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  1. #21
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by mican333 View Post
    I am advocating a progressive tax structure and Warren recommended would indeed qualify with what I am proposing.
    I am not debating your progressive tax ideas. I am debating the specific plan offered by Warren. Are you supporting her proposal for a wealth tax.

    Quote Originally Posted by mican333 View Post
    I went over my previous posts and I've only made two claims about the 70% tax rate.

    1. We've had it in the past and the results weren't bad
    2. That it would be a tax increase on the rich if it were implemented today.

    Attacking any other statement regarding the 70% tax rate are attacking statements that I did not make and have no intention of defending.
    The claim that we have had it in the past is a red herring. If you don't know the effective rate, the actual rate is irrelevant. If a sofa is sold for $1000 but it is always on sale for 30% off, then can you claim the sofa costs $1000? If they drop the price to $900 and remove the sale, would you claim that the sofa is now less expensive? This is the game you are playing with the tax code. Without knowing the effective tax rate you are not offering anything useful to compare. Of course, we are not even arguing an income tax. We are arguing about an even more insidious tax proposal.

    Quote Originally Posted by mican333 View Post
    But a wealth tax would be taxing the wealthy which I have argued for. So per my previous arguments, I would be for this unless one can show that we should not have a progressive tax structure or that this is a particularly poor method of achieving it.
    So, you are claiming ALL progressive taxes are equally good?

    Quote Originally Posted by mican333 View Post
    It's not whether I have an idea or not. The issue is that EITHER OF US is going to say that X will happen to the GDP if we implement a certain policy, then THAT PERSON needs to support that argument before either of us need to make any kind of argument.

    So I'm not admitting cluelessness when it come to the GDP. I'm just not bothering to make any argument about it at this time. And if you likewise aren't going to bother to make an argument about it at this time, then the GDP is not a topic of debate on this thread.

    So do you have a point to make about how the GDP would be effected by a progressive tax structure? If so, state your point. If not, then neither of us has a point to make and we can drop this particular issue.
    Let's get back to this because I think you missed the argument.

    Quote Originally Posted by mican333 View Post
    Good. I'm going to restate your argument in my own words to make sure we both know that I have it right (pretty sure I do). And I'll make about my company and a customer named Joe.

    1. The tax goes into effect. 2. Some of the money goes to Joe. 3. Joe buys one of our products with some of the money he got. 4. Because of people like Joe, my company does well and decides to expand. 5. So we need a loan. 6,7, 8. Since the bank has less money than it did before the tax change, the interest rate on the loan is very high. 9. So we may decide to not expand due to the high interest rate and that would make our product more scarce and therefore raise the price of the product. 10. So Joe can no longer afford our product because of our cost increase and he's effectively poor again.

    And my rebuttal is that your scenario is one big "maybe". You even directly say "may" ("may dissuade companies from expanding") in point 9. Yeah, maybe. Or maybe not. Do you know how much the Warren proposal will raise loan interest rates? Do you know that it will be so much that it would override the benefits of companies doing better because people have more money to spend? I very much doubt it. So "may happen" does not equal support that it's likely to happen.

    And besides that, if the theory that how much money rich people have directly corresponds with interest rates had merit, it would be observable that the interest rates would rise and fall with the tax rate on the wealthy rising and falling. I'm pretty sure that that has not been generally observed.
    The maybe in point 9 was a fork where companies either raised prices to pay for the higher loan costs OR chose not to expand which would increase product scarcity (also raising prices). What isn't a maybe is that prices would be higher. This is the definition of inflation. Going back to your comment that I never argued that GDP would decrease, well this was it. If the prices of goods increase, the power of consumers decrease, then the GDP is lower. I have made a logical argument on behalf of why the GDP would decrease. At this point you have not made a logical argument that rebuts this nor have you explained how a wealth tax would increase GDP. You argue that I don't offer a specific number as to how much a wealth tax will decrease GDP, but, of course, I do not need to in order to support my argument. If it lowers GDP every year, even by a small amount, then, over the long run, a wealth tax will be unsustainable. Over the long run it will harm the U.S. economy and will leave the poorest people in an equally poor condition.

    Quote Originally Posted by mican333 View Post

    I did not say "no one does". But I am saying that most don't. So finding some exceptions does not invalidate what I said.

    Let me put it this way. All of those self-made men have families - a wife and two kids. So that's four rich people in the family. What percentage of them got rich by achieving. About 25%. And then the kids have their own families and the percentage in the family shrinks further.

    So if you are going to argue that MOST rich people get there by achievement instead of relation, please support it.



    But again, exceptions to the rule.




    Yes it CAN happen. Again, individual cases do not support a general conclusion.
    Read the quote again. It was not identifying an exception to the rule. It was stating the rule. The top 1% are almost all 1st or 2nd generation wealthy. Very few, less than 10%, are 3rd generation. Your claim is simply false.


    Quote Originally Posted by mican333 View Post
    I never said that that is the only reason. But I'm saying more often than not, it is the case. There are more people that are rich by relation than rich by achievement.
    However, when it comes to the top 1%, the portion that will be impacted by a wealth tax as proposed by Warren, your observation is not true.


    Quote Originally Posted by mican333 View Post
    But you are the one who initiated this point so if you are going to argue otherwise, please support your claim that most are rich by achievement And again, individual cases where it happened by achievement will not suffice.
    I did. Burden is now on you to disprove it.


    Quote Originally Posted by mican333 View Post
    Sure. Assuming the money will be used to help those who are not-rich (which I imagine is the case), then I've supported that it will have a generally positive impact on workers, such as with the example of my company selling more items because more people have more to spend.
    And I directly offered a rebuttal explaining why this is too simplistic and does not recognize the decrease in GDP which would result.


    Quote Originally Posted by mican333 View Post

    No, I've referred to people who work full-time but can't afford the basics. And I have explained the impacts of the plan. These people will have more money which will help them afford the things that they have access to due to being fully employed and they will buy more things, which will help companies.
    How many of these people are there? What is the scope of the problem you are attempting to solve?

    Quote Originally Posted by mican333 View Post

    To my knowledge, I've heard no argument from you that supports that it likely will shrink the GDP. Maybe I missed it somewhere but regardless, until you do support that it will have a certain effect on the GDP, I have no obligation to provide a counter-argument to your position.

    If I missed argument, my bad. But you still will need to show that argument, either paste it or restate it.
    I think you missed it because you do not recognize the relationship between inflation and GDP. Hopefully, now you do.

    Quote Originally Posted by mican333 View Post
    Yeah, more money gets spent which helps businesses.

    And I see no problem with keeping it simple. If an argument holds up, there's no need to make it more complicated than it is for that would be making it, by definition, unnecessarily complicated.
    [/QUOTE]
    Unfortunately, simple is wrong. You cannot just hand people money and declare a success. There are consequences which I've outlined in my previous post and which we have discussed in this post. Your argument does not hold up.
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  2. #22
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by Ibelsd View Post
    I am not debating your progressive tax ideas. I am debating the specific plan offered by Warren. Are you supporting her proposal for a wealth tax.
    Since Warren's plan is a progressive tax, one should support the plan if they support progressive taxation.


    Quote Originally Posted by Ibelsd View Post
    The claim that we have had it in the past is a red herring.
    Not if the point is that such a thing was not a disaster in the past and therefore is not likely to be a disaster if implemented again.

    Quote Originally Posted by Ibelsd View Post
    If you don't know the effective rate, the actual rate is irrelevant.
    But it does stand to reason that if the tax rate is higher than it was, then more money will be collected.

    I have made no argument that the effective rate will be any particular number nor does any argument I made hinge on knowing what that number is.

    So yes, we don't know what the effective tax rate would be with a 70% rate. And so what?


    Quote Originally Posted by Ibelsd View Post
    So, you are claiming ALL progressive taxes are equally good?
    No. But I'm arguing that a progressive tax, at this time, would generally be good.




    Quote Originally Posted by Ibelsd View Post
    The maybe in point 9 was a fork where companies either raised prices to pay for the higher loan costs OR chose not to expand which would increase product scarcity (also raising prices). What isn't a maybe is that prices would be higher. This is the definition of inflation. Going back to your comment that I never argued that GDP would decrease, well this was it. If the prices of goods increase, the power of consumers decrease, then the GDP is lower.

    But what is a HUGE maybe is that the price increases so much that it counters the positive effect on the GDP of people having more money to buy stuff which increases demand and productivity to meet that demand. I mean if we raise our prices, say 2%, to make up for the higher interest rate, would that really effect people's ability to buy our stuff? Maybe a tiny bit but I would say that a person who can afford to buy our product for $50 can afford to buy it for $51.

    If it went up to, say, $100, then it probably would be priced out of people's ability to buy it. But there is absolutely no support that we would have to double the price instead of raise it one dollar.

    So just saying that there will be some kind of effect (and really, your support doesn't really go above "might be an effect" - you point 9 specifically say "may", not "will") does not give support that there will indeed be a strong counter-active effect that would wipe away all of the good that I have supported will happen.

    I have supported that good things will happen. You have, at best, supported that there's a possibility that something even worse will happen.

    You have not supported that there WILL be an overly negative consequence.


    Quote Originally Posted by Ibelsd View Post
    I have made a logical argument on behalf of why the GDP would decrease. At this point you have not made a logical argument that rebuts this nor have you explained how a wealth tax would increase GDP. You argue that I don't offer a specific number as to how much a wealth tax will decrease GDP, but, of course, I do not need to in order to support my argument. If it lowers GDP every year, even by a small amount, then, over the long run, a wealth tax will be unsustainable. Over the long run it will harm the U.S. economy and will leave the poorest people in an equally poor condition.
    I have explained how it would increase the GDP but let me restate it since it might have been so apparent in the past.

    Using my company as an example, when the person can afford to buy our product, we will produce more of the product to meet demand and there fore the GDP will increase. If you want to argue that the counter-effect would be so drastic that it would wipe out the gains made to the GDP, you will have to support that.

    If neither of us can support that the net effect to the GDP will be positive or negative, then only logical compromise is that it will have no noticeable effect on the GDP. And I'm willing to go with that for debate's sake. But if you are going to argue that the net GDP will be lower - that once we factor in the both the positives and negatives, the net effect will be lower - you will need to support that.


    Quote Originally Posted by Ibelsd View Post
    Read the quote again. It was not identifying an exception to the rule. It was stating the rule. The top 1% are almost all 1st or 2nd generation wealthy. Very few, less than 10%, are 3rd generation. Your claim is simply false.
    But again, MOST of the newly rich people got rich because of connections, not achievement.

    As an example of someone famous. Donald Trump's Dad, Fred Trump, is indeed someone who is a self-made tycoon. And that's just ONE person from the Trump family. Everyone else, Donald, his kids, his wives, his siblings and their families, are rich because Fred got rich. So if we estimate that this family has about 50 people, only 2% of these people got rich through achievement. There is no particular reason to think that anyone other than Fred would have gotten rich if they were born into a poor or middle-class family. That's not to say that no other Trumps achieved anything on their own but they all started from a place of wealth which greatly increases their chances of making their own fortune and likewise shields them from their financial errors (such as Donald being bailed out by Fred when his ventures fail). With the exception of Fred Trump, there's no particular reason to think that if any of the Trumps were raised as poor as any other poor person, they would have risen above their station (since the average poor person doesn't do that).

    But isn't think not really addressing the point anyway?

    You were arguing that poor people are poor due to poor choices. And you have provided no support that that is the case for those who are already born poor. Sure, if someone is not poor and then becomes poor because he made mistakes, that would be an example of ending up poor due to poor choices. But I see no support that those who were born poor and remain poor are in that situation because of some flaw in the person himself.

    So either way, you have not supported your primary argument.


    Quote Originally Posted by Ibelsd View Post
    However, when it comes to the top 1%, the portion that will be impacted by a wealth tax as proposed by Warren, your observation is not true.
    First off, I have supported that it's not true with my Trump example. And secondly, this seems to be a red herring when it comes to the issue of poor people.


    Quote Originally Posted by Ibelsd View Post
    And I directly offered a rebuttal explaining why this is too simplistic and does not recognize the decrease in GDP which would result.
    You have not supported that there would be an overall GDP decrease.

