? The answer is: they can't. The law doesn't allow them to, because public finances are part of the same system of checks and balances between institutions as the rest of government. It's not just a "political" issue, this is not about what Repubs or Dems want, it's about what any party represented in the Congress and government would have to do, as part of how the whole system works.

We choose to use bonds, so that the Fed can manipulate interest rates. But there's nothing stopping us from just running a permanent overdraft at the Fed, other than lack of desire to do so by the government. (The State, not just the President.) Also I've repeated numerous times that inflation is a concern with government spending. It is the only real, non-self-imposed constraint.

Even if you disagree with my assertions about Fed-Treasury operations, my main thesis about taxation and economic growth should still stand. If, for some reason, we only taxed or borrowed whatever we spent, couldn't we just pass a law and change that? Just print money outright to fund expenditure, and use that to cover expenses, but not to the extent that it causes inflation? I don't see why taxation should be considered necessary for government expenditure, and thus economic growth.
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Re: Taxing wealthy vs economic growth

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iwillspankyou wrote:As always, you will find some studies that will confirm this, and I suspect just as many others that do not. I bet you will find "studies" that will confirm almost anything, but to conduct solid scientific studies, and finding the same "things" over many studies, is just another thing. Btw, the way you are raised, and the environment you live in, will shape the brain, should not be a surprise to anyone.
What significance this "findings" have to the broader picture, is another question, and frankly, I doubt it is very significant in predicting human behaviour or explaining why there are different political systems in China than in Western countries, in general. It seems to me that you are using this kind of odd findings, to try to explain things that are not related in any way, by overstretching the significance of the findings.
You should bear in mind, that before the revolution in China, they lived under very different economic an political systems, and I doubt that the Chinese brain has changed very much in 2-3 generations. As we all recognize that evolution takes a lot of generations, and most likely 10s of millions of years.

These are not just a few studies, it's a whole line of research that spans tens of studies which replicated the effect over a few decades. There are also (fewer) studies which failed to replicate the effect. So far, the track record seems to support the idea that Asian people process visual information differently from non-Asian people, which may have overarching cognitive effects in other ways in which they think about fundamental issues. That's why I brought it up, because it's likely to have political implications too. For years, we've noticed that Asian societies and cultures stress the importance of collective wellbeing over individual freedom, family concerns over individual concerns, ruler over ruled. Confucianism, which is something like a cultural Chinese ideology, clearly embodies this collectivist spirit which defines Chinese culture. While modern China has moved on from simple traditionalism, their mindset is still defined by a reverence for "chain of command", hierarchy, social rank, group orientation, which are characteristic of Confucianist thought.

Sure, it takes "millions" of years for brains to evolve, but not everything changes at the same pace. Those things that change over millions of years are the most basic brain structures, such as expanded cortex or atrophy of some brain structures which are no longer needed (the vomeronasal organ which used to be involved in processing pheromone signalling and which is no longer needed in higher primates, for example). On the other hand, subtle but significant changes in brain structures may have taken place in just 10000 years, to allow for humans to better process language, writing and reading. It is conceivable that such subtle structural changes may have evolved slightly differently in different cultural regions. The Chinese writing system is one of the oldest in the world: prehistoric symbols have been found in China dating back to more than 8000 years ago. And surprisingly those symbols (Jiahu symbols) look very similar to modern-day Chinese writing (from a geometrical point of view). Could it be that this graphological similarity was caused by changes in brain structure which were already present 8000 years ago? Could it be that the Chinese develop a collectivist mentality also because of learning a kind of script which requires attention to context more than attention to individual elements in the glyph? It's an idea and a hypothesis worth researching. And that's what scientists have been doing. I don't think I'm overstating the importance of these findings, it would surely explain some high-level behaviours that we notice in the Chinese but also in some other Asian countries and cultures (Confucianism has influenced Korea and Japan too, not only China). Sure, we also notice some degree of variability in how different Asian countries and cultures manifest this tendency towards collectivism: for example, in South Korea, although we tend to think of them as more similar to Western countries in terms of freedoms, let's not forget how important the chaebol system is over there.

