How does a wealth transfer (spending) increase the size of the pie? If there are 10 slices of pie and I give (spend) one to you, the pie has not grown. That's a zero sum game. Growth occurs when you take your resources, and rather than spending them, you use them to create something of greater value. And the pie grows. It's why we go to work every day, we delay consumption (spending) in order to produce something of value. The result of our increased wealth is an increased ability to spend.
It's subjective/abstract, but I see wealth that goes beyond a comfortable amount of savings (let's say several lifetimes worth of income) as more tax-worthy. Keeping this wealth circulating through the economy, either by taxation or by getting it pushed into the investment/capital realm is a good thing. Of course, investment/capital is pointless without a healthy amount of demand, which is why you keep income/spending taxes low. Disposable income under a certain range has a higher likelihood of being spent, so you want to make sure that there are enough people with that high-circulation disposable income to keep generating demand.
Its better to define what services the government should provide, determine what is a reasonable amount of money to provide those services and then adjust the rates in order to provide that amount of money depending on where the majority of wealth is.
This is the logical answer. You don't want to discourage saving or spending or making money. But taxes are a necessity, so you determine what functions government needs to perform, how much you are willing to pay for that, and then enact a mix of taxes to generate that money with the least disruption/damage possible.
http://coffeepartyblogger.blogspot.com/2011/02/isnt-it-time-for-consumption-tax.html In a recent discussion, a tangent regarding tax policy developed in which I stated that I would support a consumption tax, much like the FAIR Tax, but with a couple of caveats, changes that I would make. This post will describe the tax I would implement to replace the income tax. Basic Structure: The Consumption Tax (CT) that I would create would not have a set percentage rate, but would have a "base rate" set each year (automatically, no ability for politicians to interfere) to generate the amount of money spent by the federal government plus five percent. This implementation has a couple of goals, the first of which being a balanced budget and the second being a plan to retire the debt over time. In addition, setting the tax rate based on last year's spending would create a completely transparent system of taxation as everyone would be completely aware of government spending because the base rate would rise with increased spending. Exemptions: I would give every adult a $5000 annual tax exemption and the parents of dependent children $2500 for each child. This exemption would be implemented using the same infrastructure that currently exists for food stamps and flex accounts. I would exempt food and medicine from the tax and, after the debt is paid off, would give a CT holiday every year at back to school time, much like Texas does already. Application: The CT would apply to new goods and would not be charged on used items. Refurbished goods would only be taxed on the value of the new parts used to refurbish the item. Applying the tax only to new goods would give people a market in which they could avoid the tax altogether if they wanted. This application would also encourage the production of more durable goods as such products would hold their resale value. It is likely that such a system would encourage more recycling of products rather than the production of disposable goods that are so prevalent today. Optional component: It is my opinion that some goods should have higher tax rates applied to them than other goods due to the potential for societal damages or costs that are higher. The prime examples would be tobacco products (which cause cancer, leading to higher healthcare costs for people who use these products). For such products, I would allow for a "tax multiplier" to be applied. If the tax multiplier were 1.5, then the base tax rate would be multiplied by 1.5 to calculate the total tax rate for that product. This kind of system would ensure that tax rates would be completely transparent if the product in question was taxed at a higher rate than the base rate.
Ever? How silly. Of course profit can and usually will lead to growth. As a matter of fact, almost every business that has grown did so because of profit. Now profit doesn't always lead to a business growing I'll grant you that. But what you've said here makes no sense when read as a statement of fact.
That's not what he said. He said "No, profit doesn't mean growth.", which is true. Growth may require profits; but that doesn't mean profits necessarily lead to growth. As has been mentioned, US corporations currently have record profits and record cash on hand - they aren't growing, though. Growth is driven by demand and profit potential. Current profits are simply an input.
Profit does not indicate growth. Revenue can contract while profit grows. Is that growth? Amazon is an example of a company that grows without increases in profit margin. Their stock price is $266 but their price to earnings ratio sucks balls because profit margins are so teeny-tiny.
Make America a corporation, that can print money. Crush all competition and run the country on the profit.
The more that is being protected, the higher the costs should be. My answer is meant more towards the corporations. Any company making profits should NEVER show $0 as taxes due.
