Democrats Who Believe Taxing The Rich Can Save Us Are Wrong

The democrats’ notion that we can solve the budget crisis by cutting military spending and increasing taxes on the wealthy is misplaced.

I can disprove this notion by using some simple logic.

While the drastic cutting of military spending would definitely make a large dent in the budget deficit, ultimately the military budget only comprises around 20% of the US Federal budget. The vast majority of the spending takes place in the Medicare and Socialist Security programs, which account for 43% of spending as of 2010.

To cover a deficit of 1.5 trillion, more than just military spending needs to be cut. And of course, the president is a democrat and he shows no signs of halting any military interventionism any time soon. Thus, any claims that democrats, if they were to regain power, would halt military spending, are a joke.

This leaves us with tax hikes. While it is true that the uber rich have sucked up absolutely insane levels of wealth over the past ten years, leading to the largest wealth disparity ever, we must look at just how taxes work and the uber-wealthy’s response to them.

My argument for why tax increases will not work is quite simple, the rich already have their booty and are simply going to ride out the economic chaos caused by a collapsing dollar and bloated government.

An income tax taxes INCOME, not wealth already owned. If someone is a billionaire and the income tax rises to 100%, unless the billionaire blows his wad at the casino, he’s still going to be a billionaire. No matter what the billionaire buys with his money, no income taxes will be collected on him unless he sells off his investments. However, a 100% income tax would prevent any other person from ever becoming a billionaire.

Further, when someone is a billionaire, they aren’t restricted to earning wealth in dollars or even keeping their cash in the US. The most prudent thing for a billionaire to do if taxes were raised to 100% is simply move to a different country with a lower tax rate. – which is exactly what happens in real life. Historical records show us that no matter what the tax rate, the US government almost never collects more than 20% of GDP in taxes.

Further, we must consider how billionaires become billionaires in the first place - largely through obtaining tax breaks, government contracts, bailouts, and other fascist interactions with government politicians who they own.

Any projected revenue gains from tax increases are a fantasy. The rich will simply move their money out of the US, and the jobs they create with their investment capital along with them.

The rich are not the problem, nor are the rich the solution. The problem strictly lies with government spending and regulations. I think we can all agree that running a 1.5 trillion dollar deficit forever will ultimately lead to the total destruction of the dollar and the implosion of the US economy; so the budget must, at the least, be balanced.

Along with the misplaced notion that tax increases on the rich will somehow save the budget is the notion that government spending can produce sustainable jobs. Of course, government spending can produce jobs, but not jobs that actually improve economic conditions.

In order to improve economic conditions a nation must actually produce things that improve the standard of living for society. The people then use their money to buy those things from each other, there by improving their lives. The more stuff a country produces, the better off its people can live.

So how do we get a country to actually produce stuff? All that is needed is to simply leave people alone.

People naturally want to work, investors naturally want to make money, and people naturally want to buy the things each of them produce from each other. No intervention from government is required to make this happen.

If we think about all of the things required to make a simple ham sandwich, the nature of the free market becomes incredibly clear. There is no possible way the government could coordinate and plan the production of wheat, mustard seed, hog feed, barns, butcher shops, hogs, tomatoes, etc.. etc.. etc.. Only free people acting in their own self-interest can produce the coordination required to bring a ham sandwich to market.

The more bureaucrats that are created to manage the private sector and the more taxes that are taken in profits from the private sector, the less productive the private sector becomes.

The less productive the private sector becomes, the less well off the people of that nation will be.

This is a simple economic law that is irrefutable.

reply to post by mnemeth1

An income tax taxes INCOME, not wealth already owned.

i'm not sure you are correct, any money in the bank getting interest, or invested in stocks, is taxable, the profit at least.

The whole idea of tax the rich is being misconstrued. The rich are the ones getting the tax breaks my friend, they play it like a fiddle and in some cases the government ends up paying them. If the rich paid the same tax, in proportion, that average Americans do, there wouldn't be so much of a disparity.

the answer isn't taxing the rich to feed the poor. The answer is every has to pay their fair share and no more breaks for the ones who need it the least. There are now income tax return forms for returns of more than a million dollars. Think about that, while Bush was in charge, they actually started paying out millions of dollars in tax returns.

so lets take a look down the road at trickle down economics, which is essentially what you are talking about, let the free market decide and such.

Joe the ham sandwich maker is having a tough time keeping his doors open. Why? Because the customers he normally serves are going through hard times. So lets say the government gives him a tax break, which allows him to hire workers, who in turn spend their money on his sandwiches.

Now lets give that same tax break to joe the rich jerk. does he spend it in the free market? does he create jobs with it? Does it trickle down onto the lower class? No. He invests it, shells it offshore, plays the tax code as a fiddle, and the government owes him money.

the free market has failed, which is why the entire world financial system is in tatters. the people who are out there SPENDING have no money to spend and are probably 1 missed payment away from foreclosure. Give them a tax break and it gets injected right back into the economy.

