Honestly, in all the hubbub about tax cuts, I didn't stop to think once that those wealthy bastards I love to hate (and aspire to be like) pay for such a large portion of our government.
I still would like tax cuts to be seemingly the most beneficial for those lower quintile (love that term) of the population that is most often faced with the choice of having either milk or lights some months.
But that might just be the socialist in me.
I'm going to respond in post-form, because I just know if I start typing out a long response my computer is going to die without auto-saving. So yeah...
My problem with this is:
1.) the lowest quintile pay .65% of the income tax in America, so income tax cuts won't benefit them too much. (time for a digression) The real place where the poor are hurt are in things like gas taxes and excise taxes; these taxes tend to be regressive, because the poor will spend a greater percentage of their income on these. Especially with things like New York's new cigarette tax, which more than doubles the price of cigarettes. This is done with the full knowledge that it will force the poor, who are more likely to smoke, to have to decide between smoking and eating.
2.) It tends to be the top quintile who produces and distributes things like milk and lights. By punishing them, the government indirectly punishes the people who have to pay for their products. If a research scientist, working to produce cheaper light bulbs, works 35 hours a week at a 50% tax rate, but would work 50 hours a week if the tax rate were 20%, meaning that each additional hour he or she works means marginally more money for him or her, then it's more likely that a cheaper light is produced, which would benefit the poor.
It also drives up the cost of doing businss, as hiring someone who wants to make a certain amount of money costs businesses more, which is passed on to the consumers via higher prices.
So cutting taxes for the rich may not directly benefit the poor by giving them more money, but it benefits them by making their money able to buy more.
I think this may be Reganomics though, now that I look at it. Whoops.
3 comments:
What are the economics of taxing a certain percentage of income?
I'm usually more alright with with business on the large-scale being hindered but the guy working minimum wage getting a living wage.
In my view, it seems like a large number of satisfied, healthy, low-class individuals (who might be bumping into the middle class at this point) would do more good for curing social evils like large scale drug trafficking, crime (even if it's organized, haha), and the like than to rely on the benevolence of the wealthy.
I have absolute no economic data to back that up, and would love some (either way).
The fundamental principle behind taxing income in and of itself is that the government deserves a percentage of everyone's labor. I recently read Ron Paul's manifesto, so I apologize, but "if the average worker pays six months of his or salary in protection money to the state or federal government, how is he or her not a slave?"
The fallacy here, I think, is not recognizing that 'business on the large-scale' and the 'living wage' as being connected. Business on the large scale provides for the poorest, and everyone. Where do the things the poorest in society come from?
The evils from drug trafficking come from the fact that drugs must be distributed through the black market, and so those in the lowest economic class have the greater incentive to traffick drugs. Crime accompanies these underground industries, naturally. If you look at the trend between homicides during prohibition and the drug war, you will notice that murder almost doubles during the respective prohibitions.
As Paul likes to point out, eliminating the income tax would require a 40% decrease in the size of the federal government, which would bring the size of the government back to the level of the year... 1997... (And GW is a Republican?)
Another thing I think is interesting is the statistic that 70% of the money spent on welfare goes to the bureaucracy. I think that private charity could give more than a dollar for every four that were cut from that budget if given the opportunity. The poor in this country are so much worse off than they should be, but not because of the lack of the government trying to make their well-being better.
Okay...
"Where do the things the poorest in society (consume) come from?"
Alcohol inhibits me.
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