How would raising taxes affect you and our economy?

[cannabineer]

"To understand trickle-down theory, we have to iterate some economic basics. First off, all capitalistic economies undergo natural ups and downs. In times of prosperity, economic activity is high, and jobs are easy to find. In times of recession, a country's economy produces less, and people have trouble finding jobs. Government steps in to try to help smooth out these fluctuations and dull the pain of sharp economic downturns.
Adjusting the tax policy is one way to affect the economy, and the U.S. government has been using tax policy this way almost since the inception of the national income tax in 1913. Although economists agree that changing how a government taxes its citizens can have some dramatic effects on an economy, they disagree on which policy is best. Trickle-down theory represents one such idea that can supposedly spur economic growth.
*In a nu*tshell, trickle-down theory is based on the premise that within an economy, giving tax breaks to the top earners makes them more likely to earn more. Top earners invest that extra money in productive economic activities or spend more of their time at the high-paying trade they do best (whether that be creating inventions or performing heart surgeries). Either way, these activities will be productive, reinvigorate economic growth and, in the end, generate more tax revenue from these earners and the people they've helped. According to the theory, this boost in growth will ultimately help those in lower income brackets as well. Although trickle-down economics is often associated with the policies of Ronald Reagan in the 1980s, the theory dates back to the 1920s. The name also has roots in the '20s, when humorist Will Rogers coined the term, saying, "The money was all appropriated for the top in the hopes it would trickle down to the needy"

Thank you, beenthere. I found the entire essay here after you gave me a Google lever.

Basically, trickle down is a method used to put more money in the hands of capitalists on the theory that they will put it to productive use. That productive use will spur the economy, increase hiring and the fruits of the increased productivity will lift everybody's net worth.

It worked post Kennedy. It worked post Reagan. Will it continue to work? I don't know, the world is a different place than it was in Kennedy's time. It seems to me the biggest head wind the US faces is the economic recovery of Europe post WWII and the rise of the Asian countries as competitors in the economic sphere. After WWII the US was more or less the only economy left standing and the US had beefed up industrial capacity for the war effort. Economically, the world was our oyster from 1945 to about 1975.

I don't know how we can be sure that it worked during and after Reagan's tenure. Y'see, he combined it with the methhead policy of running large, continuing deficits, which his protégé Bush Sr. continued. Now I'm not an economist, and I didn't spend the night at a Holiday Inn Exp[ess, but as one trained in natural philosophy I can say "uncontrolled experiment" ... inconclusive. It's also a tremendously polarizing issue between fiscal neocons and socialist-leaning neolibs, which makes finding a dispassionate analysis a bit of a challenge. cn

 

[beenthere]

Basically, trickle down is a method used to put more money in the hands of capitalists on the theory that they will put it to productive use. That productive use will spur the economy, increase hiring and the fruits of the increased productivity will lift everybody's net worth.

It worked post Kennedy. It worked post Reagan. Will it continue to work? I don't know, the world is a different place than it was in Kennedy's time. It seems to me the biggest head wind the US faces is the economic recovery of Europe post WWII and the rise of the Asian countries as competitors in the economic sphere. After WWII the US was more or less the only economy left standing and the US had beefed up industrial capacity for the war effort. Economically, the world was our oyster from 1945 to about 1975.

Of course it can work again, the big question is, will the government step out of the way and let it.
The second most important factor in supple side is, getting rid of job killing government regulations.
It's idiotic to claim supply side hasn't worked, in one hand the left reminds us about the Bush tax cuts, with the other hand they're drowning us in federal regulations.

That's like taking lights away from a plant and claiming the nutrients aren't working!

 

[cannabineer]

Of course it can work again, the big question is, will the government step out of the way and let it.
The second most important factor in supple side is, getting rid of job killing government regulations.
It's idiotic to claim supply side hasn't worked, in one hand the left reminds us about the Bush tax cuts, with the other hand they're drowning us in federal regulations.

That's like taking lights away from a plant and claiming the nutrients aren't working!

I will venture one opinion.

If supply-side economics really does work, i would expect the wealth disparity between the capitalist/investor class and the professional and working classes to have remained essentially the same. It stands to reason that if it trickled down efficiently, everyone's boat (on average) would receive the same flotation. but as regs have been repealed or neutered one by one, the wealth disparity has grown steeper. That argues to me (strongly suggestive, not conclusive. What in economics ever is?) that trickle-down or supply-side is self-serving twaddle ... akin to Churchill's famous comparison of unfettered democracy as "two wolves and a sheep voting about what's for dinner". If anyone can cogently counterargue, I'll listen. cn

 

[UncleBuck]

Well, following the Reagan years the US had one of the largest economic expansions post WWII.

wages have been stagnant for americans since trickle down, despite increased productivity.

i guess trickle down was successful at making the rich richer, as evidenced by the rapidly expanding income inequality we see, which is once again at levels not seen since the great depression.

 

[beenthere]

I will venture one opinion.

If supply-side economics really does work, i would expect the wealth disparity between the capitalist/investor class and the professional and working classes to have remained essentially the same. It stands to reason that if it trickled down efficiently, everyone's boat (on average) would receive the same flotation. but as regs have been repealed or neutered one by one, the wealth disparity has grown steeper. That argues to me (strongly suggestive, not conclusive. What in economics ever is?) that trickle-down or supply-side is self-serving twaddle ... akin to Churchill's famous comparison of unfettered democracy as "two wolves and a sheep voting about what's for dinner". If anyone can cogently counterargue, I'll listen. cn

You're commonly mixing up our free trade economy with government spending, they're entirely two different animals.

Your claim that government deregulation is a determining factor in income disparity has zero merit, it benefits almost all classes. Anytime products are made with less regulation, those products cost less.

