Page 1 of 10 123 ... LastLast
Results 1 to 10 of 91
Like Tree37Likes

Thread: The problem with "Trickle Down Economics"

  1. #1
    Sage
    kaya'08's Avatar
    Join Date
    Nov 2008
    Location
    British Turk
    Last Seen
    05-12-14 @ 11:14 AM
    Gender
    Lean
    Centrist
    Posts
    6,363
    Likes Received
    1319 times
    Likes Given
    2502

    Exclamation The problem with "Trickle Down Economics"

    I've always been somebody who has held firmly onto the belief of lower tax's for the rich, and competitive Corporation tax.

    Why?

    Because the truth is, when you start levying massive taxes on the people in our economy that, as a relatively small demographic, provide the vast majority of jobs in the country, then we make them poorer, and that has a direct consequence, a more detrimental consequence on the middle and lower classes then if they themselves where to pay higher taxes.

    It holds back the class that essentially lead the industries and create the industries in our country that is responsible for massive amounts of foreign trade, global competitiveness, employment and treasury income. Tax them more, they spend less. They spend less, our industries grow less. Our industries grow less, we have unemployment, and we loose our competitiveness. If that happens, we soon find ourselves staring down the blazing hole of a recession. And for what? An artificial sense of "social justice"?

    Sure, taxing the rich a lot of money will reduce the deficit in the short term, but the long term effects on the potential of our industries to maximize on innovation and profit diminish. If that happens, they go abroad, and we may aswell just give handouts to everybody until we are left with nothing more than cobwebs in our safe banks.

    But does trickle down economics really work?

    The rich are constantly exploiting tax loop holes, sending the vast majority of their wealth beyond the reach of the government, consuming national resources and failing to pay their due share. Thus, do the under-taxed rich become a drain on national budgets and resources, as opposed to helping boost the economy?

    Above all however, how can we be sure that Cutting the top tax rate will lead to income and wage growth?

    There is no way we can stop people from sitting on their money, and if we cut taxes in the hopes of achieving something that ultimately does not materialize we end up poorer then what we where when we began. Hence, nor does it follow that we can always increase employment levels.

    So are we better off distributing poverty? Like a "Trickle up poverty" theory of economics?

    Or can we simply solve our problems by cutting taxes for the rich and increasing the minimum wage for employee's working at the richest corporations?
    Last edited by kaya'08; 07-12-12 at 07:20 PM.
    "If religious instruction were not allowed until the child had attained the age of reason, we would be living in quite a different world" - Christopher Hitchens
    > Good to be back, but I'm only visiting for a few weeks. <

  2. #2
    trailer park king
    beerftw's Avatar
    Join Date
    Nov 2011
    Location
    nolanville tx
    Last Seen
    07-15-14 @ 09:19 PM
    Gender
    Lean
    Very Conservative
    Posts
    7,073
    Likes Received
    1884 times
    Likes Given
    2841

    Re: The problem with "Trickle Down Economics"

    imdho trickle down economics is just a slogan,the real practice in talk is supply side economics.what many fail to realize is if you dont tax the rich,they amass wealth,if you tax the rich,they hold onto it.the only time the rich will spend is if the opportunity arrises tomake more money.

    however supply side economics is an extremely sound principle.it shows its true benefit however under supply side problems,like keynesian economics shines during demand side.most supply side problems occur when an economy is trying to transition.this is why it worked so wellfor reagan in the 80's,was because we were switching from a manufacturing economy to a technology/service economy.the money existed for changes but little to no reward to spend money on those changes.supply side economics addresses this problem by lowering taxes to create incentive and reducing unnessecary regulation.this allows a market to create itself anew,however even in supply side economics austerity should be practiced when possible,this of course has never happened.


