Taxation and wealth

Great points! Economic demand is certainly the driving force behind pretty much all employee hiring, and we do need more of it.
I also agree with what you said in that other post about the private sector being unlikely to create the needed growth on its own,

So the question is, what can/should we as a society be doing to create that new additional economic demand?

Well, for economic demand to exist, people need to have two things;
A desire (need/want) for something (measured in how willing a person is to pay for it) +
the ability to pay for it, with resources (goods, services, money) in exchange for having that desire met.

So, with that, one way to create more demand, is to simply find people who have the desire/willingness to obtain things,
but lack the ability, and to turn their latent desires into new economic demand by granting them with that ability,
either by matching them up with the money needed to buy what they desire,...or better yet,
by directly or indirectly hiring them, allowing them access to resources such that they can earn or create what they desire
or obtain the money needed to purchase it, through their own labor.

If the goal is to energize the economy by creating more jobs, then as you pointed out,
having the government hire people for infrastructure projects is a great way to do it.
Not only do we get the benefit of directly creating new jobs, but those hired will also subsequently have more ability
to satisfy their desires due to the extra money they'd be earning, thereby creating new demand and leading to yet more employees being hired through the private sector. And as a further benefit, we also get the perks provided by the new infrastructure which may yet enable even more desires to be satisfied.

But then the question becomes, how do we pay for that initial investment?
Either way you look at it, if we want more demand in the economy, it's going to cost some money up front,
I just don't see any way around that,...and like you pointed out, perpetually borrowing money in order to pay for it is not really the best way to go.

We've got enough debt as it is, and we certainly don't need more.
But yet it is also the case that we need more demand, so what I would propose instead is that we pay for it
the same way that we are eventually going to have to pay for the debt we already have. Taxes.
And in order to ensure that such taxes did not erase the demand they were intended to create by stifling ability,
it would make sense in my opinion to tax more of those who have stores of ability in excess of their desire and willingness.

-Meta

 

How would that be a net-negative when even the people being taxed would benefit from the new infrastructure and increased levels of demand?
Are you of the opinion that any tax is a bad tax, and that anything that requires a tax is automatically a net negative, regardless of the benefit?

Do you agree that our economy needs more demand?

Because the way I see it, we either do nothing, and have the wealthy have good lives today, and with their reserves of money probably still have good lives tomorrow,
while the rest of us continue to have OK/bad lives today and eventually end up with worse lives latter on,....or
we pay to create more demand in the markets, and have the wealthy still have good lives today, with even better lives in the long run
due to increased business and societal capabilities, while the rest of us have better lives today and tomorrow.

The latter is not a net negative...it is a net positive.

-Meta

 

First of all, you can't call it a net-negative when you haven't even addressed the benefits.
Second, if we, as I said, tax amounts which are in excess of a person's desire and willingness to spend,
you aren't preventing those people from spending money on something they'd prefer more,
because there isn't anything which they would prefer to spend it on, else they'd be spending it;
IOW, their desires, or at least those of which could be satisfied by individually spending money, are met.

If you agree that its necessary, it doesn't really matter whether its good or not.
But as long as we're talking morals/ethics, it is my belief that the government has every right
to set the terms of use for the currency of which government through its own actions created and gave value.

This is a significant point of disagreement. We do in fact need more demand,...it will in fact improve lives.
Not talking about my life per se; I'd say I'm firmly in that "OK" group, maybe even slightly better than OK, but as a country I'd very much like to see us improve overall.
How is it that more demand will lead to that improvement you ask? Well, to put it simply, demand is what drives our economy.
It is what gives jobs to the unemployed and what leads to the underemployed getting better jobs and higher pay.
Demand is what drives production of the things we need and want. And the more latent desires we can convert into demand, the better off we'll be.

You do at least agree, that all of these things;

-lower unemployment/underemployment,
-higher pay (without the need for mandated wages),
-better standards of living due to folks being able to meet more of their desires,..​

are in fact all good things, that we should want to do,....don't you??

-Meta

 

I understand your concerns, but in general, consumption is not a bad thing, just the opposite in fact;
it creates benefits,...it's what makes our lives better, and in many cases it is actually necessary.
In a way,...consumption is congruous with prosperity.

I would say that the only times consumption can be considered a bad thing are in the following situations:
A: It isn't paid for, or it is paid for by going into debt
B: You consume so much more in excess of what you need that you prevent others from being able to consume what they need
C: You consume so much that the realized potential benefits of the things being consumed diminish, creating waste
D: You consume so much that it leads to resources being depleted to a level that is not easy to restore
E: You consume so much that the negative effects of the consumption on you (the consumer) outweigh the benefits

Obviously, B through E are all about consuming too much. If A is the issue, you could also be consuming too much,
or it could just be that you're consuming at the wrong time. It may also point to some deeper problem.
Either way, I believe these are all the ways that consumption can end up hurting the consumer or others. Would you agree?
If so, then it would seem that if we as a country simply avoid those 5 pitfalls while consuming more, we will have become better off for it.

