Smart Economics

There was and probably still is a pretty large shoutbox debate on taxes that had occurred, but now it is a thread.

I am going to put forward a couple equations for economic success, rather then attempt to explain them through words. Those with specific #'s are based off of US IRS data, so it isn't relative to all nations, but a handy example.

Argument for keeping Income Taxes Low for the Middle and Lower Class

Equation for disposable income: Total $ Yearly - Expenses = Disposable Income

How to generate a higher disposable income: Lower Expenses (I.E, Income Tax)

Equation for consumer spending = Population (avg. disposable income-bought assets) = Total Consumer Spending

How to increase consumer spending: Increase the avg. disposable income (E.G, Lower Income Tax)

Equation for corporate growth: Generated Revenue - Profit Opport. Expenses - Tax Expenses (Profit Opport.) = Corporate Growth

How to increase corporate growth: Increase Consumer Spending (E.G, Lower Income Tax)

Equation for job growth: Consumer Spending = Inflation + Demand + Corporate growth, which = Job Growth

How to increase job growth: Increase Consumer Spending (E.G, Lower Income Tax)

Equation for poverty: Income $10,000 < = Poverty

How to end up in poverty: Don't have a job (E.G, you don't have a job because those damn income taxes are so high)

Equation for unemployment decline: Job Growth = Unemployment Decline

How to cause unemployment to decline: LOWER INCOME TAXES!!!



Argument for keeping Corporate Taxes Low

Equation for GDP: Value of all Goods and Services over the course of a year = GDP

Equation for GDP growth: More Jobs = More bought Profit Opport. Assets = More GDP Growth

Equation for corporate growth: Generated Revenue - Profit Opport. Expenses - Tax Expenses (Profit Opport.)

How to keep corporate growth high: LOWER TAX EXPENSES (42% in America and equally ridiculous most other places)

Argument for keeping taxes on the wealthy low

Golden Rule for $: Money changes hands

How the wealthy spend their $:

#1 - They invest it
#2 - They create new enterprises
#3 - They spend it on goods and services like everyone else

The one impediment that we face with wealthy people: According to the golden rule, money gets spent, ignoring the ppl who put millions in the bank for their children, but that is another issue. The one impediment we face with wealthy people is that they usually only want luxury goods and services. This affects negatively on a very small group of people. Small businesses. Small businesses usually don't stock both general population goods and luxury goods, which alienates either the wealthy class or the middle class from utilizing their goods. This is only harmful when small businesses only sell luxury products. The reason for this is because their money is only circulating back and forth among the wealthy and the luxury goods business, meaning only a minimal amount of that wealth goes back to the lower and middle classes. This isn't a justification to keep taxes for the rich high on the basis of income equality, but begs for a different solution. Consumer education programs in America have taught small business owners to diversify their price ranges, because not only does that maximize profits for them, but it also allows the business to benefit people of all classes.

The Wrong Way to Tax

The Liberal Methodology: Increase taxes for the rich and middle class, increase social spending for the lower class, lower class becomes economically productive

Why this doesn't work well: This makes somewhat sense, which is why so many policy makers and liberals end up falling for it. It does actually increase the standard of living for the lower class, but it actually hurts the economic mobility of the lower class as well, and the middle and upper classes are equally affected, but more more transparent reasons.

Here is a hypothetical, since I am not fully educated on the US budget and Internal Revenue Service. The middle class has to pay on average 25% of their total income to the government. Imagine that half of that 25% (12.5%) went towards paying for welfare, healthcare, and college tuition for the lower class. To prove why this is a bad thing, we need to refer back to the first argument I made in this thread. The less taxes the middle class and lower class have to pay, the more they spend on goods and services. As demand increases, so do corporations, so does the economy, and so do jobs. More jobs combined with good government policy allow lower class citizens squabbling away on Tyson farms to find a better job at a corporation and get a sustainable income above the poverty line. This creates a boom effect. All these new middle classmen will also have low taxes, and will now contribute to the economy on a grander scale. To fill in the gap we have for low paying jobs, you increase immigration, and boom, the cycle repeats itself. The population grows, the GDP grows, and the standard of living grows as well.

When it comes down to it, all that money the government leveraged that is going to the lower class is doing nothing more than prolonging the status quo. Healthcare, Welfare, and Education are important, but the liberal methodology is the wrong way to deal with these needs. The US system is actually very good in this regard, and it differs from almost every other nation highly dedicated to social spending. Instead of giving money that we took from other people to help pay for healthcare, welfare, and education, it is much more efficient to just lower the actual expenses these things cost through policy.

Why are certain US states some of the few governments which regulate how much an educational institution can charge for tuition?
Why is the US one of three nations which have decided to lower the cost of premiums based on your yearly income (ACA)?
Why is the US one of the few nations which has experimented with a new form of welfare which saves 50% of what it used to cost?

Smart Economics are directly connected to Smart Policy. Bad policy, something most liberal countries have, is when you take money from everyone to give it to the few. In this case the lower class. Ironically, this is the qualm most liberals have with the wealthy.

The Conservative Methodology: For the most part equalize low taxes for all social classes, proceed to spend treasury revenue on fueling lobbyist corporations, trickle trickle to the masses

Post-communist countries, especially Russia, are the most guilty of this. They keep incredibly low taxes on the rich, which they justify by keeping a flat tax equal to theirs on the lower and middle class. It is a guarantee that 75% of that money will find its way back into the upper class, because in really conservative countries, most of the upper bracket are already subsidized legally by the parliament, therefore it is basically just backwards robbery. Sure, in Russia's case, and even Massachusetts under Romney, government subsidies created a boatload of new jobs, but they also created very corrupt politicians, and corrupt politicians aren't concerned with good policy.

As you can see, both conservatives and liberals have bullshitted themselves on how to help the economy. A word of advice to any country which doesn't hold debt. STOP WITH INCOME TAXES THAT SURPASS 15%!!! You have no liabilities, and the best stimulation for your economy is a tax break. No, you cannot justify income taxes that aren't extremely low through social spending. Social spending is a bad idea to begin with. Start by creating policy which doesn't cost the taxpayers anything, and trust the lower classes to help themselves with the taxes they no longer have to pay to the government.

Seriously ppl, stop being so damn stupid

Blackflag: As you might expect, I see things rather differently, and don't appreciate being called stupid because of it.

Just as a first principle:
Inflation is when we have too much money, and too few goods. We bid up the prices.
Growth is when we have a real increase in the net value of goods and services, less inflation.
Equality is when we have that value being distributed as equitably as possible.

Ideally, a government needs to balance a number of competing objectives.
A government must keep employment high. Growth must be high. These are easily accomplished.
They must also keep equality high. They must keep inflation low (both to protect savings and to allow poor people to have enough to spend via "sticky wages"). These too can be easily accomplished.
But unfortunately, managing both of those demands at the same time is extremely hard. Trying to do so generally leads to failing at both, a phenomenon known (no pun intended) as Stagflation.

The government uses two tools to do so: fiscal and monetary policy. (Regulation is also a big influence on this, but that's a whole story in and of itself so I'll ignore it for the time being).
Monetary policy primarily (nowadays) refers to government manipulation of interest rates. This can encourage borrowing/spending, driving growth, or its opposite, curbing inflation. The government needs to be particularly careful with this, however. The people most likely to take out loans they can't pay back are the poor, and lowering interest rates is a great incentive for them to do so. That's how markets crash.
Fiscal policy refers to what the government taxes and spends. On one extreme, the government could just not tax at all. As Stag describes, this would mean the economy would be in the hands of the private sector, which is often more efficient in the short term because the tax process is slow and holds up money. On the other hand, if the government cannot spend, there are two important disadvantages.

