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> rich yet reserved people, who keep most of their money in the bank (which lends it) and are earning an income (=productive) ... will not penalized. This goes
by geofft 6y ago
> rich yet reserved people, who keep most of their money in the bank (which lends it) and are earning an income (=productive) ... will not penalized.
This goes against just about every standard defense of the ability to be rich: that rich people are job creators, that they power the economy by buying things, etc. Why should we discourage them from employing people and buying things? I don't want a loan (that needs to be repaid) from a bank from a rich person, I want the rich person to either employ me or buy goods and services from me.
Actually, that's another point - does employment incur your "sales" tax? If not, it's more advantageous to hire a private chef or driver than to pay for a restaurant meal or a taxi trip, which makes the tax regressive - there's a discontinuity when you're able to hire someone instead of getting a service from a business.
- andrepd 6y agoReplace "the rich" with "Lords" and your post is an adequate defense of feudal society. In other words, you're thinking "inside" the system, i.e. justifying the system with itself.
- geofft 6y agoWell, the position I'm arguing against is that the lords should be left alone, that it's better for them to have their fiefdoms be isolated places than to actually employ anyone or purchase anything, and that we should use tax law to incentivize the lords to never interact with the peasants. (Or in other words - my actual position that the nobility should be abolished. I'm just surprised to see someone say not only that it should stay, but that the world would be better if they didn't provide any of the benefits people usually claim in defense of feudal society, so I'm trying to understand what their position is.)
- oDot 6y agoAn economy is driven by production, not consumption.
- geofft 6y agoSure. But the standard way of driving production is private consumption. Given that you have disincentivized the poor from consuming, what is the counterbalance that incentivizes the rich to produce? (There are a couple of standard answers, including government consumption / public works projects, that can address this.)
- tryptophan 6y agoPrivate consumption is only possible due to productivity gains due to capital investment. Venezuelans can't just vote to redistribute nonexistent wealth or declare food to be a human right and magically have sufficient food appear. Food comes from capital investment in farms, factories, etc. That is real wealth. >There are a couple of standard answers, including government consumption / public works projects, that can address this. These answers don't work, and are great at destroying wealth.
- oDot 6y agoNote that a sales tax as only tax means no income tax, so overall a gain to production incentives.
- somatic 6y agoAn economy is driven by free money.
- somatic 6y agoThe standard defenses of the ability to be rich are persuasive arguments promulgated by those who are rich. If we assume that the rich are, as other advertisers, rational and self-interested, the we should expect their messaging (i.e., the “standard defenses”) to be that which is most effective. Something akin to if it works, it ships. Consider that from the perspective of the accountants, every job created is a huge and ongoing liability and cost, and that from the perspective of the shareholders, every job created is stolen profit, money that is not returned in the form of equity appreciation + dividends. Then you will begin to see the reality of the situation.