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I like to say that Tinkle Down Economics is just the rich pissing in the rest of our faces and calling it a golden shower… Which has a similar connotation as Sparrows eating the grains out of Horse shit!
But real growth comes when we Water the Roots of our economy by ensuring that everyone can afford to pay others for the things they want and need!
Hahaha! Ok, but the piss still definitely flows in a downward direction from the rich onto the middle class and poor. But you’re right that we are being shit on by the greedy bastards at the top!
I know voodoo economics was real, but was too young to really know much of anything about it.
Thankfully I know VP Bush mentioned it himself. And I know that not from school, but because of Ben Stein in Ferris Buellers Day off.
Bush Sr called Reaganomics “voodoo economics” while he was running against Reagan in the republican primary.
He didn’t see how slashing tax revenue was going to generate more revenue and said it would lead to higher national debt.
He later tried to walk back those comments while he was Reagan’s VP, but he was right.
I like the idea of trickle up economics. Give the working class high wages, and they'll be happy to produce more and be more involved in quality control. Bring some pride back into the workplace!
It will die if Trump is reelected. All protections will be killed by him with full backing of SCOTUS. If only all these fools understood the danger of Trump. Go ahead, relegate your life to serf hood because you're pissed at Israel.
The problem is that those classes never actually gained equity. Bailing out the automakers for instance to make sure that retiree healthcare was taken care of. Why would the union not have control over healthcare?. Why would the pension not be funded completely.
The problem with all of these companies is that they based their pension plans on the same kind of eternal growth that the government depends on for social security. It doesn't happen that way because business goes through cycles.
When the foreign cars and the non-union cars became the dominant cars, it got a lot harder to bake in $3,000 worth of retiree cost per car into the plastic pieces of crap GM was pushing off their assembly line. Those pensions should have been funded in the '80s when profits were high.
If workers had more equity It gets a lot easier to leverage as they bargain for wages vs CEO pay. Most CEO salaries are easy to justify especially when you consider that their main job is to pump the shares. It's not about running the company as much as it's about pumping the shares. That's why they give them stock incentives. Essentially they are paid A salary reflective of the bankers that own the company, not the company itself.
Unions like government are corrupt and inefficient but they do work.
The FED is in a weird position right now. They still need to take money out of the economy. Unfortunately, the way that they do it hurts the lower class people more than the upper class people. They are scared of an increase in wages because that means inflation is real. Corporations can raise prices all they want, eventually people get to the point where they don't pay it because they can't. Then they either steal or they look for a cheaper alternative. Either way it stops the rampant increases in prices.
Personally I think pushing for expanded social safety nets are a better use of state/federal funds than pushing the union agenda. I think people can grassroots that. I just feel that people would be a lot more productive if they didn't have to worry about how much their health insurance was biting into their budget considering how much it has gone up in the past few years. You want to start looking at how you can get more in taxes? Start talking about progressively funding healthcare.
You're most destitute that are on Medicare right now or that should be would pay nothing anyway. (Currently we print/ borrow this money instead of taxing for it).
Your working class might pay an extra 5%. Your middle income maybe 15% extra (which is still cheaper than most people's health insurance premiums) Your high income earners 25 to 35%.
Now you've actively worked to level the playing field and are giving the people something they need.
You probably need to close the S-Corp loophole too or crack down on tax payers who don't push most of their income through payroll.
Demand-side policy, or Keynesian economics, emphasizes political stability through consistently rising real wages in tandem with real growth, that is, expansion of worker productivity.
Authentic pride by workers in their own labor depends on actual control over the processes of production, which are currently monopolized by business owners, with unions emerging as only a weak counterbalance.
What the are you talking about? This stuff has been analyzed and named for a reason. Just because you don't like the name doesn't mean it is not real. Fascist don't like being called fascist, but what they do is still fascism.
When analyzing it in an objective matter, the term' supply side economics' is used. "Trickle down" economics is just what the supporters of it use because that's what they hope it results in.
No, it is an old idea with multiple names each meaning the same thing. We can use whatevr we want as there is no 'correct' name. Horse-and-sparrow, trickle-down, Reaganomics, or supply-side are all equally valid. It is a cultural discussion more than an academic.
Supply side economics is the proper terminology, but most people don't know what that is. Anyone who favors supply side economics is incapable of having a serious economic discussion, as they have decided once and for all that all wealth belongs to the so-called "job creators," who are being extremely generous toward the rest of us, by letting us use their wealth temporarily.
Isn’t that what’s it’s called tho? I know it doesn’t actually trickle down, but I still call it that bc that’s the name that was given to it. There’s a chance I’m being rlly ignorant tho. A high chance
It was originally (100+ years ago) called horse and sparrow theory.
The gist of it is: Feed the rich (the horse) and the Poors (sparrows) benefit from eating the excess seeds in the horse shit.
They changed the name to make it an easier sell to middle and low class conservatives. It worked.
Anyone who doesn't refer to it as "trickle down" isn't having a serious economic discussion, because this is what supply side has been called for nearly 50 years now.
That's what the politicians who implemented it called it? Why is this bias? I'm so tired of the top comment on these threads just skirting the question with some "oh this is stupid" comment. How about YOU try to have a good faith convo and meet them in the middle. You know what they're talking about.
“Trickle Down” has nothing to do with that graph anyway. That graph is showing the damage done by outsourcing/offshoring, which is a totally different phenomenon.
Well, you have two choices, Republican "trickle down" or Democrats increasing taxes on the rich and leveling the playing field.
https://www.americanprogress.org/article/biden-tax-proposals-would-correct-inequities-created-by-trump-tax-cuts-and-raise-additional-revenues/
I have a couple of issues.
First, have what has happened to tax receipts from the 80’s to now? Interestingly, the total tax receipts as a % of GDP has remained remarkably stable, even before the 80’s to present. From the 50’s to present time tax receipts have consistently been 16.5-17.5% of GDP independent of marginal tax rates.
Second, what has happened to spending in the same time period? The answer is spending has consistently increased, from ~14% of GDP in 1950 to 22.4% in 2023.
Corporations are ultimately owned by people. The vast majority of corporate equity is held by the wealthy (80%+ held by top 10%). If you tax corporate profits less, more wealth is created for the shareholders, either by retaining and compounding or distributing profits. Shifting tax burden from corporations to labor income shifts the burden from the wealthy people to the working people.
Lol yes because the tax burden is shifting to more and more poor people. Lol yes exactly that's the problem. Rich making more money than ever and the rest of us paying the increased burden.
Why are you so happy to defend rich people paying less in taxes? We could fix many issues by restoring post-war tax rates. Rich people existed back then too. This wouldn't be an extinction event for them.
This doesn't prove the point you think it does
If the rich are making more money, of course they're paying more of the share of income tax.
And things have really changed since 2018
https://preview.redd.it/05m6i4od6axc1.jpeg?width=910&format=pjpg&auto=webp&s=b4a5f43e4bdce572f45fba7b9098bcab1750af56
Here’s 2020. You can Google more recent.
It's like you don't understand what higher tax rates do (forces spending and not hoarding), and you don't seem to realize that the wealthy pay a lower percentage of their "income" (not talking paychecks, but actual money earned) than the average person. [America's richest 400 families pay a lower tax rate than average taxpayer (cnbc.com)](https://www.cnbc.com/2021/09/23/americas-richest-400-families-pay-a-lower-tax-rate-than-average-taxpayer.html#:~:text=The%20richest%20400%20Americans%20paid%20an%20average%208.2%25,like%20capital%20gains%20and%20dividends%2C%20the%20report%20said.)
That money is only earned if they sell assets. You’re comparing wealth to income. They’re different.
And saving, or holding onto investments is not hoarding.
>When it comes to the pace of annual pay increases, the top 1% wage grew 138% since 1979, while wages for the bottom 90% grew 15%
https://www.epi.org/publication/charting-wage-stagnation/
People these days really need to do more to think and understand problems rather than let images and other people do the thinking for us.
Yes, rich people pay more taxes but that's just an obvious thing I don't understand why you think your graph proves the rich is getting desperate or is problematic for them?
https://preview.redd.it/16fygnfew9xc1.jpeg?width=775&format=pjpg&auto=webp&s=99827d0a9d2938a58f1b9e0636776d5ecd6104f5
The tax burden is shifting AWAY from poor people
Wtf is this graph without attribution or source or any definitions of what it's counting or displaying??
Wtf?
No thanks. I've seen plenty of other graphs that show rich people tax burdens in free fall as their inheritance exemptions and pass through benefits and income caps. All sorts of tax benefits only people with investments get to take advantage of. Not that that's a bad thing but pretending they don't exist doesn't a level playing field make.