We don't yet have a conclusive answer to this question, we don't know whether this is mostly based in biological differences, if it's only partly based in neurobiology, or just predominantly the result of cultural developmental forces. What we know is that there is a growing body of evidence which supports this idea that Asians tend to process information slightly differently from non-Asians. Which might also explain other cognitive outcomes: their excellence in maths and STEM subjects, their tendency to develop collectivist societies which shun individualism, their public "poker face" when it comes to dealing with strangers, but also their fondness for "cute face" characters (anime, toys, etc - even for adults), and their manufacturing prowess in electronics. Imagine finding some neurobiological differences which appeared long ago, when Denisovan populations inter-mixed with Neanderthals, and which eventually led to a regionally unique version of humans in Asia, with unique and slightly different characteristics. That's a super-fascinating hypothesis that may one day be proved, at least partially. We may also discover some even more surprising influences coming from the environment too (imagine the type of soil and vegetation having also an influence over gut microbiota and this, in turn, leading to other changes in brain development).
Yeah, I know, I'm bringing lots of things which appear "unrelated" to this discussion, but, as it happens on this planet, biological systems are not tightly sealed, there are influences on higher-level behaviour (such as economic choices, political choices) that may come from low-level brain processing, which may have been, in turn, caused by evolutionary changes brought about by much more ordinary causes than just "culture".

this way of arguing that taxes don't solve anything and that the individual could just "man-up", is what we usually call argumentation that wants to privatize a systemic problem in the society. In other words, drag yourself up by the bootstraps.

Could be, but then, so is the opposite school of thought which believes that you can simply change a whole society by using a top-down approach, by forcing a specific model onto a society, when that model wasn't organically developed by that society. There's this hillarious example of USA officials visiting Romania's capital some years ago and telling the press how Iraq will be the next young, vibrant democracy, following in Romania's footsteps. It just shows typical American ignorance of local culture and their simple and simplistic belief that a country can change according to their interests. They only forgot one little detail: Iraq is split between different ethnic clans which have different Islamic allegiances. Look at where Iraq is today, can we really say it's a vibrant and young democracy? They've been rocked by terror attacks ever since Saddam was removed from power. The USA's forced democratisation of Iraq didn't lead to the establishment of a stable democracy, it led to a country torn apart by civil war until recently (2017). And I don't think that even after ISIS has been officially "defeated" we are going to see a happy federal Islamic Switzerland over there too soon.
The top-down approach to social changes might work for some very specific and targeted issues, like removing plastics from the environment, but even such policies are likely to have very variable rates of success in different cultures. But imagine having an even more ambitious target...

and that is at the core of the problem imo. stacking away money, and not spending it in the economy, are damaging the economy. As simple as that, and the reason that there should be heavy taxation on money that is being exempt from the economy. I bet that would incentive the super-rich to spend more in the economy. It should not be "secure" to hoard money in Tax havens. It will take political decisions to turn this around, and that is at the core of my argumentation.

If you raise taxes on deposits, it's likely that banks will need to raise interest rates to be able to still attract capital. And this will have a chain effect on the whole economy, making credit very expensive for private enterprise, which would pretty much suffocate.

On the second point, I agree, in fact, I'm more radical than you in this respect. I'd go as far as to say that tax havens should not exist, they should be simply banned. Why should one category of citizens have privileged access to different fiscal treatment? They shouldnt.
I have no clue to what you are saying here about Tribal mentality ;) I only know that the Scandinavian model is probably the best in the world. It is not communist, nor is it pure socialist, but it is a blended economy model, just like most western economies are. The only difference is that in Scandinavia they tax rich ppl more and have a more fair system, and the welfare state is one of the main pillars of its success. It also constitutes the example that Bernie Sanders is using, when he is speaking about a political revolution in USA.