1. No public goods. The private sector, and society in general, cannot function without public goods. Such states rapidly devolve into lawlessness and lack critical infrastructure to keep their nation working, especially infrastructure that otherwise nobody would pay for as they generate no return (in economics, this is called the free rider principle). Alternatively, where such goods have a cost attached (such as private contract toll roads) the lack of subsidies generally means they become unaffordable to all but the wealthy. Which brings us to the second problem:
2. No redistribution of wealth. Rich people tend to invest more of their money than poor people. These investments generate returns, a portion of those returns is reinvested, ad infinitum. The problem is that the rich have less incentive to spend their money, so they hoard more and more of it, diversify their investments to make it really hard to lose it all, and eventually, you get The Great Gatsby repeating itself.

A flat tax can be used to purchase public goods, but it is what economists call regressive - in the long run it makes the poor poorer, and the rich richer. Consider, at a 0% tax rate, a poor person might spend 90% of their income on goods. With a 10% income tax, the poor person now is unable to make any savings at all. A wealthy person might spend 10% of their income on goods (and this is assuming they're not rich enough to figure out how to dodge tax!). With a 10% income tax, they can still save 80%. These 80% will make the wealthy person ever greater profits. Where does that money come from? The backs of the poor. Because the rich are getting richer, the economy sees too much money chasing the same number of goods - inflation. But the poor people's wages don't increase - this inflation is coming from the wealthy people's disposable income, and the profits from these sales go back to the investors, the poor people.

The counter-theory to this is known as trickle-down economics. The idea is that if the upper class does well, then everyone does well. Taken to the extreme, adherents of this view are the ones who lobby for tax breaks to the rich. The theory goes that the rich get money, use that to create jobs, and thus redistribute to the poor. This has been proven wrong countless times. The rich don't create any jobs if they don't have to. They're content to hire nobody - indeed, this was the very complaint made during the industrial revolution, man was being replaced by machine. Marx dreamed of taking down the power of the bourgeoisie, the labor unions operate on the same principle of the need for a collective bargain. And even if people are paid well, what we might call the Fordist model, that doesn't mean they have incentives to treat anyone well. Stag basically supported the trickle-down theory with his argument for lower taxes for the rich. It was the same argument run by probably the most famous self-proclaimed Anti-Liberal Conservative in history, Ronald Reagan. And it directly lead to some of the biggest busts in world history. Apparently Stag's pseudo-liberalism has no room for enforcing economic equality, which from the outset has been a core tenant of the philosophy.

The other kind of tax, other than an outright regressive (think Sheriff of Nottingham for that one) is a progressive tax. This is one where the poor end up paying less than the rich. So in our scenario from being, the poor person can still get a 10% investment, while the rich person pays 20% instead of just 10%, yet still keeps 70% for his investments. It means the rich pay more proportionally, the rich remain the top dogs ruling the economy, the poor keep money and thus retain the opportunity for mobility, the incentives are created for a positive labor force, and the government earns more money than they would taxing both of them 10% (since the poor person had very little money indeed).

My percentages are, of course, simplifications, but the principle is very well-established. The problem is with implementation. New Zealand has a progressive income tax, for example, but a flat company tax rate, meaning small businesses like mine pay more tax than any waged income earner. This discourages entrepreneurship. We tax income that you earn from your wages, but not income from capital gains on property, making property an extremely lucrative investment and artificially inflating house prices (particularly in our biggest urban area) with speculation. This is bad for equality because it means investment returns are artificially high due to government policy - and when the market collapses, the poor will be hurt the most as they're the ones who cannot take a loss on their homes.

As you can see, tax is actually an extremely complicated and dynamic system.

With all that being said, let's examine Stag's story. He begins with a series of equations, where he makes a number of critical errors, the most important of which are:
1. The assumption that corporate growth = job growth. In almost no case has that held true.
2. The assumption that the government's spending on public goods cannot in and of itself create jobs.
3. The assumption that lower income tax universally increases spending. As my thing with the percentages shows, this is only true of the poor. In the wealthy it mostly affects saving.
4. The assumption that everyone in poverty has no job (*cough cough look at me cough cough*)
5. The assumption that full employment is an ideal goal for the government to go for.
6. The assumption that taxes on earnings/profits, affects a willingness of businesses to spend (where spending isn't taxed).
7. The assumption that more jobs = more growth, which also doesn't hold. Diseconomies of scale is a thing, synergy is a myth. Hence why large scale layoffs are becoming more common.
8. The assumption that corporate growth is harmed by tax expenses (public goods, ensuring a society with relative equality, etc)
9. The assumption that money changing hands is good for everyone, as opposed to just the people it changes hands between
10.The assumption that the new enterprises created by the rich create jobs, growth, equality, and also don't create a load of inflation that screws up the economy
He also assumes a very American-centric tax system, ie no sales taxes etc.

He then goes on about luxury goods. There are some key problems with this:
1. Countless research proves that the wealthy actually rarely invest in luxury goods. When they do, they do it more of an investment hoping to make a gain by later pawning it to some upper-middle class person.
2. Most of the providers of luxury goods and services ARE small businesses. Yachts, for example, are generally classed as luxury goods, but yacht builders all around the world rarely have hundreds of employees or something. These small businesses don't necessarily spend their money on the wealthy.
3. And when the yacht builder is run by somebody wealthy, the same problem exists whether they buy luxury goods or not. The type of good they're buying is fundamentally irrelevant to the argument.
He then presents the "solution" of "consumer education programs" which for some reason target businesses. This fails because the value of a good is determined primarily by scarcity - diversifying the price range of a non-scarce good is stupid because nobody will buy from you and go to other suppliers, while diversifying the price range of a scarce good is stupid because you'd be make subnormal profits (which usually means a loss). Marketing tricks and gimmicks, such as talking about how much effort and care you put into shining this pebble to make it worth a thousand dollars, generally don't work with luxury goods (the wealthy person would simply counter by picking up a pebble from the ground - the reason $1000 is an outrageous price for a pebble is that they're not scarce).

On an unrelated note, Stag should stop worrying about liberals ruining the world and blasting me at every turn for my beliefs, and instead come up with an argument in our debate.

admin: First of all, it is legit retarded that you wrote all this blabber without actually reading what I wrote. I never argued for a flat tax and I personally support a progressive tax, I said so myself in my Edeb8 issues. You wrote 5 paragraphs of endless bullshit about how flat taxes are bad even though that is extremely off topic.

You probably just skimmed my page anyways, otherwise you wouldn't of thought I was arguing for flat taxes. Again, that kind of ignorant debating is legit retarded

Inflation is when we have too much money, and too few goods. We bid up the prices.
What, that is a half sided definition?More money in consumer pockets leads to an increase in inflation. We bid up prices on goods because consumers have more money to spend. It increases our purchasing power, and causes growth.

They must also keep equality high. They must keep inflation low (both to protect savings and to allow poor people to have enough to spend via "sticky wages"). These too can be easily accomplished.
Surely, but not economic equality. Capitalism doesn't work on the principles of fairness and equality. Either you have rich, middle, and poor, or you have everyone poor. That is reality, not your version of a fiction novel.

Monetary policy primarily (nowadays) refers to government manipulation of interest rates. This can encourage borrowing/spending, driving growth, or its opposite, curbing inflation. The government needs to be particularly careful with this, however. The people most likely to take out loans they can't pay back are the poor, and lowering interest rates is a great incentive for them to do so. That's how markets crash.

Governmental monetary policy is driven entirely by central banks and national banking commitees. Manipulation of the economy by the invisible hand of the government is a sure recipe for economic disaster.

A flat tax can be used to purchase public goods, but it is what economists call regressive - in the long run it makes the poor poorer, and the rich richer. Consider, at a 0% tax rate, a poor person might spend 90% of their income on goods. With a 10% income tax, the poor person now is unable to make any savings at all. A wealthy person might spend 10% of their income on goods (and this is assuming they're not rich enough to figure out how to dodge tax!). With a 10% income tax, they can still save 80%. These 80% will make the wealthy person ever greater profits. Where does that money come from? The backs of the poor. Because the rich are getting richer, the economy sees too much money chasing the same number of goods - inflation. But the poor people's wages don't increase - this inflation is coming from the wealthy people's disposable income, and the profits from these sales go back to the investors, the poor people.
Okay, these economics aren't correct at all. When you have a huge gap in income, the economy actually deflates, making products more affordable for the poor. The lower the taxes, the higher the inflation, which does make prices higher for the poor, but it also creates jobs and a higher GDP. It also increases our purchasing power. Currency of value is great for investors and Forex traders.