    I have supported that there would be some level of GDP growth (factor X) and you have supported that there would be some level of GDP shrinkage (Factor Y).

    But you have not supported that Y would be greater than X. Perhaps X would be greater than Y. Or maybe they would equal out.




    Quote Originally Posted by Ibelsd View Post
    How many of these people are there? What is the scope of the problem you are attempting to solve?
    I'm not hearing a rebuttal here. If you are going to challenge my argument, then you need to present an argument that supports that my position is flawed.




    Quote Originally Posted by Ibelsd View Post
    Unfortunately, simple is wrong. You cannot just hand people money and declare a success.
    And such a statement is either an intentional or unintentional misstatement of my argument. I have two specific reasons why this would be a good idea.

    1. People who work full-time deserve to have enough money to buy the basics
    2. It will help businesses when people have more money to spend (which also will increase the GDP).


    Quote Originally Posted by Ibelsd View Post
    There are consequences which I've outlined in my previous post and which we have discussed in this post. Your argument does not hold up.
    And I have addressed your argument. Just saying that my argument does not hold up does not magically make it not hold up.

    And I've addressed the consequences and have shown that you have not supporte
    Last edited by mican333; January 29th, 2019 at 02:10 PM.

  3. #23
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by mican333 View Post
    Since Warren's plan is a progressive tax, one should support the plan if they support progressive taxation.
    So, if one likes cars, then one should like Yugos since a Yugo is a car? I believe this would be an example of a hasty generalization. One may very well love progressive tax schemes, but find Warren's wealth tax scheme deeply flawed. So, the question is whether you actually support Warren's wealth tax plan.


    Quote Originally Posted by mican333 View Post
    Not if the point is that such a thing was not a disaster in the past and therefore is not likely to be a disaster if implemented again.

    What wasn't a disaster? It wasn't a disaster perhaps because the effective tax rate was less than 70%. You are making an false comparison.


    Quote Originally Posted by mican333 View Post
    But it does stand to reason that if the tax rate is higher than it was, then more money will be collected.

    I have made no argument that the effective rate will be any particular number nor does any argument I made hinge on knowing what that number is.

    So yes, we don't know what the effective tax rate would be with a 70% rate. And so what?

    This does not stand to reason at all. If the tax rate was 70% but the effective tax rate was 18%, then less money would be collected. Since you have no idea what the effective tax rate, you cannot make any assertive claim. The point here is that you have no idea if more or less money was actually being collected when the rate was 70%. It may have been much lower than today which is why it didn't destroy the economy.


    Quote Originally Posted by mican333 View Post
    No. But I'm arguing that a progressive tax, at this time, would generally be good.
    Details matter. A wealth tax that taxed 100% of all wealth above $100,000 would be a good thing based on this logic since it would be a progressive tax. Would you support such a tax?


    Quote Originally Posted by mican333 View Post
    But what is a HUGE maybe is that the price increases so much that it counters the positive effect on the GDP of people having more money to buy stuff which increases demand and productivity to meet that demand. I mean if we raise our prices, say 2%, to make up for the higher interest rate, would that really effect people's ability to buy our stuff? Maybe a tiny bit but I would say that a person who can afford to buy our product for $50 can afford to buy it for $51.

    Then why doesn't your company charge $51 now? Are the business people at your company ignorant of economics? Do they simply oppose maximizing profit? This does not make sense.


    Quote Originally Posted by mican333 View Post
    If it went up to, say, $100, then it probably would be priced out of people's ability to buy it. But there is absolutely no support that we would have to double the price instead of raise it one dollar.

    So just saying that there will be some kind of effect (and really, your support doesn't really go above "might be an effect" - you point 9 specifically say "may", not "will") does not give support that there will indeed be a strong counter-active effect that would wipe away all of the good that I have supported will happen.

    I have supported that good things will happen. You have, at best, supported that there's a possibility that something even worse will happen.

    You have not supported that there WILL be an overly negative consequence.
    You are just making spurious arguments bereft of any actual economics science. You haven't supported this at all. If you can say that people could afford your product at $51 since they can afford it at $50, then conversely, giving a person who cannot afford your $50 product a few extra dollars won't make them any more likely able to afford it. You cannot have it both ways. Either price matters or it does not. And, of course, 2% matters. And it isn't just a $1 more for YOUR product. It is the 2% added to ALL products. So, if you give every poor person a raise of 2% but everything is 2% more expense, what have you accomplished? And you are right, we are just throwing numbers around and we should be more precise. Which is exactly my point. You are claiming to support a tax scheme without having any idea as to how it would actually impact the economy. You support it because it is a progressive tax. You have essentially made a moral argument to supporting this tax even if its outcome is to hurt the economy.

    Quote Originally Posted by mican333 View Post
    I have explained how it would increase the GDP but let me restate it since it might have been so apparent in the past.

    Using my company as an example, when the person can afford to buy our product, we will produce more of the product to meet demand and there fore the GDP will increase. If you want to argue that the counter-effect would be so drastic that it would wipe out the gains made to the GDP, you will have to support that.

    If neither of us can support that the net effect to the GDP will be positive or negative, then only logical compromise is that it will have no noticeable effect on the GDP. And I'm willing to go with that for debate's sake. But if you are going to argue that the net GDP will be lower - that once we factor in the both the positives and negatives, the net effect will be lower - you will need to support that.

    Mican, this is where debating with you gets frustrating. I made it very clear how your company (or companies like it) will deal with an increase in demand. Products don't just magically appear, do they? Someone has to MAKE them, yes? So, whomever is making them will need the capacity to make more than they did before. However, if the money is more expensive, they will have to pass the costs on to the consumer. Hence, the GDP isn't automatically going to increase just because you hand some group of people more money. If it did then there would be a causal relationship between progressive tax rates and higher GDP. Hint: There isn't. Most of the literature on the subject finds just the opposite. Taxes are harmful to growth.
    https://taxfoundation.org/what-evide...xes-and-growth
    "
    So what does the academic literature say about the empirical relationship between taxes and economic growth? While there are a variety of methods and data sources, the results consistently point to significant negative effects of taxes on economic growth even after controlling for various other factors such as government spending, business cycle conditions, and monetary policy. In this review of the literature, I find twenty-six such studies going back to 1983, and all but three of those studies, and every study in the last fifteen years, find a negative effect of taxes on growth. Of those studies that distinguish between types of taxes, corporate income taxes are found to be most harmful, followed by personal income taxes, consumption taxes and property taxes."


    Quote Originally Posted by mican333 View Post

    But again, MOST of the newly rich people got rich because of connections, not achievement.

    Either support this or retract it. In particular, we are discussing the top 1% since that is the demographic Warren's wealth tax will impact most directly.


    Quote Originally Posted by mican333 View Post
    As an example of someone famous. Donald Trump's Dad, Fred Trump, is indeed someone who is a self-made tycoon. And that's just ONE person from the Trump family. Everyone else, Donald, his kids, his wives, his siblings and their families, are rich because Fred got rich. So if we estimate that this family has about 50 people, only 2% of these people got rich through achievement. There is no particular reason to think that anyone other than Fred would have gotten rich if they were born into a poor or middle-class family. That's not to say that no other Trumps achieved anything on their own but they all started from a place of wealth which greatly increases their chances of making their own fortune and likewise shields them from their financial errors (such as Donald being bailed out by Fred when his ventures fail). With the exception of Fred Trump, there's no particular reason to think that if any of the Trumps were raised as poor as any other poor person, they would have risen above their station (since the average poor person doesn't do that).

    But isn't think not really addressing the point anyway?

    You were arguing that poor people are poor due to poor choices. And you have provided no support that that is the case for those who are already born poor. Sure, if someone is not poor and then becomes poor because he made mistakes, that would be an example of ending up poor due to poor choices. But I see no support that those who were born poor and remain poor are in that situation because of some flaw in the person himself.

    So either way, you have not supported your primary argument.
    Actually, my argument was that you never defined the problem in terms of quantity or quality. You noted some working poor people exist. I asked how many? In addition, I noted that some percent of those people likely are poor because they made bad choices. Giving people money does not improve their decision making skills. I never claimed all poor people made bad decisions. The onus is on you to explain the problem you are attempting to solve with a wealth tax.

    Quote Originally Posted by mican333 View Post

    First off, I have supported that it's not true with my Trump example. And secondly, this seems to be a red herring when it comes to the issue of poor people.
    You have offered an anecdotal example. Nothing more. I never claimed it was always true. I claimed over 90% (I think the literature said 93%) of the top 1% are 1st or 2nd generation.


    Quote Originally Posted by mican333 View Post
    You have not supported that there would be an overall GDP decrease.

    I have supported that there would be some level of GDP growth (factor X) and you have supported that there would be some level of GDP shrinkage (Factor Y).

    But you have not supported that Y would be greater than X. Perhaps X would be greater than Y. Or maybe they would equal out.
    You have not really supported anything. You've offered blind assumptions based on your personal beliefs, devoid of any actual economics science. I've explained how your theory is wrong. And, it is not on me to show the GDP would get lower. I simply explained how it was possible. The onus is on you to demonstrate through more than just religious belief that the wealth tax would positively improve the economy.


    Quote Originally Posted by mican333 View Post

    I'm not hearing a rebuttal here. If you are going to challenge my argument, then you need to present an argument that supports that my position is flawed.
    I've explained this a few lines above.


    Quote Originally Posted by mican333 View Post
    And such a statement is either an intentional or unintentional misstatement of my argument. I have two specific reasons why this would be a good idea.

    1. People who work full-time deserve to have enough money to buy the basics
    2. It will help businesses when people have more money to spend (which also will increase the GDP).

    And your two reasons don't make any sense as it relates to supporting a wealth tax.
    1. You have not defined the quantity or quality of the people you want to help.
    2. You have not made a reasonable argument as to how a wealth tax would actually increased the GDP.

    So, it is unclear how many people you wish to help and it is not at all certain a wealth tax would be the best way to help them (or even a good way).



    Quote Originally Posted by mican333 View Post
    And I have addressed your argument. Just saying that my argument does not hold up does not magically make it not hold up.

    And I've addressed the consequences and have shown that you have not supporte
    I've not just waved my hands and claimed your argument is full of holes. I've given logical and supported arguments that demonstrate your argument is full of holes. Nothing you have offered is more substantial than just your feelings. I have offered logic and arguments supported by research and the science of economics. To be clear, the facts do not care about your feelings. As much as you feel a wealth tax would accomplish something you support, you have offered nothing in the way of facts to defend your positon. The few statements you've made which masquerade as facts, I've shown are flawed (i.e. your red herring reference to 70% tax rates).

    As far as I can tell, and I was hoping for a better argument from you, a wealth tax is indefensible.
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  4. #24
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    Re: Is a Wealth Tax a Good Idea?

    I have addressed all of your points but I'm also going to make a summary of the main debate as I see it.

    ME: Because of the moral premise that those who work full-time should be able to afford the basics, I support a tax that shifts wealth from the rich to the not-rich (primarily the working poor).

    YOU: I don't challenge your morality but your plan will not achieve the results you desire because it might cause the GDP to shrink which will essentially keep the poor as effectively poor as they were before since prices may rise in tandem with their increased access to money.

    ME: Or maybe the GDP will increase instead of shrink or maybe if it shrinks, it won't be so bad that the poor will remain poor. Neither of us has supported what the GDP WILL do, only what it MIGHT do. Therefore the GDP issue does not rebut my moral argument for a progressive tax. Unless one can support that the GDP WILL significantly shrink, one cannot argue that my plan is bad because it WILL cause the GDP to shrink. We have both essentially conceded that we don't know what will happen to the GDP.

    --------------------

    Quote Originally Posted by Ibelsd View Post
    So, if one likes cars, then one should like Yugos since a Yugo is a car? I believe this would be an example of a hasty generalization.
    You are incorrect. It's not an example of hasty generalization. You can look up that fallacy if you doubt me, but I would say that this is not really a pertinent point to the overall debate.


    Quote Originally Posted by Ibelsd View Post
    One may very well love progressive tax schemes, but find Warren's wealth tax scheme deeply flawed. So, the question is whether you actually support Warren's wealth tax plan.
    Based on all information that I currently have on it, I am in favor of it. If you want to argue that even if one is in favor of progressive taxation, this particular plan is a poor one, make your argument.