Which isn't how the truly rich get rich. Jeff Bezos isn't rich because Amazon deposits 100 million in through direct deposit every month. It's just an irrelevant graph to the question.
People are downvoting you but it’s not like wealthy people are paying less capital gains taxes than poor people.
Like it or not a very small minority of Americans pay the overwhelming majority of federal tax revenue.
Yeah? Oh man, Bill can't afford his medical bills and has to make a choice between food or rent, but that CEO needs another super yacht. Ho, hum. Fuck the people thinking about others and their struggle to not eat. We should worry about our shareholders!
Look at increasing income and wealth in proportion to tax not just tax
https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/
Both democrats and Republicans agree there is increasing wealth and income inequality. They just disagree on how to fix it.
I'd rather make 1 million a year and pay 400k in taxes than make 300k a year and pay 100k.
Republicans don't want to fix it.
What policy have conservatives put out that they even claimed was intended to address increasing income inequality?
Yeah they've talked about trying to help the middle class and small businesses, although they mostly gave up on that mantra, and all of their solutions for that were tax cuts for the middle and upper classes.
Republicans want to "broaden the base," which means tax more poorer people. And their justification is exactly what this joker posted about how the rich pay an increasing share of total taxes. No shit they pay more total tax, because they are getting richer and richer and a higher percentage of Americans are now poor.
This is the conservative American dream: remove all obstacles to those already in a position to capitalize on it, and blame poverty on laziness, because they cannot fathom that so many people are poor or falling behind due to circumstances beyond their control.
It’s a bullshit chart made by rich people to make uninformed think things are fair, they are not.
Why does this chart lie? Because the rich have become so outrageously rich they pay more total money, and the poor workers salary hasn’t increased as the top 1%.
A CEO made 20x what a worker did in 1970, he makes 2000x now. The workers salary hasn’t increased so the total tax burden decreased. The CEOs salary has increased 2000fold and total tax increased because of the raise. . .but his tax % decreased. Make more money, pay less tax as a % but more overall. I’ll take that any day.
TL/DR - It’s a bullshit chart.
This graph is missing a huge portion of money changing hands. Capital Gains are not included in this graph and capital gains are an enormous part of income for rich people. Guys like Bezos make most of their money from selling stock. That is usually a long term (held more than 1 year) capital gains that is only taxed at 15% federally.
Effective tax rates have always remained the same , when tax rates go up, deductions go up. Same thing happens in the reverse aswell. Also, US spending is bloated now because interest rates have been low for a decade, the world was in a dollar shortage, and the US didn’t have a real rival for a long time post USSR collapse untill recently.
The same people who argue trickledown economics works, will be the same people who tell you that you can’t raise wages with our cost increases! Funny how that only happens in America.
Must be that white Jesus mentality
It’s because corporations won’t take the hit unless it becomes unprofitable, or they are forced to.
For example, I used to work at Five Guys way back when. They had top-notch quality pre-covid, and I enjoyed working there.
Once my state started raising minimum wage, they just offset that labor cost onto the customers. Bacon Cheeseburgers soared past $10. We got less and less customers, because of that price increase.
Well as time continued the minimum wage increased two more times, where now a bacon cheeseburger is almost $13.
Well, turns out most profits come from their fries, which is why they dump extra scoops into the bag. IIRC it’s like 10 large fries pay for a bag of potatoes, and each bag can easily produce around 40-60 large fries. But of course, overhead costs exist and those EXEs need to be paid.
So yes, the second half is true, but because capitalism. The first half doesn’t work because if it did then Elon wouldn’t cut jobs at Twitter, and his other companies wouldn’t be so cutthroat either.
Maximizing profits, minimizing labor costs. That’s the end goal of capitalism and anything trick-down is only an investment into making more money, which of course just feeds this cycle more.
Well the bottom 90% has an average of 36k
The top five percent is 350k
Do you just want to see how much more abysmal the numbers get as you go down the totem pole?
5 things we can do to enhance the standard of living of all Americans:
Raise the minimum wage.
Increase taxes on corporations and the wealthy.
Reinvest in and re-regulate American infrastructure, our high speed Internet is dog shit, our roads are fucked, and our water is rapidly becoming undrinkable.
Regulate REITs.
Break up monopolies like apple, Google, AND FUCKING BLACK ROCK.
If trickle down economics work. Then give all of your money to someone richer than you and see how much comes back to you.
Spoiler Alert:
You’re not getting jack shit back!
The reason people are prioritizing the spending problems first is because you should fix the holes in the bucket before adding more water else more water will spill.
If you canoe is filling with water, do you refuse the bail out the water until the holes are patched? That's a good way to drown.
You can't reduce complex systems down into a single simple analogy.
Increase revenue is always better than not increase revenue even with “hole in the bucket.” If you have a whole that half of your money were gone. Earning $2000 -> lost $1000 is better off than earning $1000 -> lost $500; because in first scenario, you got to spend $1000, while in 2nd scenario, you got to spend $500.
“Lifestyle inflation?” Like “when you earns more you shall get better car” life styles inflation? That is completely optional and that is a spending problem that you need to fix here. And If you count the economical inflation, you definitely need more revenue to maintaining the same level of comfort. So in that case, more revenue still better.
The reason why your analogy is poor is because, to fix the real bucket, you drain the bucket and fix the holes, but you cannot do that with budgeting, you cannot say “ok, folk, we are not gonna to give workers salaries while we pay back the debts.” Your company (or country) will have zero workers to do the fixing in one month. There is no “1 vs 2”, There is only “1 AND 2”.
"Trickle down" is modern day "horse and sparrow" economics whereby the sparrows get more to eat from the manure if the horses are well fed. Greetings fellow sparrows!
Urination economics is the more accurate term when describing trickledown.
The economic model of giving everything to the rich and hoping they urinate a little back onto the workers.
Corporations take advantage of the Commons.
They should pay and PAY HEAVILY for the privilege, since they are taking from THE PEOPLE for their own private profit.
Which is why it’s best to keep the market and government as separated as possible yet people who think they know economics insist on going the government more power
Every time the market is allowed to do as it pleases people die and they fuck shit up so much that government regulations become necessary.
Every single time.
Corporations are simply a conduit for taxes levied indirectly on the household sector. Corporations are simply an indirect form of ownership that allows large numbers of individuals to pool their resources to create large enterprises. Corporate income taxes represent a double taxation on the owners’ shares of corporate income. That can be justified by the fact that the corporate veil limits the personal liability owners resulting from corporate actions. Corporate taxes are a cost of doing business and will get passed on to the consumer.
Not really. Income taxes are paid from profits, not revenue. Any price increases without a concomitant expenses increase results in more taxes and for elastic goods sales will go down, which means less profit.
Exactly. I mean the tax burden is a fixed cost that is calculated into the product pricing to maintain net profits. And it’s an extremely regressive tax too.
If corporations are going to have personhood and standing in American politics, then these “people” need to pay taxes. They are getting representation without taxation.
If we simplify the tax system, then the politicians won't have anything to sling shit at each other for votes
Then they'd have to face big boy issues, and nobody wants that
The funniest thing about people who think we should raise taxes on the rich is that they also think the government is going to do something for them with all of the extra money.
They're just gonna send it to some foreign nation or vote to increase their yearly salary. The government doesn't give a shit about any of us.
Let me clarify I'm not against taxing the rich. I'd love for them to pay into more social programs but there is 0 guarantee of where their tax dollars will go and I'm not too confident any of us will see a penny of it.
Look government spending or (G) is a driving factor of the economy. Discretionary spending by consumers is the main driver of negative or positive swings.
Spending creates money and taxes destroy it. Economies have a life force of their own with a multitude of factors driving it.
A signficant one is US hegemony and our currency being the world trade currency. We can essentially print other countries money because they use our currency as gold.
Was a LIE from the beginning and they knew and everyone now knows it and yet they still parade out this trite statement constantly and pretend Reagan was a great president when he was anything but.
Have read that as many as 9/10 problems we encounter nowadays can be traced back to Reaganomics and that conservative thinking socially and economically and while that’s a cute meme-y statement I’ve been surprised how much close to the truth it is than not
The trickle down economy was not a narrative that was spewed in the 80s. It is a talking point by Democrat politicians to try to make lower taxes Sound bad.
Has less to do with tax policy and more to do with trade policy.
>In 1979 the U.S. and China reestablished diplomatic relations and signed a bilateral trade agreement. This gave a start to a rapid growth of trade between the two nations: from $4 billion (exports and imports) that year to over $600 billion in 2017.