You obviously have NO understanding of what a regressive tax is, because you are using the definition COMPLETELY wrong. A regressive tax lowers your tax rate depending on your total income. A regressive tax IS NOT a flat tax. A regressive tax is a reverse progressive tax, whereas a flat tax is neither progressive or regressive, it is flat.

Your economics are whack and you obviously are talking up your ass here.


The counter-theory to this is known as trickle-down economics. The idea is that if the upper class does well, then everyone does well. Taken to the extreme, adherents of this view are the ones who lobby for tax breaks to the rich. The theory goes that the rich get money, use that to create jobs, and thus redistribute to the poor. This has been proven wrong countless times. The rich don't create any jobs if they don't have to. They're content to hire nobody - indeed, this was the very complaint made during the industrial revolution, man was being replaced by machine. Marx dreamed of taking down the power of the bourgeoisie, the labor unions operate on the same principle of the need for a collective bargain. And even if people are paid well, what we might call the Fordist model, that doesn't mean they have incentives to treat anyone well. Stag basically supported the trickle-down theory with his argument for lower taxes for the rich. It was the same argument run by probably the most famous self-proclaimed Anti-Liberal Conservative in history, Ronald Reagan. And it directly lead to some of the biggest busts in world history. Apparently Stag's pseudo-liberalism has no room for enforcing economic equality, which from the outset has been a core tenant of the philosophy.
Your right, there is no room for enforcing economic equality. That is what neo-stalinists want to do. That is what authoritarian basement dwellers want to do. That is not what smart people want to do. I also critcized trickle down economics if you actually took the time to read anything I wrote.

Corporations grow, and corporations are owned by the rich. Whether they sit on wealth or not, they are investing money back into their own company, and they are investing money in stocks, and they are investing money into trades. That is doing a lot for the economy, like it or not.


My percentages are, of course, simplifications, but the principle is very well-established. The problem is with implementation. New Zealand has a progressive income tax, for example, but a flat company tax rate, meaning small businesses like mine pay more tax than any waged income earner. This discourages entrepreneurship. We tax income that you earn from your wages, but not income from capital gains on property, making property an extremely lucrative investment and artificially inflating house prices (particularly in our biggest urban area) with speculation. This is bad for equality because it means investment returns are artificially high due to government policy - and when the market collapses, the poor will be hurt the most as they're the ones who cannot take a loss on their homes.
I agree partially. Businesses should be taxed based on their economic output, not by whether they are an arbitrary corporation or small business. Small businesses that lose 25% a year should be taxed less, but a small business that produces 25% profit a year should be taxed more.

Your economic theory about how we need to drain more money out of growing businesses on the basis of equality is legit retarded and stalinist

The assumption that corporate growth = job growth. In almost no case has that held true.
Actually it is true. Your word isn't credible anyhow, you're making really ridicolous statements that are based off of personal belief and not facts. You are not arguing using logical flow like I am. You are just making baseless claims and expecting us to believe them.

The logic is that the more profit opport. a company has combined with the amount of revenue they have to spend on profit opport. will dictate how many jobs will be created in an industry. Any economist will tell you the same thing. Any economist besides Karl Marx and Vladimar Lenin.

The assumption that the government's spending on public goods cannot in and of itself create jobs.
No one made that assumption. You didn't actually read anything I wrote. That came apparent when you assumed I was against progressive taxes.

It is better for consumers to go directly to markets. Retard logic dicates that we take money from the people to spend it on goods they don't want to stimulate corporations which are destined to fail. Ridiculous liberal logtic, loony.

The assumption that lower income tax universally increases spending. As my thing with the percentages shows, this is only true of the poor. In the wealthy it mostly affects saving.
That is ironic considering you made the argument before that increasing the minimum wage increases consumer spending. Doesn't work both ways, does it?

Logic, not baseless speculation, dictates that the more money in a consumers pocket the more they will spend. That is a fact. Any economist will tell you the same. Any economist but Karl Marx and Vladimir Lenin.

The assumption that everyone in poverty has no job (*cough cough look at me cough cough*)
I never made that assumption. I made the claim that more jobs combined with good policy creates better paying jobs, where the old poor jobs can be filled by immigrants. That is what I learned week 1 of macroeconomics. You are disputing a professor who is teaching material that people agree on universally. That is a desperate Stalinist for you.

The assumption that full employment is an ideal goal for the government to go for.
Again, never made this assumption. Full employment is a double edged sword. You want everyone to have a job, but if everyone already has a job then you cannot fill new positions. This is where immigration comes into play. Lower unemployment and increase the population is a recipe for GDP growth.

The assumption that taxes on earnings/profits, affects a willingness of businesses to spend (where spending isn't taxed).
I never even said ANYTHING in relation to this. Actually read what I write. Ridiculous. I do believe a low sales tax can be very effective though.

The assumption that more jobs = more growth, which also doesn't hold. Diseconomies of scale is a thing, synergy is a myth. Hence why large scale layoffs are becoming more common.
Your example is incompatible with your claim. Layoffs are just evidence of economic decline. Large scale layoffs during the great recession were in synergy with GDP decline, which is proving my point more than yours.

The assumption that corporate growth is harmed by tax expenses (public goods, ensuring a society with relative equality, etc)
100% true. Corporations are regulated in a fashion that makes it illegal to take money out of a shareholder corporation to spend for personal items. All the money not payed to employees and officials goes back into fuelling corporate growth. Taking 40% of a corporations income is incredibly stupid,, because that money was going to go back into the company to be invested in new profit opport. The sad thing is that most of that money gets robbed and goes to lobbyists, sometimes the same people who own the taxed corporations.

The assumption that money changing hands is good for everyone, as opposed to just the people it changes hands between
I agreed with you on this. I wrote a whole paragraph titled the one impediment to the wealthy. Money often goes back and forth between rich people and luxury good stores.

.The assumption that the new enterprises created by the rich create jobs, growth, equality, and also don't create a load of inflation that screws up the economy
He also assumes a very American-centric tax system, ie no sales taxes etc.

We have a rather sales tax in most states. Obviously you don't have a clue on anything regarding American taxation, so stop making incorrect claims. Inflation is great, it is better then deflation. Central banks try to stop overinflation, otherwise known as rapid deflation, but in general, inflation helps us pay off our debt, increases our trading power, and increases corporate revenues. And yes, the rich are job creators. Some use their power for evil and some use their power for good, but they do create jobs, and the good vs evil should be solved using good policy, not overtaxation on the basis of equality principles.

Countless research proves that the wealthy actually rarely invest in luxury goods. When they do, they do it more of an investment hoping to make a gain by later pawning it to some upper-middle class person.
Bullshit. Are you saying the rich sleep on 200$ sofas and drink Jack Daniels Whiskey on their clearance lawn chair wearing a wife beater?

Most of the providers of luxury goods and services ARE small businesses. Yachts, for example, are generally classed as luxury goods, but yacht builders all around the world rarely have hundreds of employees or something. These small businesses don't necessarily spend their money on the wealthy.
Also bullshit. Mom and pop stores, music stores, restaurants, bookstores, ect. usually are not luxury, and still are considered small businesses.

This was the most frustrating argument from admin I've EVER read. This is some really stupid and laughable stuff right here. A lot of baseless claims with no supporting substance. I'll wait for an actual argument on some of these things instead of a simple "you're wrong!!!"