    But I'm not going to accept that a proposal that looks good by criteria that I accept is actually bad just because it's possible that there is something that I'm not aware of that ruins it.


    Quote Originally Posted by Ibelsd View Post
    What wasn't a disaster? It wasn't a disaster perhaps because the effective tax rate was less than 70%. You are making an false comparison.
    No I'm not. If one is saying that doing X will lead to a disaster and we can see when X was tried in the past, there was no disaster, the claim that it would be a disaster if we did it now does not hold up.



    Quote Originally Posted by Ibelsd View Post
    This does not stand to reason at all. If the tax rate was 70% but the effective tax rate was 18%, then less money would be collected. Since you have no idea what the effective tax rate, you cannot make any assertive claim. The point here is that you have no idea if more or less money was actually being collected when the rate was 70%. It may have been much lower than today which is why it didn't destroy the economy.
    If the CURRENT tax rate is, say, 20% and we raise it to 70%, we WILL be collecting more money after we raise it from 20 to 70. If the effective rate is 18%, then we will be collecting 18% of 70 instead of 18% of 20. Clearly that will increase how much is collected.

    I honestly think that you think I'm saying much more about the 70% than I was saying. I was making a very simple basic point in regards to the OP and most of your attacks have nothing to do with the point I was making which indicates either disingenuous arguments (which I very much doubt it what you are doing) or honest misinterpretations of what I was saying (which is very much what I think is going on).

    I will say that my 70% is not part of my general argument but was just a response to the OP and I will have absolutely no problem if you just ignore it. It won't help or hurt my general argument at all if this issue is dropped.




    Quote Originally Posted by Ibelsd View Post
    Details matter. A wealth tax that taxed 100% of all wealth above $100,000 would be a good thing based on this logic since it would be a progressive tax. Would you support such a tax?
    No. Please note that I said "generally" good. That does not mean that someone cannot propose a progressive tax that goes too far or is flawed on some level and should be opposed despite being a progressive tax.

    And if you want to argue that the Warren proposal is such a tax that even those who like progressive taxation should oppose it, then have at it. But until you do, you have provided no reason for a person who does approve of progressive taxation to oppose it.




    Quote Originally Posted by Ibelsd View Post
    You are just making spurious arguments bereft of any actual economics science. You haven't supported this at all. If you can say that people could afford your product at $51 since they can afford it at $50, then conversely, giving a person who cannot afford your $50 product a few extra dollars won't make them any more likely able to afford it. You cannot have it both ways. Either price matters or it does not. And, of course, 2% matters. And it isn't just a $1 more for YOUR product. It is the 2% added to ALL products. So, if you give every poor person a raise of 2% but everything is 2% more expense, what have you accomplished? And you are right, we are just throwing numbers around and we should be more precise. Which is exactly my point.
    I agree that we BOTH need to be more precise if EITHER OF US is make a supported argument that the economic impact will overall be positive or negative. And guess what? Neither of us has done that. Therefore, the ONLY logical conclusion is that we don't know if the overall effect will be positive or negative.



    Quote Originally Posted by Ibelsd View Post
    You are claiming to support a tax scheme without having any idea as to how it would actually impact the economy. You support it because it is a progressive tax. You have essentially made a moral argument to supporting this tax even if its outcome is to hurt the economy.
    Wrong. If you can support that the outcome of a progressive tax will significantly hurt the economy, then I will have to withdraw my support for progressive taxation even if I morally agree with it.

    And as we've just established above, due to lack of precision in deterring if the net economic benefit would be positive or negative (since neither of us has supported that the GDP will go up or down because we an only throw numbers around), no reason has been presented for me to not continue to promote something that is morally positive.

    So to avoid redundancy, I'm not going to respond to any points that will require me to point out that it's not been supported that a progressive tax will shrink (or grow) the GDP. You do acknowledge that we don't have the data to tell either way, right? If you disagree, then you need to support that the negative effects will indeed be stronger than the positive effects.


    Quote Originally Posted by Ibelsd View Post
    I made it very clear how your company (or companies like it) will deal with an increase in demand. Products don't just magically appear, do they? Someone has to MAKE them, yes? So, whomever is making them will need the capacity to make more than they did before. However, if the money is more expensive, they will have to pass the costs on to the consumer.
    But then whether this is a significant factor depends on HOW MUCH more expensive the money becomes. If it's not much of an increase, then it won't make much difference on our end.

    As you said, we are throwing numbers around and your hypothetical about us having to raise our prices too high does not rise above a "maybe" in terms of support.



    Regarding your article. It is an article about higher taxes, not PROGRESSIVE taxation so it's irrelevant to the debate. Progressive taxation does not inherently advocate a high tax rate. Progressive taxation just says that the more one makes, the higher their RELATIVE tax rate is to those who make less. The wealthiest paying 2% and the poorest paying .5% would qualify as a progressive tax.


    Quote Originally Posted by Ibelsd View Post
    Either support this or retract it. In particular, we are discussing the top 1% since that is the demographic Warren's wealth tax will impact most directly.
    Actually, the debate was about whether poor people can handle money so this is kind of a red herring to that point.

    But my Trump example did support what I said. Out of the 50 or so people in the wealthy Trump family, only one of them (Fred Trump) attained great wealth from a prior position of non-wealth. The rest of them started wealthy or married into wealth. Donald Trump and his children were all born rich. Extrapolate that to all rich families, most of them were born rich. Those that got rich via achievement are in the minority.


    Quote Originally Posted by Ibelsd View Post
    Actually, my argument was that you never defined the problem in terms of quantity or quality. You noted some working poor people exist. I asked how many? In addition, I noted that some percent of those people likely are poor because they made bad choices. Giving people money does not improve their decision making skills. I never claimed all poor people made bad decisions.
    You didn't say the word "all" but you did say that they, as a group, make poor decisions with money in support of the notion that giving them more money is not necessarily a good idea.

    So let me say that you have not supported that there is a significant difference in the ability to make life decisions between the poor and the rich.

    I don't know what percentage of poor people generally make bad decisions and I don't know what percentage of rich people make bad decisions. So if you are going to continue your argument, please provide support that poor people, in general, are relatively bad at making such decisions.


    Quote Originally Posted by Ibelsd View Post
    The onus is on you to explain the problem you are attempting to solve with a wealth tax.
    The problem of people who work full-time but can't afford the basics. These people, one way or another, should be getting more money. A progressive tax rate will shift more money to them.


    Quote Originally Posted by Ibelsd View Post
    You have not really supported anything. You've offered blind assumptions based on your personal beliefs, devoid of any actual economics science. I've explained how your theory is wrong. And, it is not on me to show the GDP would get lower. I simply explained how it was possible. The onus is on you to demonstrate through more than just religious belief that the wealth tax would positively improve the economy.
    Wrong. My primary argument IS a moral one and no one has challenged it on moral grounds, so as a moral argument, it currently stands.

    You challenged it on economic grounds and that's fair. Indeed if the economic outcomes would end up hurting the people I morally want to help (which your ten-point argument pretty much forwarded), then my moral argument has been defeated for the progressive taxation would not accomplish the moral goal that I laid out. But for your economic argument to defeat my moral argument, your economic argument had to be supported. So laying it out that it's possible that the negative effects would occur does not defeat my moral argument.

    So my moral argument, without a supported counter-argument to defeat it, stands.


    Quote Originally Posted by Ibelsd View Post
    And your two reasons don't make any sense as it relates to supporting a wealth tax.
    1. You have not defined the quantity or quality of the people you want to help.
    2. You have not made a reasonable argument as to how a wealth tax would actually increased the GDP.

    So, it is unclear how many people you wish to help and it is not at all certain a wealth tax would be the best way to help them (or even a good way).
    1. I am referring to full-time workers who can't afford the basics (quality) and from what I've gathered from things I've read, they number in the millions.

    2. As above, you have the burden to show that the tax would shrink the GDP before I have any burden to counter it. I agree that you showed that it's possible that it will have a negative effect but then I've shown that it's possible that it will have a positive effect.


    Quote Originally Posted by Ibelsd View Post
    I've not just waved my hands and claimed your argument is full of holes. I've given logical and supported arguments that demonstrate your argument is full of holes. Nothing you have offered is more substantial than just your feelings.
    No, it's not "my feeling" that I've forwarded but a moral premise. And my moral argument has not only not been shown to be full of holes but it hasn't even been challenged on its own terms (as far as I know). NO ONE has tried to argue that I'm incorrect that working people should be able to afford the basics. So if you are going to challenge my argument on its own terms, then let's hear that argument from you. Where are the holes in that argument?

    And ultimately positing that it's possible that the GDP will shrink does not show that it's full of holes either.



    Quote Originally Posted by Ibelsd View Post
    To be clear, the facts do not care about your feelings. As much as you feel a wealth tax would accomplish something you support, you have offered nothing in the way of facts to defend your positon.
    Your attack was an economic one and I have used facts to defend against your argument.

    I've shown that it's possible that the GDP will grow in response to your argument that it's possible that the GDP will shrink.


    Quote Originally Posted by Ibelsd View Post
    The few statements you've made which masquerade as facts, I've shown are flawed (i.e. your red herring reference to 70% tax rates).
    I will say that you did a good job of demolishing all of the straw-men you constructed based on that comment. Again, I was just pointing out that we survived having that kind of tax rate in the past. I can't help it if you read all kinds of other things into that statement.



    Quote Originally Posted by Ibelsd View Post
    As far as I can tell, and I was hoping for a better argument from you
    I could complain about your arguments as well (seriously) but doing so never contributes anything positive to the debate.

    So I keep such comments to myself. Please do likewise moving forward.


    Quote Originally Posted by Ibelsd View Post
    a wealth tax is indefensible.
    Why? Because it will shrink the GDP instead of grow it? I think that issue has been settled.
    Last edited by mican333; January 30th, 2019 at 10:24 AM.

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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by mican333 View Post
    I have addressed all of your points but I'm also going to make a summary of the main debate as I see it.

    ME: Because of the moral premise that those who work full-time should be able to afford the basics, I support a tax that shifts wealth from the rich to the not-rich (primarily the working poor).

    YOU: I don't challenge your morality but your plan will not achieve the results you desire because it might cause the GDP to shrink which will essentially keep the poor as effectively poor as they were before since prices may rise in tandem with their increased access to money.

    ME: Or maybe the GDP will increase instead of shrink or maybe if it shrinks, it won't be so bad that the poor will remain poor. Neither of us has supported what the GDP WILL do, only what it MIGHT do. Therefore the GDP issue does not rebut my moral argument for a progressive tax. Unless one can support that the GDP WILL significantly shrink, one cannot argue that my plan is bad because it WILL cause the GDP to shrink. We have both essentially conceded that we don't know what will happen to the GDP.
    I think the points-counterpoints have simply become repetitive at this point. So, I am just going to address your summary.

    I think you have gotten some things right in your summary and some things wrong. You are correct, I am not making a rebuttal as to what you believe is moral. It is your opinion. However, where I think we are having trouble communicating is the burden of proof in showing that a wealth tax is viable. You are positing that the plan would achieve some end and, therefore you have the burden to support it. It so happens that the ending you want you also believe is justified morally. As noted, I am not disputing that. Not because I agree with you, but simply because I don't think it needs to be argued.

    In terms of the efficacy question, you have made a few points to support it.
    1) Historically, we have had high tax rates (i.e. the 70% income tax right) and the economy did ok.
    2) Giving money to people would increase their consumer spending which would lead to increased GDP.

    I think you are probably correct that the 1st point isn't really very important. However, please do not take this as a concession of that point. It isn't. The key is the 2nd argument you are making. You have offered a very simple scenario whereby you explain how giving people more to spend would increase GDP. Let's hopefully agree, GDP is the key here. A plan that slows or lowers GDP is not sustainable long-term. The goal for any economic plan should be increased GDP.