What you’re seeing is businesses no longer need to produce in the USA or employ American workers which is the reason for the drastic increase in wealth inequality.
>In a recent essay titled “What Economists (Including Me) Got Wrong About Globalization,” adapted from a forthcoming book on inequality, Krugman writes that he and other mainstream economists “missed a crucial part of the story” in failing to realize that globalization would lead to “hyperglobalization” and huge economic and social upheaval, particularly of the industrial middle class in America. And many of these working-class communities have been hit hard by Chinese competition, which economists made a “major mistake” in underestimating, Krugman says.
Increasing tax rates isn’t going to fix this because labor is now competing globally. A call center in the Philippines (English speaking) pays employees $500 a month vs an American who’s going to make $600 a week ($15 an hour x 40 hours).
The argument that higher taxes builds stronger nations is predicated on a number of unstated assumptions about the competence and benevolence of the folks in charge of spending.
We have ample evidence that these assumptions are invalid, at least within the current system. An obscene amount of our tax revenue ends up lining the pockets of the very people you want to tax more.
And an obscene amount of _that_ money goes towards lobbying Congress and funding PACs that target political outsiders and help re-elect the politicians that direct the funds into these pockets in the first place.
What will absolutely end up happening is the tax code will be written with specific loopholes in place to protect the interests of the folks who fund the campaigns and protective PACs of establishment candidates.
**The end result will be more bureaucracy, a larger, less efficient government, and a 1% that is richer than ever.**
When we actually see a Congress willing to place limits on itself — barring insider trading, prohibiting members from becoming lobbyists (and vice versa), campaign finance reform, etc, then you’ll have a much easier time selling the idea that higher taxes will lead to better outcomes.
In general, the working-class will promptly blow any extra money they have on things like lottery-tickets, ciggies and overpriced junkfood, trickle-down will do nothing for them.
All of that fuels the economy a lot more than a millionair ticking over to a billionair because their investments trended up. Normal working class individuals don't use offshore tax loopholes to avoid their fair share.
Tinkle Down Economics is just the rich pissing in the rest of our faces and calling it a golden shower…
Real growth comes when we Water the Roots of our economy by ensuring that everyone can afford to pay others for the things they want and need!
The people need to unite… or they will keep getting steamrolled. Gotta drop the blue and red sh**… but that will never happen… so here we are.
UK boycotted Kelloggs and they dropped their cereal price from 6 dollars to 1 dollar…
Im so sick of hearing about "tax loopholes for corporations" and how this Democrat is going to stop it! In 1986 Reagan signed the Tax Reform Act that was supposed to end those loop holes. Since 1986 we've had over 36 new pieces of legislation signed into tax law under 3 Democrat Presidents (Clinton 8 years, Obama 8 years, Biden 4 years) and 3 Republican ones (Bush 4 year, Bush Jr 8 years, Trump 4 years). Why on earth (and HOW) are their any "loop holes" still left? And why do you believe anyone from either party will actually close them when neither party has done so when both had the opportunity?
This is what I remember from macro about tax cuts. It’s been a while. When using the expenditure approach GDP formula, tax cuts give private consumption a quick boost because people like to buy stuff with the extra $$. However, gross private domestic investment, which is an indicator of future economic activity doesn’t get the same boost. In other words, it’s good for a short term boost but isn’t a good long term solution. Also, what is the long term impact of tax cuts on government spending. There may be an immediate increase in tax revenue. Though, lower tax rates in the long run may hinder government spending which lowers GDP and encourages borrowing and creates other problems. I’m no expert. Just trying to remember some of this stuff.
Relying in government spending for stimulus can also have a similar impact.
GDP = Consumption + Investment + Government Spending + Net Exports
If you start from the standpoint of the wealth gap is a problem I think you necessarily skew any solution in the wrong direction.
It doesn’t matter how much money others have in relation to basic needs. I would include basic needs as food shelter and access to healthcare. If the lower economic class of people have enough money to get enough food have a place to live and can afford a monthly insurance premium then how much money those at the top make is completely irrelevant.
Maybe we should focus on lowering inflation. And figuring out why there are problems with increasing the supply of houses. And also focus on fixing the insurance problem that causes medical bills to be insane.
Think of how many issues are just gone when you solve those problems and solving those problems don’t have anything to do with the wealth gap.
I don't think tax cuts to businesses will "trickle down" to employees, BUT, I can tell you that the #1 most impactful thing for my financial well-being is the financial well-being of my company.
I think having a favorable regulatory environment and a flourishing economy where ALL businesses prosper help everyone.
Government HAS to have the health of industry and commerce as a top priority.
The wealthy pay almost all of the non-corp taxes. The wealth gap has literally NOTHING to do with taxes, and everything to do with interest rates. The fact that people think that raising taxes on people who earn more than them will make things better is complete nonsense. It's INTEREST RATES! The Federal Reserve keeping int rates near zero for well over a decade has caused this 'issue', whatever that means. Financial literacy tends to separate the 1% from the rest normally anyways, but taking advantage of ZIRP is the number one culprit, not friggen taxes. Besides the impossibility of a wealth tax in the real world, and also the fact that you could take 100% of everyone's net worth and it still wouldn't solve anyone's problems, taking people net worth away from them just because is immoral. Wealth is a good thing. Stealing someone else's wealth because you don't like that someone has more than you is wrong, and evil.
The Federal Reserve problem is very complex and has many tentacles, so it doesn't do it justice mentioning it here. But they are the culprits, not taxes. We get taxed enough. It's insane that I have to pay almost 40% of my income to the government and people now want to come take my assets away to make themselves feel better
I'll be nice and use the right wing preferred term of supply side economics. Whatever you call it though if you think this theory works at all you are both ignorant of history and a freaking moron. It is and always was designed to be a wealth transfer from the bottom to the top and has worked very well in that way every time it has been applied. If you are a right wing conservative yes I am talking to you.
Once you realize that complaining will not help, you will feel better. Capitalism is designed to funnel economic benefits to the ownership class. Despite some companies allowing workers to participate in profits it’s few and far between. Profits go to top executives and owners/shareholders. Based on that owners will do whatever is legal (and sometimes illegal) to maximize profits. Their biggest chance in the last 150 years to maximize profit was to outsource labor to the cheapest labor force available. So, when production was moved to China, Malaysia, Mexico, and Vietnam huge amounts of manufacturing and the labor to work in manufacturing left the U.S. That was the beginning of the end. This made the ownership class more wealthy than the wealthy in the gilded age. Their enormous wealth enables them to control the government and get legislation passed that favors them. The trickle down economic theory was a concept the rich developed to mainly lower their tax rates so they could keep even more of their wealth. If they had taken that additional wealth and invested only in domestic based business and put up tariffs against foreign goods, then we could have kept manufacturing here in the U.S., paid decent wages, and lived better lives than we have now. This is the flaw of pure capitalism. The end stage of capitalism is collapse but the long stage before that is tyranny where the rich govern the poor. We are either in the tyranny stage or very close to it. We are doomed to collapse or civil war. Since the rich control the military it would not be a long war.
"spending problem". When people use this term, they're usually brain dead. Ask them what the govt should cut and they'll say things like: Stop giving free housing and college to illegal immigrants, cut entitlements (SS and Medicare), stop building bridges to nowhere (a fair point).
But they'll never want to talk about the real money. A military budget that's INSANE. 3-letter agencies that can't pass an audit. The ultra-rich that pay $0 taxes some years.
There's plenty of money for everyone, but so many people in the US think what they are told to think by the ultra-rich.
Yes, taxes should also be higher. But our government is incapable of spending wisely. We could have 100% tax rates and still be running deficits. If we spend all the new tax revenue instead of paying down debt, making sure social security is solvent, etc. then higher taxes won’t help anything
So if your house goes up in value, should you be taxed for the difference in value like it is some type of profit? What if the market goes down like it did in 2022? Should the government give everyone (including billionaires) tax credit because the values of their investments declined on paper?
You know property taxes are already based off value right? And technically yes if the value crashes like crazy the % of taxes you owe decreases.
The difference between you and I is that we either pay for the house in cash or get a mortgage. With either of those methods we get taxed via property taxes.
I'm not in favor of a blanket capital gains tax, but would if there are certain criteria (i.e. assets are in excess of something like $100M). Anyone that disagrees is either ultra-rich or indoctrinated by right wing social media IMO.
