Tigerlure said:
HappySqurriel said:
ManusJustus said:
HappySqurriel said:
| ManusJustus said:
The only thing that matters is if there is money to be made. Tax the wealthy 80% of their income and they will still start businesses and hire workers to make a profit and meet demand, just like America in the 1950's. You could not tax the wealthy at all, heck you can give them money, but they won't create jobs unless there is money to be made meeting demand.
Thats the lesson that both the Republicans and Democrats should have learned with the Bush and Obama tax cuts.
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No, taxing individuals like that will ensure that they pay themselves 5 times as much; and recover the costs by paying their employees less and increasing the cost of their goods/services more.
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Employers do not decide how much their employees are worth, the market decides how much they are worth. Employers have to pay their employees what the market values says they are worth, otherwise they won't have as good employees or, if its too low they won't have any employees. The reason that mechanical engineers get paid $50,000 a year while fast food workers make $20,000 a year isn't because their employers just decided to pay them some arbritary number, its because thats how much their labor is worth on the market.
Nor do they decide the value of goods, the market decides the value of goods.
To answer your side note, the same as everybody else. Here, we are effectively deciding to limit luxury spending of the rich to promote necessity spending of the poor. Its ultimately a social and moral approach rather than purely an economic one.
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To a certain extent you're right, but you fail to see the whole picture ...
You increase taxes on high income individuals (mostly small business owners) or corporations and one of their initial reactions will be to cut costs to maintain their current income level; this will translate into layoffs and a reduction in spending across the board. The reduced revenues these companies receive due to lower employment and other companies cutting back may result in further cost cutting. When this is done there is a massive surplus in labour which results in lower income increases, and people getting hired for lower wages with fewer benefits.
By the time the employment rate returns to normal employeers are earning about as much as they ever did (after taxes) but the employees are earning less and have fewer benefits.
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I could have sworn Bill Clinton did exactly what you just mentioned, and the economy boomed. But maybe I'm wrong, maybe there were different circumstances. Care to explain?
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Clinton actually lowered the tax rate for the richest.
He became President in 1993
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213
http://www.truthandpolitics.org/top-rates.php
It looks like an increase, until you notice it went from 80,000 to 200,000. Clinton actually made a stealthy tax cut.
Edit:
Just in case you don't understand how this is a tax cut.... tax rates are gradual.
Bill Gates pays as much taxes on his first $20,000 as I do.
By raising the tax rate by $120,000 he saved people a LOT of money... outside of the "ungodly" wealthy.
Also as squirrel mentioned... it really wasn't that big a factor compaired to the bubbles we had.