    Now, I've explained why your example is flawed. You have focused only on the consumer. You have left out all the other moving pieces that make up the economy. And, your rebuttal to this is that we are both floating numbers. Maybe. However, the burden is on you, not me, to explain how GDP growth will work. From your simple example, I have shown that when put into the larger perspective, it is unlikely to lead to GDP growth. Historically,
    "Tax changes have very large effects: an exogenous tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent."
    https://www.nber.org/digest/mar08/w13264.html

    So, while you make an argument that a wealth tax would improve GDP, the reality is that the historical evidence does not support your claim. Why? Well, because you have given an example which is too simple and leaves out all the other factors which make up the economy, some of which I included in my counter-example. Now, at this point, you can still claim uh-uh and you are free to keep to your opinion, but the facts and the research do not support your claims in the slightest.
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by Ibelsd View Post
    I think the points-counterpoints have simply become repetitive at this point. So, I am just going to address your summary.

    I think you have gotten some things right in your summary and some things wrong. You are correct, I am not making a rebuttal as to what you believe is moral. It is your opinion. However, where I think we are having trouble communicating is the burden of proof in showing that a wealth tax is viable. You are positing that the plan would achieve some end and, therefore you have the burden to support it. It so happens that the ending you want you also believe is justified morally. As noted, I am not disputing that. Not because I agree with you, but simply because I don't think it needs to be argued.

    In terms of the efficacy question, you have made a few points to support it.
    1) Historically, we have had high tax rates (i.e. the 70% income tax right) and the economy did ok.
    2) Giving money to people would increase their consumer spending which would lead to increased GDP.

    I think you are probably correct that the 1st point isn't really very important. However, please do not take this as a concession of that point. It isn't. The key is the 2nd argument you are making. You have offered a very simple scenario whereby you explain how giving people more to spend would increase GDP. Let's hopefully agree, GDP is the key here. A plan that slows or lowers GDP is not sustainable long-term. The goal for any economic plan should be increased GDP.

    Now, I've explained why your example is flawed. You have focused only on the consumer. You have left out all the other moving pieces that make up the economy. And, your rebuttal to this is that we are both floating numbers. Maybe. However, the burden is on you, not me, to explain how GDP growth will work. From your simple example, I have shown that when put into the larger perspective, it is unlikely to lead to GDP growth. Historically,
    "Tax changes have very large effects: an exogenous tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent."
    https://www.nber.org/digest/mar08/w13264.html

    So, while you make an argument that a wealth tax would improve GDP, the reality is that the historical evidence does not support your claim. Why? Well, because you have given an example which is too simple and leaves out all the other factors which make up the economy, some of which I included in my counter-example. Now, at this point, you can still claim uh-uh and you are free to keep to your opinion, but the facts and the research do not support your claims in the slightest.
    But you have my argument wrong and therefore the basis or your rejection is invalid. While I have forwarded GDP growth in the debate, that is not the basis of my argument.

    So here is my argument, laid out in logic chain form.

    1. MORAL PREMISE - people who work full-time should have enough access to money to pay for the basics
    2. Some people, who I will call the "working poor" do have jobs but can't earn enough to afford the basics
    3. Therefore, the working poor should receive more money than they currently earn to help achieve the moral premise in point 1.
    4. A progressive tax will shift money from the wealthy to the poor.
    5. Therefore progressive taxation will help achieve the conditions of point 3 (the working poor receive more money) and therefore achieve the conditions of point 1 (those who work can afford the basics).


    So assuming one does accept the moral premise of point 1, they should be in favor of progressive taxation. This logic chain, as far as I can tell, logically follows from the premise and therefore does support the conclusion. But of course you are free to counter any of it.

    Your rebuttal seems to forward that implementing this might cause the GDP to shrink. And my response is that it might cause the GDP to grow instead. An we have BOTH supported that the GDP might grow/shrink and neither of us has supported that the GDP WILL grow/shrink. Since neither of us can claim, with support, the the GDP will do anything in particular if a progressive tax is implemented, the GDP issue does not equate a reason for or against implementing a progressive tax and therefore this issue neither helps nor hurts my initial supported argument. So you are correct that I've not supported that the GDP will grow but you are incorrect that I need to support that in order to support my argument. I've supported it a different way as shown above.

    So to be clear, my OFFICIAL position on the effects of progressive taxation on GDP is that no support has been provided by either of us in this debate that the GDP would do anything In particular (grow, shrink, or stay the same) and therefore the GDP issue cannot be used to support that there are economic hazards to progressive taxation that would counter the benefits that I have supported that progressive taxation would bring..

    And to counter a statement you said earlier in case you bring it up again, this is not based on "my feeling". Yes, it is based on a moral premise that I personally agree with but the premise is valid for anyone who sincerely agrees with it. So if one agrees with the premise, then my argument is supported.
    Last edited by mican333; January 31st, 2019 at 07:26 AM.

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    Re: Is a Wealth Tax a Good Idea?

    Generally, I'm not in favor of a wealth tax. The calculations and complexity involved is a burden and it causes various economic disruptions.

    The one exception is Estate taxes, though really, that is a transfer of wealth, aka income. I think it should be taxed at the same rate as all other income, possibly a little higher. Dead people don't need wealth especially. And while its nice to give it to your family, it is income for them, and it should be taxed like other income is.

    I also think capital gains should be taxed at the same rates as income, because.... well it is income. The fact we shelter it makes living off of capital cheaper than living off of labor and this concentrates wealth in a capitalist system more than it needs to.

    But a straight wealth tax... not a good plan in my opinion.
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by mican333 View Post
    But you have my argument wrong and therefore the basis or your rejection is invalid. While I have forwarded GDP growth in the debate, that is not the basis of my argument.

    So here is my argument, laid out in logic chain form.

    1. MORAL PREMISE - people who work full-time should have enough access to money to pay for the basics
    2. Some people, who I will call the "working poor" do have jobs but can't earn enough to afford the basics
    3. Therefore, the working poor should receive more money than they currently earn to help achieve the moral premise in point 1.
    4. A progressive tax will shift money from the wealthy to the poor.
    5. Therefore progressive taxation will help achieve the conditions of point 3 (the working poor receive more money) and therefore achieve the conditions of point 1 (those who work can afford the basics).


    So assuming one does accept the moral premise of point 1, they should be in favor of progressive taxation. This logic chain, as far as I can tell, logically follows from the premise and therefore does support the conclusion. But of course you are free to counter any of it.

    Your rebuttal seems to forward that implementing this might cause the GDP to shrink. And my response is that it might cause the GDP to grow instead. An we have BOTH supported that the GDP might grow/shrink and neither of us has supported that the GDP WILL grow/shrink. Since neither of us can claim, with support, the the GDP will do anything in particular if a progressive tax is implemented, the GDP issue does not equate a reason for or against implementing a progressive tax and therefore this issue neither helps nor hurts my initial supported argument. So you are correct that I've not supported that the GDP will grow but you are incorrect that I need to support that in order to support my argument. I've supported it a different way as shown above.

    So to be clear, my OFFICIAL position on the effects of progressive taxation on GDP is that no support has been provided by either of us in this debate that the GDP would do anything In particular (grow, shrink, or stay the same) and therefore the GDP issue cannot be used to support that there are economic hazards to progressive taxation that would counter the benefits that I have supported that progressive taxation would bring..

    And to counter a statement you said earlier in case you bring it up again, this is not based on "my feeling". Yes, it is based on a moral premise that I personally agree with but the premise is valid for anyone who sincerely agrees with it. So if one agrees with the premise, then my argument is supported.
    Before moving forward, the section in bold is untrue. I have offered logical reasoning why a wealth tax would likely decrease GDP. I also provided support from the National Bureau of Economic Research that backs my claim. I expect that you will, at the very least, acknowledge that I've supported my claim.
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by Ibelsd View Post
    Before moving forward, the section in bold is untrue. I have offered logical reasoning why a wealth tax would likely decrease GDP.
    I disagree. Your original ten-point argument specifically said "may", not "will" or "is likely to" and your support has yet to rise above "may".

    I have made an argument that progressive taxation may increase GDP due to more purchases of goods and services.

    But I have yet to see any support that the effect that you are referring to will be greater than the effect that I am referring to so no, you have not supported that it will likely decrease GDP. You've only supported that it might.


    Quote Originally Posted by Ibelsd View Post
    I also provided support from the National Bureau of Economic Research that backs my claim. I expect that you will, at the very least, acknowledge that I've supported my claim.
    The article refers to tax on GDP, not tax on the wealthiest Americans.

    And again, some shrinkage in GDP might be more than made up for by how the money is used. I sincerely believe that whatever shrinkage from taxing the wealthy will be more than made up for by using the money to aid the less-wealthy. Can you support that my assumption is incorrect? Can you support that your assumption in the other direction is correct?

    Until you can support that your assumption is correct and mine is incorrect, your position is not supported.

    And to be clear, I have no burden to support that my position regarding the GDP before you support that yours is correct. Again, my logic chain argument is not based on what the GDP will do. The GDP argument is yours.

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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by mican333 View Post
    I disagree. Your original ten-point argument specifically said "may", not "will" or "is likely to" and your support has yet to rise above "may".

    I have made an argument that progressive taxation may increase GDP due to more purchases of goods and services.

    But I have yet to see any support that the effect that you are referring to will be greater than the effect that I am referring to so no, you have not supported that it will likely decrease GDP. You've only supported that it might.
    You are blatantly cherry-picking words here. The conclusion was that GDP will shrink. Period.

    Quote Originally Posted by mican333 View Post
    The article refers to tax on GDP, not tax on the wealthiest Americans.
    Huh? Unless you mean GDP to be an acronym for God Damned People, this rebuttal is nonsensical. Taxes are on people. GDP is a measurement of the production of those people.

    Quote Originally Posted by mican333 View Post
    And again, some shrinkage in GDP might be more than made up for by how the money is used. I sincerely believe that whatever shrinkage from taxing the wealthy will be more than made up for by using the money to aid the less-wealthy. Can you support that my assumption is incorrect? Can you support that your assumption in the other direction is correct?
    So, your argument is that we can make some people richer by making everyone else poorer.... Thatcher is rolling over in her grave right now. Aside from that, your argument is just plain daft. Your argument is now, if we can just make the most productive segment of society less productive, then everyone will benefit. This is illogical.

    Quote Originally Posted by mican333 View Post
    Until you can support that your assumption is correct and mine is incorrect, your position is not supported.

    And to be clear, I have no burden to support that my position regarding the GDP before you support that yours is correct. Again, my logic chain argument is not based on what the GDP will do. The GDP argument is yours.
    It is precisely YOUR burden. If you cannot demonstrate how this tax increases wealth and your primary motivation of this tax is to increase wealth, then you cannot justify this tax. And to be clear, I've already rebutted your faulty assumption both by logic and authoritative support.
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by Ibelsd View Post
    You are blatantly cherry-picking words here. The conclusion was that GDP will shrink. Period.
    And the conclusion has yet to be supported.

    Let me lay this out in a logic chain. And stop the chain and respond where you disagree with it.

    1. You have made a valid argument that there will be some level of GDP decrease by progressive taxation (less money in the ban, rising interest rates, etc.)
    2. I have made a valid argument that there will be some level of GDP increase by progressive taxation (people buy more stuff which increases demand for products, etc).
    3. Neither of us has managed to quantify how much the increase or decrease will be. As you correctly said earlier, we are just throwing numbers around.
    4. Therefore I have not supported that the increase will be greater than the decrease and therefore have not supported that the net change to the GDP will be positive and you have not supported that the decrease will be greater than the increase and therefore have not supported that the net change to the GDP will be negative.

    So if my logic chain above is wrong, tell me how it is. Otherwise it does shown that you have not supported your claim that the net effect would be a GDP shrinkage

    Quote Originally Posted by Ibelsd View Post
    Huh? Unless you mean GDP to be an acronym for God Damned People, this rebuttal is nonsensical. Taxes are on people. GDP is a measurement of the production of those people.
    Production of people =/= people. So a tax on people is not necessarily a tax on their production. For example, an estate tax isn't a tax on anything that was produced so an increase in the estate tax would not be an increase on a tax on the GDP.


    Quote Originally Posted by Ibelsd View Post
    So, your argument is that we can make some people richer by making everyone else poorer
    I think you've misinterpreted my argument and I will take some blame by not stating it as clearly as I should have. So I will repeat it with the clarification.

    And again, some shrinkage in GDP might be more than made up by growth in the GDP by how the money is used. I sincerely believe that whatever shrinkage from taxing the wealthy will be more than made up for in GDP growth by using the money when it's used to aid the less-wealthy. Can you support that my assumption is incorrect? Can you support that your assumption in the other direction is correct?