Again, Scandinavia does not tax the rich more than other countries at all. There are way more countries that tax the rich a lot more than Scandi countries. Which proves that taxing more does not automatically lead to less economic inequality. Economics is a lot more complicated than a 2-variable function. :smile:

Can't really explain the tribalist Scandinavia theory here, it's an idea I've been having for some time, but it's just an inkling for now, nothing fully developed I could expand on. I would need more anthropological data to be able to check whether my observations are actually accurate or it's just a vague impression.

=========

This was just published today:
https://www.theguardian.com/world/2019/ ... inequality

It appears that populist regimes have surprising effects on reducing economic inequality. And the even more surprising finding coming from this study is that they didn't achieve this by "raising taxes on the rich", which is what leftwing politics usually craves for.
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Re: Taxing wealthy vs economic growth

Post by spanky4ever »

Dolan wrote:
This was just published today:
https://www.theguardian.com/world/2019/ ... inequality

It appears that populist regimes have surprising effects on reducing economic inequality. And the even more surprising finding coming from this study is that they didn't achieve this by "raising taxes on the rich", which is what leftwing politics usually craves for.

I do not have much to comment on your post above, but just want to comment on this last thing you say.
Just raising taxes on the rich may not be sufficient, or even the right tool. I would think that closing the biggest loopholes, and getting rid of tax havens, would be quite enough. :!:
For instance, Jeff Bezoz did not pay any taxed last year despite earing 233 billion dollars in global revenue, but still gets a federal refund of 129 million dollars. This is despite the fact that Amazon nearly doubled its taxable income in 2018 to 11,2 billions.
Things like this is just crazy imo. I think we could come a long way with healthcare, Green new deal, tuition-free higher education, fixing infrastructure etc etc. by just getting rid of the most obvious loopholes. One could even imagine that working ppl could get away with less in taxes :P
https://www.cnbc.com/2019/02/15/amazon- ... -year.html
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Re: Taxing wealthy vs economic growth

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Yes, the problem is Amazon and Jeff Bezos are avoiding to declare any profit, they are rolling over that profit by reinvesting it.
You could say that this should help the economy, by creating more jobs. And that's what it does, to a certain extent, but slowly and surely they are building a quasi-monopoly in the online sales market. They are becoming the Google of online sales. They're getting way too much power in that sector, which eventually will turn against us, consumers.

But well, some people, such as the OP of this thread, don't even see any problem with that.
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Re: Taxing wealthy vs economic growth

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@kami_ryu the substance of this is; get a fair tax system. tax the rich and get rid of loopholes. That would bring the world a big leap ahead ;)
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Re: Taxing wealthy vs economic growth

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Re: Taxing wealthy vs economic growth

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I disagree with her. I don't see any problem with people "segregating" according to wealth. If some people like to live in seclusion or in a community of their own choosing, which reflects their level of wealth and possibly their values, I don't see why this is anybody else's business. They have and should have a right to do so.
Same for education and other services. If they can afford more, then it makes sense the market will supply them with another class of services.
What's this nonsense that everyone should have the same level of services? Sure, there should be a basic level of public services available for everyone. But if someone can afford more, it's their business what private services they choose to use.
If I had their wealth I would do the same and I'd be right to do the same.

That's not what is wrong with the current system and that's not what causes the current major issues with the current system. In any market-based free economic system, there will always be people who will perform better than others. It's completely idiotic to punish them for being better performers than others. What the state should do is make sure their wealth does not distort competition, does not distort decision-making in politics, does not benefit from any special fiscal treatment and so on. It's not the government's or society's business to tell some particular people how much wealth they should have.

