Smithers MINNEAPOLIS

Does taxing the wealthy more heavily impact poor people in a positive way? And have countries with free markets been the ones who have been most compasionate to the poor?

Do wealthy people have more opportunity to make money?

Money is capital - if you have it, you can reinvest it and make more of it - so in capable, motivated hands, the answer to this question is “yes”.

In the hands of trust funders like Paris Hilton, the answer is “no”.

Yea!!!!! it’s State Fair time

Did you mean Fair or fair?

Do we want a completely “fair” tax code, or do we want a “wise” tax code? The two concepts are not synonymous.

It’s worth noting that the persistence of poverty in this country has actually increased as we’ve moved from consumption based taxation (excises, tariffs, etc..) to “progressive,” income-based taxation. Ironically, reinstating tariffs and consumption based taxes might be one of the best things we could do for the poor.

Not “fair” in the minds of many, but perhaps the best. And yes, this is one big place where I differ with most libertarians and conservatives.

It’s worth noting that the persistence of poverty in this country has actually increased as we’ve moved from consumption based taxation (excises, tariffs, etc..) to “progressive,” income-based taxation.

I have sooooo many issues with that statement that I can’t get them all down on paper, er, keyboard….

1) ‘persistence of poverty’. what the H does that mean? Increase in poverty? Prevalence of poverty? difference in income levels? Difference in wealth levels?

2) you have made a causal relationship between poverty and the movement of taxation type. I reeeeeeally suspect the the ‘persistence of poverty’ is quite a complex argument and reducing it to single causation is quite simplistic. And of course mentioning that the cause is a ‘liberal’ tax issue (ack, ‘progressive’ taxes!) shows your true colors.

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redBeard - This is Bike Bubba

1) if the government is in involved then affected market/policy/whatever will go downhill.

2) if a market/policy/whatever goes downhill, then obviously the government was involved.

Insert economic/military/diplomatic crises of your choice into either 1 or 2 above.

http://tinyurl.com/5raau4

“Income statistics, however, don’t tell the whole story of Americans’ living standards. Looking at a far more direct measure of American families’ economic status — household consumption — indicates that the gap between rich and poor is far less than most assume, and that the abstract, income-based way in which we measure the so-called poverty rate no longer applies to our society.”

In the hands of trust funders like Paris Hilton, the answer is “no”.

Errr…Paris Hilton is making money hand over fist, it seems to me.

yeah…. “fist” seems to have a lot to do with it….

Redbeard, what I’m getting at is that people who are poor today have a higher tendency to stay poor than, say, a century ago, according to Marvin Olasky’s “The Tragedy of American Compassion.” The correlation is certainly there; one example of this is to look at the rates of unwed childbirth among urban blacks before, and after, AFDC was started. Before: 25% or so. After: 75% or so.

The trick to understanding the causality is to understand the incentives. If you reward people for having low income through progressive taxation and various welfare programs, what do you think will happen?

If you said “more people will choose to have low income,” go to the head of the class.

Now consider, on the other hand, what will happen if you do not have welfare programs or taxes on income, but rather on consumption.

And come on, pcomeau. This isn’t mindless repetition; it’s merely figuring out what is likely to happen when certain incentives are given. You get what the system rewards.

If you said “more people will choose to have low income,” go to the head of the class.

Yeah…people are lining up to make $9,500 a year instead of $50,000.

You’re an idiot, Bubba.

black-unwed-mothers destroying america is so 1998. Get with the program. How does this relate to terrorism?

Im thinking that a consumption tax puts more burden on the poor than the rich. The poor spend all their money on basic needs, while the rich meet those needs, and then they either save, invest or buy services under the table (illegal alien house-cleaners, mistresses, etc)

Agreed with Skibby and Jim R. I don’t know anyone that’s turned down a promotion to ensure they stayed in a lower tax bracket. The relative impact of taxes in a literal, day-to-day way, only subsides as the gap between the cost of basic needs and discretionary income grows.

If we’re talking about poor areas in this country, we’re not talking about people refusing a promotion. We’re talking about people never getting a job in the first place, and yes, there are certain incentives to not even try.

Skibby is correct that a consumption tax would tend to extract a larger tax burden from the poor, proportionally. However, they also create the incentives to get to the next level.

