Squilliam said:
TheRealMafoo said:
Squilliam said:
If a country spent a year without taxation, what would happen to its GDP? (Trying a new tact) |
it would go through the roof, but the government would not make any money.
Also, this only works on the rich, for the reasons HappySqurriel states. If you raise or lower taxes on the middle class, you gain or lose real dollars.
So an argument would be that if you left the tax brackets the way they were for everyone other then the top 1%, and removed all tax from the top 1%, you might actually bring in more dollars for government.
I don't propose you do that, as I think everyone needs to pay there fair share, but that's what the numbers tell us would generate the most dollars for government.
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" Abstract:
The move to a pay-as-you-earn income tax system in Iceland in 1987-1988 made income earned in 1987 tax-free. Using a sample of 9,274 individuals for the years 1986, 1987 and 1988, we calculate the labor-supply response of this change and find that total labor supply rose by 6.7% in 1987 over the average of 1986 and 1988 when we correct for entry in 1988. This consists of an 8.6% increase in weeks supplied by those already in the labor market in 1986 and a 1.9% decline due to entry/exit. The elasticity of weeks worked to the rise in after-tax wages was 0.41 for men and 0.11 for women. While the participation rate of women increased somewhat in our sample, participation by men fell."
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=268859
Theres a good summary.
GDP did not go through the roof though, but it did increase as expected.
I would never propose that those in the top 1% be taxed near 100% of their incomes, nor would I say it would be effective. The point of governence to me is for them to take as little money as possible to ensure an efficient economic outcome without taking so much as to make the markets inefficient. I think where we differ is that I believe that health and education are areas which are worthwhile to improving the economic efficiency of a country whereas you're more individualistic.
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Your missing the point of this thread.
I am not arguing politics, or if healthcare should or should not be around, or if it's the governments job to run it.
I am stating that Government expects to generate revenue for a program buy manipulating the tax system in a way that's proven to not generate more revenue.
Forget about what the program is or isn't, and if the rich should pay more taxes or less. The "deficit neutral" philosophy of this administration is banking on money that will not be there.
That's a problem, for any program. Especially when we are in a debt based recession.
