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RE: [evol-psych] Why Taxing 'The Rich' Doesn't Work

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  • Graeme
    Artemistroy wrote Yes. See below. It s true: During World War II, there was 94 percent marginal income tax rate. And what s more, the president had originally
    Message 1 of 80 , May 31, 2012
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      Artemistroy wrote

      Yes. See below.

      "It's true: During World War II, there was 94 percent marginal income tax rate. And what's more, the president had originally proposed a 100 percent tax rate. In those days, everyone made contributions for the war, and the wealthy made the biggest ones. Labor journalist Sam Pizzigati argues that this shared sacrifice from the top down helped define the "Greatest Generation" and pulled the country—including the elites—together in wartime."
      http://www.tompaine.com/articles/shared_sacrifice_shared_glory.php

      Graeme: thanks Artemis.  It strikes me that most arguments over the goodness or badness of taxation might be driven by the apriori political position of the proponents. It also seems that taxation (however it is named) is the only real revenue governments have, so if this is in shortfall relative to the services the populace requires, then governments can either borrow, or reduces services. 

      I would advocate that the problem might be solved, in principle, by state cooperation to shut down tax shelters, and an approach to taxation that taxes EXCESS – however that might be defined within a jurisdiction.  Taxation of excess - consumption, wealth, & income (particularly if unearned) – might be a starting point.  Here in Australia, we have a super-profits tax pending, at this stage on mining interests where royalties (a payment to the common-wealth of the nation) are considered insufficient to deliver services and infrastructure (to both the commonwealth and the miners too). 

      A tax on excess might be targeted from the top down (as described above) and potentially allow the vast majority to still be motivated by self-interest to aspire to a better life for them and theirs. 

      My guess is that those claiming class envy as a driver are misguided, or themselves benefitting from the accumulation and hoarding of excess.  I suspect that mostly we aspire to emulate those who are doing better than ourselves, but envy those who take excess (note that I don’t consider that they earn it). 

       

      Graeme Deeth B.V.Sc., B.A. (Psych), B.Psych (Hons 1st class), FACCP.
      P.O. Box 548
      Southport BC
      QLD 4215
      Australia
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      Ph: +61755911193
      Fax: +61755939492

      Web: www.cpccpc.com.au

       

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      Why Raising Taxes on the Rich Is So Hard
      December 8, 2011 RSS Feed Print

      Washington needs money. The wealthy are prospering. Much of the middle class, meanwhile, is falling behind. Normal patterns of elective politics would suggest that tax hikes on the rich are in the bag.

      [See 11 things wrong with Congress.]

      That's what has happened before. Taxes on the wealthy soared during the Great Depression. After World War II, the top marginal rate went as high as 91 percent, staying there for 14 years before beginning a gradual decline toward today's level of 35 percent. Recent polls show that a solid majority of Americans--between 60 and 70 percent--favor higher taxes on the wealthy to help pay down the national debt and finance other priorities. There's even a group of "patriotic millionaires" who have pleaded with Congress to raise taxes on them and their fellow 0.1 percenters.
      http://www.usnews.com/news/blogs/rick-newman/2011/12/08/why-raising-taxes-on-the-rich-is-so-hard

