News Should the Bush tax cuts be extended?

[mheslep]

Romer's finding of a tax multiplier of three is from the 2007 paper, and has some qualifiers.
THE MACROECONOMIC EFFECTS OF TAX CHANGES: ESTIMATES BASED ON A NEW MEASURE OF FISCAL SHOCKS
C Romer, D Romer, UC Berkley, March 2007

In terms of consequences, there are six main findings. First, tax changes have very large effects on output. Our baseline specification suggests that an exogenous tax increase of one percent of GDP lowers real GDP by roughly three percent. Our many robustness checks for the most part point to a slightly smaller decline, but one that is still well over two percent. Second, these estimated effects are substantially larger than those obtained using broader measures of tax changes, such as the change in cyclically adjusted revenues or all legislated tax changes. This suggests that failing to account for the reasons for tax changes can lead to substantially biased estimates of the macroeconomic effects of fiscal actions. Third, investment falls sharply in response to exogenous tax increases. Indeed, the strong response of investment helps to explain why the output consequences of tax changes are so large. Fourth, the output effects of tax changes are highly persistent. The behavior of inflation and unemployment suggests that this persistence reflects long-lasting departures of output from its flexible-price level, not
large effects of tax changes on the flexible-price level of output.

www.econ.berkeley.edu/~cromer/RomerDraft307.pdf[/URL]

In Romer's later paper released just prior to the US stimulous legislation she sites different figures, more in line w/ the CBO numbers Gokul points to above. There are numerous professional critics of that view (spending stimulates more than tax increases depress), as we discussed last month
[url]https://www.physicsforums.com/showpost.php?p=2833038&postcount=760[/url]

 

[CRGreathouse]

More later, but R & R have more than one paper. I thought you were referring to the one from June 2010, in Amer Econ Rev.

http://elsa.berkeley.edu/~dromer/papers/RomerandRomerAERJune2010.pdf

Romer's finding of a tax multiplier of three is from the 2007 paper, and has some qualifiers.

I haven't seen the new paper. I'll try to review it this weekend.

 

[mheslep]

Yes cryptic in part due an allusion to old discussions. I meant that deficit data displayed there is only qualified as being produced by the federal government. The data does not speak further as to who or what part of the federal government was responsible for revenue, spending, or economic conditions immediately preceding the current data (i.e. recessions). To get the proper attribution requires some more work: [...]

Previously addressed here,
https://www.physicsforums.com/showpost.php?p=2790316&postcount=89
my suggested reasons for the deficit/surplus in the 90's, and relevant attributions.

First a bit more detail:
Gingrich left Jan 1999.
The budget in place for the fiscal year under which a given President concurrently enters office in January is created as law by the preceding President and the preceding Congress. So the 1993 US budget was Bush Sr's, which cut the '92 budget deficit by $53B (2005 $)[1]. Likewise, both the FY 2000 and 2001 budgets were Clinton's. The dot com crash was well underway by 2000, on Clinton's watch, and as the revenues collapsed the surplus was cut in half in 2000-01 and was gone in 2001 mostly before Bush W pushed a fiscal button [2].
The Republicans held control of the House from '94 through the remainder of Clinton's term. While minority parties in Congress can stop some actions or slow them down, they can originate almost nothing, certainly not big spending programs. So especially with regard to budgets, I contend there's no such thing as a 'more or less evenly split' Congress, as the majority party no matter how slim calls the shots, and spending originates in the House.

[...]That said, I don't credit the all the yearly deficit results to any single politician, as if this was akin to yearly rainfall statistics. Instead I credit several significant events along the way as dominating the results of the entire period, and those events do mostly deserve credit to one side or the other:

