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  • winsabokk winsabokk Dec 28, 2012 4:30 AM Flag

    The Left's Dirty Little Secret: The Middle Class and Poor Pay For the Entitlement State

    the idea that higher taxes can be bad for an economy hardly requires study of other countries where its been tried.

    these are simple concepts.

    A dollar left in a taxpayers pocket will always provide more potential economic impact than if taken by the govt.

    To be clear, economic impact is not the same as GDP.

    There are other factors to consider like the multiplier effects that relate to how that dollar gets spent as well as what impacts there might be on a nation's productive capacity.

    Clearly, that same dollar spent by the Obama administration is a net loss for the economy if its taken from a taxpayers pocket--no contest.

    and this says nothing about what higher taxes does to incentive and behaviour. and how that can hurt productive capacity.

    Higher taxes are really a double edged sword as they hurt in two ways:

    1.) By punishing the productive class, incentive to work hard is reduced--duh

    2.) By rewarding the unproductive and capable with overly generous social benefits that are derived from higher taxes when jobs are available, it destroys the economic potential of a society to produce because some would rather take the easy way out.

    The oil patch is a perfect example. There are some low skilled jobs in ND that pay well but industry has a hard time getting people that want to work.

    " Insisting on highly progressive taxes that draw most revenue from the rich may result in more inequality than if we relied on a flatter, more ‘regressive’ tax schedule to raise money from everybody (!!!) and pay for a government that could help every American family attain a decent standard of living.”

    I'll bet that goes right over the heads of most lefties but a very interesting statement.

    One clue- marginal utility of savings and investment as it relates to the productive capacity of an economy.

    IOW, there needs to be capital to grow the pie, not just eat it.

    Capiche, Obama!

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    • A dollar left in a taxpayers pocket will always provide more potential economic impact than if taken by the govt - and that economic impact will be felt in a very positive way by Chinese manufactures.
      It's a global economy, and Americans are consumers first.
      The majority of the $600 rebate from a few years back went to banks (pay off debt) and to buy consumer goods, the majority of which were produced in Asia.
      the direct positive economic impacts of that "rebate" were felt by US retail employees, US bank employees, and foreign manufactures, not necessarily in that order
      Gov money hires bureaucrats, consultants, construction workers, teachers, and researchers directly, then trickles down to the Chinese.
      If your taxes are lower, you ill not invest in American projects, you will buy more foreign manufactured products.
      If your taxes are higher, essentially you (the governed) have hired a bunch of marginally productive and very productive US residents who pay taxes here and create service jobs here.
      One makes for some folks having more stuff and but fewer US jobs.
      The other makes for more jobs, more folks having some stuff, and an educated, healthy family traveling about on smooth roads or using quiet wi-fi enabled rapid transit.

      • 4 Replies to bzusa6
      • That is the silliest reasoning I've heard yet.
        By that token, we should be rushing madly to raise taxes and expand government as big as possible. In fact, every county in the world that carried a trade deficit would prosper by doing the same by your reasoning.
        For one thing, by your post, you assume that 100% of disposable income goes to purchase Chinese products. That assumption is highly flawed. Wallmart is the largest employer in the US, so Chinese manufactured products still benefit the workforce in the US. So why does it stand to reason that the government employees can return the money back to the economy(or to China for that matter) any more than Walmart employees ?

        I just don't see more gov. jobs being the answer. I've said it here before and I'll say it again, the government can not add anything to the economy that it didn't already take out.

      • "If your taxes are lower, you ill not invest in American projects, you will buy more foreign manufactured products."

        You are just thinking abou the spending/consumption side of things and that's only accurate to the extent tht all goods and services are from offshore and that's not qyuite true.

        Lower taxes also encourages domestic investment.

    • Wins writes:

      "Clearly, that same dollar spent by the Obama administration is a net loss for the economy if its taken from a taxpayers pocket--no contest."

      Arguable. Dollars taken out of taxpayer's pocket go right back into the economy in some form, either as investment (military, roads etc) or as consumption in the form of different forms of transfer - Social security, Medicare, Food stamps, Unemployment checks.

 
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