    Until you can support that your assumption is correct and mine is incorrect, your position is not supported.




    Quote Originally Posted by Ibelsd View Post
    It is precisely YOUR burden. If you cannot demonstrate how this tax increases wealth and your primary motivation of this tax is to increase wealth, then you cannot justify this tax.
    But that's not my primary motivation. I made my primary motivation quite clear a couple of posts ago. It is to abide by the premise:

    People who work full-time should have enough access to money to pay for the basics

    It is MY burden to support that a progressive tax would help achieve that and I've done that with my logic chain which has never been challenged.

    Here it is again for reference:

    1. MORAL PREMISE - people who work full-time should have enough access to money to pay for the basics
    2. Some people, who I will call the "working poor" do have jobs but can't earn enough to afford the basics
    3. Therefore, the working poor should receive more money than they currently earn to help achieve the moral premise in point 1.
    4. A progressive tax will shift money from the wealthy to the poor.
    5. Therefore progressive taxation will help achieve the conditions of point 3 (the working poor receive more money) and therefore achieve the conditions of point 1 (those who work can afford the basics).


    You challenge has not been to show a flaw in my chain itself but to argue that the negative consequences to the economy are so dire, that I would not achieve the results I want (the working poor would still not be able to afford the basics). And it's a valid tactic. But again, you haven't risen above showing that it "may" have such a result since you have not shown that the net effect will be negative. Again, can you show that your assumption that the net effect that it will be negative is more correct than my assumption that the net effect will be positive? I haven't seen it. Again, earlier you said that we were "just throwing numbers around" and you were precisely correct in that statement. And throwing numbers around does not come close to supporting that one number will indeed be greater than another.

    Your guess is as good as mine and my guess is as good as yours. But guesses are not support.

    Quote Originally Posted by Ibelsd View Post
    And to be clear, I've already rebutted your faulty assumption both by logic and authoritative support.
    You have made no arguments that I have not rebutted so you can't reasonably claim victory on any point. If there is a point that I missed, it was an unintentional oversight and I welcome you to re-state that missed argument.

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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by mican333 View Post
    And the conclusion has yet to be supported.

    Let me lay this out in a logic chain. And stop the chain and respond where you disagree with it.

    1. You have made a valid argument that there will be some level of GDP decrease by progressive taxation (less money in the ban, rising interest rates, etc.)
    2. I have made a valid argument that there will be some level of GDP increase by progressive taxation (people buy more stuff which increases demand for products, etc).
    3. Neither of us has managed to quantify how much the increase or decrease will be. As you correctly said earlier, we are just throwing numbers around.
    4. Therefore I have not supported that the increase will be greater than the decrease and therefore have not supported that the net change to the GDP will be positive and you have not supported that the decrease will be greater than the increase and therefore have not supported that the net change to the GDP will be negative.

    So if my logic chain above is wrong, tell me how it is. Otherwise it does shown that you have not supported your claim that the net effect would be a GDP shrinkage
    #2 is wrong. You have not shown GDP would grow by progressive taxation. You made that assertion, but it was based on no actual economic theory and was rebutted by the actual research which I provided and that you have repeatedly ignored. Raising taxes does NOT increase GDP. My logical argument didn't assert numbers. It asserted a general principle. However, the research I provided showed that for every 1% increase in taxes that there would be a 2-3% decrease in GDP. If you believe this statistic does not relate to this tax, then you must offer some support rather than just your blanket denial.

    Quote Originally Posted by mican333 View Post
    Production of people =/= people. So a tax on people is not necessarily a tax on their production. For example, an estate tax isn't a tax on anything that was produced so an increase in the estate tax would not be an increase on a tax on the GDP.
    So, wealth under the umbrella of an estate just magically appeared? Of course it is a tax on something that was produced, an in most cases, it is a tax on wealth which has already been taxed.

    Quote Originally Posted by mican333 View Post

    I think you've misinterpreted my argument and I will take some blame by not stating it as clearly as I should have. So I will repeat it with the clarification.

    And again, some shrinkage in GDP might be more than made up by growth in the GDP by how the money is used. I sincerely believe that whatever shrinkage from taxing the wealthy will be more than made up for in GDP growth by using the money when it's used to aid the less-wealthy. Can you support that my assumption is incorrect? Can you support that your assumption in the other direction is correct?


    Until you can support that your assumption is correct and mine is incorrect, your position is not supported.
    1) It is up to you to show that this tax can lead to a net gain in GDP.
    2) I've already laid out logically and via authority why this tax is likely to decrease GDP.
    You keep making the same unsupported assertion. Repeating it doesn't make it more true or less faulty.


    Quote Originally Posted by mican333 View Post

    But that's not my primary motivation. I made my primary motivation quite clear a couple of posts ago. It is to abide by the premise:

    People who work full-time should have enough access to money to pay for the basics

    It is MY burden to support that a progressive tax would help achieve that and I've done that with my logic chain which has never been challenged.

    Here it is again for reference:

    1. MORAL PREMISE - people who work full-time should have enough access to money to pay for the basics
    2. Some people, who I will call the "working poor" do have jobs but can't earn enough to afford the basics
    3. Therefore, the working poor should receive more money than they currently earn to help achieve the moral premise in point 1.
    4. A progressive tax will shift money from the wealthy to the poor.
    5. Therefore progressive taxation will help achieve the conditions of point 3 (the working poor receive more money) and therefore achieve the conditions of point 1 (those who work can afford the basics).


    You challenge has not been to show a flaw in my chain itself but to argue that the negative consequences to the economy are so dire, that I would not achieve the results I want (the working poor would still not be able to afford the basics). And it's a valid tactic. But again, you haven't risen above showing that it "may" have such a result since you have not shown that the net effect will be negative. Again, can you show that your assumption that the net effect that it will be negative is more correct than my assumption that the net effect will be positive? I haven't seen it. Again, earlier you said that we were "just throwing numbers around" and you were precisely correct in that statement. And throwing numbers around does not come close to supporting that one number will indeed be greater than another.

    Your guess is as good as mine and my guess is as good as yours. But guesses are not support.



    You have made no arguments that I have not rebutted so you can't reasonably claim victory on any point. If there is a point that I missed, it was an unintentional oversight and I welcome you to re-state that missed argument.
    I understand your prime motivation is giving money to some group of poor people, meeting your basic moral prerogative. However, if doing so results in lower GDP, then your plan is unsustainable. Eventually, as the GDP shrinks, whatever spending power the recipients of your tax have gained will be swallowed up. In the short term, you've effectively harmed the large majority of people who don't fit into your recipient class and in the long run, you've harmed everyone. You cannot afford a tax intended to increase wealth when its net effect will be a decrease in wealth.

    You make one last major mistake when you compare our "guesses" on estimated GDP impact. Your guess is based on hope and flawed reasoning due to an overly simplified chain of cause and effect. Mine is based on a more complete picture coupled with research/statistics.
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by Ibelsd View Post
    #2 is wrong. You have not shown GDP would grow by progressive taxation.
    Yes I have. I will repeat it again in a logic chain.

    1. Poor people get more money
    2. They spend the money on goods and services
    3. The demand for goods and services increases increase the purchases of said items
    4. The increased demand incentives increased production
    5. increased production increases the GDP.

    And to be clear, I'm not saying that the net GDP would increase but just that it will have an effect that will increase the GDP.

    Quote Originally Posted by Ibelsd View Post
    You made that assertion, but it was based on no actual economic theory and was rebutted by the actual research which I provided and that you have repeatedly ignored. Raising taxes does NOT increase GDP.
    Straw man. Please note that in my logic chain, it does not include raising taxes. Also progressive taxation does not inherently incorporate raising taxes.

    Quote Originally Posted by Ibelsd View Post
    My logical argument didn't assert numbers. It asserted a general principle.
    As does mine. The general principles that we both were forwarding were points 1 and 2 of my prior logic chain. Since you have not effectively rebutted point 2, my logic chain stands so I will repost it.

    1. You have made a valid argument that there will be some level of GDP decrease by progressive taxation (less money in the ban, rising interest rates, etc.)
    2. I have made a valid argument that there will be some level of GDP increase by progressive taxation (people buy more stuff which increases demand for products, etc).
    3. Neither of us has managed to quantify how much the increase or decrease will be. As you correctly said earlier, we are just throwing numbers around.
    4. Therefore I have not supported that the increase will be greater than the decrease and therefore have not supported that the net change to the GDP will be positive and you have not supported that the decrease will be greater than the increase and therefore have not supported that the net change to the GDP will be negative.



    Quote Originally Posted by Ibelsd View Post
    However, the research I provided showed that for every 1% increase in taxes that there would be a 2-3% decrease in GDP. If you believe this statistic does not relate to this tax, then you must offer some support rather than just your blanket denial.
    But again, I'm not challenging that there will be SOME negative effect. What I'm challenging is that the negative effect will be greater than the positive effect that I'm referring to.




    Quote Originally Posted by Ibelsd View Post
    So, wealth under the umbrella of an estate just magically appeared? Of course it is a tax on something that was produced, an in most cases, it is a tax on wealth which has already been taxed.
    So the GDP is all of the money that everyone has? If that's your assertion, please support. While my knowledge of the GDP is not great, I'm pretty sure it's not the sum of everyone's money.


    Quote Originally Posted by Ibelsd View Post
    1) It is up to you to show that this tax can lead to a net gain in GDP.
    2) I've already laid out logically and via authority why this tax is likely to decrease GDP.
    You keep making the same unsupported assertion. Repeating it doesn't make it more true or less faulty.
    1. Done (see above)
    2. You have supported that there will be some kind of decrease but have not supported that the decrease would be greater than the increase that I've supported would occur.




    Quote Originally Posted by Ibelsd View Post
    I understand your prime motivation is giving money to some group of poor people, meeting your basic moral prerogative. However, if doing so results in lower GDP, then your plan is unsustainable. Eventually, as the GDP shrinks, whatever spending power the recipients of your tax have gained will be swallowed up. In the short term, you've effectively harmed the large majority of people who don't fit into your recipient class and in the long run, you've harmed everyone. You cannot afford a tax intended to increase wealth when its net effect will be a decrease in wealth.
    You are smuggling in the premise that it will lead to a net decrease in GDP. When you support that that is the case, then this of yours argument will be correct.

    But until that happens, no reason has been presented to not pursue a morally correct tax program.


    Quote Originally Posted by Ibelsd View Post
    You make one last major mistake when you compare our "guesses" on estimated GDP impact. Your guess is based on hope and flawed reasoning due to an overly simplified chain of cause and effect. Mine is based on a more complete picture coupled with research/statistics.
    No, yours is not. So let me ask you some questions.

    1. How much in dollars will the tax remove from rich people?
    2. How much money needs to be removed from the wealthy before they decrease their businesses with banks in an effective manner?
    3. How much money must be removed from the banks before they take action that will effectively lower their interest rates?
    4. How much lower must the interest rates get before there is any significant decrease in GDP.

    When you demonstrate that you know the answer to those questions and that the tax increase on the wealthy would indeed be large enough to start the cycle that would lead to a decrease in the GDP, you have not supported that what might happen actually will happen.

    You have been just throwing around numbers and guessing that the actual effect would be significant. If you have some real numbers that will support your conclusion, provide them.

  17. #34
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by mican333 View Post
    Yes I have. I will repeat it again in a logic chain.

    1. Poor people get more money
    2. They spend the money on goods and services
    3. The demand for goods and services increases increase the purchases of said items
    4. The increased demand incentives increased production
    5. increased production increases the GDP.