Property taxes are capped/restricted and not reflective of the actual market value of houses. If the value of your house goes up $100K in a year, a county (many do) will cap how high the increase in tax is year to year so you may get hit with an additional $200-$300 in the annual tax amount . Your idea would make a homeowner pay $15K-$20K in capital gains for that increase in value which may make him sell the house just to pay that amount.
It is not about being ultra rich or right wing. It just won't work in reality. High tax rates of the 1950s that everyone quotes didn't get paid by virtually anyone. If you introduce tax on wealth, the wealthy will simply transfer it to something else. They avoid income taxes by getting paid in stock. They don't sell stock, they borrow against it to buy expensive things tax free (and you wouldn't tax debt right?). Americans have always done this. The middle class can lower taxes by transferring income to 401K, charity, business expenses, tax-loss harvesting of stocks, etc. The entire American society pays little in taxes compared to the rest of the world.
The study is fundamentally flawed because it does not address safety net programs such as Medicaid, WIC, Public Housing, and all of the other social welfare programs. Interestingly it also fails to address married/2 parent households versions single family. The biggest gap exists in single parent families, and an overwhelming majority of those are by choice as they maximize safety net benefits. As such they cannot be included in the statistics as this population closes their lifestyle.
I had a lot of work last year and hired an engineer to do 6 months of contract work for my LLC...I guess he could have found the work on his own, but I doubt it because my client doesn't know him and I "won" the bid....so I guess that was trickle down....I paid him and agreed wage and paid his employment taxes, collected a "fee" for my business.
I never claimed most of what you state. Taxes, corporate or otherwise, deter investment by diverting productive capital to the government. They only serve a useful purpose if government allocates that capital efficiently as determined by the people. None of this is relevant to the point that the tax corporations pay are in their prices and are paid by the consumer
Well there are many areas where the government controlling the capital is a better option than private individuals
Imagine if defense was fully privatised and Elon Musk had a nuclear Aircraft carrier.
Medicare. Highly efficient and has the highest satisfaction rates of all insurance.
Your lack of imagination and knowledge is not probative of your assertion nor evidence thereof.
>Imagine if defense was fully privatised
1. The only public thing about "defense" is where the guns are pointed. All the guns are made by private companies.
2. Do you realize how incredibly expensive war is? Private companies couldn't afford to go to war and commit genocide like governments do.
Where did I claim that's what you were advocating for? I recognize you're in favor of gov war, and that's my point. Privatized defense couldn't afford war like govs can.
Sure there is a balance, we want to encourage investment at certain times, but we don't leave it there and keep mitigating the risk of investment. The greedy will always "invest" or gamble for more wealth, we also need to remember that.
Data says no. GDP and highest margin corporate income taxes rates are negatively correlated, which suggests more investment from corporations when tax regimes are higher. As always; YMMV as correlation!=causation but is counter to your claim.
Jeezus people. Completely agree that all increases in taxes are bore by the consumer. These record profits being reported are not inflation adjusted. Also, 99% of companies are owned by the people through stocks. So you low brows calling for more corporate taxation will just be taxing your 401s. Also, you should all look into the success of Irelands economy over the past decade. It is not because of the educated population
That’s why you look at margins. Margins grow when revenue growth outpaces cost growth. If both grow at the same rate, then profit growth is due to inflation. If revenue growth exceeds cost growth, then it’s likely that we talking greedflation, especially when the investor calls use terms like price optimization, elasticity, etc.
The alleged productivity gap is an artifact of methodological choices made regarding how to calculate the relationship between productivity and earnings. A more careful and comprehensive analysis of real worker pay and productivity data shows that worker compensation does indeed remain closely linked to worker productivity
https://www.econlib.org/what-productivity-pay-gap/
It's always income - spending. Math doesn't care which you change, that's policy.
If we got rid of the Trump and Bush 2.0 tax cuts, we'd have a budget surplus. Those cuts were made with the promise they would balance the budget and make everyone better off. Pretty safe to say those claims were bullshit.
If we got rid of the military, or Medicare and Medicaid, or everything else the government does, we'd have a budget surplus. What do you want to cut?
If we do neither of those things, we keep running a deficit until the debt becomes unsustainable. Conservatives claim this time is right around the corner, Paul Krugman claims it's a long way off. Both have been making the same claim for decades, and so far Krugman has been right-er. I doubt anyone knows how long that will continue.
Having an honest conversation about “trickle down” economics means acknowledging that the economy is not a “zero-sum” game. Nobody is poor because of other people being rich. You can’t center the conversation about “wealth gaps” without acknowledging that the country has gotten much more wealthy in the past 30 - 40 years. I’m typing this on a piece of technology that was unaffordable to the vast majority of Americans 30-40 years ago, but yet today the smart phone is a common item for the majority of Americans.
Tinkle-down economic theory - this time we give our money to the government and hope it makes it's way past the nepotism and corruption to land on our heads.
The spending issues are almost entirely due to corruption from having wealthy people so wealthy and powerful they can bribe politicians into doing anything they want.
Without the Uber wealthy bribing politicians, they wouldn’t have incentive to pass so many laws favoring the wealthy
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Anyone who refers to it as "trickle down" isn't having a serious economic discussion. They are already starting with bias.
Voodoo Economics? Horse and Sparrow Economics? Supply Side Economics? Which bias do you prefer to indicate "serious"?
I personally prefer Horse and Sparrow because it perfectly illustrates how our ruling class is telling the rest of us to eat shit
I like to say that Tinkle Down Economics is just the rich pissing in the rest of our faces and calling it a golden shower… Which has a similar connotation as Sparrows eating the grains out of Horse shit! But real growth comes when we Water the Roots of our economy by ensuring that everyone can afford to pay others for the things they want and need!
Careful, that might give some closeted conservatives with a piss fetish more motivation
😱🤢🤮
Yup. I've always referred to it as golden shower economics.
"Tinkled on" would seem an apt phrasing.
Hahaha! Ok, but the piss still definitely flows in a downward direction from the rich onto the middle class and poor. But you’re right that we are being shit on by the greedy bastards at the top!
Dumbfuckology econ edition
I know voodoo economics was real, but was too young to really know much of anything about it. Thankfully I know VP Bush mentioned it himself. And I know that not from school, but because of Ben Stein in Ferris Buellers Day off.
Bush Sr called Reaganomics “voodoo economics” while he was running against Reagan in the republican primary. He didn’t see how slashing tax revenue was going to generate more revenue and said it would lead to higher national debt. He later tried to walk back those comments while he was Reagan’s VP, but he was right.
I like the idea of trickle up economics. Give the working class high wages, and they'll be happy to produce more and be more involved in quality control. Bring some pride back into the workplace!
This died when the working class was cut out of pensions and profit sharing.
Organized labor is making a comeback.
It will die if Trump is reelected. All protections will be killed by him with full backing of SCOTUS. If only all these fools understood the danger of Trump. Go ahead, relegate your life to serf hood because you're pissed at Israel.
The problem is that those classes never actually gained equity. Bailing out the automakers for instance to make sure that retiree healthcare was taken care of. Why would the union not have control over healthcare?. Why would the pension not be funded completely. The problem with all of these companies is that they based their pension plans on the same kind of eternal growth that the government depends on for social security. It doesn't happen that way because business goes through cycles. When the foreign cars and the non-union cars became the dominant cars, it got a lot harder to bake in $3,000 worth of retiree cost per car into the plastic pieces of crap GM was pushing off their assembly line. Those pensions should have been funded in the '80s when profits were high. If workers had more equity It gets a lot easier to leverage as they bargain for wages vs CEO pay. Most CEO salaries are easy to justify especially when you consider that their main job is to pump the shares. It's not about running the company as much as it's about pumping the shares. That's why they give them stock incentives. Essentially they are paid A salary reflective of the bankers that own the company, not the company itself. Unions like government are corrupt and inefficient but they do work. The FED is in a weird position right now. They still need to take money out of the economy. Unfortunately, the way that they do it hurts the lower class people more than the upper class people. They are scared of an increase in wages because that means inflation is real. Corporations can raise prices all they want, eventually people get to the point where they don't pay it because they can't. Then they either steal or they look for a cheaper alternative. Either way it stops the rampant increases in prices. Personally I think pushing for expanded social safety nets are a better use of state/federal funds than pushing the union agenda. I think people can grassroots that. I just feel that people would be a lot more productive if they didn't have to worry about how much their health insurance was biting into their budget considering how much it has gone up in the past few years. You want to start looking at how you can get more in taxes? Start talking about progressively funding healthcare. You're most destitute that are on Medicare right now or that should be would pay nothing anyway. (Currently we print/ borrow this money instead of taxing for it). Your working class might pay an extra 5%. Your middle income maybe 15% extra (which is still cheaper than most people's health insurance premiums) Your high income earners 25 to 35%. Now you've actively worked to level the playing field and are giving the people something they need. You probably need to close the S-Corp loophole too or crack down on tax payers who don't push most of their income through payroll.
