ShivaX
1742
You think money in the stock market is money in the economy. It’s adorable.
Wow. Yes all poor people waste their money at McDonalds. I’m done. Enjoy your bubble of easily disproven delusions and stereotypes.
Oh wait, he was wrong:
Then again, he’s been wrong on everything. Literally everything. He’s never been right.
It’s pretty obvious Andy_Bates has never actually studied macroeconomics, nor heard of the multiplier effect.
You can’t really say “That’s one fucking guy” when you use the absolute richest person in America as your example.
You’re missing the part where the 100% inheritance tax gets passed into law. Assuming that it takes time to actually be passed (and Bezos doesn’t immediately drop dead), what are the odds that Bezos is actually going to keep all that money, instead of, say, giving it to his friends, or to charity? Or for that matter, why wouldn’t he move it to another country for tax-exempt status? Hell, he could cash most of it out, bury it in a box, and then bury it in the Scottish Highlands and leave clues for people to find it generations later.
There are all sorts of perfectly legal tax shelters to protect someone’s money, and the more money you have, the more it’s worth spending money to hire lawyers to find them. When tax rates have dropped in the past, it has become less financially viable to worry about tax shelters, so they money gets pumped back into the economy, improving society and increasing tax revenues as a result. That’s the reason that tax rates should be dropped: to promote growth and revenue.
Timex
1745
I think that the truth less somewhere in the middle. Rich people getting wealth and then using it does in fact drive economic growth. Having the government manage the expediture of wealth doesn’t actually work.
But at the same time, there comes a point at which wealth gets somewhat excessive. You could achieve some useful societal goals, by heavily taxing the really ultra wealthy.
When you are talking about incomes over say, 5 million dollars a year, you have passed the point where you can really buy anything you could possibly want. And you’d have tons of money to invest wisely.
Likewise, with estates, there’s even less justification for spring the tax free interface of wealth. The children have no inherent ability to better manage our invest that money than anyone else.
And again, estate taxes don’t kick in until millions of dollars of exempt wealth. That’s more than enough to give your child an extremely good head start… probably enough to guarantee that if they wanted, they could just do nothing their entire life and still be taken care of. If they want to leave a ton of money to their kids? Well, then they’ll have to work.
I think that there’s room at the very top, to place very high taxes… Because it won’t actually hinder economic growth. It won’t change anyone’s behavior in the market, in any negative way. If anything, it may limit offshore investment.
You don’t need to pass a 100% tax… of course that doesn’t work. No one would bother warning money pest that point. You’d gain zero taxes from it.
But you could place a high tax on that wealth, and people wouldn’t stop earning it.
Nesrie
1746
I am not sure how we even got to 100%. I mean there is a canyon between what we do now and that. The goal is not to punish the rich. It’s doing what is best for the country which also benefits… the rich.
ShivaX
1747
Because it was used as reductio ad absurdum, poorly.
I never said “waste”. I eat at McDonald’s. Millions of people eat at McDonald’s. If I was poor and only had a small amount of money to spend on prepared food, McDonald’s would be a great choice for low-cost food because of its widespread reach of 37,000 restaurants, thanks to Ray Kroc who used to sell milkshake mixers and food-service equipment before investing in a chain restaurant run by Richard and Maurice McDonald.
The Laffer Curve, an explanation of the concept that tax revenues will approach $0 at the highest and lowest tax rates, is different from Arthur Laffer’s opinion on specific revenue changes from specific tax cuts.
ShivaX
1751
Since you obviously aren’t going to read it.
Economists don’t like the Laffer curve
Economists tend to roll their eyes when the Laffer curve is mentioned. A panel of elite academic economists across the political spectrum found in 2012 that none of its respondents agreed that the United States was on the wrong side of the curve. Even George Stigler, a leader of the Chicago School of Economics who disliked taxes at least as much as Laffer, described the Laffer curve as “more or less a tautology.”
Yet the idea has been influential for more than 40 years. The Laffer curve did not begin as a formal economic theory, but as a simple depiction of the relationship between tax rates and government revenue. Legendarily, perhaps apocryphally, it was scribbled onto a napkin after dinner.
The Economic Recovery Tax Act did not lead to promised revenue increases. Federal receipts fell by an average of 13 percent in the four years following the passage of the Economic Recovery Tax Act. For Democrats, this represented a decisive rejection of the Laffer curve argument, and it became an ironic, cautionary tale of the Reagan administration: a “joke,” “nonsense” and — commonly — a “laugher.”
It’s bullshit. It doesn’t work. It’s never worked. It never will work.
Proof: The deficit since 1980 when they tried it.
More Proof: Every GOP President’s deficit numbers since then (barring Bush Sr).
It’s a made up thing that economists mock that’s been tested in the real world for going on 40 years and has made the deficit a monster that will never be tamed.
Anyway. I’m done. Enjoy your fantasies that have been disproven for going on half a century, I’m sure it’ll magically start working one day. Also we need to cut food stamps and Social Security to pay for it so that Bezos can become the first trillionaire, guys.
Me, too, which means the top marginal rate should be somewhere around 80%. Glad we can agree on something!
Laffer? My god.
But, you know, there need not be. This can change.
It’s adorable how you think the stock market is not part of the economy.
Nesrie
1755
Yeah for a curve to mean anything you need to measure it, so when measuring it is just not possible then it’s not really useful for anything but political noise. That doesn’t mean the idea was wrong or without merit because even failing to find use with something teaches us something… in economics. Politically, they make it mean whatever they want it to.
Because Microsoft, Apple and Google, specifically, have no consumer products with high margins , right?
It works for capitalists living on state contracts and lobbied laws, all at the expense of the “reckless” deficit, why wouldn’t it work for everyone?
Obviously within other limits, it’s just that those are… Not good.
But, but, capital controls are communism, think of the poor entrepreneurs who can’t buy their own pleasure island!
Calm down. All of your bloviating about Arthur Laffer and specific tax cuts throughout history has nothing to do with my very narrow statement about a 100% tax rate leading to virtually $0 in revenue.
The Laffer Curve is hot garbage.
In my experience much of the opposition from the middle class to the estate tax is the mistaken believe that you pay tax on inheritances. It seems like double taxation, “you tax the estate and then I have to pay income tax on top, that’s unfair.”
Personally I’ve never understood the opposition to the estate tax, especially with the current very high exemption levels. If I had 4 kids that’s almost 6 million each and then 40% estate, If you have estate of 50 million the kids get almost 10 million each. That’s a ton of money.
The reason I support the estate tax is what hell I’ll be dead.
No, it’s not. Andy is right. The concept that you actually hit a point of diminishing returns from raising taxes is important and has shown to be right.
It is completely separate discussion if the US is currently on the right side of the Laffer curve today. There is no evidence that we are and until we get start getting serious proposal of 70% tax rates, the discussion of the Laffer curve with respect to US tax policy is silly.
Matt_W
1761
We were talking about estate tax here. But you’re right any marginal tax rate up towards 100% does tend to depress wage and estate growth above those levels and depress tax collection at those rates. That’s kind of the point. Very high marginal tax rates aren’t meant to raise revenue but to curb inequality. Inequality itself is corrosive to both democracies and economies. It’s worth using tax policy to mitigate it.