    And to be clear, I'm not saying that the net GDP would increase but just that it will have an effect that will increase the GDP.
    Your logic chain is simply flawed.
    1. Poor people get money... from where? If I move beans from bin A to bin B, do I have more beans than I had before?
    2. They, in the short run, may have extra money to increase consumption. However, if the money is coming from someone else's wealth, should we subtract some amount of consumption which would have occurred anyhow? So, any increase to consumption, which you are counting on, would have to account for the loss of consumption elsewhere. Wealthy people are consumers too and if they lose wealth, then it is logical to presume they would consume less.
    3. It is not at all clear how much of a net increase in consumption would occur. You are guessing it'd occur. However, your logic chain is more like a hope chain.
    4. Again, not at all clear how much of an increase in demand would occur. Another flaw in your hope chain is that you have not accounted for the increased expense of money should consumption actually increase. I offered an example of interest rates earlier which would offset this newfound money thrown at poor people. That is but a single external side effect. How about the actual desire of rich people why just lost a ton of their wealth, raising prices? You know, passing their costs on to the consumer. This would also negatively impact any gains given to the poor. How about money moved offshore? Money which used to be in the economy but which has been moved away in order to protect it from further taxation? Double-whammy.

    Quote Originally Posted by mican333 View Post
    Straw man. Please note that in my logic chain, it does not include raising taxes. Also progressive taxation does not inherently incorporate raising taxes.
    Straw man? We are discussing a brand new tax. If your logic chain does not include raising taxes than it isn't relevant to the OP. We are discussing a brand new wealth tax. Currently the wealth tax is 0% on wealth because it does not exist. If it were to be implemented, then the tax on wealth would be something greater than 0. We call this raising taxes.

    Quote Originally Posted by mican333 View Post
    As does mine. The general principles that we both were forwarding were points 1 and 2 of my prior logic chain. Since you have not effectively rebutted point 2, my logic chain stands so I will repost it.

    1. You have made a valid argument that there will be some level of GDP decrease by progressive taxation (less money in the ban, rising interest rates, etc.)
    2. I have made a valid argument that there will be some level of GDP increase by progressive taxation (people buy more stuff which increases demand for products, etc).
    3. Neither of us has managed to quantify how much the increase or decrease will be. As you correctly said earlier, we are just throwing numbers around.
    4. Therefore I have not supported that the increase will be greater than the decrease and therefore have not supported that the net change to the GDP will be positive and you have not supported that the decrease will be greater than the increase and therefore have not supported that the net change to the GDP will be negative.

    1. Your hope chain is not at all valid.
    2. I have demonstrated why your hope chain is invalid.
    3. I have provided additional support explaining the invalidity of your hope chain.

    Quote Originally Posted by mican333 View Post
    But again, I'm not challenging that there will be SOME negative effect. What I'm challenging is that the negative effect will be greater than the positive effect that I'm referring to.
    You have not actually offered a challenge outside of your own personal hope and opinion.



    Quote Originally Posted by mican333 View Post

    So the GDP is all of the money that everyone has? If that's your assertion, please support. While my knowledge of the GDP is not great, I'm pretty sure it's not the sum of everyone's money.
    I didn't say someone's property is a component of GDP. I said it existed because of someone's production. In other words, someone earned it.

    Quote Originally Posted by mican333 View Post
    1. Done (see above)
    2. You have supported that there will be some kind of decrease but have not supported that the decrease would be greater than the increase that I've supported would occur.






    You are smuggling in the premise that it will lead to a net decrease in GDP. When you support that that is the case, then this of yours argument will be correct.

    But until that happens, no reason has been presented to not pursue a morally correct tax program.
    YOU have never offered anything but hope that a wealth tax would result in positive GDP growth. Actually, your logic is fuzzy since you alternate between saying some GDP would decrease, but not too bad and then, at other times, saying it'd be positive. I've been consistent in saying a wealth tax would decrease GDP. You are smuggling in this idea of net GDP. Please explain what you mean. How can GDP both increase and decrease?


    Quote Originally Posted by mican333 View Post

    No, yours is not. So let me ask you some questions.

    1. How much in dollars will the tax remove from rich people?
    2. How much money needs to be removed from the wealthy before they decrease their businesses with banks in an effective manner?
    3. How much money must be removed from the banks before they take action that will effectively lower their interest rates?
    4. How much lower must the interest rates get before there is any significant decrease in GDP.

    When you demonstrate that you know the answer to those questions and that the tax increase on the wealthy would indeed be large enough to start the cycle that would lead to a decrease in the GDP, you have not supported that what might happen actually will happen.

    You have been just throwing around numbers and guessing that the actual effect would be significant. If you have some real numbers that will support your conclusion, provide them.
    At the end of the day we can expect a 2-3% decrease in GDP for every 1% tax increase. So, the more you tax wealth, the greater the drop in GDP. That other stuff, your questions, they just partially explain why this phenomenon occurs. That's the difference between your hope chain and my logic chain. My logic chain describes the real world whereas your hope chain contradicts it.
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  19. #35
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by Ibelsd View Post
    Your logic chain is simply flawed.
    1. Poor people get money... from where? If I move beans from bin A to bin B, do I have more beans than I had before?
    Progressive taxing essentially moves money from the rich to the poor. That is how poor people get more money in progressive taxation.

    Quote Originally Posted by Ibelsd View Post
    2. They, in the short run, may have extra money to increase consumption. However, if the money is coming from someone else's wealth, should we subtract some amount of consumption which would have occurred anyhow? So, any increase to consumption, which you are counting on, would have to account for the loss of consumption elsewhere. Wealthy people are consumers too and if they lose wealth, then it is logical to presume they would consume less.
    With a logic chain, the only issue whether the point is correct. There is no challenge to this point which says "They spend the money on goods and services" (you pretty much concede as much in the part I bolded). You arena't saying "no, they don't" but instead "yeah, but...". So that's still a "yeah" so this point is valid.


    Quote Originally Posted by Ibelsd View Post
    3. It is not at all clear how much of a net increase in consumption would occur. You are guessing it'd occur.
    I'm GUESSING that the increase for demands of goods and services would increase the purchase of these goods and services? No, I'm not guessing, I'm appealing to clearly obvious. OF COURSE increased demand for an item leads to increased purchases of that item. If you actually don't agree, please say so.

    And I didn't say how much the increase would be but just that there would be an increase. Unless you clearly state that you don't agree that an increase in demand leads to an increase of purchases, I will consider this particular point conceded.



    Quote Originally Posted by Ibelsd View Post
    4. Again, not at all clear how much of an increase in demand would occur.
    And again, the point doesn't say how much a demand there would be but just that there would be a demand. So this point is not challenged either and therefore stands.

    You don't have to support that the point is incorrect but you do actually have to say that it's incorrect in order to challenge it. So I'll ask:

    Do you disagree that, as point 4 says, that increased purchases of an item increases production of that item. Yes or No? Unless you say "yes", I do not consider this point, or the logic chain in general, to be challenged.



    Quote Originally Posted by Ibelsd View Post
    Another flaw in your hope chain is that you have not accounted for the increased expense of money should consumption actually increase. I offered an example of interest rates earlier which would offset this newfound money thrown at poor people.
    I'm aware of the hypothetical situation you provided. I don't see how hypothetical problems are real problems for my logic chain.

    Or are you arguing that the expense of money will ACTUALLY increase so much that it will offset the gains of the logic chain. If so, please support that assertion. If not, then it remains a hypothetical and isn't really a flaw in my chain.


    Quote Originally Posted by Ibelsd View Post
    That is but a single external side effect. How about the actual desire of rich people why just lost a ton of their wealth, raising prices? You know, passing their costs on to the consumer. This would also negatively impact any gains given to the poor. How about money moved offshore? Money which used to be in the economy but which has been moved away in order to protect it from further taxation? Double-whammy.
    Hypothetical double-whammy, that is.

    The evidence that either of these things would ACTUALLY happen to such an extent that they would offset the gains forwarded by the logic chain is nil.

    The only hypothetical in the logic chain is the poor people getting the money in the first place. The rest of it WILL happen if the poor people get money. Yes, I can't say HOW MUCH it will happen but facts and logic clearly dictate that when poor people get more money, they WILL increase their spending on goods and services which will increase demand for those goods which will increase production of those goods.



    Quote Originally Posted by Ibelsd View Post
    Straw man? We are discussing a brand new tax. If your logic chain does not include raising taxes than it isn't relevant to the OP.
    My logic chain holds that giving poor people more money will help grow the GDP. If that is irrelevant to the OP, then you should cease challenging that point for there's no reason to challenge an irrelevant point. But of course the point is entirely relevant. And it is not valid to attack an argument for not being about something other than what it's about.


    Quote Originally Posted by Ibelsd View Post
    1. Your hope chain is not at all valid.
    2. I have demonstrated why your hope chain is invalid.
    3. I have provided additional support explaining the invalidity of your hope chain.
    1. Wrong.
    2. Until you specifically say that at least one of the particular points is actually wrong ("it is incorrect that the increased demand leads to increased production"), you have not demonstrated that my logic chain is invalid
    3. If you mean the hypothetical, not you have not. Saying maybe something will counter the GDP gain spelled out in the chain does not invalidate it.


    Quote Originally Posted by Ibelsd View Post
    You have not actually offered a challenge outside of your own personal hope and opinion.
    That makes no sense. A "challenge" is what one challenges another to do so the notion that a challenge is based on hope and opinion is nonsensical.

    So as I said, what I'm challenging is that the negative effect will be greater than the positive effect that I'm referring to.



    Quote Originally Posted by Ibelsd View Post
    I didn't say someone's property is a component of GDP. I said it existed because of someone's production. In other words, someone earned it.
    But you seem to be saying that ANY dollar that is taxed is essentially taxing the GDP. That does not represent what the GDP is as far as I can tell. It's not just everyone's money and taxing someone is not taxing the GDP.

    So either I'm misunderstanding what you are saying or you don't really understand what the GDP is.

    Either way, you argument does not seem to make much sense so I'm rejecting it on that basis.



    Quote Originally Posted by Ibelsd View Post
    YOU have never offered anything but hope that a wealth tax would result in positive GDP growth.
    No. I offered a solid logic chain. You have not shown any actual flaw and just calling it a "hope chain" is just bunk.

    I don't "hope" that increased purchases of an item leads to increased production of that item. I use LOGIC (as in "logic chain") to reach that conclusion.


    Quote Originally Posted by Ibelsd View Post
    Actually, your logic is fuzzy since you alternate between saying some GDP would decrease, but not too bad and then, at other times, saying it'd be positive. I've been consistent in saying a wealth tax would decrease GDP. You are smuggling in this idea of net GDP. Please explain what you mean. How can GDP both increase and decrease?
    There are some effects that will increase the GDP and there are some effects that will decrease the GDP. Of course when all of the positive and negative effects are added up, there will be a single net loss or gain to the GDP so in that respect, there is only one number - a positive or negative one.

    Since I'm addressing BOTH of our arguments, I am referring to positive effects and negative effects and likewise discussing the net gain/loss.



    Quote Originally Posted by Ibelsd View Post
    At the end of the day we can expect a 2-3% decrease in GDP for every 1% tax increase. So, the more you tax wealth, the greater the drop in GDP. That other stuff, your questions, they just partially explain why this phenomenon occurs. That's the difference between your hope chain and my logic chain. My logic chain describes the real world whereas your hope chain contradicts it.
    I'm pretty sure in the real world, increases in consumer spending increases the GDP, which is essentially what my logic chain is about. I can appreciate some doggedness in trying to tear it down but really, it's pretty self-evident. But if that's not good enough for you, I'll provide linked support to back it up.

    Progressive tax systems reduce the (tax) burdens on people who can least afford to pay them, and these systems leave more money in the pockets of low-wage earners, who are likely to spend all of their money and stimulate the economy.

    https://www.investopedia.com/terms/p/progressivetax.asp

    And as I said, your article is not about progressive taxation but just raising taxes in general. But to be fair, we are talking specifically about Warren's plan which is a bit more specific than general progressive taxation but I've read the article and it specifically says that she is planning to use some of the money to combat income inequality which does indicate that at least some of the money will make it into the hands of the less wealthy which means that it's not leaving the market which is what I assume causes the decrease in the GDP under typical tax increases.

    But besides that, your argument is not just that the GDP will shrink but that it will shrink to such an extent that it will wipe away all of the gains that the poor receive from the progressive taxation. So your argument is not dependent on GDP shrinkage but SEVERE GDP shrinkage. So here's a new series of questions for you:

    So accepting that there will be some shrinkage (I'll concede the point for argument's sake but not in reality)
    1. How much does the GDP need to decrease to undo the benefits of progressive taxation?
    2. How much will the GDP actually decrease?

