5 ms·

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. Reme

by 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).
    - Fantastic_T 10y ago
      Corporations also have record high corporate debt levels right now. Cash reserves are vitally important as cushions to provide stability in a volatile economy that crashes every few years. Companies correctly became more conservative post-financial-crisis and built up their financial reserves, and that makes the economy as a whole less fragile and likely to suffer a cascading debt default crisis. The attitude of wanting to violate other parties' property rights invariably comes down to a sort of arrogance in believing that the way the market works and the way people manage our own property is incorrect and that you have a better idea on how they should be using their property.
      - 10y ago

by anbende 10y ago

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).
  - Fantastic_T 10y ago
    Corporations also have record high corporate debt levels right now. Cash reserves are vitally important as cushions to provide stability in a volatile economy that crashes every few years. Companies correctly became more conservative post-financial-crisis and built up their financial reserves, and that makes the economy as a whole less fragile and likely to suffer a cascading debt default crisis. The attitude of wanting to violate other parties' property rights invariably comes down to a sort of arrogance in believing that the way the market works and the way people manage our own property is incorrect and that you have a better idea on how they should be using their property.
    - 10y ago