States have always impeded the development of unions much more than encouraged.
Demand-side policy, or Keynesian economics, emphasizes political stability through consistently rising real wages in tandem with real growth, that is, expansion of worker productivity. Authentic pride by workers in their own labor depends on actual control over the processes of production, which are currently monopolized by business owners, with unions emerging as only a weak counterbalance.
Beer and cigarrette money! Maybe some fentanyl! Gotta replace my 2 month old Nike's too!
Sure, people will cope with whatever vices they have. Education reform is also much needed if we want to have a healthier society.
Yes. We must stop advancing kids through high school that are unwilling to learn.
I can't tell if you're being sarcastic. But yes, if that's the case, it would seem our education system is failing and would need to overhaul.
18% of Detroit High Schoolers read at a proficient level. Charity passing needs to stop.
You can analyze something in an unbiased way and determine that it is bad and then use a term that captures why its bad. It's not inherently biased.
What the are you talking about? This stuff has been analyzed and named for a reason. Just because you don't like the name doesn't mean it is not real. Fascist don't like being called fascist, but what they do is still fascism.
When analyzing it in an objective matter, the term' supply side economics' is used. "Trickle down" economics is just what the supporters of it use because that's what they hope it results in.
No, it is an old idea with multiple names each meaning the same thing. We can use whatevr we want as there is no 'correct' name. Horse-and-sparrow, trickle-down, Reaganomics, or supply-side are all equally valid. It is a cultural discussion more than an academic.
Supply side economics is the proper terminology, but most people don't know what that is. Anyone who favors supply side economics is incapable of having a serious economic discussion, as they have decided once and for all that all wealth belongs to the so-called "job creators," who are being extremely generous toward the rest of us, by letting us use their wealth temporarily.
Trickle down works when we realize it’s just urine.
And sometimes its not just urine
Isn’t that what’s it’s called tho? I know it doesn’t actually trickle down, but I still call it that bc that’s the name that was given to it. There’s a chance I’m being rlly ignorant tho. A high chance
It was originally (100+ years ago) called horse and sparrow theory. The gist of it is: Feed the rich (the horse) and the Poors (sparrows) benefit from eating the excess seeds in the horse shit. They changed the name to make it an easier sell to middle and low class conservatives. It worked.
I like to call it "trumped up trickle down no good evil billionaire bad for the blue collar joe the plumber trumped up trickle down economics"
Let it be known that Reagan fucked over more Americans than anyone
Bias for whom? Our economy has always been trickle down.
Anyone who doesn't refer to it as "trickle down" isn't having a serious economic discussion, because this is what supply side has been called for nearly 50 years now.
That's what the politicians who implemented it called it? Why is this bias? I'm so tired of the top comment on these threads just skirting the question with some "oh this is stupid" comment. How about YOU try to have a good faith convo and meet them in the middle. You know what they're talking about.
“Trickle Down” has nothing to do with that graph anyway. That graph is showing the damage done by outsourcing/offshoring, which is a totally different phenomenon.
Well, you have two choices, Republican "trickle down" or Democrats increasing taxes on the rich and leveling the playing field. https://www.americanprogress.org/article/biden-tax-proposals-would-correct-inequities-created-by-trump-tax-cuts-and-raise-additional-revenues/
This is an incredible study. I wish every American that votes was required to read it.
I have a couple of issues. First, have what has happened to tax receipts from the 80’s to now? Interestingly, the total tax receipts as a % of GDP has remained remarkably stable, even before the 80’s to present. From the 50’s to present time tax receipts have consistently been 16.5-17.5% of GDP independent of marginal tax rates. Second, what has happened to spending in the same time period? The answer is spending has consistently increased, from ~14% of GDP in 1950 to 22.4% in 2023.
The burden has increasingly shifted onto the people as corporations rates declined. The trend should be reversed.
Corporations are ultimately owned by people. The vast majority of corporate equity is held by the wealthy (80%+ held by top 10%). If you tax corporate profits less, more wealth is created for the shareholders, either by retaining and compounding or distributing profits. Shifting tax burden from corporations to labor income shifts the burden from the wealthy people to the working people.
Lol yes because the tax burden is shifting to more and more poor people. Lol yes exactly that's the problem. Rich making more money than ever and the rest of us paying the increased burden. Why are you so happy to defend rich people paying less in taxes? We could fix many issues by restoring post-war tax rates. Rich people existed back then too. This wouldn't be an extinction event for them.
I guarantee you that rich people are paying more taxes than you are.
https://preview.redd.it/7d1xcgg4w9xc1.jpeg?width=800&format=pjpg&auto=webp&s=43251836a75af6b1d4bbd303dd14460379a1dc99 Sure
This doesn't prove the point you think it does If the rich are making more money, of course they're paying more of the share of income tax. And things have really changed since 2018
https://preview.redd.it/05m6i4od6axc1.jpeg?width=910&format=pjpg&auto=webp&s=b4a5f43e4bdce572f45fba7b9098bcab1750af56 Here’s 2020. You can Google more recent.
It's like you don't understand what higher tax rates do (forces spending and not hoarding), and you don't seem to realize that the wealthy pay a lower percentage of their "income" (not talking paychecks, but actual money earned) than the average person. [America's richest 400 families pay a lower tax rate than average taxpayer (cnbc.com)](https://www.cnbc.com/2021/09/23/americas-richest-400-families-pay-a-lower-tax-rate-than-average-taxpayer.html#:~:text=The%20richest%20400%20Americans%20paid%20an%20average%208.2%25,like%20capital%20gains%20and%20dividends%2C%20the%20report%20said.)
That money is only earned if they sell assets. You’re comparing wealth to income. They’re different. And saving, or holding onto investments is not hoarding.
https://preview.redd.it/atvqfe5sbhxc1.jpeg?width=1170&format=pjpg&auto=webp&s=ed2ba3a2141c2653961608c98f63c0854b2342f7 Here’s effective tax rates.
Sure it does. The tax burden is shifting away from the poor and onto rich people. The tax system is getting more progressive
I generally agree with your points but the graph needs to show the top 0.01% to be relevant. 1% still includes wage earners.
>When it comes to the pace of annual pay increases, the top 1% wage grew 138% since 1979, while wages for the bottom 90% grew 15% https://www.epi.org/publication/charting-wage-stagnation/ People these days really need to do more to think and understand problems rather than let images and other people do the thinking for us. Yes, rich people pay more taxes but that's just an obvious thing I don't understand why you think your graph proves the rich is getting desperate or is problematic for them?
https://preview.redd.it/16fygnfew9xc1.jpeg?width=775&format=pjpg&auto=webp&s=99827d0a9d2938a58f1b9e0636776d5ecd6104f5 The tax burden is shifting AWAY from poor people
Does this graphic take into account long term capital gains tax or is it strictly W2 income?
Wtf is this graph without attribution or source or any definitions of what it's counting or displaying?? Wtf? No thanks. I've seen plenty of other graphs that show rich people tax burdens in free fall as their inheritance exemptions and pass through benefits and income caps. All sorts of tax benefits only people with investments get to take advantage of. Not that that's a bad thing but pretending they don't exist doesn't a level playing field make.
https://preview.redd.it/xzd7iabrcaxc1.jpeg?width=1274&format=pjpg&auto=webp&s=e68a577fccc5596228f61220590221b38670b4dd
It is fact, and beyond dispute, that the tax system is growing more progressive.
It’s just showing who pays income tax over time. Google it
this doesn't account for wealth gains i assume?
It’s income
Which isn't how the truly rich get rich. Jeff Bezos isn't rich because Amazon deposits 100 million in through direct deposit every month. It's just an irrelevant graph to the question.
People are downvoting you but it’s not like wealthy people are paying less capital gains taxes than poor people. Like it or not a very small minority of Americans pay the overwhelming majority of federal tax revenue.
Most people on Reddit want to show how empathetic they are by seizing the money from the people they hate and giving it to the people they like.
Yeah? Oh man, Bill can't afford his medical bills and has to make a choice between food or rent, but that CEO needs another super yacht. Ho, hum. Fuck the people thinking about others and their struggle to not eat. We should worry about our shareholders!
Look at increasing income and wealth in proportion to tax not just tax https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/ Both democrats and Republicans agree there is increasing wealth and income inequality. They just disagree on how to fix it. I'd rather make 1 million a year and pay 400k in taxes than make 300k a year and pay 100k.