Blackflag: By its very definition, "Bad policy, something most liberal countries have, is when you take money from everyone to give it to the few. In this case the lower class" is the definition of a progressive tax. The alternative is a low flat tax. The only time you've ever supported progressive tax is in lip service, and only when the difference is very small, and only when taxes are very low - in other words, as little progressive as possible. I'll cite the shout box: "Redistribution of wealth is a silly stalinist esque ideal... Anyways, I have no qualms with progressive taxation, if it were say, no more then a 2.5-5% difference in taxation per bracket. I stand by my claim that it is stupid to take revenue from two groups and give it to one, when that one usually isn't producing an economic output, whereas $ circulates faster in non-lower classes. Generally the more wealthy ppl you have the better, no matter how many poor ppl you have. The problem is when $ circulates only through one class. When you lower txs, inflation rises and so do prices. Since ppl have more $ in their pockets, they spend more $, which creates more jobs and more demand, giving work to the lower classes." In your post above, which I didn't go into a lot of detail on (owing to complexity) you argue through effecting changes in health, education etc through policy, not realizing (as is typical of the US) that these can be public goods. Regardless it is used as a further argument for low taxes, little to no difference between income rates, and lean government. For making this observation, you called me legit retarded.

There's a big difference between calling ME legit retarded and calling MY VIEWS legit retarded. Stop using irrelevant ad hom attacks.

Regardless, I'll answer the rest of your points anyway. More money in consumer pockets AND more scarce production are really the two things that cause inflation, and my definition (which was first observed by Keynes) encompasses both of them. It doesn't necessarily increase purchasing power. A simple example of this would be if everyone earns more equally, then prices are bid up by everyone by a proportionate amount, and purchasing power remains identical. Nor does more money in the economy cause growth. Economic data time and time again proves that the velocity of money (how quickly any given unit is spent) is extremely constant, regardless of inflation. For this reason, most economists distinguish between nominal growth, which includes inflation, and real growth, which does not.

You disagree that equality is possible in capitalism? Why? Why does redistribution make everyone poor? These are assertions and they're baseless. In my argument I provided concrete evidence of how a pure capitalist system makes everyone poor in the long term without redistribution. You claim manipulation of the economy by the government is a sure recipe for economic disaster? Why? These are assertions. Not just that, but they are also baseless. Government INACTION is also a manipulation, as keeping the economy sacred and out of the government's bounds generally leads to the kind of ruin and collapse that destroys the poor and erodes the real power of the rich (who in these sorts of scenarios tend to flee, as is the case in most failed states - the warlords rule). This is commonly sold as the ideal outcome of capitalism, a system commonly known as "anarcho-capitalism" that is common to the libertarian movement.

Next you claim that wealth gaps cause deflation. Why? Think about it. If a rich person and a poor person have $100 and $80 respectively, the cost of living would probably be close to that range, because nobody will be bidding above $100. This keeps things relatively affordable for the poor. If the rich person has $100,000 and the poor still only has $80, you're literally saying that the cost of living will be LOWER. This is wrong. Prices inflate because the rich can afford to pay higher, and as they bid each other for scarce commodities, the poor are locked out by their incomes. It's a case of more money, the same amount of goods - and as we know, every time there's too much money chasing too few goods, inflation occurs. Indeed you say this in his very next sentence! Lower taxes less redistribution = higher wealth gaps) makes prices higher for the poor. It's a fairly clear logic. The counter-argument you cite is the trickle down theory again - purchasing power, jobs etc are magically created by these super-nice rich people. Again, trickle down economics does not work. You also have the reason for a valuable currency backwards. More money in an economy, ceteris parabis, means a LOWER value currency as the currency is less scarce. More goods in an economy means less inflation (same amount of money, higher amount of goods), so it's basically bad for investors/forex traders of all people, not good. Regressive and progressive refer to the outcomes of the tax. There are multiple ways to achieve the outcome of a regressive tax scenario, where the rich get richer and the poor get poorer. If you think I'm alone, just look at what investopedia says "A regressive tax is generally a tax that is applied uniformly." The outcome of every regressive tax is simply one where a greater percentage is taken from the poor, and my percentages prove that, because the wealthy earn more and more (through investment and saving) while the poor lose more and more.

Name-dropping Stalin doesn't make your argument stronger. Calling me not smart or a basement dweller just shows that your argument is so pathetic, you stoop to the level of personal attack. Your argument that rich people do a lot for the economy regardless of whom they invest in, and claims that enforced equality do not matter, only underscore your view that you have no problem with a lack of economic mobility and the concentration of wealth in the hands of the greedy rich. How exactly you intend to produce an income tax on a business AT ALL when they are making a 25% per year loss (ie, that produces zero net income since they are making a loss) is beyond me. Regardless, simply screaming that my argument is "legit retarded" or "stalinist" is hardly a super rational or well reasoned justification. And then you have the audacity to claim that logical flow is the hallmark of your points, not mine! Show me the logic!

You claim that the assertive relationship of money earned by a company = jobs created is your logic. You claim any economist would agree except communists (and I'm using much nicer language here). Well, prove it. Companies use profits in one of three ways: dividends (and other payoffs to investors), investment (including human capital) and savings. Only a small portion of investment is employment, and because the marginal cost per worker is typically high (at least, outside of the third world) companies tend to employ as few people as possible to get their work done effectively. Indeed, by earning more, companies can usually hire LESS employees than they would otherwise have required, paradoxically. A good example is supermarket clerks today being gradually replaced by self-checkout machines, made possible by huge investments on the part of supermarkets. Then you argue consumers are better off going to private markets rather than protect failing industries. But low value industries are also the ones with the most jobs! This focus on private sector jobs, ignoring public sector jobs, basically means you're missing a huge chunk of the equation. To look at that to you is "loony" and "ridiculous" perhaps, but it's important.

Smart people in universities 500 years ago agreed the sun went around the earth. Just because a professor thinks one thing doesn't mean he's absolutely right, and I can tell you right now, I know other smart economists who would disagree, particularly on who fills jobs, and to a lesser extent on what makes good policy. One thing I'll bet your professor didn't mean to imply is that more jobs by itself means higher wages. Logically, since the velocity of money is constant, it must mean lower wages, since the money is spread thinner between more people. This can be mitigated to some degree by flow-on effects of creating those jobs (and taxes are a part of that), but it's not a causal relationship. It's the government incentivisation to create high value jobs that makes the difference. Good policy can be a part of that, of course, and I'm not disputing that. I am disputing these two lines: "Equation for poverty: Income $10,000 < = Poverty ... How to end up in poverty: Don't have a job (E.G, you don't have a job because those damn income taxes are so high) ". This is NOT the only way to end up in poverty. Lots of people have work but are in poverty. This is the first "assumption" you said you didn't make.

I agree lower unemployment and immigration increase GDP. They do not, however, increase the median wage, or create a more equitable society. In most countries, full employment is a long way off, yet people also cannot find others to fill available positions. This is known as a switching cost in economics. Lowered unemployment generally doesn't affect switching costs. I don't believe humanity has ever had a period where aggregate jobs increased and the economy was in full employment (and indeed, many economists would argue full employment is itself virtually impossible). Indeed work is becoming progressively more scarce, which is the main reason for wage inflation in the long term. I'm reminded of the old argument that the point of much of modern society is to eliminate the need to work. It's an old social credit argument but I feel it still rings true - unemployment can, in many circumstances, simply be a sign of prosperity (get robots to do all your bidding or something). That prosperity needs to be equitable though, or else that classist world of haves and have nots emerges and, of course, invariably collapses. Much like the robots taking jobs, so too is it with layoffs. The reason people were laid off during periods of GDP decline wasn't because businesses looked at treasury figures and said "ah ha!", it was because businesses looked to cut costs, increasing their bottom line. Because people are expensive and other factors of production are cheaper, this is what businesses used. This is also the same reason as the rise of outsourcing.

