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The problem with "Trickle Down Economics"

imagep said:
In the case of trickle down, the "opposing forces" are the rich who don't want a penny of their wealth to trickle anywhere.
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It is not just a matter of want it is a matter of where and how to invest your money and spend your money. We haven't protected our markets and consequentially our jobs in this country. We have opened up our markets to the world and set ourselves up to have to invest in other countries who are making most of the products we buy. Free trade and immigration policies have been a disaster for this country. We've sold off all the parts to our economic engine. Give rich people something to invest in and something to spend their money on so people have a chance to control their own destiny instead of more government dependence. Americans cannot continue to live the lifestyle to which we've become so accustomed. I don't know what we can do to reverse the mess we've made. Nobody seems to have any plan besides tax and spend our way to oblivion. Today's politicians are trying to put off the misery as long as possible so they can stay in office. We are not creating a future. Buckle up kids, the future isn't very bright if we don't change course and put our interests first.
 
kaya'08 said:
By increasing the price of commodities to achieve a higher profit margin/to make up for a reduction in the profit margin? That is, after all, the entire purpose of the private sector.
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The private sector is going to try and maximize their profits. If you tax their profits less, they'll net more money. If you tax them more, they'll net less. No business is going to say, well hey.. I'm only going to be able to pocket 61% instead of 65%, better close up shop.

It be like saying that you'd rather make 80k than 90, because the last 5k is taxed at 28% instead of 25%.
 
Mithros said:
The private sector is going to try and maximize their profits. If you tax their profits less, they'll net more money. If you tax them more, they'll net less. No business is going to say, well hey.. I'm only going to be able to pocket 61% instead of 65%, better close up shop.

It be like saying that you'd rather make 80k than 90, because the last 5k is taxed at 28% instead of 25%.
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Outside of gangland drugs and prostitution, what company makes 61% profit? I need a place to invest.
 
Mithros said:
The private sector is going to try and maximize their profits. If you tax their profits less, they'll net more money. If you tax them more, they'll net less. No business is going to say, well hey.. I'm only going to be able to pocket 61% instead of 65%, better close up shop.

It be like saying that you'd rather make 80k than 90, because the last 5k is taxed at 28% instead of 25%.
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When you graduate to a new bracket, the taxable income is taxed back to dollar one. If you are moving from the 25% bracket you postulate and into the 28% bracket because of an increase from 85K to 90K, you are only netting an extra $1050 of that last $5000.

Reagan told the story of his accountant telling him that he couldn't afford to make any more money one year and had to turn down a movie because he would net less money after the extra income.
 
code1211 said:
When you graduate to a new bracket, the taxable income is taxed back to dollar one. If you are moving from the 25% bracket you postulate and into the 28% bracket because of an increase from 85K to 90K, you are only netting an extra $1050 of that last $5000.

Reagan told the story of his accountant telling him that he couldn't afford to make any more money one year and had to turn down a movie because he would net less money after the extra income.
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You have no clue how our tax system works. Thats totally wrong.

Look it up, some ignorant tea bagger told you some crap.
 
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imagep said:
You have no clue how our tax system works. Thats totally wrong.

Look it up, some ignorant tea bagger told you some crap.
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That ignorant tea bagger is the tax tables. You should pay taxes and find this out.
 
Solution is to repeal Taft Hartly and make crossing a picket line a felony. THAT would change incomes for the USA worker......
 
imagep said:
http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

You should learn to read and find this out.
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I mean, you're right, but the name-calling is kind of petty and counterproductive. A LOT of people don't know how taxes work.
Senate Democrats Also Unclear on How Taxes Work -- Daily Intel

I think that's a big reason why there's any real opposition for allowing the tax breaks on the top marginal rates to expire. We see a scenario in which everyone keeps the same rate on the first 250k of TAXABLE income, and then pays a higher rate on everything above that. The people who oppose it think that anyone who runs a business will have to pay an extra 3% on all income (not profit).
 
riddle me this, armchair economists...

