Kraken Loc: Barry's Bay

Elizabeth Warren’s wealth tax proposal has certainly sparked debates not just about basic questions of fairness, of morality, but also about the economic effectiveness and very meaning of taxation.

The debate raises the question of what it means to invest in America.

Beto O’Rourke, in the last debate, jumped on the Warren-bashing bandwagon, accusing Warren’s policies of being “more focused on being punitive or pitting one part of the country against the other instead of lifting people up.”

Elaborating O’Rourke’s critique in terms of the impact of the proposed tax on the economy, Lawrence Summers, Treasury secretary under President Bill Clinton, and law professor Natasha Sarin argued in a paper they wrote that a wealth tax would “undermine business confidence, reduce investment, degrade economic efficiency and punish success in ways unlikely to be good for the country or even to be appealing to most Americans.”

While we tend to hear in the media from billionaires like Bill Gates and Leon Cooperman and not the 99/9% of households that would not pay more taxes under Warren’s proposal, polls directly contradict Summer’s and Sarin’s claim, showing overwhelming public support for a wealth tax.

But let’s assess Summer’s and Sarin’s claims that the tax would “undermine business confidence, reduce investment, and degrade economic efficiency.”

In short, let’s explore the question of what it means to invest in America and whether a wealth tax would really constitute a reduction of investment in America.

First, let’s just reflect intuitively on whether a tax on just .1 percent of American households seems likely to “undermine business confidence” and “reduce investment.” Consumer spending makes up roughly 2/3 of the U.S. economy, so it stands to reason that policies geared toward fostering a consistently robust consumer and encouraging consumer confidence in the 99.9% of households just might be a more effective approach to stimulating economic activity and ensuring the long-term economic health. Just saying.

For example, a recent study from the Illinois Economic Policy Institute highlights the many ways raising the minimum wage would significantly improve Illinois’ economy. The study contends, “By raising the minimum wage, Illinois can boost worker incomes, reduce income ine******y, increase consumer spending, grow the economy, generate tax revenues, and decrease taxpayer costs for government assistance programs.”

In a nutshell, raising the minimum wage to $15 would both save taxpayers money by decreasing the need for public assistance for the working poor (saving $87 million alone in food stamp outlays, according to the study), increase the revenue the state brings in from income and sales tax (generating, the study says, $380 million in new state tax revenue), and overall generate $19 billion in economic activity.

And let’s consider whether providing in universal childcare and helping to alleviate the burdens of college debt crippling many Americans, both benefits Warren’s wealth tax would pay for, would be good investments of our tax dollars in ways that would uplift American citizens and businesses.

Studies show that the high cost of childcare prevents women, in particular, from participating in the labor force, strait-jacketing the U.S. economy and reducing GDP by as much as five percent.

When it comes to student debt. according to a study from the Levy Institute, canceling the $1.4 trillion in student debt would spur economic activity to the tune of creating between 1.2 and 1.5 million new jobs in the first few years, creating tax-paying citizens who buy houses, start families, create businesses, and so forth.

Summers himself has made a similar point elsewhere, arguing that instead of these tax cuts, it would serve businesses better for the government to invest in the infrastructure and education of the workforce to help businesses be more competitive.

These investments in people trickle up.

And let’s remember, also, how effective Trump’s tax cut was in spurring investment and fostering economic efficiency.

These tax cuts benefited the wealthy and did not trickle down, despite Trump’s promises that companies would invest in workers and not cut jobs. Companies like AT&T, Wells Fargo, and General Motors lobbied for them, promising to re-invest their tax savings in their workers and companies to the benefit off the nation as a whole. And yet all of these companies have engaged in massive layoffs or plant closings. AT&T has eliminated over 23,000 jobs since the tax cuts went into effect, despite receiving a $21 billion windfall from the tax cuts with the prospect of cashing in an additional $3 billion annually in tax savings. In November 2018, GM announced it would be closing five plants, eliminating 14,000 jobs in communities across Ohio, Maryland, Michigan, and Ontario, Canada, while buying back $10 billion in stock and earning a net profit of $8 billion on which the company paid no federal tax. Wells Fargo did raise the minimum wage of its employees, though the tax savings for the company were 47 times larger than the cost of that pay raise to the company; and the company announced its plans in September 2018 to eliminate 26,000 jobs, at the same time that it has raised health insurance costs for its employees.

