On 08/14/09 16:41, Warp wrote:
>    I'm not an economist, but from the little understanding I have, burdening
> rich people with exorbitant taxes is not good for the economy in the long
> run. People tend to vote with their feet, so to speak.

	Not disputed.

>    I have yet to hear any good argument why rich people should be punished
> with high taxes, other than emotional things like it being "fair".

	Again, you use the word "punishment". Since when was taxing punishment? 
If increasing taxes for the rich is punishment, then isn't increasing 
taxes for *any* group punishment?

	It may simply be the case that the government needs the money, and 
having a progressive tax rate is the most optimal way to do so for the 
economy. Wasn't that the criterion you yourself set?

>    Taxing rich people a lot is not very productive because they are so few.

	What is "a lot"? In the US, the highest is 35% federal - and that's 
only for the amount above $350,000. And if you believe people like 
Buffet, they pay a lot less (I think he said about 17%) - without even 
trying to find tax loopholes.

	Yes, in Europe, I can understand the rich getting really upset if their 
taxes increase. They're likely paying a lot already. It's different here.

> If the same amount of money was taxed from medium wealth people, they would
> get their tax % raised only very little because they are much more numerous.
> Leveling out the tax percentage a bit raises low and medium wealth people's
> taxes only a bit, but reduces the taxes of rich people by a considerable
> amount (because they are a small minority). The *advantage* of this is that
> the rich people are rewarded for succeeding, will keep running their
> business in the country, will keep employing people and thus will keep the
> economy of the country running.

	A 1% tax increase hurts the medium and low income citizens more than it 
hurts the rich. Because everyone has to pay certain fixed costs (rent, 
food, etc), taxing is not linear. For a medium income person, a 10% 
increase in tax may result in 20% less savings. When it comes to 
purchasing decisions, that can drastically reduce the amount of stuff 
he'll buy.

	Someone making 500,000 a year will lose very close to 10% in savings by 
a 10% tax increase, because his fixed costs are a small percentage of 
his salary. That amount isn't going to affect his purchasing as much 
(unless he keeps buying really expensive stuff all the time).

	I can see increasing the tax for the middle class as resulting in lower 
spending, hurting the economy.

	Is that what really happens? I don't know. The point is that we can all 
construct reasonable scenarios. I can see things both ways. I just don't 
see people dogmatically sticking to one viewpoint (e.g. no progressive 
tax) without actual *evidence* that not doing so is better for the economy.


-- 
When a toast with butter falls from your hand, it always falls on the 
butter side.

When a cat falls from a height, it always lands on her feet.

If you tie a buttertoast over a cat with the butterside to the top, and 
let both fall, what will face the floor, the butter or the feet?

Post a reply to this message