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techstepgenr8tion
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31 Oct 2010, 10:54 pm

John_Browning wrote:
You forget that since income tax increases the price of labor, it also means fewer people can be hired by a given company.

No, you're forgetting the growth of government jobs. Great GDP enhancement. :lol:



xenon13
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31 Oct 2010, 10:55 pm

Well, I did imply it... as the only way to convince Joe Six Pack that lower income taxes are good for him. However, if companies must use toll roads and pay fees for every little things in the new tollbooth economy and infrastructure is collapsing because of "starve the beast" and medical insurance costs are through the roof thanks to the gouging going on, that's not good either for hiring Americans. So these income taxes help create more favourable business conditions by strengthening infrastructure and a strong state.



xenon13
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31 Oct 2010, 10:56 pm

Government jobs do enhance GDP. They do services that improve quality of life and improve the conditions for doing business. Even if there were government workers doing nothing this means customers for private business that wouldn't exist otherwise - but as there are many things to do to improve life then why not have this happen through the state?



John_Browning
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31 Oct 2010, 11:24 pm

xenon13 wrote:
Out of $787 billion of stimulus about $350 billion was tax cuts. Much of the rest was funds to keep state governments afloat. Other portions of this was unemployment insurance. It was more an exercise in treading water than in stimulus, thank you very much Rahm "One trillion dollars is scary" Emanuel...

$111 billion went to infrastructure, $144 billion went to state and local governments to spend, and $81 billion went to projects for the vulnerable. That is more than a quarter trillion dollars in funding for projects that usually involve construction and nobody is seeing a dime of it.


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John_Browning
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31 Oct 2010, 11:31 pm

xenon13 wrote:
Even if there were government workers doing nothing this means customers for private business that wouldn't exist otherwise - but as there are many things to do to improve life then why not have this happen through the state?

Government workers doing nothing would be best put to work in private enterprise where they would be productive and still provide customers for other businesses without wasting the taxpayer's money.


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xenon13
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01 Nov 2010, 1:06 am

$100 billion or so for construction projects doesn't amount to very much in a country as vast as the United States. The stimulus was far too small. Now the ideological arguments on the Right against stimulus claim that there is a finite amount of money held by Rich people mainly and that when government decides to spend lots of money that increases the competition for that money and drives up the interest rates. This is called Crowding Out. This theory however is propaganda. When money is spent by government there's more money in the economy. If Crowding Out were true, then you'd see interest rates rising and they're not! They're still near zero.

Right now there's debt deflation going on. The only way to prevent much of the economy from collapsing under that debt deflation is government spending. There is no other way, there is no alternative. Actually, there is another possible solution, and that's to write down the debts that are causing this. Either one are politically difficult because the Right sees such things as helping the "undeserving", namely people who are not rolling in money.



xenon13
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01 Nov 2010, 1:10 am

The private sector is not demanding large numbers of new workers now - in fact, they're doing the opposite. So if the private sector can't absorb existing unemployed, what makes anyone think that they're in a position to absorb government workers?

What if in the future, automation is such that ten times what we need is being produced yet only half of the existing workforce is required. Surely you don't think that the company owners should reap all the bounty and those idle people live in garbage dumps. For one thing, these rich owners can only consume so much - so if there isn't demand from the dump dwellers then the production will be revised downward. That's what happens when demand is reduced through pauperisation in the name of "self-sufficiency" and the "work ethic" - private business will be forced to adjust production downward, the nation will produce less.



John_Browning
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01 Nov 2010, 2:21 am

xenon13 wrote:
The private sector is not demanding large numbers of new workers now - in fact, they're doing the opposite. So if the private sector can't absorb existing unemployed, what makes anyone think that they're in a position to absorb government workers?

What if in the future, automation is such that ten times what we need is being produced yet only half of the existing workforce is required. Surely you don't think that the company owners should reap all the bounty and those idle people live in garbage dumps. For one thing, these rich owners can only consume so much - so if there isn't demand from the dump dwellers then the production will be revised downward. That's what happens when demand is reduced through pauperisation in the name of "self-sufficiency" and the "work ethic" - private business will be forced to adjust production downward, the nation will produce less.