Reducing the corporate tax rate from 35 to 21 percent and saving corporations some $13 billion in taxes was supposedly to spur economic growth, create more jobs, and induce companies to raise wages. While Treasury Secretary Steve Mnuchin trumpeted that 90 percent of working adults would experience an increase in pay tied directly to the tax cuts, in fact only 4.3 percent of workers in Fortune 500 companies have received either a one-time bonus or an increase in wages. Businesses have reaped nine times more in tax cuts than what they have passed on to workers.

Maybe investing in people, with an toward, in fact, lifting them up, would be wiser and create a healthier economy for all, such that the wealth tax shouldn’t be viewed as punishing success but as an investment in the very economy and infrastructure that made the success of millionaire’s possible.

Directing resources through public policy not to the wealthy but to the worker contributes more powerfully to the health of the economy and overall society.

https://www.politicususa.com/2019/11/09/as-wealth-tax-debate-heats-up-what-does-it-mean-to-invest-in-america.html

anotherview Loc: California

Logical Fallacy: "Directing resources through public policy not to the wealthy but to the worker contributes more powerfully to the health of the economy and overall society."

This conclusion omits alternatives, presenting instead two options, this or that (either/or).

After all, perhaps a policy balancing resource allocations in an equity between the wealthy and the worker might prove more effective, beneficial, or efficient.

Blurryeyed Loc: NC Mountains.

Such a stupid article written by someone who could not possibly have more than a 3rd grade education. The taxation claims the author makes are lies and nothing better can be said for them, the author of this article is lying to you yet here you are reposting it, it only goes to show that you are indeed in need of an education yourself.

incognito

Krack head get involved in Canadian Taxation and save your stupidity for Canada Not ours. We don't need the ilk like Warren, Sanders, and YOU trying to peddle the tax BS. Afterall we don't want to bring our healthcare system down to your level.

Tex-s

This article is nothing short of criminal. If Warren's plan were to come into law, private wealth among those affected would decrease at 8% per year. This formula does not hit only their income from year to year, but would tax, re-tax, re-re-tax etc all of their wealth, including appraised value of non-liquid assets like homes. Current taxation has a mathematical form of wealth = last year's wealth + this year's earning minus taxation. This formula allows one to build wealth. Warren's plan is merely a depreciation formula wealth = (original weath + new income)(.92)^y where y is the number of years. Unless billionaires earn in excess of 8% of their wealth EVERY year, this plan rapidly decreases their wealh, and rapidly reduces revenue, while also crippling investments and the economy.

thom w Loc: San Jose, CA

I don't suppose you've ever heard of property tax?

anotherview Loc: California

We have the old story that the rich individuals and wealthy corporations lobby the Congress to jigger the tax code to reduce their tax burden. So we see the spectacle that some individuals and corporations pay no income tax.

Given so, I believe it is more in order to revise the tax code with a view to the rich and corporations having to pay their fair share of taxes.

I believe it is also possible for the Congress to reduce and consolidate the number of overseas installations (now about 800) dev**ed to U.S. military activity -- without significantly harming national defense or national security.

Further, the national debt and the continuation of annual budget deficits together require payment of interest on loans that float this debt and these deficits. All candidates for federal political positions, including the President, should agree to trim the annual federal budget and lower the national debt. The savings on loan interest could go to funding other projects and programs or to lowering individual income tax.

Other ways exist toward living within our means without drastic action harming the nation or negatively affecting the standing of our nation in the international order.

Blurryeyed Loc: NC Mountains.

Thom, the federal government had to pass an amendment to our federal constitution in order to institute an income tax, it was specific in nature. No where does the constitution authorize a property tax and it also is specific in the manner in which taxes are to be collected, in other words you can not isolate a segment of our population for taxes.

The reason that the states and local communities can collect property taxes and the states can not is because of the 10th amendment, that and the fact that for the most part other than individual rights the US constitution is controlling on the federal government not the states.