      --- In evolutionary-psychology@yahoogroups.com, "Graeme" <graeme@...> wrote:
      >
      > How do we know that taxing "the rich" doesn't work, if the excessively rich
      > succeed in avoiding tax? Said differently, have we ever succeeded in
      > actually taxing the rich (as opposed to the comfortably well off)?
      >
      > Graeme Deeth B.V.Sc., B.A. (Psych), B.Psych (Hons 1st class), FACCP.
      > P.O. Box 548
      > Southport BC
      > QLD 4215
      > Australia
      > M: +61418751617
      > Ph: +61755911193
      > Fax: +61755939492
      > Web: www.cpccpc.com.au
      >  
      > This correspondence is for the named persons only.
      > It may contain confidential or privileged information or both.
      > No confidentiality or privilege is waived or lost by any mis transmission.
      > If you receive this correspondence in error please delete it from your
      > system immediately and notify the sender.
      > You must not disclose, copy or relay on any part of this correspondence, if
      > you are not the intended recipient.
      > Any opinions expressed in this message are those of the individual sender
      > except where the sender expressly, and with the authority, states them to be
      > the opinions of the defined organisation.
      >
      >
      >
      > -----Original Message-----
      > From: evolutionary-psychology@yahoogroups.com
      > [mailto:evolutionary-psychology@yahoogroups.com] On Behalf Of R A Fonda
      > Sent: Thursday, 31 May 2012 8:49 AM
      > To: evolutionary psychology
      > Subject: [evol-psych] Why Taxing 'The Rich' Doesn't Work
      >
      > Why Taxing 'The Rich' Doesn't Work
      >
      > by Gail Buckner
      >
      > Published May 29, 2012
      >
      > If you want to understand politics, all you have to do is think back to
      > third grade. Even at 8 years old, it was probably clear to you that the only
      > reason the class bully picked on weak kids was because they were unable to
      > defend themselves. That's exactly the strategy driving proposals to raise
      > tax rates on corporations and "The Rich."
      >
      > Never mind that you're barely scraping by if you're trying to raise a family
      > of four on $250,000 a year in places like Long Island, N.Y., San Bernardino,
      > Calif., or the suburbs of Chicago. The folks in Washington, D.C., consider
      > you wealthy. Thanks to Obamacare you're going to see your income taxes go up
      > on Jan.1.
      >
      > It's Not Fair! (No Kidding!)
      >
      > We continually hear that "The Rich" got richer thanks to the tax cuts
      > enacted in 2001 George W. Bush's first term. If that's the case, why is it
      > that in the wake of these lower tax rates (set to expire at the end of this
      > year) the top 1% of income earners now pay roughly 40% of the income taxes
      > collected. As you can see by the chart below from the non-partisan Tax
      > Foundation, that's double the share they paid back in the early 1980s. (2)
      >
      > Still convinced the "wealthy" (whatever that means) don't pay their fair
      > share? It turns out that the U.S. has the most progressive personal income
      > tax rates of any country in the Organization for Economic Cooperation and
      > Development (OECD). According to the Tax Foundation, "the top 10% of U.S.
      > taxpayers pay a larger share of the income tax burden than do their
      > counterparts in any other industrialized country, including traditionally
      > `high-tax' countries such as France, Italy, and Sweden." (1) Moreover, the
      > Tax Foundation calculates that even if you took as much as half the annual
      > income "from every person making between one and ten million dollars," you'd
      > only reduce the federal deficit by 1%.
      >
      > I Double-Dare You to Defend Yourself!
      >
      > Here's the question: Why- especially in an election year- is raising taxes
      > on top earners so popular? "It's clearly class envy," says Tom Giovanetti,
      > president of the Institute for Policy Innovation (IPI), an economic think
      > tank headquartered in Dallas. (It's no coincidence that Texas is a state
      > with no income tax and far from our nation's capital.) "There's a group of
      > voters who are very susceptible to arguments that the rich or corporations
      > should pay more. They're not interested in thinking it through."
      >
      > It may also have to do with the fact that the wealthy aren't organized.
      > There's no union for taxpayers who fall in the top two brackets.
      >
      > It's All Connected
      >
      > Here's the problem with raising taxes on business entities: "Any economist
      > will tell you that corporations don't pay taxes. They're passed along to
      > consumers in the form of higher prices," says Giovanetti. "When you're
      > buying a car from Ford (F: 10.57, -0.27, -2.49%), you're paying Ford's
      > taxes. Business taxes are embedded in the prices of goods and services.
      > They're counter productive." In other words, if you want to pay more for
      > your next car, you should be in favor of raising taxes on the automotive
      > industry.
      >
      > In addition, when you tax "millionaires" you're taxing a lot of small
      > business owners, who typically hold their companies as "pass-through
      > entities" (sole proprietorship, partnership, LLC) and, thus, pay tax on
      > their business profits at the individual level.
      >
      > Last fall, Tax Foundation president Scott Hodge pointed out to the House
      > Committee on the Budget that "fully 68% of private business income is earned