1. The 'defense dividend' as it was called. The fall of the Berlin wall and subsequent collapse of the former USSR allowed the US defense budget to fall. Bush Sr started cutting and Clinton and Congress continued through '96. Perhaps Clinton deserves some credit for actually following through on the cuts, since there always seems to be plenty of congressmen and senators who want new military spending for contractors and bases in their district. [3]
2. Tax increases leading to more tax revenues, credit to Clinton. Works if the additional taxes don't slow down the economy as they are predicted to do, which luckily didn't happen because of the ...
3. Dot Com boom and consequent growth in tax revenue. No credit to Clinton, or even to Al Gore ;-)
4. Welfare reform. Welfare entitlements were periodically exploding prior to reform. Clinton veto'd the effort a couple of times, but eventually did sign it. Almost all credit to Gingrich and Congress for this one, as it was one of the planks of the Contract w/ America that brought them to office in 94-95, and such a bill would have never emerged from the earlier D. congresses.
5. General holding the line on non-defense spending by the post '94 Congress. Gingrich's Congress refused for a time to increase the debt limit, eventually forcing a shutdown of the government for a couple of days in attempts to obtain Presidential approval of additional non-defense spending cuts. Eventually non-defense spending went up as Clinton won politically, but Gingrich and company clearly opposed spending increases, Clinton favored them.
6. Dot Com crash, and consequent collapse of revenues starting in 2000 and continuing to 2003

.

 

[Gokul43201]

The CBO table suggests a multiplier of 0.1 to 2.5 for the various aspects of the ARRA (0.2 to 2.5 if the upper-end tax cut is excluded). But Romer & Romer measure a multiplier of 3.0 for tax cuts. So taxing money out of the system to stimulate it doesn't seem workable: a tax of T reduces the GDP by 3T, then increases it by kT where k is in [0.1, 2.5]. So at best, taxing T decreases the economy by 0.5T.

Let me rephrase, using general terms, what I gather of how your argument works, and you can let me know if I have it wrong.

The CBO has estimated multipliers (x_1,x_2,...,x_n} respectively for govt actions {g_1,g_2,..., g_n} using some methodology M1. Separately R&R estimate multiplier x'_1 for g'_1 using methodology M2.

Your argument is that:

(A) x'_1 is a better estimate than x_1 and g'_1 is essentially identical to or more appropriate than g_1,

(B) Instead of comparing x_1 with {x_2, ..., x_n}, it is more sensible to compare x'_1 with {x_2,...,x_n}.

If that is indeed what you are saying, then the following are my objections:

1. The methodologies are different!

R & R admit that their estimates for multipliers are larger than those derived from conventional estimates. They argue that their estimate is better in that it eliminates some systematic errors that exist in the conventional estimates. But they specifically caution against doing exactly what it seems you've done.

Quoting the 2010 AER paper, Conclusions, pg 799 (4th new paragraph):

" Similarly, our results do not speak to the issue of whether taxes are a more powerful tool of fiscal policy than government purchases. The fact that our estimates of the effects of tax changes are larger than conventional estimates of the effects of changes in purchases is of little relevance: conventional estimates of the effects of purchases, like conventional estimates of the effects of taxes, almost surely suffer from omitted variable bias."​

2. g'_1 (from R&R) and g_1 (from CBO) are significantly different, in several ways:

Since the CBO action g_1 is a one year tax cut for higher income groups (i.e., a pulse of width one year), it does not accurately apply to the pertinent question: "how is there any stimulative effect to letting the Bush cuts lapse on the higher income groups?" (i.e., what is the short term effect on GDP of a step function-like tax increase on the high incomers). My argument assumes that (i) for small changes in tax rates, the response can be linearized, and hence, flipping the sign does not cause a huge error, (ii) we care about short term effects, which I shall define, for convenience, as the immediate year following the action (see also the introductory section of the CBO paper), and I therefore neglect effects of changes to tax policy beyond 1 year as well as any second order anticipatory effects resulting from the knowledge of cuts beyond 1 year. I think these are not completely terrible approximations for the situation.

On the other hand, g'_1 is a "generic" tax hike on all income groups. And while it has the right temporal profile, I believe it introduces a rather significant error in that it is not a high-income tax change, which, according to the CBO report, has a multiplier that is about 4 times smaller than one on the lower income groups. One might argue that (modulo methodology) these are essentially the same, if the contribution of lower income households to GDP were negligible compared to that of the higher income group. I do not know how true (or untrue) that is.