There will be no wealth tax.

Blurryeyed Loc: NC Mountains.

Corporate taxes are stupid in the first place and the fact that the tax code is some 70,000 pages of bought and paid for favor by lobbyists is just another reason to get rid of corporate taxes all together.

Clearly the consumer pays the corporate tax, there is no getting around the fact that corporate taxes are paid with proceeds gained by selling or providing goods and services. Bottom line is that a VAT tax is much more t***sparent and fair in that no one gets the types of breaks that allow major corps like GE, GM, Amazon to make billions in profits without paying taxes, a VAT would collect the same tax rate on the products of these giants that they would collect on the services of Joe the plumber.

It is insane that your local service provider, be it your plumber, electrician, or any other small service provider is paying taxes while profitable giants are paying zero in taxes. A VAT levels the field and we can all see the taxes that are being paid and there can be no sweet heart deals for favored corps.

thom w Loc: San Jose, CA

But, property taxes do exist and they continue year after year. That was my point. Will there be a wealth tax? I don't really know, you may be correct. Do I favor a wealth tax? I haven't studied it. I favor it on an emotional level, but I try to not make decisions based on emotions.

letmedance Loc: Walnut, Ca.

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Cykdelic Loc: Now outside of Chiraq & Santa Fe, NM

The single most ignorant and valueless article I’ve read in months. Thanks for sharing this mindless swill with the rest of us.

Note the early complete lie “...the 99/9% of households that would not pay more taxes under Warren’s ...”
as anyone with the slightest command of math understands Warren’s series of proposals requires increased taxes down through the middle and lower middle class.

Even that dinosaur c****e Bernie recognizes this!

anotherview Loc: California

News reports say the business world opposes eew because of her proposed tax scheme to soak the rich and corporations. As always, the oligarchs will step forward to protect their valued interests. We shall see.

Blurryeyed Loc: NC Mountains.

You do realize that we will all be taxed and many people will be taxed right out of their employment, you can't just soak the rich for $5 trillion + per year, that much money does not exist, the taxes will hit us all, and businesses can't just absorb the costs without making adjustments elsewhere, and what has always been true is that the labor force is the easiest line on the budget to manage.

Here is anotherview for you to consider, under the 8 years of the Bush administration average household wages rose an anemic $400, under 8 years of the Obama administration average household income rose another anemic $1000, in less than 3 years under Trump average household income has risen over $5000. Something that the MSN is not reporting on but new numbers came out last week and they are even better than those in the linked article. Lizzy Warren and the progressive movement will cause a recession and put millions out of work, another cost to the government of Lizzy's empty promises because she will never get these grand plans through congress. Any Democrat threatens our economy at this point but those like Bernie and Lizzy are dangerous for the middleclass.

You Trump h**ers can h**e Trump all you want but the fact is that he is doing good things for the working families of this country.

https://www.nationalreview.com/2019/10/income-gap-growth-obama-trump-administations-economy-politics/

Tex-s

Just take Apple as an example. In 2007 Americans had wonderful hand held phones that were A-MAZE-ING tech. No one could have wanted a smart phone like we have now, but the folks at Apple invented it, created, MADE it. The world is forever altered. Imagine all that would not be without the smart phone.... The 'Arab Spring' was coordinated via smart phones. Parents can know exactly where their children are at any moment. 911 is not only acall away but can track you even if you are lost... We would just have to pass each day without knowing what outfit the Kardashian's are wearing.....

It's in everyone's interest that creators create, that builders build, that producers produce. The surest way to stop creators creating, builders building, and producers producing is to remove their profit/investment capitol, or to force them to reduce holdings to reduce taxes. Also, as others have noted, the eventual consumer will ALWAYS pay for any taxes levied on business, via higher prices, reduced supply, or both.

Wealth envy is not productive for anyone and wealth vilification/theft is bad for everyone, maybe not immediately, but over time. As Robert Kennedy spoke "I wonder what is not and wonder why not," I suggest the future's "why not" might very well be because idiocy ran rampant in America about 2020 and we voluntarily ruined our own economy, lowered our standard of living irrevocably, stifled innovation, and punished success.