The Rich Aren't Stupid

[Supermac34]

Didn't the Bush tax cuts, along with credits such as the earned income credit, not only bring marginal rates down for everybody, but created a system where the bottom 50% of filers end up owing little or no income tax?

Since we have a progressive tax system, wouldn't cutting marginal rates across the board lead to more actual dollars being saved for higher income earners because they pay more in the first place?

If my wife and I pay $60,000 in income tax a year, and we get a 10% break, while they guy that pays $600 in income tax gets a 10% break as well...sure my wife and I get to keep more real dollars. I get to keep $6,000 instead of $60. Is this the definition of tax break for the wealthy?

Its my understanding that under the Bush cuts, we all got tax breaks.

[juicystream]

Originally Posted by Supermac34 Didn't the Bush tax cuts, along with credits such as the earned income credit, not only bring marginal rates down for everybody, but created a system where the bottom 50% of filers end up owing little or no income tax? Since we have a progressive tax system, wouldn't cutting marginal rates across the board lead to more actual dollars being saved for higher income earners because they pay more in the first place? If my wife and I pay $60,000 in income tax a year, and we get a 10% break, while they guy that pays $600 in income tax gets a 10% break as well...sure my wife and I get to keep more real dollars. I get to keep $6,000 instead of $60. Is this the definition of tax break for the wealthy? Its my understanding that under the Bush cuts, we all got tax breaks.

We all did get tax cuts. He cut the top tax rates and created the 10% bracket(15% was the lowest before, and there is a lot more than just the rates that changed). The tax code is far more complex. The vast majority of us wouldn't notice if the top 2 rates went back to their old levels.

[Raven]

Let's face it, there are lots of wealthy Democrats, in the House and Senate, who don't want their taxes to increase, so they pursue their own self interest over those of their constituency. On this issue, they might as well be Republicans.

[thadeus]

There is one respect in which the rich are stupid - they seem to believe, as they consistently accrue more capital and more influence in determining events in U.S. politics and society, that no one will notice, that they'll continue being able to dupe people, that there will never be repercussions for any of their depredations.

By accruing too much power/capital, using their influence to unilaterally (always in their own interests), they don't seem to realize that they're aiming at their own feet. If the income/power gap in this country continues to have a massive imbalance in their favor, then eventually the entire system is going to come crashing down under its own weight - people will rebel, and that rebellion will be catastrophic.

[Mr. Clutch]

Originally Posted by FranchiseBlade I rarely start purely economic threads, but this whole idea that the wealthy need tax breaks so they can invest in new jobs and expand their businesses is so absurd that I felt it deserves its own discussion. We've all seen the figures that historically giving money to the wealthy when economic times are tough, they don't spend it on investing in job creating endeavors. They build their own savings, and that money doesn't really help the economy as a whole. There is good reason for that. Why any smart businessman look at the economy right now, and think they should hire a bunch of new workers and open new businesses? People aren't buying they are holding on to as much as they can and dealing with the tough times. Nobody who knows anything about business is going to increase their workforce when there isn't a need for more workers. That's why we need incentives and government stimulus to middle class and those that will spend that extra money. Once they get the money the data shows they pour it back into the economy. If there is enough stimulus to these groups they provide the demand which will make it profitable for businesses and the wealthy to hire more workers and expand. Then it's smart business to expand. The idea that giving money to the wealthy is going to cause them to hire unneeded workers and wrecklessly expand their businesses is just silly, but we here conservatives and people on this board touting this line of reasoning all the time.

Tax cuts are stimulative. That's a fact. There's a reason marginal tax rates on the rich and corporations have come down all across the world. Tax cuts across the income spectrum promote growth.

[SamFisher]

Originally Posted by Mr. Clutch Tax cuts are stimulative. That's a fact. There's a reason marginal tax rates on the rich and corporations have come down all across the world. Tax cuts across the income spectrum promote growth.

Where are you getting this "fact"? If a tax cut is 100% saved, and none of it is spent, it in fact has zero stimulus effect, as far as additional consumption goes. This is a fact, based on the assumption that 0 + 0 = 0.

[Joshfast]

Originally Posted by thadeus By accruing too much power/capital, using their influence to unilaterally (always in their own interests), they don't seem to realize that they're aiming at their own feet. If the income/power gap in this country continues to have a massive imbalance in their favor, then eventually the entire system is going to come crashing down under its own weight - people will rebel, and that rebellion will be catastrophic.

Not if they keep us all on anti depressants, a steady diet of TV and so much information that it all gets jumbled without knowing what's real.

