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Can you imagine what your theory will do to medical costs?
I imagine that medical costs would drop significantly if there was real competition in providing those services.
So do I, I am all for it.
But your theory does not address competition at all, only artificially reduced supply for high payed and high skilled doctors or high tech medical services. Again, supply will increase eventually (more students going to medical school, etc) but that equilibrium will still need to be raised (increased costs) due to the lack of economies of scale. It will increase medical costs. No doubt.
And we are talking about individual income taxes, right? Corporate tax is another subject (and if we want to go there we have a whole different set of issues that are also counterproductive to your argument).
Listen, there are alot of positive reason for a progresive tax system. But "the equalization power" as you call it, I am not sure you read that in some crazy internet site or what...that is simply not one of them.
The problem of disparity of wealth is one that has been studied thru the ages.
Plato looked at the issue and concluded that a wealthy man should make no more than 6X what a simple working man earned.
To understand this problem we need to break it down to it’s root causes and effects.
The first thing we need to understand is that there are people in this world to which money, and the power money represents, is an addiction.
Money addiction is every bit as intense as heroin or gambling, and as it’s counterparts, addicts will lie, cheat, steal, and murder to obtain it.
They can never be satisfied, and never have enough.
As their wealth increases, they are able to purchase political favors, to have legislation created or eliminated through lobbying. They are able to affect tax laws, and hire lawyers to find ways to exempt them.
Throughout history, we have seen the results of this greed play out time and time again. We saw it with the ancient Greeks and the Romans, we saw it with the French, Russian, revolutions, we saw it with the Cuban, Iranian, and Spanish revolutions, and today we see it in the revolutions of Egypt, Libya, Bahrain, and Syria.
We now also see the beginnings of revolution throughout Europe and in the US.
The need for justice and fairness is a fundamental human need. It is what makes laws, and rights a necessity for which people everywhere strive.
There is simply no justification for any person to earn 2000X the median wage. No one on earth is worth that.
The tax system needs to be designed to ensure fairness in compensation of all people.
If a company can afford to pay a CEO 50 million, then they are not paying their rank and file who actually earn the companies profits enough. It is just that simple.
While it is impossible to ever expect a company to fairly compensate all employees, taxation is the only available means to stop the ever-increasing greed and injustice.
Alternatively, we can allow things to continue on their present course until like Egypt, Libya, and Greece we see the protests become violent, and the justice come from the street.
No system is perfect, capitalism included.
Capitalism will have people that will abuse the system at the expense of others.
What I can tell you is that where capitalism exists those countries have become the most successful, have the highest standards of living, have had longer lifespan, better medical systems, less birth deaths, higher caloric intatke, etc.
What I see is a problem is that the more people have the more they want. People tend to be envious in many countries that have wealth. Overall the people that are considered poor in those countries cannot see themselves having less than others. They are ripe by others like you to tell them how bad they have it and they need to revolt. Many of those countries have elected leaders that are good at convincing how bad and greedy the rich people are so they MUST give to others in one form or anther (forced) because they have more than what they need regardless if they earned it by hard work or not.
There are poor people in all countries and capitalists ones are no exception. Many are truly poor due to circumstances beyond their control and a good system can come up with ways to help them out.
Many of the poor I see when I do community service are well fed, have the latest flat screen TV, kids walk around witht he latest iPod or cell phone sytem, etc. Why don't we also look at how we can help them learn how to spend their money wisely?
If you put all the money in let us say the US in one pot and equally distribute it to all citizens, after some length of time we will all end up the same again. The entreprenours will start using their money to make more money, the lazy ones will spend it all, the savers will save it, the suspiciouse ones like you will come up with all kinds of conspiracy theories, etc.
I am aware that there are greedy rich people but they are in numbers no different that greedy middle class people that will milk the system or even cheat the system to have more money at the expense of others. The problem is that the rich are the more visible and easy target to blame.
There are good and honest rich people that do help others but they are lumped together with the bad apples and YOU want force them to give away what they have earned and tell them they do not need to have more.
Who decides how much an individual should have, you? Well, if that is the way to go why not aske everybody how much everybody should have and you can see that opinions are like anuses, everybody has one and we will not come to a conscensus.
I have no problem to some degree to have laws that help protect against abuses but to say people have to much and take it away from them is not the way to go as far as I am concerned.