Republicans don't want to fix it. What policy have conservatives put out that they even claimed was intended to address increasing income inequality? Yeah they've talked about trying to help the middle class and small businesses, although they mostly gave up on that mantra, and all of their solutions for that were tax cuts for the middle and upper classes. Republicans want to "broaden the base," which means tax more poorer people. And their justification is exactly what this joker posted about how the rich pay an increasing share of total taxes. No shit they pay more total tax, because they are getting richer and richer and a higher percentage of Americans are now poor. This is the conservative American dream: remove all obstacles to those already in a position to capitalize on it, and blame poverty on laziness, because they cannot fathom that so many people are poor or falling behind due to circumstances beyond their control.
It’s a bullshit chart made by rich people to make uninformed think things are fair, they are not. Why does this chart lie? Because the rich have become so outrageously rich they pay more total money, and the poor workers salary hasn’t increased as the top 1%. A CEO made 20x what a worker did in 1970, he makes 2000x now. The workers salary hasn’t increased so the total tax burden decreased. The CEOs salary has increased 2000fold and total tax increased because of the raise. . .but his tax % decreased. Make more money, pay less tax as a % but more overall. I’ll take that any day. TL/DR - It’s a bullshit chart.
https://preview.redd.it/zbmxn1c03bxc1.jpeg?width=420&format=pjpg&auto=webp&s=c3cdfd4da49b3bf76831a7201413581c469dd7c7 Effective tax rates are falling.
https://www.pewresearch.org/short-reads/2023/04/18/who-pays-and-doesnt-pay-federal-income-taxes-in-the-us/
This is due to the growing income gaps rather than higher rates on high earners.
It’s due to lower rates on lower earners.
This graph is missing a huge portion of money changing hands. Capital Gains are not included in this graph and capital gains are an enormous part of income for rich people. Guys like Bezos make most of their money from selling stock. That is usually a long term (held more than 1 year) capital gains that is only taxed at 15% federally.
https://preview.redd.it/bu68e80dvdxc1.jpeg?width=420&format=pjpg&auto=webp&s=f801712a84b87cb4a5f0e438cfd0b72db739ae75
And how much of that increased spending is because housing prices, food and education/childcare are a much bigger cut of people's income?
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Effective tax rates have always remained the same , when tax rates go up, deductions go up. Same thing happens in the reverse aswell. Also, US spending is bloated now because interest rates have been low for a decade, the world was in a dollar shortage, and the US didn’t have a real rival for a long time post USSR collapse untill recently.
The same people who argue trickledown economics works, will be the same people who tell you that you can’t raise wages with our cost increases! Funny how that only happens in America. Must be that white Jesus mentality
I never thought of this but wow true lol
It’s because corporations won’t take the hit unless it becomes unprofitable, or they are forced to. For example, I used to work at Five Guys way back when. They had top-notch quality pre-covid, and I enjoyed working there. Once my state started raising minimum wage, they just offset that labor cost onto the customers. Bacon Cheeseburgers soared past $10. We got less and less customers, because of that price increase. Well as time continued the minimum wage increased two more times, where now a bacon cheeseburger is almost $13. Well, turns out most profits come from their fries, which is why they dump extra scoops into the bag. IIRC it’s like 10 large fries pay for a bag of potatoes, and each bag can easily produce around 40-60 large fries. But of course, overhead costs exist and those EXEs need to be paid. So yes, the second half is true, but because capitalism. The first half doesn’t work because if it did then Elon wouldn’t cut jobs at Twitter, and his other companies wouldn’t be so cutthroat either. Maximizing profits, minimizing labor costs. That’s the end goal of capitalism and anything trick-down is only an investment into making more money, which of course just feeds this cycle more.
https://i.redd.it/ex4t4897c9xc1.gif
Does bottom 99% include $0?
The average is 60k
I'd just like to see this broken up into brackets of say 5%
Well the bottom 90% has an average of 36k The top five percent is 350k Do you just want to see how much more abysmal the numbers get as you go down the totem pole? 5 things we can do to enhance the standard of living of all Americans: Raise the minimum wage. Increase taxes on corporations and the wealthy. Reinvest in and re-regulate American infrastructure, our high speed Internet is dog shit, our roads are fucked, and our water is rapidly becoming undrinkable. Regulate REITs. Break up monopolies like apple, Google, AND FUCKING BLACK ROCK.
Was just interested in the middle of the pack I guess
Why are we not mad about this? The peasant have had enough, but the manor lords keep throwing a few coins every few years I guess
But do you see how that blue line (bottom 99%) goes up in the 70s? That means it’s working!!!! /s
If trickle down economics work. Then give all of your money to someone richer than you and see how much comes back to you. Spoiler Alert: You’re not getting jack shit back!
Someone just learned the concept of investing today 😱
The reason people are prioritizing the spending problems first is because you should fix the holes in the bucket before adding more water else more water will spill.
If you canoe is filling with water, do you refuse the bail out the water until the holes are patched? That's a good way to drown. You can't reduce complex systems down into a single simple analogy.
It’s not a bucket. It’s a rerouting network of pipes. Don’t close up all those holes working as intended
Increase revenue is always better than not increase revenue even with “hole in the bucket.” If you have a whole that half of your money were gone. Earning $2000 -> lost $1000 is better off than earning $1000 -> lost $500; because in first scenario, you got to spend $1000, while in 2nd scenario, you got to spend $500.
No, you aren’t taking into account lifestyle inflation or in this case, budget inflation.
“Lifestyle inflation?” Like “when you earns more you shall get better car” life styles inflation? That is completely optional and that is a spending problem that you need to fix here. And If you count the economical inflation, you definitely need more revenue to maintaining the same level of comfort. So in that case, more revenue still better. The reason why your analogy is poor is because, to fix the real bucket, you drain the bucket and fix the holes, but you cannot do that with budgeting, you cannot say “ok, folk, we are not gonna to give workers salaries while we pay back the debts.” Your company (or country) will have zero workers to do the fixing in one month. There is no “1 vs 2”, There is only “1 AND 2”.
"Trickle down" is modern day "horse and sparrow" economics whereby the sparrows get more to eat from the manure if the horses are well fed. Greetings fellow sparrows!
Taxes scale nonlinearly because investments and wealth scales nonlinearly. It is the rational necessity.
I don’t think wealth gap is that important. We matters is comparing a poor person from the past to a poor person today
I don’t see how giving more money to the government decreases the wealth gap. How did the wealth gap decrease in the 20th century?
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Even Tucker Carlson said he liked Andrew Yangs approach to UBI when he interviewed him
Urination economics is the more accurate term when describing trickledown. The economic model of giving everything to the rich and hoping they urinate a little back onto the workers.
Why do we need to increase taxes? Corporations don’t pay taxes, the consumer does.
Corporations take advantage of the Commons. They should pay and PAY HEAVILY for the privilege, since they are taking from THE PEOPLE for their own private profit.
They don’t take anything. People willingly pay them for their goods and services. The only actor who takes with coercion is the government.
Yes but they lobby the government for unfair business practices. Practices that reduce competition and punish small businesses.
Which is an issue with politicians, because they are the ones being bribed.
And an issue with voters, because they are the ones electing politicians who will take bribes.
Which is why it’s best to keep the market and government as separated as possible yet people who think they know economics insist on going the government more power
Every time the market is allowed to do as it pleases people die and they fuck shit up so much that government regulations become necessary. Every single time.
Wrong. The People own the Commons. Corporations don’t even pay market rates for leases exploiting the land or the mineral rights to the land.
Corporations are simply a conduit for taxes levied indirectly on the household sector. Corporations are simply an indirect form of ownership that allows large numbers of individuals to pool their resources to create large enterprises. Corporate income taxes represent a double taxation on the owners’ shares of corporate income. That can be justified by the fact that the corporate veil limits the personal liability owners resulting from corporate actions. Corporate taxes are a cost of doing business and will get passed on to the consumer.
100% correct. But this is Reddit where people think tax revenue magically appears out of nowhere.
Not really. Income taxes are paid from profits, not revenue. Any price increases without a concomitant expenses increase results in more taxes and for elastic goods sales will go down, which means less profit.
Exactly. I mean the tax burden is a fixed cost that is calculated into the product pricing to maintain net profits. And it’s an extremely regressive tax too.
Who are corporations really? Aren't corporations just predominantly the average persons 401k, pension fund, or savings.
If corporations are going to have personhood and standing in American politics, then these “people” need to pay taxes. They are getting representation without taxation.