Put differently, when Kennedy and Reagan lowered peak tax brackets, and when capital gains taxes were cut, revenues soared as capital came out of hiding. People who stopped working at a dime a dollar (top tax rate pre Kennedy) found it worthwhile at 30 and 60 cents on the dollar.

And you know what? When they did so, they hired the poor.

And you know what? When they did so, they hired the poor.

Bubba,

Please define “the poor”.

…and also…please define “the group” that hired them…

We’re talking about people never getting a job in the first place, and yes, there are certain incentives to not even try.

then why aren’t you and the rest of us basking in the glory of unemployment?

are we just stupid? Free money, right?

or, is it really not that awesome to be poor, down-trodden, out-of-work, and struggling to feed your kids?

or do you mean, “never getting a job in the first place” in the born into weath sense?

talk about leeches…

p.s. i have been on unemployment.

you don’t get all that much.

I think it’s funny that “the poor” have become the topic of this big debate when the original post concerned the wealthy vs. the middle class (at least, what’s left of it).

The wealthy can withstand higher taxes at a smaller percentage effect on their overal financial standing than the middle class. A $1000 dollar tax break to a middle class family carries more weight than does such a tax break to the wealthy. In the same respect, I’m OK paying more taxes than someone who makes half of what I do. Taxes go toward the public good. I’m certainly not an advocate of wealth redistribution, but I’m also not against making my contribution to the public bank account to fund various public goods.

As for unemployment, I know of one dude who went on unemployment and actually made off pretty well cause he had worked in a highly specialized field and made good money before being laid off.

Finally, Re: welfare’s addictiveness… I’ve only spent a brief amount of time volunteering with a kid who’s mother was likely on some form of welfare or another. On the one hand, I sometimes wondered about how she spent the money she was getting in public assistance. On the other, I didn’t feel right judging her predicament because all I had was a cursory exposure to her every-day life. I think that’s the error many of us make in all this pontificating — I don’t think most of us know what it’s like on the other side of the fence. Sure, I imagine it can be easy to just collect a check from the government and leave it at that, but I think it naive to ignore ALL the other factors that contribute to a person’s predicament in life — luck (as brought up here many times before), race, sex, etc. all play a huge roll in all of that.

To a degree both Dem’s and Repub’s often try to solve these problems by simply thowing money at them; the Repub’s just feel they deserve to see a return on it as if it were an investment for themselves rather than an investment in someone else.

The thing is its all based on want. Everyone here and anywhere would want to earn more money, have financial independence and retire early. But nobody is doing anything about it. Seemingly content in their jobs and excuses people are not utilizing the resources available to achieve success. How easy would it be to go to a community college part time and get a secondary degree or even pursue another degree? The total cost for part time is around like 5-6K a year. With that new learned skill or title it would increase your skills and you would enhance your network along the way. Those are the two keys to success having skills and networking, its not luck. In order to get to the top it’s who you know and what to do when you get there. Let me put it another way, how many people are satisfied with the quality of training you accomplish through the week? It could be better right? But other things get in the way; if you truly wanted it you would pursue it. Every one knows this but training is hard so people don’t want to do it and those that put it first win the most, right? That is what is holding everyone back and that is what bubba was talking about. People are not stepping up like they used too. Being poor doesn’t mean instant death anymore, it just means a lower quality of living. We are the first generations to deal with the poor on a whole new level, since before dieses and pestilence just wiped them out. So we got more people not working, living on the edge but being in a way rewarded. They know they can use that money and carve out a meager means and adjust to that lifestyle. Like it or not poor people have a choice, every one has a choice to make their lives better. It’s just the way things are.

Morgan,

Wow. I do not know where to begin, but way to oversimplify everything. This, in particular, deserves comment:

People are not stepping up like they used too.

Who is not stepping up? What exactly is this comment based upon? Anything??

And this bit: Those are the two keys to success having skills and networking, its not luck.

I’m not trying to knock anyone who attends community college, but be serious. Networking from the community college bank of potential resources is not the same as that of Yale, Harvard or any other major University for that matter. Not even close. If one grows up poor and in an underfunded school system where teachers supervise rather than teach, and this student has to contend with all sorts of serious disadvantages and major obstacles both at school and at home, you think they just aren’t “stepping up like people used to?”

Think about what your saying.

imo, there is no middle class.

just wealthy and poor.