"I never even said ANYTHING in relation to this" you protest when I claim you assumed business spending was linked to the tax rate. Let's explore that. This thread is about tax. You talked about business spending. Therefore you related the two. Everything you wrote about employment as a function of business expenses (and you wrote quite a lot) is profoundly relevant to this assumption. As an aside, sales taxes generally also hurt the poor more than the wealthy, as the poor spend the greatest proportion of their income (as opposed to saving or investing it). Tax dollars doesn't inherently go to lobbyists - much of it goes to help the poor, and I wish more of it did. Taking a corporation's income may harm that corporation's ability to make a profit, but it helps the nation as a whole make a long-term profit, by providing stability, equality, and long-term security. It's about looking beyond the selfish desires of the greedy fat cats at the top of the corporate food chain and to humanity as a whole.

I am of the understanding that sales taxes in America only exist on a state level, and even then are uncommon. Happy to be proven wrong. Regardless, my point was that you didn't factor them into your model, but with sales taxes on top of income, a lot of variables change. And no, the rich are not job creators. Indeed the very reason they're rich is that they kept their costs low and their revenues high. Forcing their hand with good policy is generally seen as an encroachment on the free market (an obvious example would be minimum wage law) while taxation is seen by people like you as somehow ephemerally unfair. There's no reason why you can't have both!

I agree the rich buy luxury goods, you read me wrong. What I meant was that the majority of investment in luxury goods is not by the rich. It's by people who can't really afford it. I call them the upper middle class, the people who like to show off how rich they are, without really being that wealthy. Targeting these people is a far more lucrative industry for luxury goods. Ever noticed how many jewellery stores partner with finance companies? That's the principle in action. Wealthy people don't need to buy stuff on finance, but poorer people do. Still the wealthy don't buy as much as all the poorer people put together. I do agree that most small businesses are not providers of luxury goods, but that's not what I said. I said most providers of luxury goods are small businesses. There's a huge difference between the two statements and you evidently have them confused.

You're the one shouting a laughable "you're wrong!!!" here, and personally attacking me in all kinds of ways to boot, comparing me to a mass murderer even, and frequently demeaning my intelligence, while providing a minimum of actual responses. You think I'm frustrating? Reread your last post and tell me how exactly one can't be frustrated by that.

In your post above, which I didn't go into a lot of detail on (owing to complexity) you argue through effecting changes in health, education etc through policy, not realizing (as is typical of the US) that these can be public goods. Regardless it is used as a further argument for low taxes, little to no difference between income rates, and lean government. For making this observation, you called me legit retarded.
Yeah, I argued for low income taxes. What about it? And I actually called your argument, not yourself legit retarded, thinking that I was arguing flat taxes. How the hell can you confuse flat taxes with low taxes? That is legit retarded, but that does not necessarily make you legit retarded (which you aren't)

Regardless, I'll answer the rest of your points anyway. More money in consumer pockets AND more scarce production are really the two things that cause inflation, and my definition (which was first observed by Keynes) encompasses both of them.
This is actually not true at all. Scaricity causes an increase in prices, but not an increase in the purchasing power of the dollar, which is what inflation does. This is coming from the mouths of every other economist who has ever written a book or given a lecture.

It doesn't necessarily increase purchasing power.
That is exactly what it does ALL THE TIME. It literally correlates EVERY time.
Corporations and Entrepreneurs invest in imports and shares, so when the value of the dollar rises, so does the value of their treasury, and along with that their purchasing power.

A simple example of this would be if everyone earns more equally, then prices are bid up by everyone by a proportionate amount, and purchasing power remains identical
Seriously m8, just shut up when you don't know what you are talking about. I hate it when people talk out of their ass about things they don't understand. You obviously do not understand this shit.
Purchasing power is not applicable to everyone, and income equality has no effect whatsoever on the power of investors.

The less money the wealthy have, the less purchasing power you'll have. That is a fact. It is a golden rule.
Stop talking out your ass about thinks you don't even understand. Seriously, it is as if you are saying the definition of a cat is a dog. To someone who understands the actual definitions and economics, it looks like the equivalent of that.

Your argument that rich people do a lot for the economy regardless of whom they invest in, and claims that enforced equality do not matter, only underscore your view that you have no problem with a lack of economic mobility and the concentration of wealth in the hands of the greedy rich.
Yes, and this will be the sixth time I've said it. I don't care about income equality. I don't give two shits about it to be honest. As long as every member of society is producing an economic output on some scale it is completely irrelevant if everything is fair and equal.

Neo-stalinists think fairness and equality co-align with capitalism. I am preaching non-fiction. As a market liberal, I must be content with the fact that the best we can do is offer the opportunity to ascend classes, not a guarantee that someone will ascend classes.

How exactly you intend to produce an income tax on a business AT ALL when they are making a 25% per year loss
First of all, what the hell is a income tax in relation to corporations? That doesn't exist. If you are talking about a corporate tax though, then yeah, you can produce a profit on a corporation that is losing money. They are still making money, they just aren't making a profit, and taxes are one of the expenses that come along with it.

That is kind of my point though. Why charge growing and decking corporations ridiculously high taxes? For the sake of equality? Sounds like the great depression all over again.


You claim that the assertive relationship of money earned by a company = jobs created is your logic.
Again, you need to actually read what I write instead of skimming. Generated Revenue coupled with Profit Opport. create jobs. It is an economic law. You cannot dispute a law.


Smart people in universities 500 years ago agreed the sun went around the earth. Just because a professor thinks one thing doesn't mean he's absolutely right, and I can tell you right now, I know other smart economists who would disagree, particularly on who fills jobs, and to a lesser extent on what makes good policy.
Except you are saying things that don't even make sense. You are using words in the wrong context and you are making economic arguments that are outright false and illogical in every sense of the word. That is ignorant and stupid. Stop talking out your ass, because that IS what you are doing.

It is ridiculous that you keep making stuff up. I'm not making this stuff up, you are. I've studied this shit to the barrel and read numerous economics texts, and you are probably skimming wikipedia. Are you basing these theories of yours on any evidence or Economists, because to me it looks like all these theories on economics were pulled out your ass?

Everything I've said is ESTABLISHED economics, agreed upon by both liberals and conservatives. There ARE arguments against low taxes, but none of them dispute the basic principles I have stated

"Equation for poverty: Income $10,000 < = Poverty ... How to end up in poverty: Don't have a job (E.G, you don't have a job because those damn income taxes are so high) ". This is NOT the only way to end up in poverty. Lots of people have work but are in poverty. This is the first "assumption" you said you didn't make.
Then there are two other reasons why you could be in poverty...

1. You are not getting payed minimum wage
2. You are really bad at managing money and overspend on things you don't need (The IRS does not deduct montly expenses when calculating your annual income)

Usually though if you have a job and you are not a legit retard with how you spend your money, you wont be in poverty. Or you got screwed over one to many times, in which case you are still to blame. Solution, take out a loan. It is a second chance most people probably do not deserve.


I agree lower unemployment and immigration increase GDP. They do not, however, increase the median wage, or create a more equitable society.
Well first of all, immigration doesn't necessarily increase Gross Domestic Product. It can cause GDP decline when not regulated correctly.
Although I do disagree with your claim that high employment isn't a sign of economic equitability. Unless you meant equality, which is a totally different term.

This is known as a switching cost in economics.
Don't you mean switching barriers? I don't know what switching costs is but it sounds like switching barriers.
I also don't see how it correlates with what you are arguing, and to be honest, your switch to microeconomics topics are incompatible with arguments for macroeconomic changes.

I don't believe humanity has ever had a period where aggregate jobs increased and the economy was in full employment
What are you talking about? Full employment is achieved when 4% < of the population is unemployed and the rate of unemployment is below NAIRU inflation. Everyone knows that.

Taking a corporation's income may harm that corporation's ability to make a profit, but it helps the nation as a whole make a long-term profit, by providing stability, equality, and long-term security. It's about looking beyond the selfish desires of the greedy fat cats at the top of the corporate food chain and to humanity as a whole.
Bullshit! Corporate profits are directly related to how much a corporation can pay on profit opport., and profit opport. is directly related to how many jobs, products, and revenue a corporation can produce. What doesn't create jobs and commercial stimulation is spending money on social spending for a group of people with the lowest economic output.