    Unless you can answer these questions, I don't see how you can say that whatever economic benefits Warren's plan may have will be undone by a decrease in the GDP.
    Last edited by mican333; February 1st, 2019 at 07:14 AM.

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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by mican333 View Post
    Progressive taxing essentially moves money from the rich to the poor. That is how poor people get more money in progressive taxation.



    With a logic chain, the only issue whether the point is correct. There is no challenge to this point which says "They spend the money on goods and services" (you pretty much concede as much in the part I bolded). You arena't saying "no, they don't" but instead "yeah, but...". So that's still a "yeah" so this point is valid.
    No. I'm saying it may. It may not. You HOPE it will. However.... if you kept reading my arguments you'd see that I also noted any increase in spending by the poor people would result in a decrease in spending by wealthy people. That's important. It is part of the explanation of why GDP decrease when taxes increase.

    Quote Originally Posted by mican333 View Post
    I'm GUESSING that the increase for demands of goods and services would increase the purchase of these goods and services? No, I'm not guessing, I'm appealing to clearly obvious. OF COURSE increased demand for an item leads to increased purchases of that item. If you actually don't agree, please say so.

    And I didn't say how much the increase would be but just that there would be an increase. Unless you clearly state that you don't agree that an increase in demand leads to an increase of purchases, I will consider this particular point conceded.
    Let me say this clearly then. Increasing taxes will not lead to an increase in consumerism. You MAY see a short term bump. You may not. In the long run, you will experience a decrease in consumerism. It is very simple. For every 1% increase in taxes, you will experience a 2-3% drop in GDP. GDP is Investment + Consumption + Govt Sprending + (Exports - Imports).

    Your chain is flawed because you account for an increase in consumerism by one group but do not acknowledge a decrease in consumerism which will occur for all other groups. Plus, there will be a decrease in investment by those are taxed. We can round and round on this. However, your hope chain is simply incomplete and does not account for all the different things which occur when taxes are increased. Until you can actually counter the argument that GDP will drop 2-3% for every 1% tax increase, I am not sure anything else matters. Why does 2-3% GDP decrease matter? Well, again, whatever gains poor people will make in the short term (IF they make any gains) will quickly be reduced as GDP shrinks. Goods will become more expensive meaning the extra money they are getting will lose spending power. It means they will decrease their own consumption, decreasing GDP even further. It is a spiral. You have not solved any problem. In the long run, the poor people will be in the same position or worse position than they are in today. In addition, if GDP shrinks, you will simply have more poor people who need help.

    Until you actually counter that GDP will drop from a tax increase, everything else is irrelevant.
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by Ibelsd View Post
    No. I'm saying it may. It may not. You HOPE it will.
    No, I don't hope that people buying products will increase production of those products. And I don't hope that the increase in production on products will have a positive effect on GDP. Logic clearly dictates that that WILL happen. And again, you have never directly said that any of this won't happen. Say with a straight face that you don't agree that increased purchases of a product leads to an increase of production or that you don't agree that an increase in production will have a positive effect on the GDP and I will consider my logic chain to be challenged. But if you don't even challenge it, then it clearly stands.

    But besides that, I supported the same conclusion with linked evidence.

    Progressive tax systems reduce the (tax) burdens on people who can least afford to pay them, and these systems leave more money in the pockets of low-wage earners, who are likely to spend all of their money and stimulate the economy.

    https://www.investopedia.com/terms/p/progressivetax.asp

    So by logic chain or by linked support, I have supported that progressive taxation will have some kind of positive effect on the GDP.


    Quote Originally Posted by Ibelsd View Post
    However.... if you kept reading my arguments you'd see that I also noted any increase in spending by the poor people would result in a decrease in spending by wealthy people.
    Certainly not dollar-for-dollar.

    A dollar in the hands of poor people is very likely to be spent on products. The odds that a dollar in the hands of a rich person being spent on products is much smaller. A rich person has many other options in what to do with a dollar and not as much incentive to purchase something with it than a poor person does. They could buy something. Or they could put it in the bank. Or invest it. Or store it with a bunch of other cash in a home safe. Or put it in some off-shore tax haven.

    A dollar in the hands of a poor person is much more likely to be spent on a product than a dollar in the hands of the super-rich. I'm sure if track how a wealthy person's money has been used, you will find that a small fraction of it was used to purchase products.

    So while I don't challenge your notion that if we take TOO MUCH from the wealthy, it will result in some kind of negative economic consequence that will adversely effect the poor, the implication that for each dollar that we transfer from the wealthy to the poor will result in something bad that will essentially just take that dollar back from the poor later seems to be completely without merit.



    Quote Originally Posted by Ibelsd View Post
    Let me say this clearly then. Increasing taxes will not lead to an increase in consumerism. You MAY see a short term bump. You may not. In the long run, you will experience a decrease in consumerism. It is very simple. For every 1% increase in taxes, you will experience a 2-3% drop in GDP. GDP is Investment + Consumption + Govt Sprending + (Exports - Imports).
    The article you quoted DID not say that for every 1% increase in taxes, but 1% increase in taxing the GDP.

    And from what I can tell, you are confusing taxing the wealthy with taxing the GDP. I don't think that is the same thing so if you are going to argue that they are essentially the same, you will need to support that with some external link - not just your own words (since I suspect you may not have your facts straight on the issue).

    So I disagree that each dollar that we tax from the wealthy is the same as taxing a dollar from the GDP and if that is a position that you are going to maintain, you will need to support it.


    Quote Originally Posted by Ibelsd View Post
    Your chain is flawed because you account for an increase in consumerism by one group but do not acknowledge a decrease in consumerism which will occur for all other groups.
    As I said, you cannot criticize my logic chain for not addressing what it's not meant to address. It supports that increasing the poor's access to money will have a positive effect on the GDP and at no point have you directly said that you disagree with any of the points in the chain.

    It doesn't address OTHER things that might negatively effect the GDP because those other things are not part of the logic chain and the notion that the logic of the chain is flawed because it's not about what it's not about is a ridiculous assertion. It would be like me criticizing your argument about the negative effects of higher interest rates because it didn't address some other issue. Again, that would be just as ridiculous as your criticism of the logic chain.



    Quote Originally Posted by Ibelsd View Post
    Plus, there will be a decrease in investment by those are taxed. We can round and round on this. However, your hope chain is simply incomplete and does not account for all the different things which occur when taxes are increased.
    Nor is it meant to. Again, that is not a valid criticism.

    And please don't call it a "hope chain". Its purpose, whether it succeeds in its goal or not, is to logically get from the first point to the last point via logic so it IS a logic chain. If you think the logic it presents is flawed, you are free to point out how you think it doesn't succeed in what it intends to do. But its purpose is to forward logic so it is a logic chain. Calling it a "hope chain" seems kind of trollish to me.

    Quote Originally Posted by Ibelsd View Post
    Until you can actually counter the argument that GDP will drop 2-3% for every 1% tax increase, I am not sure anything else matters. Why does 2-3% GDP decrease matter? Well, again, whatever gains poor people will make in the short term (IF they make any gains) will quickly be reduced as GDP shrinks.
    ONLY if the GDP ACTUALLY shrinks so much that it offsets the gains they make. But will it?

    So here's some questions for you:

    1. How much will the GDP actually shrink?
    2. How much does the GDP have to shrink before the positive effects are nullified.

    Until you can answer those questions, you have no basis to claim that the GDP WILL shrink so much that it will offset the benefits of progressive taxation.



    Quote Originally Posted by Ibelsd View Post
    Goods will become more expensive meaning the extra money they are getting will lose spending power. It means they will decrease their own consumption, decreasing GDP even further. It is a spiral. You have not solved any problem. In the long run, the poor people will be in the same position or worse position than they are in today. In addition, if GDP shrinks, you will simply have more poor people who need help.

    Until you actually counter that GDP will drop from a tax increase, everything else is irrelevant.
    Until you support that the GDP WILL (not might, but will) decrease so much that it will offset the gains, your GDP argument is irrelevant. I acknowledge that it MIGHT happen. But then it MIGHT NOT happen. So no one has supported that the ACTUAL effect on the GDP will be more positive or negative than vice versa.

    So I understand your point about the negative side effects. You just have not shown what will actually happen. You have neither supported that GDP will shrink any particular amount, let alone enough to cause a real problem.

    And since we have gone round and round on this, I'm going to "get real" here.

    I Challenge to support a claim. you to SUPPORT OR RETRACT that the overall effect of the Warren tax cut will cause the GDP to shrink so much that it will offset any economic benefits that the tax may have.
    Last edited by mican333; February 2nd, 2019 at 10:24 AM.

  22. #38
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by mican333 View Post
    No, I don't hope that people buying products will increase production of those products. And I don't hope that the increase in production on products will have a positive effect on GDP. Logic clearly dictates that that WILL happen. And again, you have never directly said that any of this won't happen. Say with a straight face that you don't agree that increased purchases of a product leads to an increase of production or that you don't agree that an increase in production will have a positive effect on the GDP and I will consider my logic chain to be challenged. But if you don't even challenge it, then it clearly stands.

    But besides that, I supported the same conclusion with linked evidence.

    Progressive tax systems reduce the (tax) burdens on people who can least afford to pay them, and these systems leave more money in the pockets of low-wage earners, who are likely to spend all of their money and stimulate the economy.

    https://www.investopedia.com/terms/p/progressivetax.asp

    So by logic chain or by linked support, I have supported that progressive taxation will have some kind of positive effect on the GDP.
    NO! Your logic doesn't dictate what WILL happen. It dictates what you hope will happen. I explained why what you hope will happen will not likely happen. I provided TWO different arguments/rebuttals to your points. TWO. One, via logic where I explained some of the external factors you are omitting which will impact your desired goal. Second, I explained that raising taxes tends to lower GDP. This infers a decrease in consumerism. That is precisely what you hope that this tax will increase.

    Now, your quote from investopedia does not rebut my arguments in the least. First, it is a point about progressive taxes, in general, and not specific to the tax in question. Second, it is a definition without a source. How is this stimulation supported by actual research? You now, like the research I have already presented. Finally, it isn't at all specific to this particular progressive tax system. As we already discussed, a wealth tax is a specific tax system and I've noticed you have tried everything to make this a discussion about progressive tax systems in general.

    Quote Originally Posted by mican333 View Post

    Certainly not dollar-for-dollar.

    A dollar in the hands of poor people is very likely to be spent on products. The odds that a dollar in the hands of a rich person being spent on products is much smaller. A rich person has many other options in what to do with a dollar and not as much incentive to purchase something with it than a poor person does. They could buy something. Or they could put it in the bank. Or invest it. Or store it with a bunch of other cash in a home safe. Or put it in some off-shore tax haven.

    A dollar in the hands of a poor person is much more likely to be spent on a product than a dollar in the hands of the super-rich. I'm sure if track how a wealthy person's money has been used, you will find that a small fraction of it was used to purchase products.

    So while I don't challenge your notion that if we take TOO MUCH from the wealthy, it will result in some kind of negative economic consequence that will adversely effect the poor, the implication that for each dollar that we transfer from the wealthy to the poor will result in something bad that will essentially just take that dollar back from the poor later seems to be completely without merit.
    You are certainly free to your opinion. I have offered facts that show otherwise. What your vision does not account for is almost too numerous to state here. I have mentioned a few of the side effects. Warren's plan would levy a 3% tax on all wealth over $1B. Plus, she would levy a 2% tax on wealth over $50M. This would essentially lead to some people being taxed for 100's of millions of dollars. Now, I know you think these people just kinda hide their money in mattresses and that it does not help the economy... but how much will this impact on investment? I'll give you the approximate contraction of GDP based on your reading of the research below.

    https://www.cnbc.com/id/44505017
    At negative growth, you can be guaranteed layoffs, declining business revenues and a decrease in consumer spending.


    Quote Originally Posted by mican333 View Post
    The article you quoted DID not say that for every 1% increase in taxes, but 1% increase in taxing the GDP.
    Actually it states a tax of GDP. Meaning as a percentage of GDP.
    "Tax changes have very large effects: an exogenous tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent."

    So, Warren's tax will result in about $2T in taxes over 10 years. The GDP is approximately $20T. So, over the next 10 years, we can estimate that the GDP will decrease anywhere from 20-30%.