    keynesian economics adresses demandside issues,like i said in supply side the rich want to spend the money but are hindered by it all being taxed away and heavy restrictions,in demand side the economy would not be facing a transition,rather demand would be suffering due to economic insecurity or other outside factors.keynesian economics adresses this problem through many ways,one is tax cuts,another increased spending to try and kick start an economy.there is also military keynesianism,which is a theory that the military can pump more money into an economy faster than anything else.keynes once said that perhaps the only way to pump enough money into an economy was through war,it was not part of his economic theory but was proven true during ww2.

    the faults with the two systems stem from the fact they were never properly used.keynesian economics calls for extreme spending during bad times,and heavy measures of austerity under good times,as eliminating a deficit and most the debt would allow flexibility under another recession,however since keynesian policies were used,austerity has never been practiced.

    in supply side,only unnecessary regulations should be cut and necessary ones re-adjusted for market conditions,taxes would be lowered to an optimal level,and under good conditions raised within the optimal level(currently we are on the low side of the optimal level,so lowering it would make no difference)also ss economics calls for heavy amounts of austerity,it does not oppose a safety net,but considers business growth a higher priority,and austerity a must,especially under good economic times.reagan and bush senior being the only presidents to really try supply side economics failed on the austerity part,they produced higher revenues from tax cuts but increased spending well beyond the growth of revenue.


    other interesting facts,george w bushs economic policies were keynesian,not trickle down,he gave tax cuts for all class's,but 85% of the cost and benefit went to middle and lower classes,tax cuts for the rich are not against keynesian economics,keynes just considered it more politically driven than economically.bush also introduced stimulous packages(also a part of keynesian economics)he also increased regulations on many things,and was by no means a deregulator.

    clinton never followed either path,though some of his economic policies like the dot com boom,the community re investment act and siding with republicans on glass steagall have come back to haunt us.also to note even though clinton was neutral for the most part,there has only been 2 presidents to practice supply side economics,reagan and bush senior,and bush senior to a much lesser extent.all republicans pre reagan and after clinton have practiced keynesian economics,though they probably will deny it.
    I can walk on water,but i tend to stagger on beer.

  3. #3
    Banned
    Join Date
    Oct 2011
    Last Seen
    09-18-12 @ 06:07 AM
    Lean
    Private
    Posts
    3,245
    Likes Received
    397 times
    Likes Given
    790

    Re: The problem with "Trickle Down Economics"

    Trickle down economics doesn't work without social values.

    You gotta create a society that rich people want to invest in. Otherwise, they won't invest in it.

    Create a bunch of cultural relativist losers, and rich people just go, "Yea.........."

  4. #4
    Villiage Idiot
    imagep's Avatar
    Join Date
    May 2010
    Location
    Upstate SC
    Last Seen
    Today @ 08:06 AM
    Gender
    Lean
    Independent
    Posts
    15,049
    Likes Received
    5533 times
    Likes Given
    17112

    Re: The problem with "Trickle Down Economics"

    Here is why in "trickle down" the trickle doesn't happen...

    Every time that an "average joe" like myself makes a purchase, we pay a "rich tax", in addition to any government taxes. If I purchase a new TV, the store makes a profit, and the owners of the store, whether it is shareholders or "mom and pop", get that profit. Now while there is nothing wrong with that, and thats the way that a capitalistic free market is supposed to work, but most shareholders and business owners tend to be more wealthy than the median wage earner. So in a way, the profit that is added to the cost of the purchase is effectively a private tax that goes to the wealthy. Then when the tv manufacturer sells to the store, the same effect happens, and when the trucking company is paid, the same effect happens. This rich tax is on virtually every product that we purchase.

    There are only a few natural mechanisms for redistributing that rich tax. One is the income that the rich pay their workers, another is the consumption that the rich engage in (which part their expenditures they get back because they get the rich tax portion), and the third is death (which typically only results in transfering the pooled wealth to another individual(s) rather than distributing it among the populas). The other mechanism, the "unnatural" one, would be a progressive income tax, death tax, and/or wealth tax.

    Since every time we make a purchase, a larger portion of our money flows up, than which flows back to us (the profit portion), money tends to trickle up and pool. Without the "unnatural" redistribution mechanisms, more money will always trickle up than what trickles down, so our economy is a "trickle up" economy, not a trickle down economy. You can't apply economic concepts for one type of economy, to a totally different system and expect results.