3. The multipliers calculated by both papers are time dependent (i.e., they vary with time measured from the implementation of the action). The time dependences for different multipliers have different forms. For instance, the CBO report discusses multipliers for purchasing of goods and services:

"For example, a one-time increase in federal purchases of goods and services of $1.00 in the second quarter of this year would raise GDP by $1.00 to $2.50 in total over several quarters, with most of that effect in the first two quarters and little effect beyond a year."​

So the effect of government purchases is mostly short term, their multiplier of 1-to-2.5 being realized over a couple of quarters. On the other hand the 3X multiplier calculated by R&R is much slower coming into effect, and takes as long as 10 quarters to mature to that value. In the first few quarters (what I consider the short run), the multiplier stays below 1.

That's all for now.

 

[OmCheeto]

http://www.nber.org/aginghealth/2009no2/w14839.html" :
as people don't pay attention to the costs when someone else picks up the tab.

Reminds me of what I saw regarding the deduction of home mortgage interest about a year ago.

Interesting how experiments in economics can go so awry.

 

[Astronuc]

I thought of this thread when I heard some commentary on the perceptions of being rich in the US. It's an interesting discussion.

I don't know if this is worthy of a separate thread, but this series asks "What is rich?"

http://marketplace.publicradio.org/features/what-is-rich/index.html

How perception affects our sense of wealth, and taxes
http://marketplace.publicradio.org/display/web/2010/10/22/mm-how-perception-affects-our-sense-of-wealth-and-taxes

 

[OmCheeto]

I thought of this thread when I heard some commentary on the perceptions of being rich in the US. It's an interesting discussion.

I don't know if this is worthy of a separate thread, but this series asks "What is rich?"

http://marketplace.publicradio.org/features/what-is-rich/index.html

How perception affects our sense of wealth, and taxes
http://marketplace.publicradio.org/display/web/2010/10/22/mm-how-perception-affects-our-sense-of-wealth-and-taxes

Rich smitch. This is as good a thread as any. I liked the one line:

Well, because obviously the definition of rich changes depending on where you are and by the standards of most of the world, just about every American is rich.

Even though I've made a grand total of $692k over the last 34 years, I've always looked at the poverty around the world, and thought to myself that "I live better than the Pharoah's. This is pretty cool."
Even the least of my steed's had probably 20 more horses pulling my chariot.
I eat exotic foods from around the world: Chilean cherries in the dead of winter. Ribs from New Zealand. Chocolates from all over Europe. Sushi served by a self imported Japanese chef. (Thank you for coming to America http://www.thetakahashi.com/index.php"!)

So I've never had much of a "problem" paying my taxes, that seems to be plaguing a lot of people lately.

And just this morning, I was fortunate enough to find someone this morning that thinks the same way. I discovered her while researching a new "We don't think you should pay more taxes" kind of organization: http://concernedtaxpayers.us/

Which I probably wouldn't have been too concerned about, since I rarely follow politics, but I discovered that they were funding a (supposedly) http://www.artrobinsonforcongress.com/endorsements.html" .
And on top of that, the "Concerned Taxpayers for America" group, is apparently funded by only two people; a couple of millionaires, who do not like bills introduced by two congressmen. These bills would apparently raise the taxes on these two gentlemen (the millionaires that is).

Which says to me, rich people are rich because they like to keep all of their money, and will do anything to do it.

But I'm on the opposite end of the spectrum, and can't comprehend such things, so I'll progress with another tidbit I found this morning, thanks to that young lady I mentioned earlier.

http://www.msnbc.msn.com/id/3036677/#39316659

Is a link to a Keith Olbermann piece on "What is a small business?"

It seems that a company he mentions, Bechtel, is considered a "Small Business".

I really don't know anything about Bechtel, nor am I trying to pick on them, but let's see what wiki has to say about this small business:

Bechtel Corporation (Bechtel Group) is the largest engineering company in the United States, ranking as the 5th-largest privately owned company in the U.S. With headquarters in the Financial District of San Francisco, Bechtel had 44,000 employees as of 2009 working on projects in nearly 50 countries with $31.4 billion in revenue.