The middle and lower classes are consumers. They consume. What do they consume? The products people make. Since the 80s, the us doesn't really make anything other than "made in the usa" stickers they stick on parts made in Japan. So where does the money, the lower class spends, go? China mostly.

So lets give some tax breaks to the people who actually need it, and at the same time, start trying to revitalize the industrial sector.

you said it yourself, no country can sustain itself unless it produces something people want to buy. The US isn't doing this anymore, hence the loss of faith in the greenback and the mounting debt.

I don't think there is any simple solution, but if you want one to work, it must encompass fair and equal taxation for the rich AND poor, and the industrial and manufacturing sectors must be restored.

Detroit. That's your example of letting the rich get tax breaks and letting the free market decide. the free market has already decided, and that decision was to cut and run. Find me a major corporation in the US that doesn't have it's "head office" in a tax shelter.

So they gave tax breaks to the motor industry, what came of that? Jobs disappeared over night and shifted to Mexico because of literally no environmental regulations, slave labor, and of course taxes.

You give the rich a tax break the smile and keep it. Give it to the poor and they stupidly spend it, putting it right into the hands of the rich. It really is a win win for them

reply to post by phishyblankwaters


I just explained why making the rich "pay their fair share" is impossible.

What part do you not understand about that?

Do you think a billionaire is going to stand around and pay taxes on money earning interest in a US account when he can move that money overseas?

On top of that, do you think billionaires actually have a lot of cash sitting around in savings accounts?

On top of that, as you acknowledge, no matter how much is taken from them in income taxes, they will always be billionaires.

reply to post by mnemeth1


Agreed, taxing the rich is not going to do much because the problem is not in their income it's their assets - which can not be touched because that is stealing. Still we have 1% of the people with 40% of the wealth - sometimes things just have to fall apart before they can be repaired.

Perhaps the fact that the income tax fails to produce all the revenue the government wants accounts for the interest in raising the estate tax. That would be a way to get some of the wealth, but soon the market for offshore, secret accounts would be booming.

I have heard "fair share" over and over again. Would someone tell me what that means? Can you fairly pay yourself a certain per centage of everything your company makes? Is "fair share" when everyone has the same income? Is it that the highest paid person in the country can make no more than X times the lowest paid person?

The sandwich maker example looks at only one side of the equation. The government got the money that it gave to the sandwich maker by taking it from someone else who now doesn't have enough money to pay his employees, so they lose their jobs.

I wonder if this is a rant.

Taxing the rich works until you;ve "eaten the seed corn" (metaphorically) of the financial system. I am all for a flat tax where everyone pays a "tithe" to the government ("render unto caesar....") with very little deductions Mostly business expenses, green energy expenses and real not paper losses. Raise the threshhold to where the taxes kick in (first 10K per adult with additional deductions per child...maybe for 2 and then no more to disincentivize excess child rearing). If you make 100K (ceteris paribus) you pay 10K in taxes and if you make a million you pay 100K in taxes. A flat tax is still "progressive" based on the progressively higher amount paid....Why should the rate go up as well (seems like no "equal protection" there)?

The solution is simple. Tax wealth and not income. Exempt anything below $5 million per person and tax the rest at 10% a year. If they aren't investing their wealth in productive means, eventually they will lose most of it. What have you done for us lately?

Originally posted by charles1952
Perhaps the fact that the income tax fails to produce all the revenue the government wants accounts for the interest in raising the estate tax. That would be a way to get some of the wealth, but soon the market for offshore, secret accounts would be booming.

I have heard "fair share" over and over again. Would someone tell me what that means? Can you fairly pay yourself a certain per centage of everything your company makes? Is "fair share" when everyone has the same income? Is it that the highest paid person in the country can make no more than X times the lowest paid person?

The sandwich maker example looks at only one side of the equation. The government got the money that it gave to the sandwich maker by taking it from someone else who now doesn't have enough money to pay his employees, so they lose their jobs.

I wonder if this is a rant.

"Fair share" would be paying in taxes a just proportion of what you reap from the economy. The more you reap the more your share should be.

reply to post by sligtlyskeptical

Wealth is taxed in many forms. IF you own a big home you have a big property tax bill annually...same for other forms of property. IF you invest in stocks and bonds then you pay a tax on their gain but it seems unfair that you should be taxed 10% when the rate of return for low risk (relatively) investment income (ie Treasuries) is so low. It seems especially unfair to tax some one for what they have when it is less than the year before (imagine what would happen to the nation's weath if we had a prolonged depression like the 30s and you got hit for another 10% per year over the decade).

