Trickle down economics

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That is the consumers choice. The consumers are responsible for their own financial management.
 
It hasn’t worked out very well. I heard in some parts of the country mom and pop stores and restaurants have been completely wiped out.
 
Wolfie said:
Despite taxation that everyone complains about, money in the U.S. is consistently flowing upward to a small amount of people who are getting richer, and the middle class is shrinking. Who is supposed to handle the consequences of this, these benevolent billionaires? The government seems to be the only organization equipped to manage it.
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Those who are “rich” have money flowing to them because they are, by and large, the owners of capital. Since 1929, (when the government first started keeping track) the percentage of GDP going to capital and to labor have been essentially the same; 1/3 to capital and 2/3 to labor. There are reasons for that, but put most simply, neither can be optimized in a modern economy if that ratio changes very much. Labor has to have the “means of production” for labor to have value. Capital (like Robinson Crusoe’s treasure) is worthless unless someone is willing to work to get it.

One thing that skews outcomes is that labor’s portion is shared by “labor” and “non-labor”; that is, between those who work for a living and those who don’t. But the 1/3-2/3 division remains the same.
Within that general rule, labor’s share is maximized at full employment. There are two reasons for that.

And both move in tandem. In recessionary periods, the ratio remains the same, but both go downward to about the same degree. In growth periods, the ratio remains basically the same, but both move up at about the same rate.

Therefore, rather than complaining about “capital” (wealth) we should be complaining about “non-labor”. Capital’s share is still about 1/3. Labor’s share is still about 2/3. But since “working labor” splits with “non-working labor”, those who work can’t benefit from tandem movement as much as they otherwise could.

What’s the “fix” for that? I don’t know. But I would say that one thing that could help is to tie welfare to work in a meaningful way, and to “means test” even government benefits like social security and Medicare.
 
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Lemuel said:
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Vonsalza:
Free trade steals from the American worker.
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So does government.
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Was there a point here???
 
Interesting, but I don’t really get how that is going to prevent the problem of wealth becoming more and more top heavy. Also, the added government bureaucracy to screen candidates for things like GA is often more expensive than just providing the benefit to applicants without such measures. (I don’t mean this to whatever extremes there may be)
 
Lemuel said:
Maybe that’s not how it works for you, and that’s perfectly fine. But that is how it works for me
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This is the thinking used by the Sovereign Citizen movement. Each one has their own believe in what the law is and is not and responds accordingly. Of course, they go to jail just like anyone else, their opinions notwithstanding. As with taxes, one’s own opinion eases their tax burden not even one cent. They may disagree, but they still must pay or face prison for tax evasion, which they should. I know you do not see yourself as an anarchist, but I see you that way. As you put it, works for me.
 
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Not sure on how the corporation thing works, but I invest the extra income I have in stocks, etc. Pretty sure that helps provide jobs somewhere.
 
A corporation is a limited liability artificial construct. It means that your liability is limited to the money you have already invested in stock.

If you have a sole-proprietorship or a partnership, then you have unlimited personal liability … they can sue the pants off of you if someone feels like it.

For fun, look up the U.S. Bankruptcy Court …their building is bigger than the U.S. Supreme Court. And they spend their time working out arguments and fights. They have a Chief Justice, just like the Supreme Court.

So, do the reading.

Look up on Yahoo Finance or on Value Line what your corporation does and how its finances shape up.

If they are not listed, then call their corporate secretary and ask for an annual report, the quarterly reports and their 10K. The corporate secretary has a box of them under his or her desk and would be happy to send you some.
 
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Instead of taxing the rich, use them.

Use them to YOUR benefit.

Rich people like to see their names on the sides of college buildings. They donate millions and get a brass plaque with their name on it.

SO … go to college and learn how to improve your state in life.

Learn some skill that will bring YOU a high return so you can tell the rich guys and tell the government to leave you alone.

Learn to invest YOUR money.

Diversify, diversify, diversity … to prevent you from getting screwed.

Never stop learning.
 
Taxing the rich is like having a wonderful asset and then throwing it away.

Use them.

Don’t throw them away.
 