Now I think the Olbermann piece was just making fun of fact that politicians are calling multi-billion dollar corporations "small" for political purposes, as I don't really see a difference in taxing corporations at 35% or individuals at 35%, which is how I read the http://www.forbes.com/global/2009/0413/034-tax-misery-reform-index.html" over at Forbes.

But then again, I might be wrong.

-------------------------
Paid for by the political action committee to elect http://connect.oregonlive.com/user/jodywiser/index.html"-DeFazio for President, 2016.

 

[CAC1001]

To me, the terms "rich" and "wealthy" actually differ. These are more my definitions, but I'd generally consider "rich" to me having good family, friends, fulfilling life, etc...while "wealthy" deals with financial issues. You can be very rich, but not wealthy, and you can be extremely wealthy, but not rich.

I agree that in terms of wealthy, all Americans are wealthy by global standards. We are about 5% of the global population. Yet today the average American grows up in pretty much a UTOPIA compared with most people in the world. Kids these days have access to iPods, cell phones, super-advanced videogames, high-speed Internet, Google, Amazon, Starbucks, etc...but just overall, I mean the average American has such an incredible choice of foods, drinks, music, movies, books available (Thomas Jefferson would've crapped his pants I think if he saw something like iPods you can load up with 1000s of songs and music and e-Readers you can load up with 1000s of books), etc...you can be listening to Mozart, sipping a Starbucks, while reading a book under a quiet light in a warm home or apartment.

We have air conditioning, refrigerators, dishwashers, even the cheapest cars now have power windows, doorlocks, CD players, etc...CRAZY! You can be living in a double-wide and drive a used pickup but still have a refrigerator, air conditioning, high-speed Internet, cable, DVD player, hot and cold running water, bed, etc...that is rich the folks in the world getting by on less than a dollar a day.

Even fast-food. In America we look down on fast-food as cheap and unhealthy, yet to someone starving, or making due on a diet of root vegetables and rice they can barely afford, something like a McDonald's Big Mac with fries is a huge luxury.

I really find it very humbling when one thinks seriously about the incredible wealth in Western societies like America.

Even though I've made a grand total of $692k over the last 34 years, I've always looked at the poverty around the world, and thought to myself that "I live better than the Pharoah's. This is pretty cool."
Even the least of my steed's had probably 20 more horses pulling my chariot.
I eat exotic foods from around the world: Chilean cherries in the dead of winter. Ribs from New Zealand. Chocolates from all over Europe. Sushi served by a self imported Japanese chef. (Thank you for coming to America http://www.thetakahashi.com/index.php"!)

YUP!

And on top of that, the "Concerned Taxpayers for America" group, is apparently funded by only two people; a couple of millionaires, who do not like bills introduced by two congressmen. These bills would apparently raise the taxes on these two gentlemen (the millionaires that is).

Which says to me, rich people are rich because they like to keep all of their money, and will do anything to do it.

Well two things:

1) Certain rich people will fund lower tax initiatives simply because they may disagree on ideology with the policies some politicians are advocating. I wouldn't assume that every rich person who disagrees with higher taxes disagrees in part because it will affect them.

2) Most rich people are rich because they have provided society with some type of product or service which people liked and thus bought in large numbers.

3) There isn't anything per se wrong with a wealthy person being against higher taxes because it will affect them, they might resent other people feeling entitled to their money and/or resent the government spending so much.

http://www.msnbc.msn.com/id/3036677/#39316659

Is a link to a Keith Olbermann piece on "What is a small business?"

It seems that a company he mentions, Bechtel, is considered a "Small Business".

I really don't know anything about Bechtel, nor am I trying to pick on them, but let's see what wiki has to say about this small business:

Now I think the Olbermann piece was just making fun of fact that politicians are calling multi-billion dollar corporations "small" for political purposes, as I don't really see a difference in taxing corporations at 35% or individuals at 35%, which is how I read the http://www.forbes.com/global/2009/0413/034-tax-misery-reform-index.html" over at Forbes.

