The 1 Percent Solution - Soak the Rich

[SB Shock]

[Kung Wu]

OH YEAH????? WELL F**K YOU !!!!!!!

Your wife poured your beer out, didn't she?

[Wu du Nord]

Again, to truly help the poor you need to create additional wealth. A country like India is good example of this theory. Transferring existing wealth will often lead to stagnation.

Again, behind a thin veil of hedging, you are treading firmly with heavy boots on the mythical territory of universal solutionism. You know quite well that 'poverty' in India doesn't look like 'poverty' in Mississippi.

And no I don’t believe outcome and opportunity are necessarily related – at least not to the extent that some do. The point is to foster an environment where opportunity exists; however, just because you have that freedom shouldn’t guarantee equal outcome. Policies and/or ideologies that are designed to pursue equality of outcome are ultimately destructive.

Remove the assumption that 'opportunity', 'freedom', 'equality' etc. (heck, I'll even through 'destructive' in there) are universally constituted and recognized and this truth claim becomes meaningless. The assumption made is that these demonstrably malleable concepts are immutable. That remains closely related to the bit earlier in which I noted that these are very much issues and questions belonging to the category moral.

The error (should someone wish to call foul) likes not in the calculations, but in the operands themselves.

I suppose that the argument against what I've written here must necessarily assume a world existing pretheoretically.

[Kung Wu]

When Thatcher became Prime Minister people earning over 200k (today's dollars) had a basic tax rate of over 80 percent. Depending on the source of the income, additional tax liabilities were in play. When the Beatles sang, "there's one for me, nineteen for you" about the taxman, it was the tax policies of the British Labour Party to which they were objecting. Yes, some earnings were taxed at a 95% rate.

You may believe it well said, but you ought to mention it was said about a radically different situation. Radically different.

There is a serious cause/effect problem here.

In a hyperinflationary period the socialists say: There is an income gap. That's a problem, and we need to do something about it. Raise taxes.

In a stagnant deflationary period the socialists are saying: There is an income gap. That's a problem, and we need to do something about it. Raise taxes.

In either situation the capitalists say: There is an income gap. No problem, it all works itself out. Stop raising our taxes.

Prime Minister Thatcher's words ring true no matter the economic condition.

[ShockBand]

My fundamental question is this. Should identical amounts of income be taxed at a different rate simply based on how it was earned? I know we currently have other issues in play in the US regarding how investment income is taxed in multiple ways, but IF all income were to be taxed only once by the fed, should it be at a different rate based on HOW it was earned?

[pinstripers]

nOT GONNA BE TAXED ONLY ONCE, SO THE QUESTION IS MOOT.

[ShockBand]

Doesn't that then beg the question of changing how we tax? And what should the answer to the HYPOTHETICAL question be?

[pinstripers]

Consider two guys, Leroy and Willie. Leroy saves his money, buys a fixer-upper, works on it in the evenings, eventually rents it out, providing a home for a young family. Willie spends his money on booze and gambling. Leroy, for being diligent and helping to build his community, pays property tax on the house that he worked so hard on, and pays taxes on the rent he vreceives. Willie heads to the bar.

[ShockBand]

Consider two people who each earn $100,000 in a year. One earns it as a salary. The other earns it through investment income. Should they pay the same tax on that income?

[Maggie]

Again, behind a thin veil of hedging, you are treading firmly with heavy boots on the mythical territory of universal solutionism. You know quite well that 'poverty' in India doesn't look like 'poverty' in Mississippi.


Remove the assumption that 'opportunity', 'freedom', 'equality' etc. (heck, I'll even through 'destructive' in there) are universally constituted and recognized and this truth claim becomes meaningless. The assumption made is that these demonstrably malleable concepts are immutable. That remains closely related to the bit earlier in which I noted that these are very much issues and questions belonging to the category moral.

The error (should someone wish to call foul) likes not in the calculations, but in the operands themselves.

I suppose that the argument against what I've written here must necessarily assume a world existing pretheoretically.

The answer to your last sentence is a flat, no. And being poor in India is different than being poor in Mississippi – but why is that? As an aside, it is getting better in India – which I will write about briefly in a moment.

But to begin with, I never suggested man can formulate a universal solution to all problems that arise in a society – I am saying quite the opposite actually. If one desires to attempt to immanentize the eschaton they are indeed seeking to create, as SB not so subtlety pointed out, a heaven on earth (Carlisle was better with The Go-Go’s, by the way). Of course, that is not only impossible attempts at doing so through policy or ideology have, to one degree or another, had grave consequences.

Furthermore, I never said morality was irrelevant. Of course, morality is relevant and it does affect the decisions people make. So what? The only person who might strongly object would be a multiculturalist. Many people embrace all sorts of ideologies be it communism, socialism, fascism, liberalism, progressivism, conservatism, libertarianism, etc. and often do so for what they believe to be moral reasons – for what they believe to be good. But the motivation is not what matters; the result matters. That is why I mentioned India. So let’s not talk theory, for a moment, and concentrate on the real world.

The British left India in relatively good shape after the Second World War – its economic infrastructure was solid, it for the most part escaped the devastation of the war, it had independent courts, a civil service, etc. Gandhi assumed control of the government – whatever you can say about Gandhi you can’t he was not a moral man. In fact, I believe he was a moral thinking man not an economic one – he was a socialist. Keep in mind I am not using the world socialist as pejorative it simply was a fact. Now he was concerned about the poor in his country – his motivations were noble; but what about the results of his policies and the continuation of them by his successors? I am not going to go into any detail; however, the historical record clearly shows they were, despite best moral intentions, devastating and not just to the poor. And they destroyed the Indian economy at the very worst time – they were posed to compete on a global level because of WWII.

India in recent years has moved away from a socialist model and largely embraced capitalism. The result has been the creation of additional wealth – which has up lifted all classes of Indian society. Capitalism is not perfect, it has flaws; but which system proved more “moral”? And India is not the only example.

[pinstripers]

Consider one guy who wears a 3x shirt and 1 guy who wears a M. Should they pay the same price for clothes? Fair is not fair, it's just slanted the other direction.

[Maggie]

My fundamental question is this. Should identical amounts of income be taxed at a different rate simply based on how it was earned? I know we currently have other issues in play in the US regarding how investment income is taxed in multiple ways, but IF all income were to be taxed only once by the fed, should it be at a different rate based on HOW it was earned?

Good question. There are good arguments on both sides of this one.

[ShockBand]

To me, the basic argument for equal tax rates is the perception (and I use that word intentionally) of fairness. The basic argument for having investment rates lower is in two parts: the risk of loss involved with investments, and the encouragement of investment into the economy. Both have validity.

[Maggie]

To me, the basic argument for equal tax rates is the perception (and I use that word intentionally) of fairness. The basic argument for having investment rates lower is in two parts: the risk of loss involved with investments, and the encouragement of investment into the economy. Both have validity.

Good place to start. Carry on. :nevreness: I don't have on opinion, yet.

[Kung Wu]

Consider two people who each earn $100,000 in a year. One earns it as a salary. The other earns it through investment income. Should they pay the same tax on that income?

Good question. There are good arguments on both sides of this one.

I cannot think of any good arguments that those situations are equivalent and warrant equal taxation. In fact, I would assert that you would threaten any economy by doing so. This is not a philosophy problem, it is a math problem.

I don't have time to explain but here is a hint: Where did person B (the guy earning $100,000 off of investments) get the money to invest?