You're the one shouting a laughable "you're wrong!!!" here, and personally attacking me in all kinds of ways to boot, comparing me to a mass murderer even, and frequently demeaning my intelligence, while providing a minimum of actual responses. You think I'm frustrating? Reread your last post and tell me how exactly one can't be frustrated by that.
No, you are definitely more frustrating, because I am at the point where I am 100% certain you are pulling these economic theories up your ass, and it annoying to hear blabber that directly contradicts every basic principle of economics I've learned during my studies. I don't believe I am making unjust accusations here. I really do believe you don't have a clue what you are talking about.

Here's something you might not know. I've debated these same arguments a dozen times with a dozen other people besides you, and this is by far the most ludicrous debate I've ever engaged in on taxation. The theories you are making up might make sense to you, but believe me when I say this shit has been tried and tested a million times. It is rare to see someone arguing against some of the few things economists universally agree on.

You are better off looking up proven pro-taxation economists and reading about their arguments, because nothing you are saying is verified or supported by any real major economists besides yourself, and you aren't an economist.

Blackflag: If there's one thing I know for certain about economists, it's that no two of them can agree on anything. If you've been taught all economists agree on basic principles, then geez... I mean, look at all the vitriol that Adam Smith gets nowadays! I'm an economist in that I studied it at university (everything except the maths undergrad papers - I was all mathsed out on statistics for my marketing degree), and follow it extremely closely. I'm pretty sure I have a solid grasp of the fundamentals. Attacking my credibility (you're no economist!) is simply another form of ad hom attack. By chance, I also quite recently wrote code for a forex simulation, so I understand the trade implications of tax policy particularly well right now as it's fresh in my mind (again, there are different theories on it, not just one single accepted narrative). So no, I'm not skimming wikipedia. I've studied this to the bone since I took my first economics class in 2006. Getting upset and accusing me of skimming wikipedia is another ad hom, and really ignorant.

Lower taxes are flatter. Even if you had the most absurdly steep progressive curve on a low tax rate, it's still flatter than if the tax rate was higher, because the people at the bottom pay a closer percentage to the people at the top. If the top tax rate is 5% for example, then the maximum variability in tax paid is only 5%, a small gradient across income brackets. If the top income tax rate was 50%, even if the bottom paid 40% taxes, it's still more progressive than the 5% tax rate can ever possibly be, because the variance is 10%. That's not to say that this progressiveness would necessarily be equitably distributed (that would depend on the brackets) but generally, low tax rates are less progressive than high tax rates can be.

I disagree strongly that scarcity cannot increase the value of the purchasing power of currency, and that inflation always does. If a good is scarce, people bid up the price (we agree on this), and it follows if the price is bid up, then each unit of currency spent is worth a reduced proportion of that good. It's easiest to think of this in terms of purchasing power parity. Say Big Macs are scarce in China, then people bid up the price of Big Macs in China, and each Yen buys a tenth of a Big Mac. If they were less scarce a Yen might be able to buy a fifth of a Big Mac. Say they aren't scarce in the USA, and people bid the price down. A dollar might buy two Big Macs, and if they were more scarce it could only buy one. So as a good (such as a Big Mac) becomes more scarce, you can get a lesser proportion of that good for your currency, and thus, your currency loses purchasing power parity. Of course, this is just for one good. If you look at the economy as a whole, aggregate scarcity becomes really hard to measure, but the same effect is working for every single good in the market. Keynes' description of inflation has stood the test of time. Introduce more money or less goods into an economy, and prices inflate.

Similarly, that inflation always does correlate with an increase in purchasing power. You said, and I quote, "That is exactly what it does ALL THE TIME. It literally correlates EVERY time." I refer you to the German hyperinflation, or Zimbabwe's recent inflation. Inflation doesn't actually always mean people are wealthier. In fact, since inflating prices means each unit of currency is worth less, inflation always diminishes savings. You're right that a high value currency is great for importers, but conversely, it's bad for exporters, and most economies rely on both. Even if it did increase treasuries though, that doesn't mean purchasing power has increased. More money only means greater purchasing power if there is also more output to purchase - otherwise, the prices are simply bid up again, and any increase you would have had in purchasing power (on a macroeconomic level anyway) is simply absorbed by price inflation. Again, more money chasing the same number of goods means prices across the board go up. Eventually this inflation cycle can spin out of control. As it did in New Zealand before our government started using monetary policy in the early 90s, and our inflation rate dropped over 10% in only a year.

You say purchasing power is not applicable to everyone. I suppose if somebody never exchanged goods or services and was entirely self-sufficient maybe, but every Big Mac purchased in the world (or every other good or service) is an exercise in purchasing power. The real value of a return on investment (ie the return less the rate of inflation), likewise, absolutely depends on purchasing power. Income equality has an extremely strong long-run effect on the power of investors - the development of a large underclass of poor people can be a darn nuisance, and ultimately, their poverty grinds the whole economy to a hault. A rather mild example of this effect in action would be South Africa, one of the few countries to legalize flamethrowers on all cars to allow drivers to defend themselves against poor people. Certainly this makes it harder for South Africa to produce anything valuable, and the government there has since taken some big steps to move wealth about.

"The less money the wealthy have, the less purchasing power you'll have. That is a fact. It is a golden rule." No it's not. There's two possible options that you meant here:
1. Either the wealthy gain this money without taking it from the poor. There's two different, competing theories for why it doesn't increase purchasing power in this case:
1.1 In Keynesian-type economic thought, there's more money and the same amount of goods. Too much money is now chasing too few goods, causing inflation.
1.2 All other schools basically accept the quantity theory of money, which argues the price level is equivalent to the money supply, all else being equal (as defined by the equation MV=PQ, money supply times velocity of money equals price times quantity, where price times quantity equals GDP). As this money has not come from others in the economy, the money supply has increased, and as the quantity has not changed, the price level increases as a result. This general increase in the price level may be called inflation.
1.3 Regardless, inflation happens. Each dollar is now worth a lesser amount, meaning the rich only have marginally more, and the poor have marginally less, with no change in overall purchasing power.
2. Or the wealthy gain the money by taking it from the poor. In this case, the money is simply moved around, and the question becomes only who can spend, not what each dollar is worth. No real value is created in the economy.

I don't care if you care about income equality. I'm saying governments have to. And like I've said before, the reasons for that are not exclusively economic, though the long-term economic consequences of ignoring equality are dire. I don't believe in pure capitalism, but even if I did, I wouldn't see it as being something that will guarantee long-term growth over short term profit, as governments require. Further, money IS the opportunity to ascend classes, and not a guarantee. When you have a bunch of people who aren't getting money and a bunch of others who are, the opportunity for social mobility becomes limited.

You note "They are still making money, they just aren't making a profit, and taxes are one of the expenses that come along with it." I think you're confusing profit with revenue. If you tax profit, then a corporation with higher expenses than its revenue pays no tax (this is the case in most of the world). If you tax revenue, then the business pays a percentage of every unit of currency earned. Revenue taxes are things like sales taxes, profit taxes are things like the company tax. This is another thing I know well because I pay both. I generalize both of them as income taxes for businesses, which is essentially what they are.

I absolutely dispute that "Generated Revenue coupled with Profit Opport. create jobs." And every economic law can be disputed, and is. Jobs come not because the money's there. Jobs come because there's demand for labor. Money might give the ABILITY to buy labor, but not necessarily the WILLINGNESS, because as I've stated several times, labor is not very profitable. I've given two examples of this - the rise of outsourcing, and automatic checkout machines at supermarkets. I'll give another example - cloud computing. All these things happen because that so-called "law" is invalid.