I don't think politicians are calling multibillion-dollar companies "small," I think such politicians are referring to legitimate small businesses, but I think what Olbermann is pointing out is that certain businesses that can be very large in reality can get themselves defined as small through manipulation of the tax code.

 

[OmCheeto]

Well two things:

1) Certain rich people will fund lower tax initiatives simply because they may disagree on ideology with the policies some politicians are advocating. I wouldn't assume that every rich person who disagrees with higher taxes disagrees in part because it will affect them.

2) Most rich people are rich because they have provided society with some type of product or service which people liked and thus bought in large numbers.

3) There isn't anything per se wrong with a wealthy person being against higher taxes because it will affect them, they might resent other people feeling entitled to their money and/or resent the government spending so much.

A. That's three.
B. My response to your list above:

1) I find it interesting how the Koch brothers and Soros are on different sides of the fence, funding ideological opposites: Tea Party vs. NPR.
2) Or they ran hedge funds, or inherited a business.
3) As long as they're open about it. Why all the hiding?

Lot's of the wealthiest people have come out vocally that they should be taxed more. I wonder what it is that frightens the Koch brothers and Bob Mercer. A happy middle class? An informed middle class? Or is this just a game for them?

Ah ha!

http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer"
The billionaire brothers who are waging a war against Obama.
by Jane Mayer
August 30, 2010
David H. Koch ... and his brother Charles are lifelong libertarians and have quietly given more than a hundred million dollars to right-wing causes.

Never mind. I understand now. My apologies for not paying attention.

 

[WhoWee]

Perhaps we should first define the middle class. Should we assume it begins at $50,000 annual income (appox level where earned income stops) and $250,000 (Obama's favorite number)? Also, should we factor in home values, savings, investments and debt obligations to reach a net worth benchmark?

 

[OmCheeto]

Screeeeeeech!

What the heck is wrong with this graph?

[PLAIN]http://marketplace.publicradio.org/features/what-is-rich/images/2008-tax-earnings.gif
ref: http://marketplace.publicradio.org/features/what-is-rich/income-gap-debate.html"

I just added those blue bars up and came up with $83 trillion.
Dividing that by a round 300 million yields an average US income, per person, including babies, of $277,000.

Well, that settles it then. We're all rich.

 

[WhoWee]

Screeeeeeech!

What the heck is wrong with this graph?

[PLAIN]http://marketplace.publicradio.org/features/what-is-rich/images/2008-tax-earnings.gif
ref: http://marketplace.publicradio.org/features/what-is-rich/income-gap-debate.html"

I just added those blue bars up and came up with $83 trillion.
Dividing that by a round 300 million yields an average US income, per person, including babies, of $277,000.

Well, that settles it then. We're all rich.

LOL Watch out, the Libs will use this to promote "effective redistributon of wealth".
I'm looking for a link that I found about a year ago. It demonstrated the residual value of dividends to US citizens if capital invested in Germany and Japan after WWII had been an equity investment.

 

[CAC1001]

A. That's three.

B. My response to your list above:

1) I find it interesting how the Koch brothers and Soros are on different sides of the fence, funding ideological opposites: Tea Party vs. NPR.

They are of completely opposite ideologies.

2) Or they ran hedge funds, or inherited a business.

Most wealth in America though is self-made, not inherited. Also, hedge-funds are providing a product as well, to their investors. And if they do their job right, hedge funds are part of the system that allocates capital throughout the economy for proper investment.

3) As long as they're open about it. Why all the hiding?

Well many are probably open about it, just quiet. Some like to be involved in politics without attracting too much attention.

Lot's of the wealthiest people have come out vocally that they should be taxed more.

And there is nothing to stop them from paying more in taxes. What gets people is when they want to force higher taxes on others, many of whom, while being high income earners, are not rich.

I wonder what it is that frightens the Koch brothers and Bob Mercer. A happy middle class? An informed middle class? Or is this just a game for them?

What makes you think taxing more creates a happy middle-class? Or that people like the Koch brothers are against an informed middle-class? People who advocate the libertarian argument can fear many things:

1) Society becoming too hampered by taxes and regulations

2) The general population becoming so pampered that they protest very vehemently when government wants to raise the retirement age from 60 to 62 (France!)

