**** Elections thread *****

[JimmyS1985]

I addressed a lot of this in my response to Bill. Other things:

Income inequality is a meaningless statistic. It tells us pretty much nothing and is misleading. Example: triple all real incomes and you've eradicated poverty while increasing inequality. Or invent something great that increases prosperity for millions and you've increased inequality. Create something that makes one person a billion dollars wealthier and a million people a thousand dollars wealthier, and you've increased inequality.

Tax cuts in higher brackets are tiny relative to the deficit and debt compared to equivalent cuts in lower brackets. The majority of investment capital exists in high incomes and the majority of human capital and labor exist in low incomes. Dollar for dollar, tax cuts to high incomes should have a bigger positive effect on the economy, while cutting restrictions should have a greater positive effect on low incomes.

That said, tax cuts for the wealthy aren't fair. Taxes should be flat. That would make them the most fair. There are a bunch of other benefits that come from that too.

Flat taxes are fair in a country with a relatively even distribution of wealth and income. We don't live in that kind of country. In a country with an extremely lopsided distribution of wealth and income, like our country, flat taxes are essentially arguing in favor of lower taxes on the super wealthy, paid for by higher taxes on the poor.

Lets suppose you've got 2 people, one guy pulls in $20,000 a year, and spends 100% of yearly take income (these are also known as workers who live from paycheck to paycheck). The man's income is so low, he pays no federal income tax. Now a Flat tax implemented. Now he has to pay $2,000 a year in taxes, and has thusly taken a 10% loss in income for his yearly expenses. This will drastically hurt him in his economic situation, that is already limited, and significantly lower his standard of living.

Now we take a guy who makes $2,000,000 a year. He spends 10% per year on his living expenses. He consistently has money left over, that is not used on living expenses. If he pays a 10% tax, he still has $1,800,000 left over, and he only uses $200,000 on living expenses. He will face no reduction in his standard of living under the same tax.

So the one who takes it in the shorts under a flat tax, is the poor, and lower classes, and the middle class. The ones who get a huge tax cut under a flat tax, would be the very wealthy.

This would further exacerbate the income/wealth inequality between the rich and the poor. It kind of reminds me of the economic conditions that lead to the French Revolution in 1780's/1790's France.

[wufwugy]

Flat taxes are fair in a country with a relatively even distribution of wealth and income. We don't live in that kind of country. In a country with an extremely lopsided distribution of wealth and income, like our country, flat taxes are essentially arguing in favor of lower taxes on the super wealthy, paid for by higher taxes on the poor.

Lets suppose you've got 2 people, one guy pulls in $20,000 a year, and spends 100% of yearly take income (these are also known as workers who live from paycheck to paycheck). The man's income is so low, he pays no federal income tax. Now a Flat tax implemented. Now he has to pay $2,000 a year in taxes, and has thusly taken a 10% loss in income for his yearly expenses. This will drastically hurt him in his economic situation, that is already limited, and significantly lower his standard of living.

Now we take a guy who makes $2,000,000 a year. He spends 10% per year on his living expenses. He consistently has money left over, that is not used on living expenses. If he pays a 10% tax, he still has $1,800,000 left over, and he only uses $200,000 on living expenses. He will face no reduction in his standard of living under the same tax.

So the one who takes it in the shorts under a flat tax, is the poor, and lower classes, and the middle class. The ones who get a huge tax cut under a flat tax, would be the very wealthy.

This would further exacerbate the income/wealth inequality between the rich and the poor. It kind of reminds me of the economic conditions that lead to the French Revolution in 1780's/1790's France.

The poor are already taking it in the shorts by the poverty traps created by labor restrictions, welfare, and progressive taxation.

Economics is often backwards. What often looks like something that helps somebody is an incentive for that person to behave in such a reduced in productivity way that he is worse off than if he didn't get that "help" in the first place.

[JimmyS1985]

The poor are already taking it in the shorts by the poverty traps created by labor restrictions, welfare, and progressive taxation.

Economics is often backwards. What often looks like something that helps somebody is an incentive for that person to behave in such a reduced in productivity way that he is worse off than if he didn't get that "help" in the first place.

Stagnant wages for multiple decades, is what's causing the country to fall behind. In the ultimate end, you're still arguing that the Median Household's purchasing power should remain unchanged, are you not? You're clearly not arguing that their purchasing power should be increased, and your flat proposal, if it applies to poor people, would clearly decrease their purchasing power significantly.


Between 1945-1981, when there was a rise in GDP per Capita, the gains got distributed among the populace as a whole. Between 1981-2017, when there was a rise in GDP per Capita, the gains got distributed to the super wealthy, particularly the wealthiest 0.1% of Americans.

And in essence you're arguing for the system of 1981-2017 to remain in place, over that of 1945-1981.

[wufwugy]

Stagnant wages for multiple decades, is what's causing the country to fall behind. In the ultimate end, you're still arguing that the Median Household's purchasing power should remain unchanged, are you not?

I've argued that it should be increased and that it is increased by more by reforms that finance more investment and promote more labor than ones that don't as much.

Between 1945-1981, when there was a rise in GDP per Capita, the gains got distributed among the populace as a whole. Between 1981-2017, when there was a rise in GDP per Capita, the gains got distributed to the super wealthy, particularly the wealthiest 0.1% of Americans.

Why do you think this one statistic that is about as broad as possible tells enough of the story? The proposed regression would likely tell even less of the story than the examples we used in my econometrics textbook to show regressions that don't tell much of the story they're trying to tell.