Lastly, who do you want to have in charge to enforce what you espouse? The government? Does the government have a good record of efficiency to do what you want? In my opinion they do not. They come up with so many laws to "help" the poor and often they actually hurt them more. They are just as human, greedy, and selfish as anybody and to them votes are so important and will come up with programs to get them regardless whether these programs work or not.
You do not trust your money three types of people because they did not work to earn it: Children, thieves, and politicians.
Take care.
But your theory does not address competition at all, only artificially reduced supply for high payed and high skilled doctors or high tech medical services. Again, supply will increase eventually (more students going to medical school, etc) but that equilibrium will still need to be raised (increased costs) due to the lack of economies of scale. It will increase medical costs. No doubt.
Ther is ALOT of doubt in my mind. As with all predictions, my only comment is this....Maybe or maybe not! Only time will tell.
Why is it when people complain about how much money the wealthy class makes, they are always talking about CEO's? Why is it that you don't hear OWS protestors complaining about celebrity earnings? Do you know how much A-listers and top athletes make? I am sure the justification of them "earning it" is no different than the CEO's of Fortune 500 companies, who I am sure do not work any harder than the janitors that clean their toilets.
a top athlete or actor makes a fraction of what the owner of the team or the owner of the studio. apples to oranges. the athlete = the analyst on wall street, not the CEO.
MLB has 30 teams, with 25 guys on each team. 40 on the active roster. you're talking about 1200 guys out of the entire world that play professional baseball. it's a bit different than the 10s of thousands of people graduating college with finance degrees.
the CEO vs Employee gap is a topic because of the gap that exists today as opposed to 30-40 years ago.
i don't agree with what the OP is saying entirely, but the question I ask is why is a CEO today worth so much more than a CEO 30-40 years ago, in comparison to the employee?
1. You will run out of rich people to tax
2. People will figure out how to be compensated in other ways than money.
3. People will not try to earn over 200,000 since none of it will be their money so why make the effort.
so in the 80s and 90s when taxes were hire, people just stopped working once they hit $200,000? I can see that being so logical. I run a McDonald's, and I've sold enough burgers for the year by June to make my $200,000 salary....so why bother operating July-December? Oh....because there are customers that will still buy my product? And I'll still make a profit and higher salary? It's 61 cents in my pocket per dollar instead of 64 cents? Jesu Cristu! what am i going to do without that 3 cents! Hell, forget it, just take the entire 64 cents instead of the 3 cents, I'm done!
The truely obscenely rich people usually pay little or no taxes and that is not going to change unless the government gives up its ability to try to control people through taxes and goes to a flat tax. That is not going to happen, so the Rich are not going to be taxed. The qualified "rich" people are already taxed very heavily. Taxing them more is simply going to eliminate the drive for people to be successful.
I could work harder and make more money, but it is a diminishing return. Instead I am backing off and trying to make less money so that I will make more money per hour of effort by paying less taxes n what I earn.
As the Federal Government raises taxes ont he Rich as a solution to their overspending problem, the State governments will jump on board as well. So if someone can make $230,000 working 2000 hours a year and pay 45% in taxes. Will they bother to work 2500 hours a year to make $260,000 if the extra is going to be taxed at 75%? If someone has a career that could bring them into the $250,000 are they going to make the extra push and take the risks that it takes to get them there, if they are just going to pay most of it in taxes?
if there are 2500 hours of work to be done, whether your "someone" does those 500 hours is meaningless. If your "someone" doesn't do it, it still needs to be done, so someone else will get 500 hours of work to do, or you'll create yourself a competitor.
Picture this....you own a landscaping company. You work 2,000 hours a year servicing 100 properties. You get a call to service 25 more properties, meaning 500 more hours of work, but you don't want to take it because that will push you into the 75% tax bracket for those dollars earned. Does you not take it destroy the desire of those 20 property owners to have their landscaping taken care of?
Sorry - your argument works on kindergartners, but not anyone who understands how demand works.
I will never understand how creating a policy to take money from the rich will help the poor. Only one result will happen - the rich will be less rich. How does that help in either income disparity (the rich still make the same amount of money) or improving the welfare of the poor? It doesn't make sense.
Another point, the Tax Act of 1986 brought on the seeds of this debate. The rich maximum tax was set at 35%, and now people are complaining. But that isn't all that happened. Two other important changes were made - 1.) Corporate tax was increased, alot, i.e rich corporations had to pay much more tax, 2.) The minimimum income rate for tax was raised, alot, i.e. the poor and even moderatly poor no longer had to pay taxes. This was a co-sponsored bill by democrats and republicans. Everyone was happy.