You forgot a third option for why one might be in poverty - there is no minimum wage (or the minimum wage is not high enough). Loans are not solutions. You said yourself, debt is dangerous for a government. Well, it's more dangerous for an individual in poverty. Lack of security means the only loans available have ridiculously high interest and essentially equate to lifetime slavery. They're most commonly the case in places like Bangladesh and such, lots of population and development sustained by a huge underclass of poor. Likewise, getting screwed over doesn't mean it's your fault. Often a seller might clearly be acting illegally and steal all your income, but because legal aid is too shit you can't prosecute. Many countries, particularly in the third world, have this issue too. When it comes to general policy for a government, maximizing employment doesn't generally spell the end of poverty. Maximizing wages doesn't necessarily do so either, but it tends to do it better.

I also agree there might be instances where immigration can cause other things which cause GDP decline, particularly when not coupled with more jobs. I'm generalizing based on what you said, and basically said it to avoid that argument. I strongly disagree that high unemployment means equitability. The Egyptians building the pyramids had low unemployment, people were slaves or masters, and both had roles to play. Also, it wasn't equitable. The slaves did almost all the work and got almost none of the pay.

I don't know if they're called switching barriers in your part of the world, but I distinctly remember countless books and my teachers calling it switching costs. Switching costs apply to the labor market as with any other. The point is that changing markets for labor incurs losses, most specifically, time. And that time means a loss of production. The tax implications of this are huge, because it means it's normal to have both unemployment and unfilled job positions. Governments can reduce these costs (communist-esque force people to do a job assigned by the government) but unless they do that, they can't have full employment. Hence why I said, many economists believe full employment is really a myth. Full employment generally means no unemployment comes around due to deficient demand (not generally the case because there are almost always unfilled positions) - in other words, no inefficiency in the labor market. The full employment definition you cited takes the fairly arbitrary figure of 4% for switching costs, and excludes the effect of inflation (which creates unemployment), which is generally the kind of more measurable and achievable/realistic approximation that is used by treasury departments (it would probably be even better if it was time-limited, such as "over the short term"). It's notable, though this is something I disagree with, that other economists do believe in full employment. Keynes thought having MORE than every position filled was very possible (though keep in mind, this was during the Great Depression). You can't study macroeconomics without fully understanding microeconomics.

Here's something I want to ask you: do you really think wages correlate to economic output? You keep saying the poor have the lowest economic output. Why? Cleaners, say, create huge economic benefit (who wants to go into a dirty shop?) but usually don't get much pay. Are they really as worthless as they are paid? Anyway, commercial stimulation requires both social stability and public goods. Merely throwing money around for a corporation doesn't magically enhance their fortunes out of nowhere - they need government to help them out in these two areas, because they won't create themselves otherwise. Of course corporate profits are directly related to how much they CAN pay on creating jobs. That doesn't mean it's related to how much they DO. Corporates have every incentive to reduce jobs, minimize their staff. You can't look to corporates as a guarantee of achieving any definition of full employment, nor fair wages.

I have my own take on economics. I could cite Galbraith or something for why taxes are great, but I'd rather tell you why your assumptions specifically are wrong (and besides, I'm not a fan of him necessarily either). If this is honestly what you're taught in universities though, then I fully understand why people say economics education in America is corrupt.

Lower taxes are flatter . Even if you had the most absurdly steep progressive curve on a low tax rate, it's still flatter than if the tax rate was higher, because the people at the bottom pay a closer percentage to the people at the top. If the top tax rate is 5% for example, then the maximum variability in tax paid is only 5%, a small gradient across income brackets. If the top income tax rate was 50%, even if the bottom paid 40% taxes, it's still more progressive than the 5% tax rate can ever possibly be, because the variance is 10%. That's not to say that this progressiveness would necessarily be equitably distributed (that would depend on the brackets) but generally, low tax rates are less progressive than high tax rates can be.
No, this is 100% wrong. A flat tax isn't necessarily low, a progressive tax isn't necessarily high. I do believe in a progressive tax 100%, but a low progressive tax doesn't change its definition to a flat tax. You need to understand the concept of dictionaries.


I disagree strongly that scarcity cannot increase the value of the purchasing power of currency, and that inflation always does. If a good is scarce, people bid up the price (we agree on this), and it follows if the price is bid up, then each unit of currency spent is worth a reduced proportion of that good.
No, there's a huge flaw in your reasoning. Mark ups in prices do not necessarily correlate with the increase in the value of the dollar, but a mark up in prices in a time of inflation is a clear indicator that the purchasing power of the dollar is increasing.

refer you to the German hyperinflation, or Zimbabwe's recent inflation. Inflation doesn't actually always mean people are wealthier.
Do you know the difference between inflation and deflation? Germany during the Weimar Republic experienced hyper deflation of the dollar. Zimbabwe had the most deflated dollar in the world for awhile, surpassing some southeast Asian countries. You really don't know what you are talking about m8.


I absolutely dispute that "Generated Revenue coupled with Profit Opport. create jobs." And every economic law can be disputed, and is. Jobs come not because the money's there. Jobs come because there's demand for labor. Money might give the ABILITY to buy labor, but not necessarily the WILLINGNESS, because as I've stated several times, labor is not very profitable.
Oh Lord, now I have to teach you basic microeconomics. Profit opport. is the profit that can be made in a faniancial transactions deducted by the oppurtunity cost. Profit opportunity, such as an expansion of a market by purchasing more goods, or an expansion in general terms, always requires the addition of more labor. Labor is a valuable commodity to every growing business.

I strongly disagree that high unemployment means equitability.
I am glad to hear that, considering I made the claim that high employment leads to equitability after thinking you made this claim yourself.

If you tax profit, then a corporation with higher expenses than its revenue pays no tax (this is the case in most of the world). If you tax revenue, then the business pays a percentage of every unit of currency earned. Revenue taxes are things like sales taxes, profit taxes are things like the company tax. This is another thing I know well because I pay both. I generalize both of them as income taxes for businesses, which is essentially what they are.
Well you're not taxing profit, you are taxing total income based on a rate determined by profit. But that is about right. You want to tax corporations which lose money as little as possible. I don't understand how anyone could make the argument that you should tax declining corporations as much as possible. A stalinist?


You forgot a third option for why one might be in poverty - there is no minimum wage (or the minimum wage is not high enough). Loans are not solutions.
They aren't solutions, they are second chances. A low minimum wage is also bad policy, and I believe in good policy, so the argument doesn't weigh much against my own.
If you have a job and you get payed enough to rise above 10,000$, you aren't in poverty, so I maintain the premise that those in poverty are mostly unemployed (or in some cases have families and one minimum wage job, which is because they make bad decisions in life and I'll get on their ass about getting a second or even third job)

You said yourself, debt is dangerous for a government.
Debt can be very dangerous, but they can also be very useful. The problem is when we take out more than we can guarantee we can pay back, which is what a lot of governments are doing to this day.

Here's something I want to ask you: do you really think wages correlate to economic output? You keep saying the poor have the lowest economic output. Why? Cleaners, say, create huge economic benefit (who wants to go into a dirty shop?) but usually don't get much pay.
This is a pretty good point, so I concur. On average though, I believe lower class citizens do have the lowest economic output, and on average, the middle class maintains the most important jobs in society. It should also be noted that many lower class jobs require not even a high school degree, so in the labor market the lower class is a dime a dozen. I prefer the lower class to get an education and let the immigrants take their jobs so they can move up in the world;.

The full employment definition you cited takes the fairly arbitrary figure of 4% for switching costs, and excludes the effect of inflation (which creates unemployment), which is generally the kind of more measurable and achievable/realistic approximation that is used by treasury departments (it would probably be even better if it was time-limited, such as "over the short term"). It's notable, though this is something I disagree with, that other economists do believe in full employment. Keynes thought having MORE than every position filled was very possible (though keep in mind, this was during the Great Depression). You can't study macroeconomics without fully understanding microeconomics.

Wait, how did you come up with the rule that inflation = unemployment?

