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I'm not sure using taxes as a way to combat income equality is effective either. Just because taxing the rich less allows them to make more money does not impl

I'm not sure using taxes as a way to combat income equality is effective either. Just because taxing the rich less allows them to make more money does not imply taxing them more allows the non-wealthy to prosper.

eigenrick 5y ago
I think the point is not that it's taking money from the rich. I mean, that's a necessary part of it. The point is that that money is forced to recirculate in the system. The thing people seem to forget is that taxed money doesn't just disappear. It right back into the economy. The target, predominately, is the working class, either directly via Gov't employee wages, or social programs. Or it goes back indirectly, through Gov't contractors. At which point it filters back up the system to the rich.
- nightski 5y ago
  The rich do not usually sit with cash in their bank account, and even if they do the system is built to keep that money recirculating. Banks use fractional reserve lending to take those deposits and lend them out several times forward. Otherwise the money gets invested in companies from your large caps, small caps, VC, to angel funding, etc... Basically there is no such thing as stagnant money imho. What taxes imply (again in my opinion) is that we believe the government is better at investing that money than the economy participants themselves. In some cases that is true where the return is over several decades or there is little to no direct monetary return at all (but still very necessary - social programs). But in many cases it is not.
  - DimitriPetrova 5y ago
abeppu 5y ago
I think it's also key to distinguish between wanting to "combat income equality" and "allow[ing] the non-wealthy to prosper." There's that old Thatcher parliament quote responding to concerns about rising inequality, where she characterizes the left as being pleased if the poor become poorer so long as the rich fall further. I think taxes (if we plug various holes) can decrease income inequality, but the challenge is efficiently spending the proceeds in a way that lifts up everyone ... and not creating firehoses of public spending that primarily benefit the same small pool of companies.
- DarylZero 5y ago
  Lifting everyone up is mostly pointless. Absolute consumption levels are not important. Most of the things that matter are "positional." Making the rich poorer reduces the competitive stress that everyone is under. Even if everyone else gets poorer, it's worth it.

eigenrick 5y ago

I think the point is not that it's taking money from the rich. I mean, that's a necessary part of it. The point is that that money is forced to recirculate in the system. The thing people seem to forget is that taxed money doesn't just disappear. It right back into the economy. The target, predominately, is the working class, either directly via Gov't employee wages, or social programs. Or it goes back indirectly, through Gov't contractors. At which point it filters back up the system to the rich.

nightski 5y ago
The rich do not usually sit with cash in their bank account, and even if they do the system is built to keep that money recirculating. Banks use fractional reserve lending to take those deposits and lend them out several times forward. Otherwise the money gets invested in companies from your large caps, small caps, VC, to angel funding, etc... Basically there is no such thing as stagnant money imho. What taxes imply (again in my opinion) is that we believe the government is better at investing that money than the economy participants themselves. In some cases that is true where the return is over several decades or there is little to no direct monetary return at all (but still very necessary - social programs). But in many cases it is not.
- DimitriPetrova 5y ago

abeppu 5y ago

I think it's also key to distinguish between wanting to "combat income equality" and "allow[ing] the non-wealthy to prosper." There's that old Thatcher parliament quote responding to concerns about rising inequality, where she characterizes the left as being pleased if the poor become poorer so long as the rich fall further. I think taxes (if we plug various holes) can decrease income inequality, but the challenge is efficiently spending the proceeds in a way that lifts up everyone ... and not creating firehoses of public spending that primarily benefit the same small pool of companies.

DarylZero 5y ago
Lifting everyone up is mostly pointless. Absolute consumption levels are not important. Most of the things that matter are "positional." Making the rich poorer reduces the competitive stress that everyone is under. Even if everyone else gets poorer, it's worth it.