The more money which is saved by frugal, high-income earners, the more valuable the money held in savings by the rest of us becomes.
Do you mean because of investment or because of keeping money from flowing and thus causing deflation?
it is detrimental to the interests of the public at large to transfer wealth out of the hands of frugal, investment-minded, high-income earners into the hands of government bureaucrats and welfare recipients.
Don't get me wrong, I agree with you, but the counter to what you say is "these people need money now, not 10 years later when bread will become 30 cents cheaper thanks to more capital investment."
forget trickle-down economics - trickle-down tax-brackets is more like it.
to the catchphrase
the above chart might give the impression that, by 1932, low-income Americans were paying taxes similar to today's low-income Americans, but this is neglecting inflationary devaluation.
You think those numbers are not adjusted for inflation? (at least in the government's inflation index?)
If that is true, then it brings a whole new meaning to "inflation tax." Oh wow. If that is really true, then the public has severely, and very clearly, been duped.
Clayton,
I just want to say out of all the message boards I frequent I always look forward to reading your posts the most. You bring a fresh and thoughtful perspective to these boards. Keep it up.
Deflation due to lower supply of money (as money is taken out of "circulation" and stored in Scrooge McDuck's vaults, the purchasing power of money increases).
Do the wealthy keep their money in vaults and safe commodities or do they invest it? Do the two have the same benefit for the public? If the money is invested, production becomes cheaper. If it is stored away, deflation increases purchasing power. Can anyone evaluate the relative effects of the two?
While we're on the topic of the Buffet Tax.
The general reply to the Buffet proposal is "so why don't you donate the money yourself?"
I assume the standard counter, then, is "because everyone must do it otherwise it's ineffective."
Today I considered that one answer to that might be "ah, right. Apply the same principle to charitable giving, and because not everyone is donating, donating anything at all is inefficient!"
Oh, one other point that I forgot to mention that the video reminded me of: Why doesn't anyone ever consider the possibility that Warren Buffet wants taxes raised because he actually benefits from it? No one doubts that a wealthy nobleman 200 years ago who wanted to raise taxes was acting in a self-interested manner. He wasn't trying to "level the playing field" or "provide for the common weal", he was just exhibiting common avarice. The Official Fairy Tale of Democracy says that all titles, nobility, royalty and so on magically disappeared sometime in the late-19th, early-20th century so when politicians say they want to raise our taxes, they really are the do-gooders they pretend to be. But what about the lobbies? Don't they benefit from increased taxes which provides increased government revenues with which the government can purchase their products and services (e.g. defense industry, of which Buffet doubtless owns stock in many companies) or enforce the regulations that keep profits in their industry high (e.g. the railroads that Buffet owns), and so on? So, maybe the supposedly "do-good, give-it-all-to-charity" super-wealthy such as Buffet are not as selfless as they promote themselves to be.
@Barty: Thanks for the positive feedback, it's encouraging to know that there are people who benefit from reading what I write.
@Wheylous:
Presumably, they do both. Savings (not investments) is a crucial part of self-insurance. You can't buy insurance for every kind of risk. However, you can always self-insure (save money under the mattress). This is even more important for the wealthy than it is for the man on the street.
I doubt the relative effects can be quantitatively compared but I'm sure a lot more can be said by real economists about the "positive externalities" of the two.
Clayton -
Just fyi, "Buffett" is spelled with two t's. "Buffet" is what you get at Shakey's Pizza.
@JJ: Argh, I hate making those kinds of mistakes. Thanks for the catch.
Clayton, your mention of "Why doesn't anyone ever consider the possibility that Warren Buffet wants taxes raised because he actually benefits from it?" made me remember this was often the case in the past, back when "democracy" was just a memory from Ancient Athenian history.
For example during the so called "struggle for survival" of the Byzantine Empire (VII-VIII century) great landowners and other "super-rich" all agreed on increased taxation on their part. Yet this wasn't done out of patriotic fervor. In return the Emperor was to give them (or their descendants) privileges of some sort. Sure, the Emperor could just have tried and made a grab for their money without asking but in those volatile times a man could find himself wearing the purple and commanding thousands of men one day and killed by his own military officers three months later without anybody raising a hand to defend him. What's changed? The mega rich like Buffett can stand losing a few extra millions but in return they want something. Whatever is more political power or something else it doesn't matter.
But more crucially this has a profund effect on the average Joe and Jane. It strips them of any possibility to defend against tax increases of any kind. "Even Warren Buffett wants to save this country from bankruptcy. You should just pay up front and shut up". This means there will be less politicians willing to make a stand against tax hikes and inflation, the media will become even more pro-Big Government and any talk of "you are sapping the lifeblood out of us" will be deemed the rants of selfish spoiled children.
I find it amazing that they still think lack of funding is the problem.
"if only we had more money..." politician
Usually any changes in tax will increase the total tax intake of government. From what I have seen they use any sort of excuse to increase taxes on the population. They even brought income tax in on the basis and justified the tax by calling it a temporary tax and we still pay it today. If they were to increase tax on a specific group and decrease it on another and then at the same time reduced the total tax intake. I would be ok with that, as I see it as any reduction in taxation in total is a good thing and any increase in total taxation is bad.
http://www.dailyfinance.com/2011/10/12/billionaire-warren-buffett-earned-62-855-038-in-2010/?ref=mostpopular
Buffett earned $63M last year.
ROFLMAO
Aren't people capable of basic arithmetic? At that rate, it would take Buffet 16 years to save up a billion dollars if the world works as our Rulers would like us to believe it does. To save up his current net worth of $39 billion would take 624 years at this rate.
Buffett's net worth grows at a much faster rate than his income could possibly account for, in large part due to his proximity to the Money Fountain, that is, the central bank. It also strains credulity that a multi-billionaire does not avail himself of the facilities for concealing his true income and net worth that millionaires use (overseas banking, tax havens, estate planning, etc. etc.)
I will reiterate what I pointed out before: has it crossed anyone's mind that perhaps Buffett wants to increase taxes because, being such an integral part of the system, he actually profits from higher taxes?
Look at the railroads he recently purchased, for example. Much of the land for those was seized through eminent domain, they are a highly regulated - protected - industry and the chances for new transport competition are essentially zero. His investment strategy is "invest in American value"... i.e. own Coke, own Ford, etc. This makes him a darling of the Establishment for the same reason that the hedge fund managers and speculators are the Establishment's Public Enemy #1. Buffett is Establishment and the Establishment is the network of families, businesses and political leaders who are the first, primary beneficiaries of government spending (tax revenues+debt+inflation).