      > by taxpayers with AGI [adjusted gross income] above $200,000- the target
      > range of President Obama's proposed tax rate increases." Since small
      > businesses are the engine of job creation, reducing the income of the owner
      > means s/he has less incentive to take on the risk of expanding, buying new
      > equipment, or hiring more employees.
      >
      > Just Do the Math?
      >
      > Don't take my word for it. According to Hodge's testimony, international
      > researchers at the OECD concluded that "the corporate income tax is the most
      > harmful tax for long-term economic growth." (1) Moreover, while "75
      > countries have cut their corporate tax rates to make themselves leading
      > industrialized nations at over 39 percent."(3) Is it any wonder jobs are
      > leaving this country and going overseas?
      >
      > Think about this on a personal level. If the sales tax in your area was 6%
      > and a neighboring state has no sales tax, wouldn't it be worth it to drive a
      > little farther to save the money? Especially on a big-ticket item such as a
      > television? Why would the owners of corporations act any differently? All
      > other factors being equal, if you were on the board of a company looking to
      > build a new plant, wouldn't you vote to locate it in a low-tax country?
      >
      > If a company can't or doesn't choose to re-locate, raising the corporate
      > income tax hurts American employees in the form of lower wages. A national
      > study by an economist at the Federal Reserve Bank in Kansas City, found that
      > "a one percentage point increase in the average corporate tax rate decreases
      > annual gross wages by 0.9 percent." The Tax foundation explains that in
      > non-economic speak, "this means that a $10.4 billion increase in corporate
      > tax collections would lower overall wages by $43.5 billion."(1)
      >
      > Yet the message we continually get from Democrats is that the way to dig
      > ourselves out of the record-breaking deficit we've amassed in the past 4
      > years of the current administration is to impose ever higher tax rates on
      > businesses and The Rich. "Every time you try to raise taxes you eventually
      > reach a point of diminishing returns," says Giovanetti. "It drives companies
      > to re-located jobs and employees off-shore and it drives capitalists to move
      > their wealth."
      >
      > I'll Take My Wealth To Go
      >
      > In other words, the thing that politicians forget is that everyone- even the
      > wealthy- makes choices about how they spend their money. Remember the 10%
      > "luxury tax" passed in the 1990s? It was an additional tax on the purchase
      > of boats and cars above a certain value. Before this tax was repealed, it
      > nearly wiped out the domestic boat industry in this country. Turns out, it
      > doesn't matter how deep pockets go--even "The Rich" will choose to postpone
      > buying a new yacht to avoid the expense of a burdensome tax. "The luxury tax
      > didn't hurt the wealthy," says Giovanetti, "It hurt the people that make
      > things for the wealthy."
      >
      > Money is one of the most mobile resources corporations and individuals
      > possess. According to Giovanetti, a year after Maryland enacted its
      > so-called `millionaire's tax' a third of the state's millionaires
      > disappeared off the tax rolls. "Either they moved or they made changes to
      > their personal finances [in order] to report less income." There are already
      > anecdotal reports of a similar phenomenon occurring in France, which has
      > just elected a socialist president who ran on a platform of demonizing the
      > wealthy and has promised to sharply raise taxes on top earners. The London
      > newspaper The Guardian reports local realtors are starting to receive
      > inquiries from French citizens looking to re-locate across the Channel.
      >
      > 1. Scott A. Hodge, "Tax Reform: The Key to a Growing Economy and Higher
      > Living Standards for All Americans," Tax Foundation, Testimony Before the
      > U.S. House of Representatives Committee on the Budget, September 14, 2011.
      > http://www.taxfoundation.org/research/printer/27613.html.
      >
      > 2. William McBride, "Reversal of the Trend: Income Inequality Now Lower than
      > It Was Under Clinton," Tax Foundation. January 20, 2012.
      >
      > 3. See "Hodge" for an explanation as to why, even considering tax deductions
      > and write-offs, U.S. corporate tax rates are still higher than other
      > developed countries.
      >
      > Read more:
      > http://www.foxbusiness.com/personal-finance/2012/05/29/why-taxing-rich-doesn
      > t-work/#ixzz1wOJbnro6
      >
      >
      >
      > ------------------------------------
      >
      > Yahoo! Groups Links
      >

    • merle lester
      it s up to you artemis..you figure it out...merle ...
      Message 80 of 80 , Jun 8, 2012
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        it's up to you artemis..you figure it out...merle

        On 08/06/2012, at 2:52 PM, artemistroy wrote:

        > Merle, can you tell us who "we" should care about and what "we" should share with them?
        >
        > Is it safe to assume that the "we" are the productive people from high resource nations who are expected to care and share with the low resource countries and nations for the purpose of promoting more population growth?
        >
        > Artemis
        >
        <Snip>
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