    Reducing taxes on the wealth only serve to reduce any trickle down, it doesn't increase trickle down. Likewise, conservatives keep complaining about the 49% that don't pay any income tax. I would assume that they would prefer it if we taxed the poor and working poor more, and the rich less. Again, redistributing the meager incomes of the poor and working poor to the rich is trickle up, not trickle down.

    If we really wanted to increase the trickle down effect, we would tax the rich more and the poor/working poor and middle class less. While conservatives believe that would reduce what trickles down, thats a falicy because we have a net trickle up economy. Increasing taxes on the rich, and decreasing taxes on the non-rich would result in a forced trickle down, with the trickle actually coming from the taxation. So why would we want to "harm" the job creators (rich)? Because if we had a forced trickle down (more progressive taxation), the middle class would be more well rewarded for their labor, thus they would have an incentive to produce more, and an incentive to purchase more, and the rich would be just as rich because they would recieve more of the profits (tax) that they place on every item sold (because they would sell more).

  5. #5
    Villiage Idiot
    imagep's Avatar
    Join Date
    May 2010
    Location
    Upstate SC
    Last Seen
    Today @ 08:06 AM
    Gender
    Lean
    Independent
    Posts
    15,049
    Likes Received
    5533 times
    Likes Given
    17112

    Re: The problem with "Trickle Down Economics"

    Quote Originally Posted by Daktoria View Post
    Trickle down economics doesn't work without social values.

    You gotta create a society that rich people want to invest in. Otherwise, they won't invest in it.

    Create a bunch of cultural relativist losers, and rich people just go, "Yea.........."
    Rich people only invest where they see a nice size potential profit. They don't make that decision based upon cultural values. The society that rich people want to invest in is the one where they can make a lot of money. Ever wonder why rich people don't open stores in Africa? Because people in Africa have limited money to spend in the stores. Rich people always go where the money is.

  6. #6
    Banned
    Join Date
    Oct 2011
    Last Seen
    09-18-12 @ 06:07 AM
    Lean
    Private
    Posts
    3,245
    Likes Received
    397 times
    Likes Given
    790

    Re: The problem with "Trickle Down Economics"

    Quote Originally Posted by imagep View Post
    Rich people only invest where they see a nice size potential profit. They don't make that decision based upon cultural values. The society that rich people want to invest in is the one where they can make a lot of money. Ever wonder why rich people don't open stores in Africa? Because people in Africa have limited money to spend in the stores. Rich people always go where the money is.
    What do you think profit is beyond culture?

    If you have nothing memorable to convert money towards, it's valueless.

  7. #7
    Sage
    kaya'08's Avatar
    Join Date
    Nov 2008
    Location
    British Turk
    Last Seen
    05-12-14 @ 11:14 AM
    Gender
    Lean
    Centrist
    Posts
    6,363
    Likes Received
    1319 times
    Likes Given
    2502

    Re: The problem with "Trickle Down Economics"

    But surely by taxing the rich more, they will merely pass on those costs to the consumers? So in a way it will be the middle class who end up paying the tax.
    "If religious instruction were not allowed until the child had attained the age of reason, we would be living in quite a different world" - Christopher Hitchens
    > Good to be back, but I'm only visiting for a few weeks. <

  8. #8
    Robots will rule
    Mach's Avatar
    Join Date
    Oct 2006
    Last Seen
    05-21-14 @ 09:40 PM
    Gender
    Lean
    Independent
    Posts
    7,200
    Likes Received
    2467 times
    Likes Given
    1977

    Re: The problem with "Trickle Down Economics"

    Quote Originally Posted by imagep View Post
    Rich people only invest where they see a nice size potential profit. They don't make that decision based upon cultural values. The society that rich people want to invest in is the one where they can make a lot of money. Ever wonder why rich people don't open stores in Africa? Because people in Africa have limited money to spend in the stores. Rich people always go where the money is.
    You are contradicting yourself.