I agree that figuring out some way to tap into overseas demand via increased exports would be a great way to reduce unemployment and raise wages here at home,...but I'm not really sure what we can do to accomplish that.
Perhaps some of the the stuff in the TPP will address that, but without much info about what's in it,
its hard to say if it'll help or not, so I guess we'll just have to wait and see on that one.

Personally, I don't really like the idea of being reliant on what goes on in other countries for our own prosperity,
especially when it seems we've got everything we need for prosperity right here in this country.
But again, if there's a way to do it, it will be helpful and if any clear opportunities arise to increase exports
and improve the employment situation here, I think it'd be pretty silly for us not to pursue them.

In fact, its better if we do more than just one thing to improve, as there are several things we could do.
I personally think direct and or indirect government hiring for infrastructure and other WPA style projects would be the most-effective in proportion to the effort, but if some improvement is good, then more improvement is even better, and increased exports would be just that,...more improvement.

In addition to demand/hiring and exports, other ways to create jobs and reduce unemployment would be things like incentivizing the folks with money to hire more Americans, and though I'm sure a lot of Liberal minded folks might take offense to this, it is also the case that one other way to limit unemployment would be to reduce or limit the number of people in this country. That can range from Immigration reform, to something like making various forms of birth-control more available/prevalent.

Of course, some of these solutions are easier to implement than others,
and some of them have bigger consequences than others. I say we should try to implement as much as possible while minimizing negative impacts as much as possible.

I believe any of the solutions I listed above (with the exception of population reduction) will lead to growth.
It's simply a matter of how much we want to invest, and for how long, and what kinds of consequences we're willing to accept.

We kind of have a lot of debt already, and while I do think there are times when paying for things with debt money makes sense,
in this scenario,...wouldn't the 2-3 years of $3T reductions under where we currently are erase any gains we might have made during the 2-3 years of higher spending?

As someone earlier in the thread posted (paraphrased):

"You Tax the people who have the money." (or you at least tax them more than everybody else)

Only other options would be to,
Tax the people who don't have the money. (which doesn't make sense),
Don't tax anybody ever. (which doesn't make sense either), or
You Tax everyone equally, the same fixed amount, which, while it may sound good to the ear,
if you think about it, you'll find it suffers the same problems present when you tax no one.
Especially as the wealthier folks come to control more and more of the money and wealth,
and the poorer less and less. Eventually one simply has no choice but to either tax the rich more,
or to tax no one. (which again, doesn't make sense if you're wanting a functioning government)

As for benefits, pretty much every benefit from infrastructure, as well as general economic benefits to the middle and lower classes,...will eventually trickle up to those who own the most in this country.

And on that note, let me go ahead and list out the three justifications/reasons for taxing people (as there's more than one)
1. To incentivize or dis-incentivize
2. To pay for direct usage costs
3. Or, as you alluded to,,,,to recompense for a direct or indirect benefit

I believe the third one is the most important of those justifications and with that in mind its important to consider both direct and indirect benefits when thinking about who should be paying what share of the taxes.

Yes, the government benefits all people, and I agree that everyone should help to fund it.
But I'll reiterate, that the vast majority of the benefit from government, will eventually trickle up to those with the most wealth.

-Meta
(sorry for the long post)

 

I'm not talking perceptions of a benefit on a personal level....I'm talking actual overall economic benefits.
And again, if we, as I said, tax amounts which are in excess of a person's desire and willingness to spend,
you aren't preventing those people from spending money on something they'd prefer more,
because there isn't anything which they would prefer to spend it on, else they'd be spending it;
IOW, their desires, or at least those of which could be satisfied by individually spending money, are met.

Which of course are all just vehicles for credit which is merely a representation of currency stored in your name in a bank somewhere that you are entitled to. Well,...except for credit card which is technically just a short term loan (also representative of U.S. cash in a bank). If you want something that is truly separate from government currency, I hear bit-coin might be a good choice.

Again, I'm not suggesting we tax people such that they are limited in obtaining what they otherwise would have spent money on,
rather we ought tax amounts which are in excess of a person's desire and willingness to spend,
which does not prevent those people from spending money on something they'd prefer more,
because there isn't anything which they would prefer to spend it on, else they'd be spending it;
IOW, their desires, or at least those of which could be satisfied by individually spending money, are met.

So then, you also agree then that the more demand we have, the better,
since more economic demand will lead to all those things....right?

-Meta

 

Again, you're not looking at it from the perspective of the overall economy, and,...again, if taxing money from certain people prevents them from being able to spend money on things they would have otherwise spent it on, then those aren't the people I'm talking about.

