
07-26-2012, 09:33 PM
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5,190 posts, read 4,367,538 times
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It redistributes it by the paying of wages to otherwise unemployed people.
my questioning may seem odd, ha ha,  , but I am just aiming to have a 'theory room' type thread.
so ideally, non partisan , non-political - just a free question and answer session.
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07-27-2012, 06:09 AM
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Location: Central CT, sometimes NH.
3,735 posts, read 5,550,623 times
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Quote:
Originally Posted by Willy702
But be careful of assuming the opposite is true, that tax cuts create jobs. Tax cuts create jobs only when you take a marginally negative business and make it profitable because the cost of taxes is now reduced. If a business is already making money, tax cuts only produce extra profits for the owners. Now the owners might spend some of their newly minted profits or expand business so there would be some potential for job increases, but its not a 1 to 1 correlation.
The bottom line for all three is to understand taxes are at an essence just a cost of doing business. When you do across the board tax cuts or increases to be "fair", expect to cause a lot of displacement in the economy. It isn't an efficient way to manage tax policy, but in current "soundbite" political climate they tend to be the desired answer. Taxes bad, tax cuts good is way too simplistic, but the average voter doesn't have time or interest in understanding it any better than that.
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Very good point. This is the danger of the current debate. The past ten years have largely proven your point that general tax cuts do not necessarily lead to job creation. However, some tax increases can lead to elimination of jobs. Tax policy needs to be carefully constructed and loopholes, subsidies, and other details need to be taken into consideration to look at unintended consequences.
Identifying exactly who the "job creators" are and what specifically motivates them to create jobs is the problem. Ultimately, it is demand that creates jobs. However, stability and confidence can stimulate demand.
It is often stated that the top income earners pay the most income taxes. Although this is true, lower taxes for the majority with lower income will stimulate demand. Stimulated demand will increase employment and increase revenue to the owners. So even though they are paying a greater % of the taxes they will also increase their revenue.
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07-27-2012, 10:23 PM
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5,190 posts, read 4,367,538 times
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That seems to make sense.
ie: all the money rises to the top anyway, so why not just tax the rich higher?
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07-28-2012, 12:02 AM
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24,497 posts, read 37,432,994 times
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Quote:
Originally Posted by Kenneth-Kaunda
That seems to make sense.
ie: all the money rises to the top anyway, so why not just tax the rich higher?
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Because that goes against an already established theory called trickle-down theory: Trickle-down economics - Wikipedia, the free encyclopedia
The idea here is that wealthy people take their money and invest in businesses and startups so they can hire people, thus passing the money down to the working class. If you tax the wealthy, they won't be able to invest in businesses.
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07-28-2012, 02:51 AM
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5,190 posts, read 4,367,538 times
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I don't really believe that this theory actually works too well in practice.
The water tends to only trickle down just over half-way, and congregate in a pool at the top, as it does with a house plant.
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07-28-2012, 08:08 PM
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2,553 posts, read 2,145,421 times
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Quote:
Originally Posted by NJBest
Because that goes against an already established theory called trickle-down theory: Trickle-down economics - Wikipedia, the free encyclopedia
The idea here is that wealthy people take their money and invest in businesses and startups so they can hire people, thus passing the money down to the working class. If you tax the wealthy, they won't be able to invest in businesses.
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Supply-side economics. That doesn't work.
Job creation starts from consumers (wealthy and not). So, there is no reason to create a business if there is no demand from consumers. And that's what we see when we lower the taxes on the top percent of earners: the wealthy get to invest more money than before in financial instruments (not in the actual economy), while the not wealthy receive no benefit.
Trickle-down economics is an upward redistribution of wealth.
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07-28-2012, 08:44 PM
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27,959 posts, read 36,010,574 times
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07-28-2012, 09:08 PM
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5,190 posts, read 4,367,538 times
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From what I read, the wages for the common man in China are going up considerably now.
Plenty of work available for those who want it, and the infrastructure of Beijing puts many Western capitals to shame.
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07-29-2012, 08:51 PM
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The question about the sandwich shop is relevant today. A popular chicken sandwich outlet has lines of customers out the door everytime it opens a new shop. So it is providing a product in demand. Yet a goofy Chicago alderman is trying to block one opening in his ward. The new jobs created as well as convenience, not having to go five or so miles, don't seem to matter.
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07-29-2012, 09:08 PM
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Location: Ohio
3,441 posts, read 5,507,898 times
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Quote:
Originally Posted by Kenneth-Kaunda
From what I read, the wages for the common man in China are going up considerably now.
Plenty of work available for those who want it, and the infrastructure of Beijing puts many Western capitals to shame.
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So when are you moving there??
NO Homosexuals or same-sex marriage to worry about either.
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