“Go into debt to get skills” isn’t really a sustainable economic method. A lot of methods of getting out of poverty require some initial investment of money, which is precisely the problem for poor people.

There’s also concerns about educational inflation. Basically, if too many people get degrees, compared to the number of jobs in the field, employers will raise their standards of who they take. Either people end up with degrees they can’t use, or they have to go into more debt to get further qualifications. Or sometimes the initial qualifications get harder - e.g. you now need a degree from a top school, not just a degree from an accredited institution. Or you need a degree plus suitable extracurriculars (which takes up time you could be working).

While you can make some predictions, it’s very hard for your average person to tell what fields are good now but may be oversaturated by the time you finish. And there’s a question of if there are enough of those skilled jobs in the current economy at all - we’ve seen many cases where skilled jobs go away and are replaced by unskilled jobs at much lower wages.
 
MonteRCMS said:
Taxing the rich is like having a wonderful asset and then throwing it away.

Use them.

Don’t throw them away.
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That is assuming that you are taxing the rich and burning the money. But who is going to pay for the additional defense spending? Certainly the rich are useful for paying for the next generation of defense toys, are they not?
 
DarkLight said:
A lot of methods of getting out of poverty require some initial investment of money
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Bingo.

I often tell my wife: “If I was like Donald Trump and could get a ‘small loan’ of a million dollars, I could become a multimillionaire within a decade of that initial investment loan.”

It’s not that difficult to turn $1,000,000 into $10,000,000 if you play your cards right.

It’s near impossible to turn $100 into $1,000 (legally), or $1,000 into $100,000 - especially if that $100 or $1,000 is literally all the money you have.

The proverb is true: it takes money to make money. Which is why, in general, the rich get richer and the poor get poorer.

And @MonteRCMS your comment was so disconnected from reality, I can’t even respond to it. Spoken like someone who has truly never experienced the crushing hand of abject poverty. Education is of little importance when you’re trying to scrape together rent money, when your teeth are rotting out because you can’t afford a dentist, when you can’t eat.
 
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JamesATyler said:
When it comes to tax policy it is about how much and for what reason is it fair for the government to take a citizen’s money. The first right of the money belongs to the citizen. Even if they made 10 trillion dollars by inventing a gadget that everyone in the world wanted, all of that money belongs to them first. It is theirs. Then they pay taxes. The whole idea of taxing them more is based around the idea that since they have so much, they owe other people something more than, for instance, a middle class person. That isn’t true. The people got their gadgets. That is all that was owed. …
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That’s not the complete picture. If a guy invents a gadget that everyone wants, how does he make 10 trillion dollars on it? He begins manufacturing. And what is stopping other people from looking as his gadget and deciding that they too will manufacture them and make lots of money? The patent system. And who enforces the patent system? The government. The government will come in an confiscate the goods of those who copy the design for a fixed period of time. And who decides how long that time should be? The government. So the government is passing judgment on how much benefit the inventor gets from his invention. In return for this protection, the inventor, especially if it makes him fantastically rich, has a moral obligation to the society that affirmed his right to exclusive use of his idea.

Your scenario would be better suited to your point if, instead of a brilliant inventor, you posited a guy walking down the path who tripped on a bag of gold.
 
stinkcat_14 said:
That is assuming that you are taxing the rich and burning the money. But who is going to pay for the additional defense spending? Certainly the rich are useful for paying for the next generation of defense toys, are they not?
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Defense spending is only about 20% of the total Federal Budget. And slightly more than 3% of GDP.


And is 16% of total Federal spending:

www.politifact.com

Pie chart of 'federal spending' circulating on the Internet is misleading

Is federal spending on the military about 50 times higher than on food stamps? That’s the message of a pie chart now cir
www.politifact.com www.politifact.com
 
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MonteRCMS said:
Defense spending is only about 20% of the total Federal Budget.
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Someone has to pay it though, there is no reason why the rich shouldn’t. In any case, we are running deficits, which these tax laws will make worse. We have voted for big government politicians, so there is no reason why we should have the rich pay less and our grandchildren pay more.
 
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