3) A society where you have true classes that develop, because the middle-income earners and poor have little incentive to work hard due to extensive social services and difficulties in starting a business or earning a high income (taxes and regulations), while the truly rich thus find their position in society very protected (this is how Europe is to a degree, and also happening to a degree in California right now; it is becoming divided into classes: the truly rich, the public-sector union class, the welfare poor, and then the struggling working class who pay the taxes that support the public-sector unions and the welfare poor).

 

[Vanadium 50]

I just added those blue bars up and came up with $83 trillion.

That's got to be off - the GNI of the US is $9T-$14T, depending on the source.

Could this possibly include corporations? Then it's understandable, as each dollar appears multiple times.

 

[Jasongreat]

AFAIC, the rich are the only ones who have the right to vote for their money to go to the poor. If the poor are voting to take money from the rich, it is no different than robbery, although that seems to be a common theme now days. Politicians get to give other peoples money, or atleast the promise of other peoples money, as a campaign promise, which seems to me to be both robbery, and bribery at the same time. One good thing at the time the founders, which is misunderstood today, only property owners had the right to vote, now everyone votes to take away property, because they don't have any, they just want to take it figuring it will make every one even. If we want charity given through government, only allow the rich to vote, otherwise its not charity, its robbery.

 

[Jasongreat]

Which says to me, rich people are rich because they like to keep all of their money, and will do anything to do it.

Its not that they are rich because they will do anything to keep it, it is that they are rich because they keep their expenditures under their expenses(a principle our government would do well to learn). I was once told by a very smart man that it isn't what you make, it is what you keep.
You do make a good point though, one most advesaries to the tax hikes on the rich agree on, the rich will do whatever it takes to keep what they have earned, that incudes moving money offshore, claiming less earnings, taking a paycut(on paper), and many other inventive accounting techniques, which will be counter productive to raising revenue through taxes. When a billionaire(soros) that has made all his money on depreciating currency, goes against billionaires that make their money from keeping their inheritance, ill take the one who is not dependent on every body else losing. It is amazing to me that people would give anyone that makes their money on other peoples misery credence, while denouncing people that don't care what happens with others as long as they keep what they have. Why can't we get away from the we want it, we'll take it argument, and go with the we need it, will you give it argument. Most people I know are more than willing to give what they agree with, but will do whatever it takes to keep what they don't agree with. Volunteerism can work, but not if your stealing in the name of volunteerism.

 

[CAC1001]

AFAIC, the rich are the only ones who have the right to vote for their money to go to the poor. If the poor are voting to take money from the rich, it is no different than robbery, although that seems to be a common theme now days. Politicians get to give other peoples money, or atleast the promise of other peoples money, as a campaign promise, which seems to me to be both robbery, and bribery at the same time. One good thing at the time the founders, which is misunderstood today, only property owners had the right to vote, now everyone votes to take away property, because they don't have any, they just want to take it figuring it will make every one even. If we want charity given through government, only allow the rich to vote, otherwise its not charity, its robbery.

Well to a degree I can see that point, but if only the rich can vote, then you'd end up with all sorts of legislation to protect the wealth of the rich and benefit the rich. You need to protect the minority from the majority and the majority from the minority.

 

[Jasongreat]

Well to a degree I can see that point, but if only the rich can vote, then you'd end up with all sorts of legislation to protect the wealth of the rich and benefit the rich. You need to protect the minority from the majority and the majority from the minority.

Whats wrong with that? When you get rich those laws will protect your wealth also. Even if you don't get rich, there is very little chance that the rich would vote to take from the poor. One thing to keep in mind, imo, is that the many have nothing to fear from the few, it is the few that have to fear the many.

 

[CAC1001]

The many have nothing to fear from the few? You sure? If the rich had sole power, for one they would immediately move to make it where no one else could get rich, because each major industry that was controleld by wealthy people would seek regulations to make it almost impossible for anyone else to start a business.

