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Sunday, February 8, 2015

Quote of the Day -- on "Trickle Down" Economics


And the Republican mantra and platform:


9 comments:

Sevesteen said...

But somehow if you give people money if they are unproductive, and take money away if they are productive that will encourage people to be productive.

Mo Rage said...


But fortunately, no one is remotely even suggesting, let alone proposing such a thing, though that's the way too many on the Right would describe it, sadly and/or untruthfully.

Sevesteen said...

Maybe people aren't proposing it in those words...but that's what we have now. Means tested welfare programs are like this, including AFDC and SSDI--If you get a job you lose benefits, you often lose more in benefits than the increase in your net income. Maybe it isn't the intent, but the result is being paid to be unproductive. In the case of SSDI the penalties are worse--if you are able to work sporadically, you can permanently lose future benefits by working too many quarters. (my wife is on SSDI)

You may not want to call it paying people to be unproductive, but it remains paying people to be unproductive and punishing if they become productive.

Actual giving to the rich is rare--rather, we take less, let them keep more. When do we give directly to the rich, when it isn't part of some government program for some other purpose? That's a separate issue from how much we should take from the rich.

I'm not interested in the titles or claims of a law, I'm interested in what it actually accomplishes.

Mo Rage said...


You perspective is purely your own opinion and outlook, not the actual situation.

The fact is, these programs pay very little, as you and the Right Wing and Republicans and Tea Party, etc., would all have it and that's fine to an extent. It's to help those down on their luck.

The fact is, yes, once you get a job, you lose benefits. Isn't that the way you would have it? Doesn't that make sense?

And yes, there will be those low paid people out there who find, the minute they get some job, they lose their benefits and they're, in effect, financially "punished" by getting that job and they feel they need to quit it and go back to the federal dole.

But here's the other catch.

You and I both know the payments from the government, from "Uncle Sugar" aren't permanent.

That wipes out your criticism.

So you're against all this help from the government but you don't want "welfare" programs to be means tested? That's what you seem to be saying.

And "Actual giving to the rich is rare"? You're denying or ignoring every tax break the wealthy and corporations get, then, and they are in the billions. They are a far bigger portion of tax handouts than anything we give to the poor. I'd be only too happy to post links to just some of them if you'd like.

Sevesteen said...

When a company has $10 million in profit and the government says "you only have to send us 2.6 million instead of 3.9 million", that isn't giving the company 1.3 million dollars. It is only reducing their taxes...to be equal to the average European corporate tax rate in this example.

Repeat--taking less isn't giving handouts.

Yes I believe we have too much welfare, and that with less interference most human welfare recipients would find work, many of the corporate welfare recipients would find legitimate profits.

As a separate issue, the way we do human welfare is insane if the goal is a hand up--the marginal income for a welfare recipient who gets a job should never be negative, and should probably be at least around 50% of actual income.

Mo Rage said...


GE, as just one example, doesn't even pay taxes, as you surely know. In fact, not only do they not pay taxes, after all the deductions they took, we paid them back money, from our own treasury. You would defend that?

And they're far from the only company that doesn't pay taxes.

Additionally, many companies offshore profits so they can and do avoid taxes. You'd defend that, too, I suppose?

And do you know why they have these legal sham of an idea options?

Well, of course, because they gave their Congressional representatives--ours---also legal campaign contributions. That way, they can and do get the laws they themselves want that benefit them.

And then there's the NFL which is totally tax exempt.

You'd defend all that?

And "Big Oil"? Why does one of the most profitable industries in the nation and world get tax deductions?

What parts of any of this makes any sense of any kind?

And how could you or anyone else defend any of this?

It's these kinds of egregious situations and examples I'm talking about. These are very real tax deductions for the wealthy that shouldn't be legal or allowed.

Or don't you agree?

Sevesteen said...

I'll have more later when I have time...but if we doubled oil company taxes what do you think is more likely--The companies would continue as is, but with less net profit, or oil profits would remain similar and the costs passed to consumers? Note that the profit margin of oil companies isn't out of line with other companies, and that taxes are already higher than their profits.

Mo Rage said...


Once again, you take a situation to its extreme.

In the first place, no one's even talking about doing the fair, sensible and decent thing and that is, doing away with the "Big Oil" tax deductions, let along doubling their taxes.

You evaded the questions and its pertinent and relevant---that is, why should one of the most profitable industries in the nation and world have tax deductions?

More to the point, shouldn't these companies help pay for our infrastructure which actually helps them get their products to market via highways, bridges, schools, etc? And if it upped the price of gas, it would be incremental, first and second, it would likely help us, actually, as a nation wean ourselves off these fossil fuels so wins all around.

Sevesteen said...

You accuse me of evading...in a response where I clearly said it was incomplete with more to come later...and your response doesn't answer the single question I asked. I suspect because the answer is obvious...and the implications don't go where you want them to.

Often an extreme example is better at showing a point. If doubled oil company taxes would get passed on to consumers, wouldn't raising them however much you think is appropriate be passed on to consumers? Admittedly oil taxes aren't a great example, since the road tax portion is at least in theory pretty well pinpointed at the users of roads-but the fact remains that in this case the government's "profit" on a gallon of gas is larger than the oil companies'. The oil companies make a LOT of profit, but the rate is similar or less than other industries for the capital investment and risk. Percentage is what we should be looking at--people use a lot of oil, it costs a lot to get that to us, it takes a big company to do it. We also have issues of competition--it is effectively impossible to build a new refinery under current rules, there are silly and complicated rules on what ships are allowed to carry what petroleum products to where. Restrictions on exporting US petroleum mean that we wind up using more expensive refinery methods to get the percentages of different petroleum products we need, instead of trading our excess for another country's excess.

I don't know the details of GE's tax situation--I've seen the claim they pay no taxes, it is plausible. That's a problem with the system rather than GE--and another round of rules is more likely to increase the problem long term than it is to fix it.

It is understandable that companies offshore profits, when our rates are much higher than the industrialized average.

There are lots of good reasons for options and futures--They allow businesses to better predict and plan. A classic example is options on real estate--a developer needs 6 different properties owned by 6 different people. Options means that he can negotiate without the 6th owner being able to take advantage, or without being stuck with 4 useless lots. The problems arise when they are used to manipulate taxes and financial regulations.

I think it is misleading to say that "the NFL is tax exempt"--that leaves the impression that the individual teams, where most of the profits occur are exempt which isn't the case. In theory at least the NFL is a trade organization rather than a company. That said, even the individual teams get far too many government breaks and actual handouts.

You can't do away with all deductions, that's how profit is calculated--expenses deducted from revenue. Offsets are another matter, it may be practical to eliminate most of them. The real issue is that tax incentives of one sort or another are how many Big Government programs are enabled--a tax break to build a factory here, a tax break to produce green energy or green cars--with each individual tax break appearing to be legitimate. Rule of law is critical--we can't just willy-nilly change everything around without creating a huge problem with investment here, we need to have an orderly transition.

We need to recognize that in the end, taxes are just another cost to a business, and costs that are shared by all businesses get passed to consumers. I believe that if citizens directly paid for the majority of government revenue and business taxes were low, the costs of goods and services provided by business would be lower, and that savings would more than offset the additional taxes we would pay. It would also encourage businesses to produce more products domestically, creating more domestic jobs. It would reduce the advantage of importing from low tax countries, and increase the advantage of our products exported to other countries. People cheating on taxes would be easier to prosecute, and there are far fewer economies of scale in finding obscure loopholes.