If this is honestly what you're taught in universities though, then I fully understand why people say economics education in America is corrupt.
You don't seem to understand the difference between economic law and economic theory. They teach us economic law in basic economics, and they'll teach you economic theory in advanced economics courses. I spent 80% of my time on this thread disputing your redefinitions of economic law rather than defending my own economic theory.

If Austrians and Keynesians can agree on an economic principle, it is immediately concerning when someone else can't. I would request that you actually find another economist to verify every argument you've made against an economic golden rule, because in my experience, golden rules are not supposed to be disputed by the sane.

Blackflag: First of all, I'm not an Austrian or a Keynesian. I thought my rant above would have made that fairly clear. There's merit to both philosophies, but I also have serious problems with both. That doesn't mean my logic is in any way wrong, and your increasing assertiveness in argumentation is troublesome. Economics is a science. People used to think Newton's laws were scientific laws that could not be questioned. People used to execute each other for questioning Aristotle. These people have been proven wrong like mad. The same is true, even more so, of economics. I have no doubt that in 200-300 years, we will both look extremely stupid with the laws and assumptions we both take for granted. This is how economics works. The more we question laws and assumptions, the better we can gain an understanding of it. Including the notion that first year university courses *might* just be wrong.

"a low progressive tax doesn't change its definition to a flat tax."
How progressive or regressive a tax is is defined by its slope across income, which is primarily affected by the variability of the tax rate. For a flat tax, the slope is zero. The closer to zero that slope is, the flatter the tax is said to be. Technically, even if the rich are taxed 0.000001% more, then it's still "progressive", but it's not very progressive at all. It's virtually flat, and most economists probably wouldn't think there's much of a practical difference between a 0.000001% progressive tax, and a flat tax, at least in any measurable sense. So as I was saying last round, when taxes are low, their maximum variability is low too. A 5% income tax can't possibly have a variability above 5%, which is much less progressive than a 25% income tax, which has a maximum variability of more like 25%. In New Zealand our highest tax rate on income is 30%ish, and our lowest is 0%, a variability of 33% that other governments that might have lower tax rates would not be able to match. Therefore our tax is more progressive than any nation with a tax rate below 25% can possibly be in terms of variability (the other factor is the position of the brackets, but like I said in my previous post, it's rarely very significant).

"Germany during the Weimar Republic experienced hyper deflation of the dollar. Zimbabwe had the most deflated dollar in the world for awhile, surpassing some southeast Asian countries."
In general when you say inflation, you're talking about a GENERAL increase in prices, not an increase in the value of one particular thing (such as a unit of currency). When there is a general increase in prices, the value of the currency is low. It's an inverse relationship. Which is why Zimbabwe had loaves of bread costing billions of units of currency. When there's an inflation, each unit of currency is worth less. What you're talking about, I *think*, is an inflation in value of currency. That's not the kind of inflation we were talking about, and isn't the economic definition. We were talking about inflation caused by taxes, which affects the purchasing power of commodities, and not forex markets.

"an expansion in general terms, always requires the addition of more labor"
Really? Because Singapore kinda had a decreasing population and an increasing GDP for the longest time. What you're forgetting is that human capital is not the only form of capital that can generate value. ATMs created HUGE value for the banking industry, but also led to mass layoffs of bank tellers. That sort of technology will eventually replace employment. We're already seeing it happen, and yet our economies keep growing. I've given like 5 examples in this thread so far that utterly disprove this so-called "golden rule", and I have hundreds more. Automatic answering machines in phones to replace secretaries. The world's effort is generally to allow us to do as little work as possible, and capitalism gives people that incentive, because people are expensive compared with technology, especially if that can be mass produced. Xero-type technology is replacing accountants, modelling is replacing meterology, etc etc.

"Well you're not taxing profit, you are taxing total income based on a rate determined by profit."
I don't think there's a single tax in the world that works this way. Company tax, AFAIK, always taxes profit. Sometimes it's progressive in that the rate changes depending on profitability, but the monies are always taken out of profit and not revenue. Also, when you're talking about companies, I assume by "total income" you mean revenue, because that phrase is ambiguous in accounting.

"A low minimum wage is also bad policy, and I believe in good policy"
Well that's a very important condition you missed from your syllogism in the first post. Redistributive policy. I wonder, why do you have a problem with tax redistribution, but none with policy redistribution. Regardless, on its own the minimum wage has little long-term effect, as it creates inefficiencies in the labor market (DWL etc). In the short term, it stabilizes equitability a lot and makes a big difference.

"They aren't solutions, they are second chances... The problem is when we take out more than we can guarantee we can pay back, which is what a lot of governments are doing to this day."
The poor can't pay things back! They're much worse placed to pay anything back than the government!

"It should also be noted that many lower class jobs require not even a high school degree, so in the labor market the lower class is a dime a dozen."
Even worse to say education level correlates to value provided economically lol. I can think of professors & doctors who have done incredible damage, and people with no education who have done incredible good.

"inflation = unemployment?"
This is known as the Phillips curve, and it holds true during all times EXCEPT when you have stagflation (which unfortunately tends to happen rather a lot if you follow it too closely, hence why it's usually seen as holding true for the short run only - regardless, it is useful to exclude inflationary effects from unemployment in short term metrics for this reason). Essentially, when unemployment is low (more people are employed), inflation is high (prices in general rise faster). There are several reasons why it holds true, most importantly because inflation makes investment harder in general, so people take on less staff.

How progressive or regressive a tax is is defined by its slope across income, which is primarily affected by the variability of the tax rate.
Even though your definition is wrong, it is still supporting what I am saying.

I am advocating for a low tax, but you are actively making the claim that the lower a tax is the more it benefits the rich. If the middle class pays 10% and the rich pay 15% of their total income ,that would be considered an extremely low tax, but it is still a progressive tax, because by your own definition, the rich are still paying more, in both percentage and lump.

You pretty much said several times that the lower a tax is, the more regressive it is, but now you are reverting and saying that you were talking about flat taxes the whole time.

In general when you say inflation, you're talking about a GENERAL increase in prices, not an increase in the value of one particular thing (such as a unit of currency)
Nope, inflation and deflation refer to the direct change in the purchasing power of the dollar. Increased or decreased prices are only a result of the value of the dollar changing. A raise in domestic prices on a certain item wont nessecarily cause inflation, but an increase in the purchasing power of the dollar will always result in an increase in prices.

"an expansion in general terms, always requires the addition of more labor"
Really? Because Singapore kinda had a decreasing population and an increasing GDP for the longest time
That is because the Singapore economy is based off of financial trading and not actual commodities. That is a dependent economy, and they are as fragile as shit.

If you don't pinpoint the exceptions to the rule though, generally population growth is needed in an expanding economy as demand for more skilled or uneducated labor rises to fullfill the new roles required to maintain this newly expanded economy.

I don't think there's a single tax in the world that works this way. Company tax, AFAIK, always taxes profit. Sometimes it's progressive in that the rate changes depending on profitability, but the monies are always taken out of profit and not revenue. Also, when you're talking about companies, I assume by "total income" you mean revenue, because that phrase is ambiguous in accounting.

That's right, it doesn't exist. The remarked about the corporate windfall tax because it would make a great platform for taxation reform.

Redistributive policy. I wonder, why do you have a problem with tax redistribution, but none with policy redistribution. Regardless, on its own the minimum wage has little long-term effect, as it creates inefficiencies in the labor market (DWL etc). In the short term, it stabilizes equitability a lot and makes a big difference.

Maybe because there isn't a word called policy distribution for me to have a problem with. Where did I say I had a problem with tax redistribution though? (Which I do)

This is known as the Phillips curve, and it holds true during all times EXCEPT when you have stagflation (which unfortunately tends to happen rather a lot if you follow it too closely, hence why it's usually seen as holding true for the short run only - regardless,
Dude, do you even know what the phillips curve is? Unemployment causes inflation, not the other way around.

I think you have all the concepts backwards, because the rules you are stating only work one way. You can't inverse the rules, because then they no longer hold true.