“middle class” living in america could easily pass for upper class in most of the rest of the world.

if you don’t consider yourself poor, you are either rich (and without worries), or you are simply waiting for the levy to break, and doing what you can to delay it. (and fooling yourself into thinking you are not poor).

it is not a crime to be poor.

“The working class and the employing class have nothing in common.” - IWW

(remind me to not listen to Billy Bragg at work.)

Who is not stepping up? What exactly is this comment based upon? Anything??
Think back to 1900’s for a somewhat modern day example. People didn’t whine about not getting enough free time or not enough money if they where impoverished. They worked hard all day every day. They made sure their kids went to school, and if they could college. They knew education was a key to success. Now people trap themselves in low income jobs. Don’t believe me? Go to a grocery store/ convenience mart and ask how long people have been working there. Now unless you’re the owner you’re getting the shaft by working there.
If one grows up poor and in an under funded school system where teachers supervise rather than teach, and this student has to contend with all sorts of serious disadvantages and major obstacles both at school and at home…
So your saying you can’t leave Harlan alive?
If you where right there would be no one successful coming out of Compton, Harlem, North Minneapolis, Albuquerque, Detroit, Miami, or Stockton… the list goes on.
I’m not saying its not going to be a cake walk but I’m saying its there if you want it. There are libraries, there are teachers, and there is the internet to find education. No teacher and I repeat no teacher is going to turn away a student who wants to learn. They will tutor you and pass on their knowledge to you if you want it. Disagree? Talk to any teacher in any district anywhere. Teachers want to teach, if they didn’t they would be somewhere else.
if you go to a community college, get your generals or degree in something. Then go to say the U part time using your past credits or degree, then you get to say you graduated from the U. And I’m guessing you never had to deal with poverty on a personal level if you don’t understand how even a community college degree can better someones life immensely. People have to start somewhere, if it’s a community college that’s great news; people gots to walk before they run.
The key thing is the network though. You may not see it at first, but there is the Kevin bacon thing. You will run into someone successful and if you befriend them then you added them and their friends to your network. its a simple thing that the more people you know the more you can get help from someone who knows.
As for stepping up I’m saying that if you’re not giving it all you got then you are not doing enough, you get out what you put in, nothing worthwhile comes easy, etc…

if you don’t understand how even a community college degree can better someones life immensely

I didn’t say that. Re-read my post.

If you where right there would be no one successful coming out of Compton, Harlem, North Minneapolis, Albuquerque, Detroit, Miami, or Stockton… the list goes on.

Also didn’t say this. Re-read my post.

Think back to 1900’s for a somewhat modern day example. People didn’t whine about not getting enough free time or not enough money if they where impoverished. They worked hard all day every day.

I’m sorry, what?? How old are you?

I’m not saying its not going to be a cake walk but I’m saying its there if you want it. There are libraries, there are teachers, and there is the internet to find education.

You’re ignoring so many factors: living conditions, environment, up-bringing, et al. This list goes on and on. I’ll say it again, you are grossly over-simplifying the situation, Morgan.

Morgan - two basic critiques…
As checkbook has pointed out, you are oversimplifying the situation. There are dozens of factors that go into why a poor person stays poor. Education is only one of them…

Second on the “Think back to 1900’s…People didn’t whine…” paragraph. There was not such halcyon time in the last century… people did whine, act like pricks, etc. just like they do now. In general the standard of living has improved, but in other areas we have not done enough (e.g. kids still starve, investment in public education could be better, etc.)

Ah leave Morgan alone–he’s just a kiddo.

But Bike Bubba oughta know better:
Redbeard, what I’m getting at is that people who are poor today have a higher tendency to stay poor than, say, a century ago, according to Marvin Olasky’s “The Tragedy of American Compassion.” The correlation is certainly there; one example of this is to look at the rates of unwed childbirth among urban blacks before, and after, AFDC was started. Before: 25% or so. After: 75% or so.

Total BS. Moffit and Rosenzweig found marital and fertility effects from TANF, it’s true, but nothing nearly that big, and they don’t hold up to robustness checks. Your correlations don’t mean jack–it’s a secular time trend, not a causal effect.

Lee and Solon (NBER 2006) found that there has been no change in intergenerational income mobility for the cohorts born 1952-1975. If you have better evidence, show it or admit you’re full of crap.

Martin Olasky is a journalist with a PhD in “American Culture”. What a load of crap. If you feel the need to pontificate on economic issues, take two minutes on Google Scholar first and edumacate yourself.