    If in the U.S. the majority "cultural value" is to heavily tax the wealthy.
    Then if the wealthy only invest where they see a nice size potential profit
    And taxes are factored into that profit.

    Conclusion, given other reasonable investment alternatives (be it loopholes or other countries), they will switch those investments as a resul of "Cultural values".

    Quote Originally Posted by imagep View Post
    Since every time we make a purchase, a larger portion of our money flows up, than which flows back to us (the profit portion), money tends to trickle up and pool. Without the "unnatural" redistribution mechanisms, more money will always trickle up than what trickles down, so our economy is a "trickle up" economy, not a trickle down economy. You can't apply economic concepts for one type of economy, to a totally different system and expect results.
    And thus if the culture of the economy they are in has a stable, relatively free market, it's almost always better to invest in that market rather than sit on that pool of money. And when there is business investment, in an otherwise fertile business climate, there is economic growth. And when there is economic growth, there are more jobs, higher incomes, more competition, more opportunity. There is likely some ideal balance between the two. Any parent I would think gets this without trying. We provide a safety net for our children, but we don't keep spending on them to the point they are spoiled, or have not incentive to work and grow on their own. Well, most of us recognize we shouldn't.

    To the OP:

    Tax policy should not primarily be about "how to grow or slow the economy". Taxation is primarily about funding government.
    Last edited by Mach; 07-13-12 at 10:12 AM.

  9. #9
    Death2Globalists Matt Foley's Avatar
    Join Date
    Dec 2011
    Location
    ExecuteTheTraitors
    Last Seen
    11-23-12 @ 10:17 PM
    Gender
    Lean
    Other
    Posts
    5,574
    Likes Received
    641 times
    Likes Given
    233

    Re: The problem with "Trickle Down Economics"

    Trickle Down Economics works great for Russian mobsters, the People's Liberation Army, OPEC, Mexican billionaires, and India.
    Globalist = Free Trade, Open Borders, Multiculturalist, Anti-White Racist, Hypocrite, Sophist, Deceiver, Manipulator, Warmonger, Vulgar Culture, Morally Depraved......Enemy

    Death to Globalists

  10. #10
    Advisor
    Join Date
    May 2012
    Last Seen
    07-22-14 @ 01:36 AM
    Gender
    Lean
    Slightly Liberal
    Posts
    497
    Likes Received
    362 times
    Likes Given
    0

    Re: The problem with "Trickle Down Economics"

    Quote Originally Posted by Mach
    If in the U.S. the majority "cultural value" is to heavily tax the wealthy.
    Then if the wealthy only invest where they see a nice size potential profit
    And taxes are factored into that profit.

    Conclusion, given other reasonable investment alternatives (be it loopholes or other countries), they will switch those investments as a result of "Cultural values".
    Everything I've read says that we've got ****loads of money for investment that people are just sitting on. All the really good investments have more than enough people looking to put their money into them. We can afford to lose a bit of that surplus via increasing their taxes. Especially if we take those collected tax dollars and then invest them in infrastructure improvements that the private sector would otherwise leave fallow.

    Quote Originally Posted by Mach
    And thus if the culture of the economy they are in has a stable, relatively free market, it's almost always better to invest in that market rather than sit on that pool of money. And when there is business investment, in an otherwise fertile business climate, there is economic growth. And when there is economic growth, there are more jobs, higher incomes, more competition, more opportunity. There is likely some ideal balance between the two. Any parent I would think gets this without trying. We provide a safety net for our children, but we don't keep spending on them to the point they are spoiled, or have not incentive to work and grow on their own. Well, most of us recognize we shouldn't.
    The problem is that things don't appear to otherwise be a fertile business climate due to diminished consumer demand. Diminished demand which is only exaggerated by choosing to take our tax dollars from the people with the highest propensity to spend it, as opposed to those with the least propensity to spend it.

Page 1 of 10 123 ... LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •