By using this site, you agree to our Privacy Policy and our Terms of Use. Close
TheRealMafoo on 23 July 2009
Edit Thread
Squilliam said:
TheRealMafoo said:

 

So you set up an example that never would happen? Funny. In your "world", what would happen, is Company A and B would move operations to wherever company C is, so they could make the most profit. Thus all the money earned by the employees now moves to Taxless land, and GDP goes down in Taxmax land.

What I was saying are two things:

1. If the government has all the data in the world about overall tax takes at different levels of tax for the wealthy which shows that its not worth the effort then they will try to find some other means to raise tax revenue. Governments may appear to be stupid, but you're saying that their efforts are obvious to be futile. They have no incentive to do something to raise revenue which they have data which shows will not work. However if they have reason to believe it will increase revenue then its quite likely that it will. If you can believe that individuals act as agents in their own best interests in the economy, then its not a difficult stretch to believe that governments will also act in their own best interests.

2. The only way to completely shrug off the effects of an increase in taxation is if you have a lot of market power. But because the economy is closer to being a competitive market rather than an Oligopoly/Monopoly over the many industries the companies involved do not usually have significant market power. This means they cannot dictate to their consumers any price increases without collusion on a massive scale. There are tax loopholes, strategies to minimise taxation etc but they only go so far. Furtheremore the desire to enact these strategies likely diminishes with increasing prosperity. If you have $3,000,000 and I took away a third of that you would feel it a lot more than if you had 10* the quantity of money. Every dollar beyond a certain point has diminishing value to an individual.

1. You don't get votes by taxing the middle class. Also, a lot of people in Washington who are for this program are trying to get it passed by taxing the middle class, because they know that's the only way to generate the revenue. Obama will veto any bill that taxes the middle class. That's what he said in the press conference. Also, a lot of people in Washington think it's better to just get something passed, and worry about paying for it later. I am sure that's Obama's plan.

2. Your arguing theory against historical fact. I am not saying why it works the way it works, I am just saying it does. We have collected 19.5% of GDP for the last 60 years, regardless of tax bracket for the rich. Why are you arguing that it will have an effect, when it has been proven not to?