Now you are getting dangerously close to promoting communism.


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Sand
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01 Nov 2010, 4:17 am

John_Browning wrote:
xenon13 wrote:
The private sector is not demanding large numbers of new workers now - in fact, they're doing the opposite. So if the private sector can't absorb existing unemployed, what makes anyone think that they're in a position to absorb government workers?

What if in the future, automation is such that ten times what we need is being produced yet only half of the existing workforce is required. Surely you don't think that the company owners should reap all the bounty and those idle people live in garbage dumps. For one thing, these rich owners can only consume so much - so if there isn't demand from the dump dwellers then the production will be revised downward. That's what happens when demand is reduced through pauperisation in the name of "self-sufficiency" and the "work ethic" - private business will be forced to adjust production downward, the nation will produce less.

Now you are getting dangerously close to promoting communism.


What has communism to do with production without workers?



number5
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01 Nov 2010, 8:55 am

xenon13 wrote:
Income taxes increase the price of labour - this is what Michael Hudson tells people when he encourages the use of the Land Value Tax... but as far as your Joe Six Pack is concerned, it's a great tax because in the end business absorbs it, so cutting his income taxes will not help him. The only argument to Joe Six Pack against income tax is to say that it's bad for business for such taxes to be too high. However, the crazy health insurance system is also bad for business and crumbling infrastructure is also bad for business and if taxes of all kinds are too low then that's what will happen.

It's clear really when you see who leads the charge for reducing income tax - business and the wealthy. They aren't calling for cuts in sales tax or any of that.


This is so true, and why I think all the yelling about taxes is so short-sighted.



number5
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01 Nov 2010, 8:57 am

John_Browning wrote:
xenon13 wrote:
Out of $787 billion of stimulus about $350 billion was tax cuts. Much of the rest was funds to keep state governments afloat. Other portions of this was unemployment insurance. It was more an exercise in treading water than in stimulus, thank you very much Rahm "One trillion dollars is scary" Emanuel...

$111 billion went to infrastructure, $144 billion went to state and local governments to spend, and $81 billion went to projects for the vulnerable. That is more than a quarter trillion dollars in funding for projects that usually involve construction and nobody is seeing a dime of it.


Maybe not at "the shooting range," but I know NY and PA have plenty of projects going.



xenon13
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01 Nov 2010, 12:41 pm

Of course even sales taxes figure into the cost of living, so large hikes in that cause wage adjustments upwards. The real danger to workers is not taxes, it's unemployment. A large Reserve Army of Labour will cause permanent adjustments downwards, particularly in cases of stingy or non-existent safety nets. Tax cuts shred the safety net and make it more difficult for governments to deal with unemployment so this leads in due course to the permanent lowering of the standard of living.

This is why there's a policy for a Reserve Army of Labour, and also with automation, the policy has been that all the benefits go to Capital, to the owners, and none to the workers. This makes the owners more powerful still, the workers weaker, and permits the downward pressure on the standard of living.

If income taxes were raised substantially, if all taxes were raised, and that money went into paying the unemployed more, into creating more jobs, in a big welfare state, in free health care and the rest of it, it would reduce these pressures on the standard of living. Higher taxes are in fact best for most people.

As for the mention of Communism, Marx himself understood with the growing efficiencies and the fact that Capital would take it all, this would lead in due course to a form of communism, and it may happen because it's just not sustainable to have all the benefits from technology accrue to a small group of owners who end up dominating society totally and taking everything... it's a completely unbalanced society. It's silly also to speak of people having to starve for not contributing when most of the work is done by machines! It's not like starving the person will do any good, that this will cut into society's surplus in a way that will threaten the whole! The Right has these strange ideas like we're in the Middle Ages and the surplus of society is almost nothing and that mass starvation is around the corner if the "non self-sufficient" are allowed to eat. Thing is, even then such people were allowed to eat.



richardbenson
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01 Nov 2010, 1:24 pm

my very best friend online who i've known for years thats lives in maryland is a republican and i respect, and look up to most of his viewpoints