Yes, you said that already, so let me ask you this. Where does the value of your check or debit card come from?
Are they not merely representative of some amount of cash (bills and coins) which is stored in your name via your bank account?
Do your checks have any value at all if you have no money in the bank??
Or do your checks and cards simply derive their value from the aether???

Again, you're not looking at it from the perspective of the overall economy, and,...again, if taxing money from certain people prevents them from being able to spend money on things they would have otherwise spent it on, then those aren't the people I'm talking about.

You're disagreeing with a premiss because you don't like what the possible conclusion might be?
That's a clear case of Appeal to Consequences Fallacy.

Whether I argue for taking anything from anyone or not says nothing about whether or not higher economic demand leads to lower unemployment, higher wages/standards of living etc.
"Realize that you can deal with reality, no matter what that reality turns out to be. You don’t need to hide from it—face it and embrace it."

-Meta

 

That's the 10-million dollar question, ain't it!
I'd say the answer is this:....Politics. (read more below)

Like I said,....it comes from Taxes,...particularly amounts which are in excess of a person's desire and willingness to spend.

I'm not sure I understand your point....Are you suggesting that increasing the relative buying power of those with the most latent desires wont increase demand?

Also, as far as savings go, I'm pretty sure that the more money people start to make, the higher percentage of their income they'll save due to the simple fact that
as they make more and spend more, more and more of their needs will be met, and as their needs become less and less,
they'll be more inclined to save money simply because they'll have less and less of a reason to spend it.
Sure, there will be the handful of hopeless cases who are simply incapable of saving money,
but do you know of any aggregate data that suggests that the majority wouldn't save more?
Either way, its sort of beside the point...demand is not created via saving.

Again, 10-million dollar question. And again the answer is politics, ie the lack of political will to fix things.
How do we change that you ask? Well first of all, we the American people, or at least a fairly large chunk of us,
need to think about and then agree upon what it is we want our politicians to do,..then we need to twist their arms until they start doing it.
The more specific our requests, the better. I agree with you that figuring out ways to increase exports is one thing that they ought to be doing to reduce unemployment.
But I do not think that it is the only thing. Employer Incentives, immigration, birth-control, all options which our politicians ought to be exploring.
And seriously,...direct/indirect hiring for infrastructure and other WPA style projects. Its affects would be immediate and substantial.
Again, we've got what we need for prosperity to prosper...we are basically just two congressional votes away.

Things may not be right, but at least they are better. What you say is part of it though.
If you implement a fix to something temporarily, then the benefits from that fix are going to be temporary.
The only reason imo to make a fix temporary, is to evaluate how effective it is at ameliorating the problem.
If you implement such a fix however, and you see that it does indeed lessen an issue and produces benefits,
and if you also observe that the cost of investment in this solution is recouped over time,
then why exactly would it make any sense to stop such an implementation prior to the problem being fixed for good?
Such a thing does not make sense to me, and unfortunately, this isn't the only subject in which it happens.

Well,...I'm curious about that too...how can we?
People tend to be a bit individualistic, and though you may be able to get a few people to behave a certain way,
it seems insurmountable that you could illicit economy-wide change without at least some sort of organizational structure.
Do you have some idea in mind which would lead to a substantial increase in foreign exports without the aid of our government?

What's your point? Are you suggesting tax incentives don't work?

If you spread the repayment out like that over more than 2-3 years I could see it working out.
However, debt hawks still wouldn't like it, and I personally don't see any good reason to go into more debt when it isn't necessary.
Even if we still came out ahead, it seems like that would just unnecessarily increase the overall costs involved, reducing net benefit.
Counter intuitive if you ask me,...merely born out of political expediency.

I agree with you. If you pay 100% of the taxes, then you ought to own 100% of the net worth of the country.
Likewise, if you pay 50% of the taxes, then it ought to be the case that you get to own 50% of the country's net worth. And so on and so forth...
You own nothing, you pay 0 taxes. It's a shame more folks don't hold that same view, wouldn't you say?

I agree, people should all vote and pay taxes, but I think we may be starting to get just a little bit off-topic.

-Meta

 

If you ignore the impact of things on the overall economy, then you ignore the main point I was making.
Not only that, but ignoring overall economic impact also ignores the impact the health of the economy has on the well-being of the poor and rich alike.

I'm not suggesting that money, checks, etc. have an intrinsic value (btw, they most certainly do not),
but they clearly have some form of value or else they wouldn't be used for anything.
And btw, you did not answer the question.....Where does the value of your check or debit card come from?
Or, to put it another way, Why exactly are people willing to give you goods and services in exchange for that check you write??

I just said in the bit you quoted, that those are precisely the people whom what I wrote earlier does not apply to.

I just did.....

Higher economic demand leads to lower unemployment, higher wages/standards of living etc.

No, I didn't say that at all. Again, what I said was that Higher economic demand leads to lower unemployment, higher wages/standards of living etc.
Do you still disagree with that?

-Meta