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Wealth is not "trickling down" mainly because of high taxes in Europe. Corporations have incentive to transfer profits outside and spend it only when absolutely

Wealth is not "trickling down" mainly because of high taxes in Europe. Corporations have incentive to transfer profits outside and spend it only when absolutely necessary, otherwise any bigger project wouldn't be economical. So not only those corporations act like a hoover of funds, the void that is created has to be filled with something - and here comes progressive tax, that ensures middle class cover what otherwise those big corporations would have to pay and also ensures that if someone comes from a poor background they almost never go up in the class ladder. This will eventually create a society where everyone cannot afford anything to buy, but they will be able to scrap money together to pay for subscriptions and big corporations will become de facto governments and all parliaments will focus on protecting that status quo rather than serving the public.

rsynnott 6y ago
While there are obviously major problems, if you rank countries by the social mobility indexes, or by GINI (income inequality) indexes, the top ten or so are all high-tax European countries. Mind you, there's more to it than that; just setting the high-income-band taxes high won't do it. Efficacy of taxation and control of corruption is also important. Ireland's an interesting case; in the 80s its income tax was quite high (and it was a substantial net beneficiary of EU funding) but its GINI index was the worst in the EU (it was actually worse than the US for part of the decade). Today, income tax is still quite high (though not as high), and it's a donor of EU funding, but the GINI index is middle of the road European, far better than it used to be. The main thing that changed, beyond overall economic development, is reduction of corruption; there's no point in having big high-income-band taxes if no-one pays them.
ClumsyPilot 6y ago
"Corporations have incentive to transfer profits" They will always have incentive to movw money into a tax heaven, their rate is zero
- BlueTemplar 6y ago
  Only if the money can be freely moved.
unionpivo 6y ago
> Wealth is not "trickling down" mainly because of high taxes in Europe it's not trickling down anywhere. While it might be in most corporations best interest to have consumers that can afford to buy all the thing they are selling, it's also in their own immediate interest to squeeze as much money as they can, and keep it for them self. And each year laws get passed (or reverted) that help corporations , and they get better and better at squeezing. Look at the trends, middle class is disappearing, and more and more wealth is captured and kept at the top. (corporations are getting bigger and bigger, and rich people are getting richer) and it's happening in USA even faster than in most of Europe. Pretty much the only place where middle class is growing is China (and other developing countries), but that is because they are still catching up. So it can't be just the EU taxes. Trickle down is nice theory, too bad it doesn't work in practice. And no I don't even pretend to know what the solution is. I just think that lowering taxes for corporations, will just make even more money for corporations, make them more powerful and not really help anyone else.
mbrodersen 6y ago
“Trickling down” economics has been completely disregarded by serious Economists for years now. If it actually worked, the US would be in a much better position today than it actually is.
mbrodersen 6y ago
Large corporations like Google, Amazon etc. pays zero tax. I hope you enjoy your percentage of those non-existing “trickling down” $.
- WalterBright 6y ago
  A great thing about America is you can buy stock in corporations and get your share of their profits. It also gets you the right to attend shareholder meetings and vote on corporate business issues.

rsynnott 6y ago

While there are obviously major problems, if you rank countries by the social mobility indexes, or by GINI (income inequality) indexes, the top ten or so are all high-tax European countries. Mind you, there's more to it than that; just setting the high-income-band taxes high won't do it. Efficacy of taxation and control of corruption is also important. Ireland's an interesting case; in the 80s its income tax was quite high (and it was a substantial net beneficiary of EU funding) but its GINI index was the worst in the EU (it was actually worse than the US for part of the decade). Today, income tax is still quite high (though not as high), and it's a donor of EU funding, but the GINI index is middle of the road European, far better than it used to be. The main thing that changed, beyond overall economic development, is reduction of corruption; there's no point in having big high-income-band taxes if no-one pays them.

ClumsyPilot 6y ago

"Corporations have incentive to transfer profits" They will always have incentive to movw money into a tax heaven, their rate is zero

BlueTemplar 6y ago
Only if the money can be freely moved.

unionpivo 6y ago

> Wealth is not "trickling down" mainly because of high taxes in Europe it's not trickling down anywhere. While it might be in most corporations best interest to have consumers that can afford to buy all the thing they are selling, it's also in their own immediate interest to squeeze as much money as they can, and keep it for them self. And each year laws get passed (or reverted) that help corporations , and they get better and better at squeezing. Look at the trends, middle class is disappearing, and more and more wealth is captured and kept at the top. (corporations are getting bigger and bigger, and rich people are getting richer) and it's happening in USA even faster than in most of Europe. Pretty much the only place where middle class is growing is China (and other developing countries), but that is because they are still catching up. So it can't be just the EU taxes. Trickle down is nice theory, too bad it doesn't work in practice. And no I don't even pretend to know what the solution is. I just think that lowering taxes for corporations, will just make even more money for corporations, make them more powerful and not really help anyone else.

mbrodersen 6y ago

“Trickling down” economics has been completely disregarded by serious Economists for years now. If it actually worked, the US would be in a much better position today than it actually is.

mbrodersen 6y ago

Large corporations like Google, Amazon etc. pays zero tax. I hope you enjoy your percentage of those non-existing “trickling down” $.

WalterBright 6y ago
A great thing about America is you can buy stock in corporations and get your share of their profits. It also gets you the right to attend shareholder meetings and vote on corporate business issues.