[Mr. Clutch]

Originally Posted by SamFisher Where are you getting this "fact"? If a tax cut is 100% saved, and none of it is spent, it in fact has zero stimulus effect, as far as additional consumption goes. This is a fact, based on the assumption that 0 + 0 = 0.

Tax cuts aren't 100% saved.

[bobrek]

For those of you saying what the rich do or don't do with their assests, how many of you truly know a rich person - let's say, someone with more than $5,000,000 of easily disposable assets (i.e. not a building or land, etc.). How do they behave with their wealth - save, invest, spend, donate?

[Dave_78]

Originally Posted by thadeus There is one respect in which the rich are stupid - they seem to believe, as they consistently accrue more capital and more influence in determining events in U.S. politics and society, that no one will notice, that they'll continue being able to dupe people, that there will never be repercussions for any of their depredations. By accruing too much power/capital, using their influence to unilaterally (always in their own interests), they don't seem to realize that they're aiming at their own feet. If the income/power gap in this country continues to have a massive imbalance in their favor, then eventually the entire system is going to come crashing down under its own weight - people will rebel, and that rebellion will be catastrophic.

I just had this EXACT conversation with my girlfriend on Sunday as we drove through what was once a nice neighborhood but in a few short years has become a ghetto.

The rich can only stay behind gated communities for so long. What are they going to do when they can't even leave their homes without being in a sea of pissed off, poor people who see the truth about how things got to where they are?

[Dave_78]

Originally Posted by bobrek For those of you saying what the rich do or don't do with their assests, how many of you truly know a rich person - let's say, someone with more than $5,000,000 of easily disposable assets (i.e. not a building or land, etc.). How do they behave with their wealth - save, invest, spend, donate?

I know one. I know he saves a lot, invests a lot and spends quite a bit too (although not nearly what he saves and invests). He doesn't donate ****.

[bobrek]

Originally Posted by Dave_78 I know one. I know he saves a lot, invests a lot and spends quite a bit too (although not nearly what he saves and invests). He doesn't donate ****.

When you say 'saves', do you meant in safe stuff like CDs, Tbills, bank accounts, etc?

[Commodore]

Capital is needed to create jobs, tax cuts free up capital.

Not complicated.

[FranchiseBlade]

Originally Posted by Commodore Capital is needed to create jobs, tax cuts free up capital. Not complicated.

And why in an economy like this would most people be hiring?

Not complicated.

[thadeus]

Originally Posted by Commodore Capital is needed to create jobs, tax cuts free up capital. Not complicated.

It's not complicated if you insist on the wrong answer.

[SamFisher]

Originally Posted by Mr. Clutch Tax cuts aren't 100% saved.

What if it is?

Then what happens? What is the stimulus effect? Please advise. Thanks.

Originally Posted by bobrek For those of you saying what the rich do or don't do with their assests, how many of you truly know a rich person - let's say, someone with more than $5,000,000 of easily disposable assets (i.e. not a building or land, etc.). How do they behave with their wealth - save, invest, spend, donate?

I know several. What does this prove? Do I get a cookie? Is this supposed to make me doubt what I otherwise have learned via empirical evidence? Please advise. Thanks.

[bobrek]

Originally Posted by SamFisher ...I know several. What does this prove? Do I get a cookie? Is this supposed to make me doubt what I otherwise have learned via empirical evidence? Please advise. Thanks.

It just seems that a lot of people on this board know exactly how the rich spend their money. I am just curious as to how many actually have experience with this. You know, some questions are simple, honest and curious with no ulterior motive. It wasn't necessary for you to come across as a jackass.

[Dave_78]

Originally Posted by bobrek When you say 'saves', do you meant in safe stuff like CDs, Tbills, bank accounts, etc?

As far as I know he saves as in bank accounts and also a strangely large amount of cash in safe deposit boxes.

[SamFisher]

Originally Posted by bobrek It just seems that a lot of people on this board know exactly how the rich spend their money. I am just curious as to how many actually have experience with this. You know, some questions are simple, honest and curious with no ulterior motive. It wasn't necessary for you to come across as a jackass.

Then what are you exactly trying to prove?

I mean one hardly needs anectdotal evidence from anonymous strangers on a basketball BBS on this subject - it has been extensively studied on an empirical basis, by economists, among others, and there is a huge amount of anectdotal evidence (even on the first page of this forum) as well.

Was your question rhetorical or honest? I am guessing the former.

[Phillyrocket]

Originally Posted by Commodore Capital is needed to create jobs, tax cuts free up capital. Not complicated.

Demand is needed to create jobs. How many times does this have to be said.

Businesses don't need tax breaks they need customers. Why hire when there is no demand?