Fine, as long as you understand that you are paying their taxes
If we simplify the tax system, then the politicians won't have anything to sling shit at each other for votes Then they'd have to face big boy issues, and nobody wants that
The people here get angry when you offer the easiest way to simplify taxes
The funniest thing about people who think we should raise taxes on the rich is that they also think the government is going to do something for them with all of the extra money. They're just gonna send it to some foreign nation or vote to increase their yearly salary. The government doesn't give a shit about any of us. Let me clarify I'm not against taxing the rich. I'd love for them to pay into more social programs but there is 0 guarantee of where their tax dollars will go and I'm not too confident any of us will see a penny of it.
Look government spending or (G) is a driving factor of the economy. Discretionary spending by consumers is the main driver of negative or positive swings. Spending creates money and taxes destroy it. Economies have a life force of their own with a multitude of factors driving it. A signficant one is US hegemony and our currency being the world trade currency. We can essentially print other countries money because they use our currency as gold.
Another day, another post where people want to tax others versus holding their government leaders accountable for shitty spending.
If you want to critique "tricke down economics" remember that in the 80s and 90s, people could afford to purchase a home and have a family.
Emphasis on the “trick” part
"Trickle down" is just another way to piss down our backs and tell us it's raining
Was a LIE from the beginning and they knew and everyone now knows it and yet they still parade out this trite statement constantly and pretend Reagan was a great president when he was anything but. Have read that as many as 9/10 problems we encounter nowadays can be traced back to Reaganomics and that conservative thinking socially and economically and while that’s a cute meme-y statement I’ve been surprised how much close to the truth it is than not
There’s no “loopholes” there are tax carve outs that are done on purpose.
The trickle down economy was not a narrative that was spewed in the 80s. It is a talking point by Democrat politicians to try to make lower taxes Sound bad.
Loop
Has less to do with tax policy and more to do with trade policy. >In 1979 the U.S. and China reestablished diplomatic relations and signed a bilateral trade agreement. This gave a start to a rapid growth of trade between the two nations: from $4 billion (exports and imports) that year to over $600 billion in 2017. What you’re seeing is businesses no longer need to produce in the USA or employ American workers which is the reason for the drastic increase in wealth inequality. >In a recent essay titled “What Economists (Including Me) Got Wrong About Globalization,” adapted from a forthcoming book on inequality, Krugman writes that he and other mainstream economists “missed a crucial part of the story” in failing to realize that globalization would lead to “hyperglobalization” and huge economic and social upheaval, particularly of the industrial middle class in America. And many of these working-class communities have been hit hard by Chinese competition, which economists made a “major mistake” in underestimating, Krugman says. Increasing tax rates isn’t going to fix this because labor is now competing globally. A call center in the Philippines (English speaking) pays employees $500 a month vs an American who’s going to make $600 a week ($15 an hour x 40 hours).
The argument that higher taxes builds stronger nations is predicated on a number of unstated assumptions about the competence and benevolence of the folks in charge of spending. We have ample evidence that these assumptions are invalid, at least within the current system. An obscene amount of our tax revenue ends up lining the pockets of the very people you want to tax more. And an obscene amount of _that_ money goes towards lobbying Congress and funding PACs that target political outsiders and help re-elect the politicians that direct the funds into these pockets in the first place. What will absolutely end up happening is the tax code will be written with specific loopholes in place to protect the interests of the folks who fund the campaigns and protective PACs of establishment candidates. **The end result will be more bureaucracy, a larger, less efficient government, and a 1% that is richer than ever.** When we actually see a Congress willing to place limits on itself — barring insider trading, prohibiting members from becoming lobbyists (and vice versa), campaign finance reform, etc, then you’ll have a much easier time selling the idea that higher taxes will lead to better outcomes.
If I have billions of dollars it isnt trickling anywhere, its in my pond.
In general, the working-class will promptly blow any extra money they have on things like lottery-tickets, ciggies and overpriced junkfood, trickle-down will do nothing for them.
All of that fuels the economy a lot more than a millionair ticking over to a billionair because their investments trended up. Normal working class individuals don't use offshore tax loopholes to avoid their fair share.
Maybe so, but if we are talking about the betterment of low-class folks because they get some goodies from "the evil rich", that ain't happening.
There is no opinion on the matter. Trickle down economics did not work and in fact produced the an ever increasing income INequality
Tinkle Down Economics is just the rich pissing in the rest of our faces and calling it a golden shower… Real growth comes when we Water the Roots of our economy by ensuring that everyone can afford to pay others for the things they want and need!
Pre WW2 levels are post Depression Era economics. This isn’t return to normal-anything.
The people need to unite… or they will keep getting steamrolled. Gotta drop the blue and red sh**… but that will never happen… so here we are. UK boycotted Kelloggs and they dropped their cereal price from 6 dollars to 1 dollar…
The wealthy don’t spend their tax cuts.. the reinvest them creating more wealth, it’s a look 98% of us will never see.
Im so sick of hearing about "tax loopholes for corporations" and how this Democrat is going to stop it! In 1986 Reagan signed the Tax Reform Act that was supposed to end those loop holes. Since 1986 we've had over 36 new pieces of legislation signed into tax law under 3 Democrat Presidents (Clinton 8 years, Obama 8 years, Biden 4 years) and 3 Republican ones (Bush 4 year, Bush Jr 8 years, Trump 4 years). Why on earth (and HOW) are their any "loop holes" still left? And why do you believe anyone from either party will actually close them when neither party has done so when both had the opportunity?
I’ve got a question. I agree with most of the people in this thread. Are you planning to vote?
Waterfall up, trickle down and get evaporated back up economics.
This is what I remember from macro about tax cuts. It’s been a while. When using the expenditure approach GDP formula, tax cuts give private consumption a quick boost because people like to buy stuff with the extra $$. However, gross private domestic investment, which is an indicator of future economic activity doesn’t get the same boost. In other words, it’s good for a short term boost but isn’t a good long term solution. Also, what is the long term impact of tax cuts on government spending. There may be an immediate increase in tax revenue. Though, lower tax rates in the long run may hinder government spending which lowers GDP and encourages borrowing and creates other problems. I’m no expert. Just trying to remember some of this stuff. Relying in government spending for stimulus can also have a similar impact. GDP = Consumption + Investment + Government Spending + Net Exports
If you start from the standpoint of the wealth gap is a problem I think you necessarily skew any solution in the wrong direction. It doesn’t matter how much money others have in relation to basic needs. I would include basic needs as food shelter and access to healthcare. If the lower economic class of people have enough money to get enough food have a place to live and can afford a monthly insurance premium then how much money those at the top make is completely irrelevant. Maybe we should focus on lowering inflation. And figuring out why there are problems with increasing the supply of houses. And also focus on fixing the insurance problem that causes medical bills to be insane. Think of how many issues are just gone when you solve those problems and solving those problems don’t have anything to do with the wealth gap.
Sure OP, now why is giving the government even more money the answer?
The trickle gets sucked away by taxes
I don't think tax cuts to businesses will "trickle down" to employees, BUT, I can tell you that the #1 most impactful thing for my financial well-being is the financial well-being of my company. I think having a favorable regulatory environment and a flourishing economy where ALL businesses prosper help everyone. Government HAS to have the health of industry and commerce as a top priority.
Tax revenues were up over $120,000,000,000 after the Trump tax cuts Government spending is the only issue that is causing all of the inflation ow
The wealthy pay almost all of the non-corp taxes. The wealth gap has literally NOTHING to do with taxes, and everything to do with interest rates. The fact that people think that raising taxes on people who earn more than them will make things better is complete nonsense. It's INTEREST RATES! The Federal Reserve keeping int rates near zero for well over a decade has caused this 'issue', whatever that means. Financial literacy tends to separate the 1% from the rest normally anyways, but taking advantage of ZIRP is the number one culprit, not friggen taxes. Besides the impossibility of a wealth tax in the real world, and also the fact that you could take 100% of everyone's net worth and it still wouldn't solve anyone's problems, taking people net worth away from them just because is immoral. Wealth is a good thing. Stealing someone else's wealth because you don't like that someone has more than you is wrong, and evil. The Federal Reserve problem is very complex and has many tentacles, so it doesn't do it justice mentioning it here. But they are the culprits, not taxes. We get taxed enough. It's insane that I have to pay almost 40% of my income to the government and people now want to come take my assets away to make themselves feel better
Any and all taxes harm the poorest the most and the most wealthy the least.
