Taxing the Wealthy Kills Jobs Is a Myth, If Not a Whopper

[Dixie - In Memoriam]

The article I posted is written by Walter M. Cadette, an economist (JP Morgan, retired) and formerly senior scholar at the Jerome Levy Economics Institute at Bard College. He is not some loony lefty but somebody who has worked on Wall Street.

I'm not impressed. As I said, you (and Cadette's) first flaw is the myth that we tax the wealthy. We simply don't. Now, everything else you have to say from that point, is developed and constructed on a false logic, the presumption that we do, in fact, tax wealth. We don't.

We tax income, and you presume that people who make a large amount of income are wealthy. The fact is, the overwhelming majority of high income tax earners are small business owners, not the uber-wealthy billionaires, as you imagine. They are people who are living fairly comfortably, because they have worked very hard to build a successful business, but they are not wealthy. The really wealthy people generally don't earn incomes anymore, they stopped when they became wealthy. Now they use their money to invest and allow financial institutes to use it for interest dividends, and they relax and enjoy life. You can't really tax these people and punish them, they don't earn anything. You can tax their dividend incomes, but they may move the money out of this country, where it's no use to an American banker and can't be loaned. Or they may not, if the amount is insignificant, but good luck trying to fund all we need to pay for with what you'll get. It amounts to little of nothing, as the main source of tax revenues are the people who are earning a paycheck each week, the middle class. It always has been, and always will be.

To gain increased tax revenues, the middle class tax rates will have to be raised. Or we could cut the top marginal rates, as that has also proven to increase revenues. Another option would be to levy some degree of taxation on the 48% of working Americans who pay no tax at all. The one thing you don't want to do is raise the taxes on the top income earners, because these are the people who provide 96% of the jobs. In the type of slow economy we have, their only alternative for paying a tax increase, will be to decrease labor costs by eliminating jobs. They can't raise prices anymore, with rising fuel costs and insurance, they've already adjusted this as much as they can, they can only start downsizing now. But I know that you and Cadette have it all figured out, how we can still do what you claim and it won't cost any jobs. The problem is, that is all based on a fallacy that we tax wealth, when we don't. So the scenario only exists between your ears.

 

[Dixie - In Memoriam]

The article I posted is written by Walter M. Cadette, an economist (JP Morgan, retired) and formerly senior scholar at the Jerome Levy Economics Institute at Bard College. He is not some loony lefty but somebody who has worked on Wall Street.

I'm not impressed. As I said, you (and Cadette's) first flaw is the myth that we tax the wealthy. We simply don't. Now, everything else you have to say from that point, is developed and constructed on a false logic, the presumption that we do, in fact, tax wealth. We don't.

We tax income, and you presume that people who make a large amount of income are wealthy. The fact is, the overwhelming majority of high income tax earners are small business owners, not the uber-wealthy billionaires, as you imagine. They are people who are living fairly comfortably, because they have worked very hard to build a successful business, but they are not wealthy. The really wealthy people generally don't earn incomes anymore, they stopped when they became wealthy. Now they use their money to invest and allow financial institutes to use it for interest dividends, and they relax and enjoy life. You can't really tax these people and punish them, they don't earn anything. You can tax their dividend incomes, but they may move the money out of this country, where it's no use to an American banker and can't be loaned. Or they may not, if the amount is insignificant, but good luck trying to fund all we need to pay for with what you'll get. It amounts to little of nothing, as the main source of tax revenues are the people who are earning a paycheck each week, the middle class. It always has been, and always will be.

To gain increased tax revenues, the middle class tax rates will have to be raised. Or we could cut the top marginal rates, as that has also proven to increase revenues. Another option would be to levy some degree of taxation on the 48% of working Americans who pay no tax at all. The one thing you don't want to do is raise the taxes on the top income earners, because these are the people who provide 96% of the jobs. In the type of slow economy we have, their only alternative for paying a tax increase, will be to decrease labor costs by eliminating jobs. They can't raise prices anymore, with rising fuel costs and insurance, they've already adjusted this as much as they can, they can only start downsizing now. But I know that you and Cadette have it all figured out, how we can still do what you claim and it won't cost any jobs. The problem is, that is all based on a fallacy that we tax wealth, when we don't. So the scenario only exists between your ears.

 

[cancel2 2022]

I'm not impressed. As I said, you (and Cadette's) first flaw is the myth that we tax the wealthy. We simply don't. Now, everything else you have to say from that point, is developed and constructed on a false logic, the presumption that we do, in fact, tax wealth. We don't.