If you agree to such an idea that society should impose a certain level of wealth on some people (ie, you're not allowed to have X much wealth), then you should also agree society should impose any other things on other people, such as what kind of adult sexual relations they're allowed to have or what kind of food they're allowed to eat.
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Re: Taxing wealthy vs economic growth

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Dolan wrote:I disagree with her. I don't see any problem with people "segregating" according to wealth. If some people like to live in seclusion or in a community of their own choosing, which reflects their level of wealth and possibly their values, I don't see why this is anybody else's business. They have and should have a right to do so.
Same for education and other services. If they can afford more, then it makes sense the market will supply them with another class of services.
What's this nonsense that everyone should have the same level of services? Sure, there should be a basic level of public services available for everyone. But if someone can afford more, it's their business what private services they choose to use.
If I had their wealth I would do the same and I'd be right to do the same.

That's not what is wrong with the current system and that's not what causes the current major issues with the current system. In any market-based free economic system, there will always be people who will perform better than others. It's completely idiotic to punish them for being better performers than others. What the state should do is make sure their wealth does not distort competition, does not distort decision-making in politics, does not benefit from any special fiscal treatment and so on. It's not the government's or society's business to tell some particular people how much wealth they should have.

If you agree to such an idea that society should impose a certain level of wealth on some people (ie, you're not allowed to have X much wealth), then you should also agree society should impose any other things on other people, such as what kind of adult sexual relations they're allowed to have or what kind of food they're allowed to eat.

We do not have a "free" market based economy. What we have instead, is super rich ppl, influencing the politics, to favor them even more at the expense of everybody else. Or maybe you would call that a "free" marked :) Most ppl would disagree with you, and even this Disney person, who inherited her wealth are getting pretty scared of the situation, and the prospects if nothing is done.
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Re: Taxing wealthy vs economic growth

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The gated community thing is just stupid, whatever to that, if you to think you are cool and live in a community you have to pass a guard to get into then whatever, thats your choice.
She is right about the education aspect though. That's a MAJOR problem in the US. Everyone talks about freedom and equal opportunity but that's a complete fallacy. There isn't equal opportunity. The wealthy have gamed the education system to favor themselves at the expense of the rest. It keeps getting worse.
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Re: Taxing wealthy vs economic growth

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iwillspankyou wrote:We do not have a "free" market based economy.

Do we live in planned economies?

What we have instead, is super rich ppl, influencing the politics, to favor them even more at the expense of everybody else.

How is Jeff Bezos, one of the richest people on the planet influencing politics? He's Trump's number one enemy. True, he recently bought Washington Post, a paper which has always been closer to Democrats and which is a constant critic of Trump. So, it's actually weirder, a rich guy bought a left-wing news outlet, which continues to attack right-wing politics. Trump even gave the rich a big fat tax cut and yet Bezos continues to be in open conflict with Trump. I guess, the world is a little more complicated than that, huh.

It's like in that cartoon in which libertarians/anarchists are engaged in a tug of war with Communists and capitalists on the other side. Really makes you thonk.

Image
Or maybe you would call that a "free" marked :) Most ppl would disagree with you, and even this Disney person, who inherited her wealth are getting pretty scared of the situation, and the prospects if nothing is done.

Again, taxing the rich more doesn't solve any practical problem. It's an illusion. They need to be taxed justly, just like everybody else. We need to ban every kind of fiscal havens or financial arrangements like the Dutch Sandwich or the Double Irish. That's what needs to happen. It won't solve everything that's wrong with the current system, but you need to start somewhere and it'd better be with making sure there are no external havens where untaxed money can hide.
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Re: Taxing wealthy vs economic growth

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Dolan wrote:How is Jeff Bezos, one of the richest people on the planet influencing politics? He's Trump's number one enemy. True, he recently bought Washington Post, a paper which has always been closer to Democrats and which is a constant critic of Trump. So, it's actually weirder, a rich guy bought a left-wing news outlet, which continues to attack right-wing politics. Trump even gave the rich a big fat tax cut and yet Bezos continues to be in open conflict with Trump. I guess, the world is a little more complicated than that, huh.