So now we want to change the rules? Why? Where is the balance? We have 50% of our citizens that pay no tax. If we want to increase the taxes why don't we just do away with the 1986 Tax Act? That means - Maximum tax rates for the rich are increased, exactly what people want, right? That also means corporate taxes are decreased, that also mean, YOU BETCHA, minimum income for tax rates are also decreased and we start getting a portion of the 50% of our deadbeat citizens paying income tax again. Is that not fair? I think it is.
Another alternative. The 1986 tax act significantly did away with tax shelters that were used by the rich to avoid paying taxes. It was very effective, such that the 35% rate gained as much revenue as the previous 60% rate, or whatever it was, before 1986 with the numerous shelters were considered. But, in 25 years these shelters and write-offs have crept back in, mostly as the result of poltical reasons. Why don't we simply revisit the tax code one more time and eliminate these tax write offs.
corporate tax rates were increased, along with the number of loopholes that they could use. the effective rates really didn't go up.
50% is not only the incorrect % (it's 47%), but your claim is false. they pay no "income" tax. they pay plenty of other taxes. maybe the more alarming thing is that 47% of our income-earners make less than the threshold of the first taxable brackeT?
Punitive taxes on the wealthy is uhh, stupid. You're going to punish people for being successful? Really?
We were able to do all those amazing things from the 1940s through '80s because the modern social-welfare/imperial economy was still growing. Today, between the welfare-state and imperial-state, there's less than nothing left for any productive uses any longer. Every last dime, and then quite a bit more, is gobbled up by welfare and military spending.
I agree that it's problematic that the income gap has returned to pre-recession levels (the wealth gap has not, yet, but it will soon). Punitive taxes on the wealth, however, is not the answer. The income gap is due to two primary reasons as I see it. Globalism and the failure of public education to meet the demands of the modern work force. Being a capitalist, I see globalism is a good thing. Much of the manufacturing has moved abroad to countries like China or Southeast Asia. What manufacturing that is doing well here is skilled and capital intensive rather than unskilled and labor intensive. Auto manufacturing and agriculture both come to mind. Unfortunately, the education system is failing the demand for more skilled works. It's churning out graduates who are functionally illiterate and even weaker than that in basic math and science. Combine that with the cost of four year colleges and cuts to junior colleges and it's no surprise we have such an inadequately educated work force.
i agree with a lot of what you said right here. globalism has it's positives and negatives though.
What? That is the first time I heard that argument for a progressive tax system. In fact it is counter productive. It's an argument AGAINST a progressive tax system. Economies of scale in a free market would allow a person, or corporation, to work those extra hours or produce those extra items at lower cost and an increased rate of productivity. That is benificial to society as a whole.
With your scenario, you are dismissing the laws of supply and demand. Supply, manpower or products, will be artificially reduced. Supply will eventually catch up, but without the economies of scale of the first level. Production will not be as efficient. Cost will be raised until a new equilibrium is achieved with demand. Simply speaking - labor costs will increase, product cost will be raised. The increase labor costs will be good in appearance until we forget we are talking about high income workers and possibly small businesses. Non of this will help the working class, and in fact will hurt. Can you imagine what your theory will do to medical costs?
what it would do to medical costs? you want doctors working 20 hours, 7 days a week, instead of hiring more doctors to handle the caseload? your argument makes no sense for a majority of businesses.
But your theory does not address competition at all, only artificially reduced supply for high payed and high skilled doctors or high tech medical services. Again, supply will increase eventually (more students going to medical school, etc) but that equilibrium will still need to be raised (increased costs) due to the lack of economies of scale. It will increase medical costs. No doubt.
Ther is ALOT of doubt in my mind. As with all predictions, my only comment is this....Maybe or maybe not! Only time will tell.
the healthcare system has nurses, doctors, physician's assistants, etc. taxing higher income wouldn't increase the costs. it would increase job openings. some people wouldn't turn down making 61 cents on the dollar instead of 64 cents, and some would. but the ones that turn it down create an opportunity for others to step in and make that money. any increase in costs would be temporary in nature, until more people went to college to get those degrees. the argument is weak, it defies economic logic.
you're not reducing the supply of doctors by increasing taxes on their income. unless you run out of unemployed people to fill those positions, you'll have people that switch fields to take the demand, or that go to college to be a doctor instead of an investment banker. that's actually a lot of what we could use in this country - less finance degrees and more math/science/health...
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