We tax income, and you presume that people who make a large amount of income are wealthy. The fact is, the overwhelming majority of high income tax earners are small business owners, not the uber-wealthy billionaires, as you imagine. They are people who are living fairly comfortably, because they have worked very hard to build a successful business, but they are not wealthy. The really wealthy people generally don't earn incomes anymore, they stopped when they became wealthy. Now they use their money to invest and allow financial institutes to use it for interest dividends, and they relax and enjoy life. You can't really tax these people and punish them, they don't earn anything. You can tax their dividend incomes, but they may move the money out of this country, where it's no use to an American banker and can't be loaned. Or they may not, if the amount is insignificant, but good luck trying to fund all we need to pay for with what you'll get. It amounts to little of nothing, as the main source of tax revenues are the people who are earning a paycheck each week, the middle class. It always has been, and always will be.

To gain increased tax revenues, the middle class tax rates will have to be raised. Or we could cut the top marginal rates, as that has also proven to increase revenues. Another option would be to levy some degree of taxation on the 48% of working Americans who pay no tax at all. The one thing you don't want to do is raise the taxes on the top income earners, because these are the people who provide 96% of the jobs. In the type of slow economy we have, their only alternative for paying a tax increase, will be to decrease labor costs by eliminating jobs. They can't raise prices anymore, with rising fuel costs and insurance, they've already adjusted this as much as they can, they can only start downsizing now. But I know that you and Cadette have it all figured out, how we can still do what you claim and it won't cost any jobs. The problem is, that is all based on a fallacy that we tax wealth, when we don't. So the scenario only exists between your ears.

If you do not tax wealth then what are estate and gift taxes then? Grasshopper, you also have much to learn about the tricks that the wealthy can use to minimise tax.

But this is not an option available to 99.99 percent of Americans, because the number of people who have access to "carried interest" is tiny. These opportunities exist for people in the private-equity or hedge-fund industries because their investors have agreed up-front to compensate the general partners by giving them their upside in the form of virtually free equity in their deals (in addition to the not-insignificant annual 2 percent fees on the size of the fund, which for a $10 billion fund equals $200 million annually.)

This is a point that Zakaria made eloquently in his July 22 interview with Rattner. Citing something Washington Post (and my fellow BloombergView) columnist Ezra Klein had written, Zakaria said the "larger point at play" worth discussing is "that it shows that people like Mitt Romney and you have access to advice, mechanisms, strategies to build wealth that really ordinary Americans don't have access to. And that when you couple that with his agenda, which is to cut taxes further for those people, it gets to the heart of this idea that there are two Americas, one for the very, very, very rich and one for everyone else."
And on that point, Zakaria and Klein are absolutely right.

http://www.theatlantic.com/politics...-on-with-mitt-romneys-102-million-ira/261500/

 

[wanderingbear]

Money and corperations are imaginary. People are real.

 

[Dixie - In Memoriam]

If you do not tax wealth then what are estate and gift taxes then? Grasshopper, you also have much to learn about the tricks that the wealthy can use to minimise tax.

You forgot luxury tax. Another way we tax the super-rich. Yes, there are taxes which affect the wealthy, but we are talking about income taxes and income tax rates.

There are no "tricks" that only rich people have, there is a tax code that is used by all. Depending on what they are using their wealth for, there are "tax breaks" (not tricks) they can use to limit their tax liability. These are available to everyone, although most of us don't use our money to invest in venture capital or earn interest dividends, because we don't have enough. Now, there is a reason we have these tax breaks, and why it's important to keep them. Can you wrap your mind around why that is? Why would we possibly want to give someone a tax break for, say, investing in 'green technology' or something that creates a lot of jobs? Keep in mind, they can choose to move their money completely out of this country, where you can't tax the dividends or interest, and someone else will have it available to lenders and banks in their country.

We don't give these tax breaks to certain types of investment dividends because we're favoring the rich or because we want to help the rich. (We don't tax wealth) We do this so that money will be made available in this country for various projects and to create business, which generates jobs. There are certain other factors that apply, first there has to be a need for new business and jobs, otherwise it makes no difference how much money is available. But it's kind of a case of: better to have it and not need it, than need it and not have it. If we hike these tax rates by removing the tax breaks or actually raising cap gains rates, the result will be less money available to banks and lending institutions for venture capital and start-ups, and without that, we can't create new business or jobs. Why? Because wealthy people aren't stupid, they didn't get to be wealthy by being stupid. They will simply move their wealth to Zurich and it won't be subject to US tax liability anymore, but it also won't be available.