He isn't Trump's number one enemy? Trump made him his enemy because he hates the MSM (any which criticize him at least). Anyways, let's say Bezos sits out. You can look down the list. You've got people like the Koch brothers, who made it their life's mission to disrupt the American democracy to promote "free market" economics. You have the Mercers, who have assembled a far right media monopoly that sydicates idiots like Seb Gorka. There's the Walton family, ciritical in destroying American labor movements. There's Sheldon Adelson, basically dictating middle East foreign policy amongst other things. THe list goes on and on. Devos family, Eli Broad, the Coor's family, the Olin family, the Mellons.

If you really care about this topic, read Democracy in Chains or Dark Money.
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Dolan wrote:[
How is Jeff Bezos, one of the richest people on the planet influencing politics? He's Trump's number one enemy. True, he recently bought Washington Post, a paper which has always been closer to Democrats and which is a constant critic of Trump. So, it's actually weirder, a rich guy bought a left-wing news outlet, which continues to attack right-wing politics. Trump even gave the rich a big fat tax cut and yet Bezos continues to be in open conflict with Trump. I guess, the world is a little more complicated than that, huh.


This paragraph left me speechless
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Re: Taxing wealthy vs economic growth

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n0el wrote:The gated community thing is just stupid, whatever to that, if you to think you are cool and live in a community you have to pass a guard to get into then whatever, thats your choice.
She is right about the education aspect though. That's a MAJOR problem in the US. Everyone talks about freedom and equal opportunity but that's a complete fallacy. There isn't equal opportunity. The wealthy have gamed the education system to favor themselves at the expense of the rest. It keeps getting worse.
Equal opportunity is still such a staggeringly common delusion. It shapes people's worldviews. It's convenient naivete, and perhaps an ego thing. I suppose it feeds our precious egos to think anyone, had they worked as hard and been as smart as us, could have been where we are.
It seems likely that we need to address the delusion before we can address the actual issue.
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Re: Taxing wealthy vs economic growth

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and the actual issue is?
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Re: Taxing wealthy vs economic growth

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In that context, equal opportunity. Or rather lack thereof
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Re: Taxing wealthy vs economic growth

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n0el wrote:He isn't Trump's number one enemy? Trump made him his enemy because he hates the MSM (any which criticize him at least). Anyways, let's say Bezos sits out. You can look down the list. You've got people like the Koch brothers, who made it their life's mission to disrupt the American democracy to promote "free market" economics. You have the Mercers, who have assembled a far right media monopoly that sydicates idiots like Seb Gorka. There's the Walton family, ciritical in destroying American labor movements. There's Sheldon Adelson, basically dictating middle East foreign policy amongst other things. THe list goes on and on. Devos family, Eli Broad, the Coor's family, the Olin family, the Mellons.

If you really care about this topic, read Democracy in Chains or Dark Money.

Well, let's take the list of the richest people in the USA, then. Is Bill Gates using his money to have a disproportionate influence on politics compared to the rest of the body politic? Is Warren Buffet? Zuckerberg? Larry Ellison? Michael Bloomberg? The Page & Brin pair from Google?
Some of them did donate some money to both political parties, this is almost common practice among many rich people. They probably do that to avoid having any animosity between them and any particular political power. They'd just rather donate a few hundred thousand bucks to secure basic good relations with both sides of the political spectrum. I don't think anyone expects a certain party to simply bow to a particular donor for just a few hundred thousand bucks.
The Koch brothers have been notoriously involved in politics, but does that mean that all the rich people in the USA have done the same? Because this is what the argument is about. The argument claims that, in general, rich people influence politics. While what we see in practice is that some rich people do get heavily involved in funding politics and lobbying for certain causes. But surely not even the majority of them. And the richest of the richest don't even seem interested much in influencing any particular party, they seem more concerned with their philantropic projects (like Gates) or some of them, like Bloomberg, have directly participated in politics as independents (he also owns a media empire which can obviously have a major influence at least in the financial press).