You're at a poker table. One player win the majority of pots and has control of 99% of the chips. He begins loaning out chips to other players, but also continues to win and maintain control of 99% of the chips. What will happen the other players run out of chips and can no longer borrow? The game ends. Better know as, The Great Depression.

Wealth in our country trickles up via a rigged tax code. The wealthy minority escape taxes though methods the majority of us do not have access to. The wealthy also have exclusive access to legislators and therefore a say in their taxes. What incentive do semi-wealthy Senators and Congressmen have to fix the tax code and bring back basic fairness?

The middle class shrinks and goes into debt.

The chips disappear. People can't pay debts. 1929 all over again.
 
code1211 said:
When you graduate to a new bracket, the taxable income is taxed back to dollar one. If you are moving from the 25% bracket you postulate and into the 28% bracket because of an increase from 85K to 90K, you are only netting an extra $1050 of that last $5000.

Reagan told the story of his accountant telling him that he couldn't afford to make any more money one year and had to turn down a movie because he would net less money after the extra income.
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Oh dear. I knew this was in people's heads but it's the first time I've seen it printed by a member here. This unfortunately is what the majority of Americans believe making it nearly impossible to have a reasonable debate around the personal tax code. If this were true than making one additional dollar over the last year would mean you would actually loose money. Our system, (probably not unlike every other progressive tax system around the world), works like this:
Imagine 3 tax brackets:
10% up to 50k;
20% from 50k to 100k;
30% from 100k and up;

Under this system:
a guy making 50k pays 5k in taxes (50k * .1)
a guy making 100k pays 15k in taxes (5k from his first 50k plus 50k * .2)
a guy making 200k pays 45k in taxes (15k from his first 100k plus 100k * .3)
a guy making 51k does NOT pay 10200. He pays 5020.

How would it make any sense that the guy making 51k brings home 5k less than the guy making 50k? It doesn't and that's why it's not the way our system works. However, it's rarely spelled out since it conveniently demonizes our government and fuels the "anti-socialist" movement.

If our legislature passes some sort of flat tax so be it. However, it better damn well be because it's the best solution and not because people didn't understand the system we had to begin with.

I beg you to correct yourself, your family, and your friends on this so the entire country can effectively debate the issue and not let the politicians use it as some silent rallying cry.
 
pdog said:
Oh dear. I knew this was in people's heads but it's the first time I've seen it printed by a member here. This unfortunately is what the majority of Americans believe making it nearly impossible to have a reasonable debate around the personal tax code. If this were true than making one additional dollar over the last year would mean you would actually loose money. Our system, (probably not unlike every other progressive tax system around the world), works like this:
Imagine 3 tax brackets:
10% up to 50k;
20% from 50k to 100k;
30% from 100k and up;

Under this system:
a guy making 50k pays 5k in taxes (50k * .1)
a guy making 100k pays 15k in taxes (5k from his first 50k plus 50k * .2)
a guy making 200k pays 45k in taxes (15k from his first 100k plus 100k * .3)
a guy making 51k does NOT pay 10200. He pays 5020.

How would it make any sense that the guy making 51k brings home 5k less than the guy making 50k? It doesn't and that's why it's not the way our system works. However, it's rarely spelled out since it conveniently demonizes our government and fuels the "anti-socialist" movement.

If our legislature passes some sort of flat tax so be it. However, it better damn well be because it's the best solution and not because people didn't understand the system we had to begin with.

I beg you to correct yourself, your family, and your friends on this so the entire country can effectively debate the issue and not let the politicians use it as some silent rallying cry.
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Thank you.
 
I'm guessing that you neither own nor manage a business.

Am I wrong?
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Your right ... Point being?
 
code1211 said:
That nutshell is exactly what was happening in this country in all times except when the USA had bombed the rest of the world into rubble and effectively eliminated the competition for its industrial complex.

We enjoyed a wold world market with only domestic competition.
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Then you should be able to easily point to the year or time frame where GDP or Per Capita GDP growth started to level off due to global competition right?
 
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