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Some better ideas: raising the minimum wage, increasing tax rates on corporations and high-income individuals, dividends, estates, and capital gains, and using

Some better ideas: raising the minimum wage, increasing tax rates on corporations and high-income individuals, dividends, estates, and capital gains, and using that additional revenue to improve public education on all levels, and reduce the cost of a college degree to a level that everyone can afford without going into debt. The higher taxes and minimum wages would encourage companies to invest in automation, which would increase productivity, increasing corporate profits _and_ government revenue. There'd be a huge jump in demand for jobs installing, maintaining, designing, programming, and building automation technology, and a general increase in demand across the board as more people have more income because of higher minimum wages, which allow them to spend more money, which in turn grows the economy. The additional investments in education availability would be timely since with higher demand for skilled labor and lower cost of tuition, people would take more classes and become more skilled and get higher paying jobs. It's a virtuous cycle. Would inflation come of this? Probably some, but after a decade of sub-2% inflation, we actually _need_ more inflation. Inflation raises prices, but it also raises salaries. When huge swaths of the middle class are buried in mortgage, student loan, and credit-card debt, inflation makes those debts _smaller_, which means those people have more money to spend, which grows the economy, creates jobs, and raises wages. It can become a virtuous cycle, if only we were brave enough to kick it off.

anbende 10y ago
Some of your ideas are good. Some, I think, seem good on the surface but would wreck the economy. In particular raising corporate income tax is pretty bad. Remember, virtually every job there is comes from some sort of corporation. You're literally putting the breaks on the economy at that point. Taxing the wealthy directly is very different and probably a good idea. It can take from those that have the most to provide for those who have the least - improving education and reducing poverty-related crime. Of course it can also just pull money out of the economy for BS pork-projects. Taxing capital gains and dividends may be similar, as it represents income for many people. I don't know enough about the economic repercussions of taxing investment to be sure. Here's an interesting article from NPR on the reforms most economists seem to agree on. Interestingly the panel of economists had a broad range from very liberal to very conservative and they were all able to agree on several things that virtually no politician would ever endorse! Enjoy! http://www.npr.org/sections/money/2012/07/19/157047211/six-policies-economists-love-and-politicians-hate http://www.npr.org/sections/money/2012/07/19/157047211/six-p...
- crdoconnor 10y ago
  A lot of economists have a vested interest in pretending that the following policies are generically, speciously "bad for the economy", because reasons: * Raising corporate income tax (if you argue for this you won't get many job offers from generously funded corporate think tanks). * Raising the minimum wage (likewise). >Remember, virtually every job there is comes from some sort of corporation. If you take a dollar from corporate profits and give it to the government they will spend it, creating jobs. If you take a dollar from corporate profits and give it to a low wage worker in the form of a minimum wage hike, they will spend it, creating jobs. If you take a dollar from corporate profits and distribute it as dividends, it will likely be re-used to bid up the stock market or the price of property and won't be spent, which is bad for economic growth and everybody who isn't rich (story of the last 10 years). If you take a dollar from corporate profits, corporations will spend another dollar on a think tank who will put out some kind of specious reasoning about why taking money from them is bad. If you take a dollar from corporate profits, they'll threaten to shut down and make everybody unemployed out of spite. That's what's known as an "empty threat" when corporate profits are at record highs (which they are).
  - Fantastic_T 10y ago
    If you take a dollar for every four dollars of corporate profits, corporations (meaning the compacts created between shareholders) will have less money to invest with. The shareholders will also have less incentive to reinvest their dividends. Capital stock (e.g. factories, restaurants, vending machines) is the basis of all productivity, and capital stock only increases through investment. So taxing profits reduces the growth in productivity. Productivity growth is the main source of wage growth and indeed that slowdown in productivity growth is the source of most of the slowdown in wage growth that has been seen in the US over the last 40 years.