What I'm saying is that it's wrong to pathologise wealth, to consider it's some kind of an a priori threat to a political system. Sure, when you create a system, you need to test its functionality against the worst case scenarios. And the worst case scenario is the Koch brothers. But I don't see why Bill Gates should be accused of having undue political influence just because he accumulated a lot of wealth. If he wanted to have an influence, I'm sure he could have had, and yet we don't hear much about any such efforts on his part to have an illegitimate influence on politics. So why not address the issues where the issues exist? That is, accuse specific people who have undue and disproportionate influence on politics in a way which is undemocratic.

The way to fix this is through legislation that would ban major donations from rich people to political parties (like in Europe) and force parties to rely on membership fees as a main source of funding, which would also force them to strengthen their grassroots connections. Pathologising wealth is not the answer, it just reeks of resentment.

On the other hand, I think I also understand why some rich people develop such a mentality of self-entitlement that they think they should get directly involved in politics. When they see the brainless choices "the people" can make and how easily they can be influenced by the flimsiest trends and the media, I think many of them simply realise that most people seem unable to actually think about politics and discern what is relevant to their lives and what is just noise. Trump's election proves exactly just that. Most people are unable to make lucid and well-reasoned political choices based on facts. They vote based on emotions and trends. So when you see how childish most people's political choices can be, what could you think of their capacity to make meta-decisions about own lives? Yeah, democracy has its serious limits in this respect. People could simply choose to vote for something that is objectively worse for them. So if you are a rich person, with a lot of life and managerial experience and you see how miserably most people make their own political choices, based on the most trifling reasons, I think you would decide it's better if someone who is more knowledgeable gets more seriously involved in such decisions.

And it's not just about rich people. The media have way more influence on people's political choices than rich people. And the media often have their own agendas, not just their owners' agenda. Sure, some are directly controlled at an editorial level, but others have a large degree of editorial freedom. Jeff Bezos claims he has zero involvement in Washington Post's editorial line. Considering that WP has continued to support the same part of the political spectrum in the USA, his claim seems genuine until we get any evidence to the contrary. And let's not forget about intellectuals and the academia, pundits, bloggers, youtubers, and so on. These people deliberately get in the business of shaping public opinion, of making it take the shape of whatever they think it's worth supporting. So then, is it really wealth that is the problem here? Did Trump win elections thanks to wealth alone? Did Clinton lose them because she's poorer than Trump and lacked connections with the wealthy in the USA (http://fortune.com/2016/08/04/hillary-c ... e-backers/)? Let's not forget that when Obama ran his first campaign, he was a champ in terms of attracting funding from the rich. Obama's campaign was the most well-funded in that year and that was thanks to fat donations from the wealthy and from corporations (he was backed by Warren Buffet, Soros, Jeffrey Katzenberg, Irwin Jacobs and others).
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Re: Taxing wealthy vs economic growth

Post by spanky4ever »

Dolan wrote:
iwillspankyou wrote:We do not have a "free" market based economy.

Do we live in planned economies?

What we have instead, is super rich ppl, influencing the politics, to favor them even more at the expense of everybody else.

How is Jeff Bezos, one of the richest people on the planet influencing politics? He's Trump's number one enemy. True, he recently bought Washington Post, a paper which has always been closer to Democrats and which is a constant critic of Trump. So, it's actually weirder, a rich guy bought a left-wing news outlet, which continues to attack right-wing politics. Trump even gave the rich a big fat tax cut and yet Bezos continues to be in open conflict with Trump. I guess, the world is a little more complicated than that, huh.


Let me get this straight. You say that there is no corruption, or influence in American politics by wealthy and powerful ppl and corporations, just because Bezos and Trump have a feud going on? You use ONE example of a rich person who doesn't like Trump, but still, benefit from the tax cuts?
I have a hard time understanding the logic behind your arguments if there is any logic or reasoning there :P
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Re: Taxing wealthy vs economic growth

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I think he's trying to say it's not as bad as you think, thereby projecting an opinion that he disagrees with onto you. He does that.

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