What strikes me as odd is that most of the people who make a case for tax cuts for the uber-rich are not uber-rich, and don't know anyone who is. They are buying in to a dream that they may, someday be part of this elite (it's the American dream!) and are therefore looking out for themselves in some way.
The truth is, most are middle class, and they are actively losing their lifestyle to benefit the top 2%.
Seems a little odd to me.

Originally posted by mnemeth1
Further, we must consider how billionaires become billionaires in the first place - largely through obtaining tax breaks, government contracts, bailouts, and other fascist interactions with government politicians who they own.

Any projected revenue gains from tax increases are a fantasy. The rich will simply move their money out of the US, and the jobs they create with their investment capital along with them.

You contradicted yourself here. Rich do not get richer by creating more jobs. So if the rich leave, will their fascist interactions with the government also leave?

Maybe taxation is not the solution but anti-trust laws and stopping indirect payoffs to politicians would help.

reply to post by mnemeth1


As usual , your Logic here is Impeccable mnemeth1 . I Agree . Bravo !

Originally posted by CosmicCitizen
reply to post by sligtlyskeptical

 

Wealth is taxed in many forms. IF you own a big home you have a big property tax bill annually...same for other forms of property. IF you invest in stocks and bonds then you pay a tax on their gain but it seems unfair that you should be taxed 10% when the rate of return for low risk (relatively) investment income (ie Treasuries) is so low. It seems especially unfair to tax some one for what they have when it is less than the year before (imagine what would happen to the nation's weath if we had a prolonged depression like the 30s and you got hit for another 10% per year over the decade).

I'm thinking those other taxes would disapear as well. The ultra wealthy take their money and invest it in "low-risk" investments which do not spur on economic activity. I say let them do it with their $5 million safety net but if they do it with all their wealth it will eventually be gone.

This is all really a moot discussion. The problem is not really taxation, etc. The problem is the money system itself. We can't have a stable economic system when we have to borrow money into existence. I still think under the present system, taxing wealth would work much better than raising income taxes on the rich. Make them spend it or it invest it in productive activities.

Originally posted by sligtlyskeptical
The solution is simple. Tax wealth and not income. Exempt anything below $5 million per person and tax the rest at 10% a year. If they aren't investing their wealth in productive means, eventually they will lose most of it. What have you done for us lately?

LOL extremely large funds invested in productive means would be doing very well just to make the 10%.

If this was implemented the entire US economy would be moved offshore by lunchtime.

Why do people hate the rich and not the government?

It may not solve the entire crisis...but continuing to give the wealthy tax cuts sure isn't helping anything.


That trickle down you are feeling isn't prosperity...it is them urinating on your head....and laughing.

reply to post by Badgered1

What strikes me as odd is that most of the people who make a case for tax cuts for the uber-rich are not uber-rich, and don't know anyone who is.

The rich do not owe you anything. You don't have to be rich to view theft as immoral.

The truth is, most are middle class, and they are actively losing their lifestyle to benefit the top 2%.
Seems a little odd to me.

You're doing it wrong.

"The rich are not the problem, nor are the rich the solution. The problem strictly lies with government spending and regulations"

you are right and wrong. Part of the issue is government regulation, the issue is that the govt is elected by the rich and are lobbied by the rich, thus the rich regulate themselves. The idea that deregulation is the key is wrong, so is self regulation.

I'd agree with deregulation if the disproportional concentration of wealth didn't exist. Think about therich control govt and regulate themselves, if you deregulated them they would run completely rampant and be worse than it is now. On this note self regulation is essentially deregulation. Don't look at regulation from the republican view point because it is flawed by defintion and philosophy. Regulation is a good tool if utilized correctly but unfortunatly it's not, and is not the only issue at hand.

reply to post by elfulanozutan0


People do not "regulate themselves" any more than government regulations "regulate" behavior.

The market provides regulation.

If you are a company that is behaving badly, I will not buy from you.

If you try to lie to me about the quality of your products, I will find out.

If you try to lie to me about your earnings potential, I will find out.

Eventually everyone will know that your company does not deliver the goods as promised and no one will buy from you.

That is all the regulation that is required.

reply to post by mnemeth1


Your post is very foolish and filled with simplistic nonsense.
The reason the economy is screwed NOW is because of tax cuts for the rich; the Iraq and ahfganistan war; and the bailout of the BANKS IN 2008 UNDER GEORGE BUSH! Also a bad trade policy and OUTSOURCING.

As far as your ideas about tax cuts for the rich. You don’t follow history at all, since every time, including the great depression in the 20’s, there have been large tax cuts for the rich the economy has bombed.

That’s because revenue to the government becomes so small that deficits increase.
Rich people don’t invest in the economy of America with their huge tax cuts, what they do is invest in speculative investments that don’t contribute anything to the American economy therefore the general economic structure of the US goes down.

You don’t know what you are talking about!

reply to post by inforeal


You are about to find out what I am talking about.

Trust me.

The markets will not put up with your nonsense for much longer.