    - crdoconnor 10y ago
      >If you take a dollar from every four dollars of corporate profits, corporations (meaning the compact created between shareholders) will have less money to invest with. But since they're currently sitting on record high stacks of cash (Apple alone has ~1/4 of a trillion dollars), I wouldn't be too worried about that. >The shareholders will also have less incentive to reinvest their dividends They're currently sitting on record high stacks of cash because they have little incentive to reinvest. It's not about tax though, it's about a lack of demand (see original points one and two for how to fix that).
tomp 10y ago
> high-income individuals I don't understand why there's such a drive for taxing high earners. I mean, I do kind-of understand - they're a convenient target for the lower classes that the elites use to redirect their anger - but I don't think it makes economic sense. If anything, we should be encouraging people to improve their skills and hence raise their value/salary. Instead, taxation should be focused on wealth not income. It's been shown time and again that the bigger tax "dodgers" (including those that legally pay very low tax) are the extremely rich (including corporations) who own a lot of capital and can afford lawyers that help them hide it in offshore accounts or other tax-advantaged vehicles (e.g. trust funds).
- taneq 10y ago
  You're thinking about "high earners" in the traditional "people providing a very valuable service in exchange for money" sense. High income individuals in this sense are taxed quite highly in basically every first world country. The people who aren't taxed highly, and who arguably should be, aren't the "high earners" but the "high revenue owners" whose income derives not from their own work but from the performance of the assets that they own.
- ams6110 10y ago
  > I don't understand why there's such a drive for taxing high earners. Envy, mostly. That and the thought that wealth is a fixed sized pie, so if someone is rich that must be causing others to be poor.
- josho 10y ago
  > I don't understand why there's such a drive for taxing high earners Because for decades we've allowed capital accumulation to grow faster than salary accumulation. That's yielded us a class of ultra wealthy. The desire is to reverse the bias from capital to salary, so that the working class can benefit from increased productivity, because so far the benefits of productivity gains has gone largely to the wealthy via their capital gains. > we should be encouraging people to improve their skills That would help, but the game is still against you since we've structured our economy over the last few decades to grow capital faster than salary. So, improving your skills and getting paid more still means you are getting farther behind.
randomdata 10y ago
> the cost of a college degree to a level that everyone can afford without going into debt. The cost of an education is already free though. If you cannot learn from those resources, perhaps you are not cut out for the fast-pace world of automation anyway? > people would take more classes and become more skilled and get higher paying jobs. Is demand really going to grow that fast? Programmers make up about 0.8% of the population. Programmers can do relatively well because they are, relatively, rare. But if we tripped the amount of people working in software, you would still be only utilizing under 3% of the population. If your training efforts were successful, I would expect more than 3% of the population having the necessary skills. That would result in much lower pay.
- Turing_Machine 10y ago
  "The cost of an education is already free though. If you cannot learn from those resources, perhaps you are not cut out for the fast-pace world of automation anyway" This is a good point, except that what's actually expensive is the credential. The stranglehold of the universities on the credentialing process would have to be broken (also, at a higher level, the stranglehold of the accrediting agencies on the accrediting process).
  - randomdata 10y ago
    I'm not sure the credential holds any value anymore. Maybe at one time there was the hope that it would represent something, but employers have data now (see: Google, EY, etc.) and it shows over and over that it is not an effective filtering mechanism. The exception is the professions where the law requires it. Employers don't have a lot of choice in those cases. But those jobs specifically have that in place to reduce the numbers to artificially increase incomes. They explicitly don't want more people.
    - Turing_Machine 10y ago
      That is strongly dependent on the field you're in. You're probably not going to get a job in a Wall Street investment bank with a degree from Directional State University, much less with no degree at all.