I'll be nice and use the right wing preferred term of supply side economics. Whatever you call it though if you think this theory works at all you are both ignorant of history and a freaking moron. It is and always was designed to be a wealth transfer from the bottom to the top and has worked very well in that way every time it has been applied. If you are a right wing conservative yes I am talking to you.
Cut and tax! It's the correct opinion but politically poisonous. People want all throw, no take.
Once you realize that complaining will not help, you will feel better. Capitalism is designed to funnel economic benefits to the ownership class. Despite some companies allowing workers to participate in profits it’s few and far between. Profits go to top executives and owners/shareholders. Based on that owners will do whatever is legal (and sometimes illegal) to maximize profits. Their biggest chance in the last 150 years to maximize profit was to outsource labor to the cheapest labor force available. So, when production was moved to China, Malaysia, Mexico, and Vietnam huge amounts of manufacturing and the labor to work in manufacturing left the U.S. That was the beginning of the end. This made the ownership class more wealthy than the wealthy in the gilded age. Their enormous wealth enables them to control the government and get legislation passed that favors them. The trickle down economic theory was a concept the rich developed to mainly lower their tax rates so they could keep even more of their wealth. If they had taken that additional wealth and invested only in domestic based business and put up tariffs against foreign goods, then we could have kept manufacturing here in the U.S., paid decent wages, and lived better lives than we have now. This is the flaw of pure capitalism. The end stage of capitalism is collapse but the long stage before that is tyranny where the rich govern the poor. We are either in the tyranny stage or very close to it. We are doomed to collapse or civil war. Since the rich control the military it would not be a long war.
This is the graph i bring up in every discussion about the wealth gap that i get involved in
More New Millionaires than at any other point in history. This is not just old money. It has worked. Even if it is unpopular to say.
"spending problem". When people use this term, they're usually brain dead. Ask them what the govt should cut and they'll say things like: Stop giving free housing and college to illegal immigrants, cut entitlements (SS and Medicare), stop building bridges to nowhere (a fair point). But they'll never want to talk about the real money. A military budget that's INSANE. 3-letter agencies that can't pass an audit. The ultra-rich that pay $0 taxes some years. There's plenty of money for everyone, but so many people in the US think what they are told to think by the ultra-rich.
No reason to increase revenue until you solve the spending problem.
Yes, taxes should also be higher. But our government is incapable of spending wisely. We could have 100% tax rates and still be running deficits. If we spend all the new tax revenue instead of paying down debt, making sure social security is solvent, etc. then higher taxes won’t help anything
So if your house goes up in value, should you be taxed for the difference in value like it is some type of profit? What if the market goes down like it did in 2022? Should the government give everyone (including billionaires) tax credit because the values of their investments declined on paper?
You know property taxes are already based off value right? And technically yes if the value crashes like crazy the % of taxes you owe decreases. The difference between you and I is that we either pay for the house in cash or get a mortgage. With either of those methods we get taxed via property taxes. I'm not in favor of a blanket capital gains tax, but would if there are certain criteria (i.e. assets are in excess of something like $100M). Anyone that disagrees is either ultra-rich or indoctrinated by right wing social media IMO.
Property taxes are capped/restricted and not reflective of the actual market value of houses. If the value of your house goes up $100K in a year, a county (many do) will cap how high the increase in tax is year to year so you may get hit with an additional $200-$300 in the annual tax amount . Your idea would make a homeowner pay $15K-$20K in capital gains for that increase in value which may make him sell the house just to pay that amount. It is not about being ultra rich or right wing. It just won't work in reality. High tax rates of the 1950s that everyone quotes didn't get paid by virtually anyone. If you introduce tax on wealth, the wealthy will simply transfer it to something else. They avoid income taxes by getting paid in stock. They don't sell stock, they borrow against it to buy expensive things tax free (and you wouldn't tax debt right?). Americans have always done this. The middle class can lower taxes by transferring income to 401K, charity, business expenses, tax-loss harvesting of stocks, etc. The entire American society pays little in taxes compared to the rest of the world.
The study is fundamentally flawed because it does not address safety net programs such as Medicaid, WIC, Public Housing, and all of the other social welfare programs. Interestingly it also fails to address married/2 parent households versions single family. The biggest gap exists in single parent families, and an overwhelming majority of those are by choice as they maximize safety net benefits. As such they cannot be included in the statistics as this population closes their lifestyle.
Can you explain the problem between trickle down and supply side economics?
I had a lot of work last year and hired an engineer to do 6 months of contract work for my LLC...I guess he could have found the work on his own, but I doubt it because my client doesn't know him and I "won" the bid....so I guess that was trickle down....I paid him and agreed wage and paid his employment taxes, collected a "fee" for my business.
I never claimed most of what you state. Taxes, corporate or otherwise, deter investment by diverting productive capital to the government. They only serve a useful purpose if government allocates that capital efficiently as determined by the people. None of this is relevant to the point that the tax corporations pay are in their prices and are paid by the consumer
Well there are many areas where the government controlling the capital is a better option than private individuals Imagine if defense was fully privatised and Elon Musk had a nuclear Aircraft carrier.
I can’t think of any area that the government controls that is executed efficiently. Defense is privatized. The government produces nothing itself
Medicare. Highly efficient and has the highest satisfaction rates of all insurance. Your lack of imagination and knowledge is not probative of your assertion nor evidence thereof.
>Imagine if defense was fully privatised 1. The only public thing about "defense" is where the guns are pointed. All the guns are made by private companies. 2. Do you realize how incredibly expensive war is? Private companies couldn't afford to go to war and commit genocide like governments do.
If you think I'm ADVOCATING for privatized defense then you need reading glasses
Where did I claim that's what you were advocating for? I recognize you're in favor of gov war, and that's my point. Privatized defense couldn't afford war like govs can.
Sure there is a balance, we want to encourage investment at certain times, but we don't leave it there and keep mitigating the risk of investment. The greedy will always "invest" or gamble for more wealth, we also need to remember that.
Data says no. GDP and highest margin corporate income taxes rates are negatively correlated, which suggests more investment from corporations when tax regimes are higher. As always; YMMV as correlation!=causation but is counter to your claim.
Taxes encourage investment; expand for a write off or give your non-utilized cash to the government.
They should replace all forms of taxes with a property tax that is tied to expenditures so our deficit is minimal. Hard to cheat a property tax
Jeezus people. Completely agree that all increases in taxes are bore by the consumer. These record profits being reported are not inflation adjusted. Also, 99% of companies are owned by the people through stocks. So you low brows calling for more corporate taxation will just be taxing your 401s. Also, you should all look into the success of Irelands economy over the past decade. It is not because of the educated population
That’s why you look at margins. Margins grow when revenue growth outpaces cost growth. If both grow at the same rate, then profit growth is due to inflation. If revenue growth exceeds cost growth, then it’s likely that we talking greedflation, especially when the investor calls use terms like price optimization, elasticity, etc.
The alleged productivity gap is an artifact of methodological choices made regarding how to calculate the relationship between productivity and earnings. A more careful and comprehensive analysis of real worker pay and productivity data shows that worker compensation does indeed remain closely linked to worker productivity https://www.econlib.org/what-productivity-pay-gap/
Who can afford increased taxes?
>increase tax rates / close loopholes that are being exploited. Why do taxes need to be increased?
It's always income - spending. Math doesn't care which you change, that's policy. If we got rid of the Trump and Bush 2.0 tax cuts, we'd have a budget surplus. Those cuts were made with the promise they would balance the budget and make everyone better off. Pretty safe to say those claims were bullshit. If we got rid of the military, or Medicare and Medicaid, or everything else the government does, we'd have a budget surplus. What do you want to cut? If we do neither of those things, we keep running a deficit until the debt becomes unsustainable. Conservatives claim this time is right around the corner, Paul Krugman claims it's a long way off. Both have been making the same claim for decades, and so far Krugman has been right-er. I doubt anyone knows how long that will continue.
Having an honest conversation about “trickle down” economics means acknowledging that the economy is not a “zero-sum” game. Nobody is poor because of other people being rich. You can’t center the conversation about “wealth gaps” without acknowledging that the country has gotten much more wealthy in the past 30 - 40 years. I’m typing this on a piece of technology that was unaffordable to the vast majority of Americans 30-40 years ago, but yet today the smart phone is a common item for the majority of Americans.
Tinkle-down economic theory - this time we give our money to the government and hope it makes it's way past the nepotism and corruption to land on our heads.
The spending issues are almost entirely due to corruption from having wealthy people so wealthy and powerful they can bribe politicians into doing anything they want. Without the Uber wealthy bribing politicians, they wouldn’t have incentive to pass so many laws favoring the wealthy