    Quote Originally Posted by mican333 View Post
    And from what I can tell, you are confusing taxing the wealthy with taxing the GDP. I don't think that is the same thing so if you are going to argue that they are essentially the same, you will need to support that with some external link - not just your own words (since I suspect you may not have your facts straight on the issue).

    So I disagree that each dollar that we tax from the wealthy is the same as taxing a dollar from the GDP and if that is a position that you are going to maintain, you will need to support it.
    I did slightly misread it as a tax increase, but it is saying a tax increase as a measure of GDP. It is not saying only taxes increased on the components of GDP. I corrected my argument accordingly and it does not result in helping your point.


    Quote Originally Posted by mican333 View Post
    As I said, you cannot criticize my logic chain for not addressing what it's not meant to address. It supports that increasing the poor's access to money will have a positive effect on the GDP and at no point have you directly said that you disagree with any of the points in the chain.

    It doesn't address OTHER things that might negatively effect the GDP because those other things are not part of the logic chain and the notion that the logic of the chain is flawed because it's not about what it's not about is a ridiculous assertion. It would be like me criticizing your argument about the negative effects of higher interest rates because it didn't address some other issue. Again, that would be just as ridiculous as your criticism of the logic chain.
    If I said things with wings can fly. I made some wings. Therefore, now I can fly, it'd be perfectly logical. However, if you questioned the material of my wings. The size of my wings. You'd show that while my argument is logical, it lacks validity. Just as I've shown that while your logic may be fine, your argument's validity is quite low. It is quite low because it omits important details.

    Quote Originally Posted by mican333 View Post
    Nor is it meant to. Again, that is not a valid criticism.

    And please don't call it a "hope chain". Its purpose, whether it succeeds in its goal or not, is to logically get from the first point to the last point via logic so it IS a logic chain. If you think the logic it presents is flawed, you are free to point out how you think it doesn't succeed in what it intends to do. But its purpose is to forward logic so it is a logic chain. Calling it a "hope chain" seems kind of trollish to me.
    Calling your argument a logic chain and hiding behind an invalid proposition seems absurd to me. I am calling it a hope chain to highlight that your logic is based on what you hope will happen even though your argument is low in validity.

    Quote Originally Posted by mican333 View Post
    ONLY if the GDP ACTUALLY shrinks so much that it offsets the gains they make. But will it?

    So here's some questions for you:

    1. How much will the GDP actually shrink?
    2. How much does the GDP have to shrink before the positive effects are nullified.

    Until you can answer those questions, you have no basis to claim that the GDP WILL shrink so much that it will offset the benefits of progressive taxation.
    I've shown you how much the GDP will likely shrink. If you think consumer spending can overcome a 20-30% drop in GDP over 10 years, please do show me. It is your burden to support that this wealth tax is viable with something other than a clearly invalid "logic" chain and a very general quote from investopedia.

    Quote Originally Posted by mican333 View Post

    Until you support that the GDP WILL (not might, but will) decrease so much that it will offset the gains, your GDP argument is irrelevant. I acknowledge that it MIGHT happen. But then it MIGHT NOT happen. So no one has supported that the ACTUAL effect on the GDP will be more positive or negative than vice versa.
    This is a rather silly argument. First, I have shown what is likely to happen, not merely what may happen. So, you believe we should risk assessing a wealth tax that will probably result in a GDP decrease of 20-30% over 10 years with the hope that it may not actually happen???

    Quote Originally Posted by mican333 View Post
    So I understand your point about the negative side effects. You just have not shown what will actually happen. You have neither supported that GDP will shrink any particular amount, let alone enough to cause a real problem.

    And since we have gone round and round on this, I'm going to "get real" here.

    I Challenge to support a claim. you to SUPPORT OR RETRACT that the overall effect of the Warren tax cut will cause the GDP to shrink so much that it will offset any economic benefits that the tax may have.
    You are trying to shift the burden. No. I have shown the GDP will likely retract. By a lot. It is your burden to demonstrate that consumer spending will increase and it will do so by enough to overcome such a large decrease in GDP. You want to defend this tax plan. Fine. Show how it improves the economy. Explain to me how this tax will overcome such a dramatic decrease in GDP. Don't just throw out what you hope will happen. Put some work in and defend your position here. Please. Give me some data that will allow me to change my mind here. I am open. I promise. I just cannot see how it possibly works in the long run.
    The U.S. is currently enduring a zombie apocalypse. However, in a strange twist, the zombie's are starving.

  23. #39
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    Re: Is a Wealth Tax a Good Idea?

    I realize that there is a miscommunication on one of my points (the logic chain). What it's saying what you think it's saying are two different things.

    But before I address that, I want to re-cap the debate to make sure that the arguments and the burden are clear.

    My argument is:

    People who work full time deserve to earn enough to afford the basics. Currently some people are "working poor" and can't afford what they deserve and therefore should, one way or another, receive more money. Progressive taxation would help achieve that goal. Warren's plan does qualify as progressive taxation. She does plan to use the wealth tax to fight income inequality. She has said as much directly.

    Your rebuttal is:

    While I don't challenge your moral premise regarding the working poor being able to afford what they should be able to afford, the Warren plan will not work as the consequence of taxing the wealthy will result in such drastic shrinkage of the GDP, the poor ultimately will not be able to afford that stuff. Even if they have more money, the price of stuff will rise to where they will have no greater purchase power than before.

    And my rebuttal to your rebuttal is:

    You have not supported your assertion.



    As far as my logic chain goes, its ONLY supported point is that giving poor people money will have some kind of positive effect on the GDP. That's it. It does not say how great the improvement will be and does not address whether there will be counter-acting forces that will override whatever the benefits are produced by it. So the logic of the chain stands even if the net effect of the GDP is negative.

    So to put in mathematical terms, if X is the amount of growth in the GDP due to progressive taxation, then all it's saying is that X > 0.

    And we'll assign Y to the amount of GDP shrinkage you hold that the Warren plan will cause.

    And of course you argument forwards that Y>X.

    But it doesn't just say that Y>X, but that Y is so much greater than X, that it will result in an amount of GDP shrinkage that it will wipe out not only X but also create so much inflation that the benefits that the poor will receive from the added money will be undone. So let's call that amount needed to destroy all of the benefits "Z".

    So your argument, put in mathematical terms. is Z-Y=Z

    But the values, either in numbers or relative to each other, has not been determined. I acknowledge that you put some effort into determining Y in your arguments below but as you will see by my response, the argument does not hold up to scrutiny. But besides that, you have not even attempted to show a value for X or Z.


    Quote Originally Posted by Ibelsd View Post
    NO! Your logic doesn't dictate what WILL happen. It dictates what you hope will happen. I explained why what you hope will happen will not likely happen. I provided TWO different arguments/rebuttals to your points. TWO. One, via logic where I explained some of the external factors you are omitting which will impact your desired goal. Second, I explained that raising taxes tends to lower GDP. This infers a decrease in consumerism. That is precisely what you hope that this tax will increase.
    No, you have continuously provided arguments that in no way show that the logic chain is incorrect. And it's quite clear this is happening is that you think the chain is saying something different than what it's actually saying.

    I addressed this above so I will repeat it here.

    The logic chain simply supports that there will be some kind of positive effect on the GDP if the poor have more money to spend.

    Whether there will be other factors that are stronger than the positive effect that ultimately lower the GDP is off-topic to the logic chain.

    The logic chain just supports, as above, that X>0. That's it. If you aren't challenging the support that X>0, then you aren't rebutting the logic chain. And this will be my only response regarding the logic chain here as your other comments are flawed for the same reason (doesn't really rebut the chain).

    Quote Originally Posted by Ibelsd View Post
    Now, your quote from investopedia does not rebut my arguments in the least. First, it is a point about progressive taxes, in general, and not specific to the tax in question. Second, it is a definition without a source. How is this stimulation supported by actual research? You now, like the research I have already presented. Finally, it isn't at all specific to this particular progressive tax system. As we already discussed, a wealth tax is a specific tax system and I've noticed you have tried everything to make this a discussion about progressive tax systems in general.
    But if you read the rest of Warren's plan, she does plan to put that wealth towards decreasing income inequality which is the other half of the equation to make it a progressive tax. And therefore it is supported that it will stimulate the economy.


    Quote Originally Posted by Ibelsd View Post
    You are certainly free to your opinion. I have offered facts that show otherwise. What your vision does not account for is almost too numerous to state here. I have mentioned a few of the side effects. Warren's plan would levy a 3% tax on all wealth over $1B. Plus, she would levy a 2% tax on wealth over $50M. This would essentially lead to some people being taxed for 100's of millions of dollars. Now, I know you think these people just kinda hide their money in mattresses and that it does not help the economy... but how much will this impact on investment?
    You tell me. If you are going to argue that the impact will be so great that it will override the economic stimulus that will be caused by the Warren plan, you will need to support it.



    Quote Originally Posted by Ibelsd View Post
    https://www.cnbc.com/id/44505017
    At negative growth, you can be guaranteed layoffs, declining business revenues and a decrease in consumer spending.
    And when you support that negative growth will occur, I will concern myself with that notion.





    Quote Originally Posted by Ibelsd View Post
    Actually it states a tax of GDP. Meaning as a percentage of GDP.
    "Tax changes have very large effects: an exogenous tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent."

    So, Warren's tax will result in about $2T in taxes over 10 years. The GDP is approximately $20T. So, over the next 10 years, we can estimate that the GDP will decrease anywhere from 20-30%.
    You are smuggling the premise that her tax is a tax on the GDP as if a tax on the wealthy is no different than a tax on the GDP.

    So SUPPORT OR RETRACT that there is no effective difference between a tax on the GDP and a tax on the Wealthy. And please use a sourced link in your support.

    Besides that, I know the GDP is a yearly measurement so even if Warren's tax was a tax on the GDP, you would have to spread it out over ten years so the tax would be $.2T per year instead of $2T.

    As it seems that every following argument is based on the notion that this argument is correct, there is no need for me to respond to them.

  24. #40
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    Re: Is a Wealth Tax a Good Idea?

    Quote Originally Posted by mican333 View Post
    Keep in mind that we used to have a 70% tax rate on the wealthiest people for quite a while and it seemed that the effects were generally positive.
    Taking advantage of numerous exemptions and loopholes, the rich paid about 40% and not the 70% your claim suggests.

    Quote Originally Posted by mican333 View Post
    Either way, if the disastrous outcomes mentioned in the OP had merit, we would have seen that in the past.
    Ummm...no. An income tax doesn't encourage people to hide assets like a confiscation of assets would with a wealth tax.

    ---------- Post added at 07:19 AM ---------- Previous post was at 07:15 AM ----------

    Quote Originally Posted by mican333 View Post
    When we have many people who work full time but can't afford the basics of food, shelter, and health care, it's pretty obvious that however the super-rich are handling their money, it's not in a fashion that is doing the common worker a lot of good.
    And here is where you're getting to the truth of how you feel about the issue. The money of the rich invested in the markets or deposited in banks gets circulated to people who need it to grow or start businesses. They benefit. And the people who get the jobs created by that circulation of money benefit. But those people aren't the ones you want to help. You want wealth redistribution from the rich to the poor, directly. Doesn't that sum up your real thinking on the subject?

    ---------- Post added at 07:22 AM ---------- Previous post was at 07:19 AM ----------

    Quote Originally Posted by mican333 View Post
    But a progressive tax rate seems like the best idea to decrease income inequality in this country.
    Again, this suggests that you want wealth transfer from rich to poor, but are cloaking that agenda in an argument about how to achieve broader and stronger economic activity. Be honest, and stop pu55yfooting around. Say that you believe in wealth redistribution from rich to poor, and we can debate whether that is a legitimate agenda, and whether a wealth tax is a good tool for the job. Sheesh.

    ---------- Post added at 07:28 AM ---------- Previous post was at 07:22 AM ----------

    We already have a progressive tax structure in the graduated income tax. So why not just raise the top bracket back to 70% and eliminate exemptions and loopholes? Or 80%, or 90%? Why should a wealth tax on personal assets be instituted in addition to an income tax (and property taxes, and inheritance taxes, etc.)?
    "If we lose freedom here, there is no place to escape to. This is the last stand on Earth." - Ronald Reagan

 

 
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