Take my industry for example, I build custom homes and am in the fire loss business. Did you know that because of regulations, the average home in California will cost you near $50k before you buy the land or break ground?

Did you know that because of new EPA lead abatement regulations, the average remodel project on a home built prior to 1974 will cost a home owner up to 50% more?

Besides those facts, how in the world would revenue from government regulations find it's way into the pockets of American consumers?

 

[cannabineer]

You're commonly mixing up our free trade economy with government spending, they're entirely two different animals.

Your claim that government deregulation is a determining factor in income disparity has zero merit, it benefits almost all classes. Anytime products are made with less regulation, those products cost less.

Take my industry for example, I build custom homes and am in the fire loss business. Did you know that because of regulations, the average home in California will cost you near $50k before you buy the land or break ground?

Did you know that because of new EPA lead abatement regulations, the average remodel project on a home built prior to 1974 will cost a home owner up to 50% more?

Besides those facts, how in the world would revenue from government regulations find it's way into the pockets of American consumers?

The documentary "Inside Job" shows a startling example of deregulation leading to massive concentration of wealth toward the top. It was a pure buccanner mission. Granted, it was not in the manufacturing sector, but it surely involved the entire economy - and bled it pretty near white.
I mentioned regulation with this example in mind. I am not suggesting that either complete deregulation (Road Warrior) or complete regulation (North Korea) are viable. cn

 

[beenthere]

The documentary "Inside Job" shows a startling example of deregulation leading to massive concentration of wealth toward the top. It was a pure buccanner mission. Granted, it was not in the manufacturing sector, but it surely involved the entire economy - and bled it pretty near white.
I mentioned regulation with this example in mind. I am not suggesting that either complete deregulation (Road Warrior) or complete regulation (North Korea) are viable. cn

I thought you were talking about regulations on American businesses, your documentary was probably about Wall St.

 

[cannabineer]

I thought you were talking about regulations on American businesses, your documentary was probably about Wall St.

Wall Street is quite a collection of American businesses. cn

 

[UncleBuck]

Wall Street is quite a collection of American businesses. cn

compartmentalization fail by beenthere.

 

[lifegoesonbrah]

wages have been stagnant for americans since trickle down, despite increased productivity.

i guess trickle down was successful at making the rich richer, as evidenced by the rapidly expanding income inequality we see, which is once again at levels not seen since the great depression.

LOL UncleBuck thinks we had a recession because of tax cuts for businesses.

 

[UncleBuck]

LOL UncleBuck thinks we had a recession because of tax cuts for businesses.

find where i said that, quote it for me, and i will send you and your big bruvva deprave a free ounce.

why call it trickle down when the rich get richer and wages remain stagnant? it should be called flow it up.

 

[abandonconflict]

"To understand trickle-down theory, we have to iterate some economic basics. First off, all capitalistic economies undergo natural ups and downs. In times of prosperity, economic activity is high, and jobs are easy to find. In times of recession, a country's economy produces less, and people have trouble finding jobs. Government steps in to try to help smooth out these fluctuations and dull the pain of sharp economic downturns.
Adjusting the tax policy is one way to affect the economy, and the U.S. government has been using tax policy this way almost since the inception of the national income tax in 1913. Although economists agree that changing how a government taxes its citizens can have some dramatic effects on an economy, they disagree on which policy is best. Trickle-down theory represents one such idea that can supposedly spur economic growth.
*In a nu*tshell, trickle-down theory is based on the premise that within an economy, giving tax breaks to the top earners makes them more likely to earn more. Top earners invest that extra money in productive economic activities or spend more of their time at the high-paying trade they do best (whether that be creating inventions or performing heart surgeries). Either way, these activities will be productive, reinvigorate economic growth and, in the end, generate more tax revenue from these earners and the people they've helped. According to the theory, this boost in growth will ultimately help those in lower income brackets as well. Although trickle-down economics is often associated with the policies of Ronald Reagan in the 1980s, the theory dates back to the 1920s. The name also has roots in the '20s, when humorist Will Rogers coined the term, saying, "The money was all appropriated for the top in the hopes it would trickle down to the needy"

In practice, what they actually do, is piss on the people.

 

[nontheist]

In practice, what they actually do, is piss on the people.

Yeah because that shit is relevant here......

Try some shit people actually believe.........

 

[H R Puff N Stuff]

higher taxs means more revenue should mean better infrastructure means more jobs more teachers to lower child teacher ratio again jobs stop laying off city workers and stop the furlough days.

 

[lifegoesonbrah]

find where i said that, quote it for me, and i will send you and your big bruvva deprave a free ounce.

why call it trickle down when the rich get richer and wages remain stagnant? it should be called flow it up.

Because progressive taxation works so well.

 

[lifegoesonbrah]

I would like to know how lower business taxes hurt people please.

 

[beenthere]

Wall Street is quite a collection of American businesses. cn

Of course it is, but the regulations they are referring to is dealing with investments and banking, not on the businesses themselves.

 

[beenthere]

higher taxs means more revenue should mean better infrastructure means more jobs more teachers to lower child teacher ratio again jobs stop laying off city workers and stop the furlough days.

Most of our infrastructure is funded by excise taxes on fuel, teachers are funded by state and local taxes and city workers are paid through city, property and sales taxes.

The federal government contributes less than 10% to the states for education, and the majority of that money goes towards administration expenses.

 

[beenthere]

LOL UncleBuck thinks we had a recession because of tax cuts for businesses.

Bucky's one of those clowns who does a five minute search on wikipedia and becomes an expert in that field.
He didn't even know his own damn tax rate, now he's is in this thread arguing economics!

 

[beenthere]

In practice, what they actually do, is piss on the people.

You are like arguing with a kid who has no money of his own, but wants his mommy and daddy to buy him a pair of $200 tennis shoes.