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Japher
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Ook! Ook! Ack! Ack! Ack!
Jun 2002
time: 05:27
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Just want to point out that those in that top 1% ussually don't have "incomes" of that much, rather they receive "compensations" in that amount. Why does this matter? Compensations, beyond regular "salary" amounts are taxed either at higher rates, or multiple times. I.e. bonus' - taxed at 40% (or somewhere around there up to a certain amount). Stock options - depending on the type those who receive will be taxed twice in order to exercise the stock, or the tax will be levied to the company that issued them.
In that case, those in that top 1% are already getting reemed with taxes, and that is why they are going to benefit the most, since Bush is trying to eliminate double taxation on investments.
Those in the next catagory (210,000 earners) also generally receive this kind of compensation, but to lesser degrees.
The jump in tax cut benefits to the next two/three catagories is justifieable, since these ppl account for the greatest spreaders of wealth, and the largest pop, and IMO (biased as it may be), are best suited to rekindle the economy.
My two cents.
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Lord Merciless
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quote:
Originally posted by Agathon
The real question is why it's supposedly better for these people to spend it than the government to spend it. |
Because I know how to spend my money better than some unmotivated, imcompetent bureaucrats.
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Q Cubed
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t3h y3ll0w p3ril
Apr 1999
time: 23:27
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quote:
Rubbish. The reason that western countries have a mixed economy is that is the most efficient kind of economy possible. Government spending on things like health care and education is extremely prudent because the private sector would fail to invest in these at the optimum level. We have taxation because of market failure. |
it's prudent, yes. but the problem is, once you get down into the details, you have bureaucrats who don't know how to use the money they're given.
for example: the county my mom works for as a teacher recently spent several thousand to open up a montessori branch at select schools. however, rather than moving teachers that it already had availible that were qualified and certified by the AMI, the highest montessori educational board, they spent more money hiring brand new teachers who didn't have said certification.
then, you have all of those damned pork projects.
by and large, a good deal of government spending isn't bad. unfortunately, when you get into details, that's when it seems downright dumb.
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Agathon
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Leafs 4TW!! - CPA
Dec 2002
time: 00:27
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quote:
Originally posted by Q Cubed
it's prudent, yes. but the problem is, once you get down into the details, you have bureaucrats who don't know how to use the money they're given. |
You can always give examples of bad spending, whether or not it's by government bureaucrats or corporate bureaucrats. You still haven't given a general reason as to why government spending is somehow worse. In fact government spending is more accountable than private spending because incompetent governments are accountable to all the voters whereas private spending is (only in some cases) accountable to shareholders.
quote:
for example: the county my mom works for as a teacher recently spent several thousand to open up a montessori branch at select schools. however, rather than moving teachers that it already had availible that were qualified and certified by the AMI, the highest montessori educational board, they spent more money hiring brand new teachers who didn't have said certification. |
Before I'd assent to this example I'd want to know why they did this.
quote:
then, you have all of those damned pork projects. |
Like public health care, education, etc.
quote:
by and large, a good deal of government spending isn't bad. unfortunately, when you get into details, that's when it seems downright dumb. |
One could say the exactly same about private spending.
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Adam Smith
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Maryland, USA
Jan 1970
time: 00:27
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Agathon:
quote:
OK - the problem with this logic is that the government spends the tax it collects.
The real question is why it's supposedly better for these people to spend it than the government to spend it. |
Two reasons.
1. Absent externalities (discussed below) people are better off if they can spend the money on what they choose than what the government chooses.
2. Economists estimate that in the US each dollar of taxation chokes off about 20 cents of econmic activity.
Conservatives often claim that higher income people are likely to invest the money increasing future production. However, if the government has to borrow to cover a deficit, the money comes entirely out of savings, so the economy is worse off.
quote:
Rubbish. The reason that western countries have a mixed economy is that is the most efficient kind of economy possible. Government spending on things like health care and education is extremely prudent because the private sector would fail to invest in these at the optimum level. We have taxation because of market failure. |
First, why is spending health or education indicative of a market failure? Many people in the US provide for their own healthcare and education without any government involvement. Aside from public health issues (eg communicable diseases), if I spend on health or education, I reap all of the benefits. No failure here.
Second, there are vast ranges of government spending which have nothing to do with remedying market failure. Eg, corporate subsidies.
Third, there are many areas where both government and the private sector provide the same service. Examples which come quickly to mind in the US include schools, hospitals, trash collection, transportation, and electric power. Economists have found, uniformly, that the private sector provides these services mroe efficiently becauses it uses resources more efficiently.
quote:
What you get in a market system is largely a matter of luck rather than desert. |
The evidence from labor economics indicates otherwise. In other words, much more of the variation in income can be explained by level of schooling or hours worked than remains in the random variation.
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