anbende 10y ago

Some of your ideas are good. Some, I think, seem good on the surface but would wreck the economy. In particular raising corporate income tax is pretty bad. Remember, virtually every job there is comes from some sort of corporation. You're literally putting the breaks on the economy at that point. Taxing the wealthy directly is very different and probably a good idea. It can take from those that have the most to provide for those who have the least - improving education and reducing poverty-related crime. Of course it can also just pull money out of the economy for BS pork-projects. Taxing capital gains and dividends may be similar, as it represents income for many people. I don't know enough about the economic repercussions of taxing investment to be sure. Here's an interesting article from NPR on the reforms most economists seem to agree on. Interestingly the panel of economists had a broad range from very liberal to very conservative and they were all able to agree on several things that virtually no politician would ever endorse! Enjoy! http://www.npr.org/sections/money/2012/07/19/157047211/six-policies-economists-love-and-politicians-hate http://www.npr.org/sections/money/2012/07/19/157047211/six-p...

crdoconnor 10y ago
A lot of economists have a vested interest in pretending that the following policies are generically, speciously "bad for the economy", because reasons: * Raising corporate income tax (if you argue for this you won't get many job offers from generously funded corporate think tanks). * Raising the minimum wage (likewise). >Remember, virtually every job there is comes from some sort of corporation. If you take a dollar from corporate profits and give it to the government they will spend it, creating jobs. If you take a dollar from corporate profits and give it to a low wage worker in the form of a minimum wage hike, they will spend it, creating jobs. If you take a dollar from corporate profits and distribute it as dividends, it will likely be re-used to bid up the stock market or the price of property and won't be spent, which is bad for economic growth and everybody who isn't rich (story of the last 10 years). If you take a dollar from corporate profits, corporations will spend another dollar on a think tank who will put out some kind of specious reasoning about why taking money from them is bad. If you take a dollar from corporate profits, they'll threaten to shut down and make everybody unemployed out of spite. That's what's known as an "empty threat" when corporate profits are at record highs (which they are).
- Fantastic_T 10y ago
  If you take a dollar for every four dollars of corporate profits, corporations (meaning the compacts created between shareholders) will have less money to invest with. The shareholders will also have less incentive to reinvest their dividends. Capital stock (e.g. factories, restaurants, vending machines) is the basis of all productivity, and capital stock only increases through investment. So taxing profits reduces the growth in productivity. Productivity growth is the main source of wage growth and indeed that slowdown in productivity growth is the source of most of the slowdown in wage growth that has been seen in the US over the last 40 years.
  - crdoconnor 10y ago
    >If you take a dollar from every four dollars of corporate profits, corporations (meaning the compact created between shareholders) will have less money to invest with. But since they're currently sitting on record high stacks of cash (Apple alone has ~1/4 of a trillion dollars), I wouldn't be too worried about that. >The shareholders will also have less incentive to reinvest their dividends They're currently sitting on record high stacks of cash because they have little incentive to reinvest. It's not about tax though, it's about a lack of demand (see original points one and two for how to fix that).

tomp 10y ago

> high-income individuals I don't understand why there's such a drive for taxing high earners. I mean, I do kind-of understand - they're a convenient target for the lower classes that the elites use to redirect their anger - but I don't think it makes economic sense. If anything, we should be encouraging people to improve their skills and hence raise their value/salary. Instead, taxation should be focused on wealth not income. It's been shown time and again that the bigger tax "dodgers" (including those that legally pay very low tax) are the extremely rich (including corporations) who own a lot of capital and can afford lawyers that help them hide it in offshore accounts or other tax-advantaged vehicles (e.g. trust funds).

taneq 10y ago
You're thinking about "high earners" in the traditional "people providing a very valuable service in exchange for money" sense. High income individuals in this sense are taxed quite highly in basically every first world country. The people who aren't taxed highly, and who arguably should be, aren't the "high earners" but the "high revenue owners" whose income derives not from their own work but from the performance of the assets that they own.
ams6110 10y ago
> I don't understand why there's such a drive for taxing high earners. Envy, mostly. That and the thought that wealth is a fixed sized pie, so if someone is rich that must be causing others to be poor.
josho 10y ago
> I don't understand why there's such a drive for taxing high earners Because for decades we've allowed capital accumulation to grow faster than salary accumulation. That's yielded us a class of ultra wealthy. The desire is to reverse the bias from capital to salary, so that the working class can benefit from increased productivity, because so far the benefits of productivity gains has gone largely to the wealthy via their capital gains. > we should be encouraging people to improve their skills That would help, but the game is still against you since we've structured our economy over the last few decades to grow capital faster than salary. So, improving your skills and getting paid more still means you are getting farther behind.

randomdata 10y ago

> the cost of a college degree to a level that everyone can afford without going into debt. The cost of an education is already free though. If you cannot learn from those resources, perhaps you are not cut out for the fast-pace world of automation anyway? > people would take more classes and become more skilled and get higher paying jobs. Is demand really going to grow that fast? Programmers make up about 0.8% of the population. Programmers can do relatively well because they are, relatively, rare. But if we tripped the amount of people working in software, you would still be only utilizing under 3% of the population. If your training efforts were successful, I would expect more than 3% of the population having the necessary skills. That would result in much lower pay.

Turing_Machine 10y ago
"The cost of an education is already free though. If you cannot learn from those resources, perhaps you are not cut out for the fast-pace world of automation anyway" This is a good point, except that what's actually expensive is the credential. The stranglehold of the universities on the credentialing process would have to be broken (also, at a higher level, the stranglehold of the accrediting agencies on the accrediting process).
- randomdata 10y ago
  I'm not sure the credential holds any value anymore. Maybe at one time there was the hope that it would represent something, but employers have data now (see: Google, EY, etc.) and it shows over and over that it is not an effective filtering mechanism. The exception is the professions where the law requires it. Employers don't have a lot of choice in those cases. But those jobs specifically have that in place to reduce the numbers to artificially increase incomes. They explicitly don't want more people.
  - Turing_Machine 10y ago
    That is strongly dependent on the field you're in. You're probably not going to get a job in a Wall Street investment bank with a degree from Directional State University, much less with no degree at all.