You'd end up with an economic ruling class. That's actually how it used to be, and that's how many of the industrial barons of 19th century America wanted to make America (if you study the history of the public education system, it is filled with people like this, from the industrial barons to Woodrow Wilson---read up on the history of the Prussian educational system).

It used to be considered the norm for a wealthy person to be handed a monopoly in a certain major industry (prior to America and market capitalism becoming big). To come in as a competitor was actually considered very rude. One of the wealtheist families in Europe today is one whose family traditionally controlled the postal system throughout Europe for centuries, for example.

 

[Jasongreat]

The many have nothing to fear from the few? You sure? If the rich had sole power, for one they would immediately move to make it where no one else could get rich, because each major industry that was controleld by wealthy people would seek regulations to make it almost impossible for anyone else to start a business.

You'd end up with an economic ruling class. That's actually how it used to be, and that's how many of the industrial barons of 19th century America wanted to make America (if you study the history of the public education system, it is filled with people like this, from the industrial barons to Woodrow Wilson---read up on the history of the Prussian educational system).

It used to be considered the norm for a wealthy person to be handed a monopoly in a certain major industry (prior to America and market capitalism becoming big). To come in as a competitor was actually considered very rude. One of the wealtheist families in Europe today is one whose family traditionally controlled the postal system throughout Europe for centuries, for example.

Those industrial barons of the late 19th, early 20th century, in the US, were given their power from the government. Those in europe you speak of are the main reason our country made the laws they did, until those laws started to get relaxed around 1850. The people, if we weren't such pansies, should never of stood for it. One, a thousand, even a million could never keep 2, 3 or 350 million under their power no matter how much they owned, or how rich they were, as long as we feel we are freemen, and act as such. On the otherhand, if we feel as freemen that our government can make things right through law, we will get what we deserve, and we won't be free, no matter how free we are told we are.

edit: when i say man or men, i mean mankind women included

 

[Office_Shredder]

Those industrial barons of the late 19th, early 20th century, in the US, were given their power from the government.

You just said that you think only rich people should be allowed to vote (in certain circumstances at least). How would this not occur again?

 

[CAC1001]

Those industrial barons of the late 19th, early 20th century, in the US, were given their power from the government.

Not all of them, some exploited government to become very rich though.

 

[Jasongreat]

You just said that you think only rich people should be allowed to vote (in certain circumstances at least). How would this not occur again?

I said that only the rich should vote when it comes to their wealth.

A constitution of limited governmental powers, and a people that holds their government to those enumerated powers, would keep them inline. IMO. As I have said a few times, the many have nothing to fear from the few. When the many allow those enumerated powers to expand in order to punish the few, it will be the many that are punished, not the few.

 

[Jasongreat]

Not all of them, some exploited government to become very rich though.

They were allowed to exploit the government, since the government gained from their own exploitation. At one point a corporation could only do one thing(pre 1855 or so), like the railroads, granted the owners got rich, but they could not use the power they were granted to expand. Now days and around the turn of the century other corporations were given full freedom, they could use the money they made from an exemption in one field, to keep out competitors, or to expand into other fields. GE is one example, they spread from electical, to radio, to tv, to tv networks and into finance getting a very powerful share. If they would have only been able to be an electrical product corporation, another company could have had a chance of tv, and another of radio, and another could finace it all. Most regulations meant to keep the power in check are surported by those corporations because they keep others from entering the market. Today, any regulation thrown at walmart, would only prop up walmart and protect them from the next startup.

 

[Al68]

...because each major industry that was controleld by wealthy people would seek regulations to make it almost impossible for anyone else to start a business.

This is exactly what has happened to a large degree, not because rich people in general gained political power, but because government itself did. That's why our founders considered it very important to limit the power of government.

It wouldn't do rich big business owners any good, or their smaller competitors any harm, for them to gain power in government if government itself didn't have the power to regulate private businesses. They would have no reason to even try.

It amazes me to no end that so many people think the "solution" to this problem is to expand government power even further, as if that weren't the source of the problem to begin with.

 

[CAC1001]

It amazes me to no end that so many people think the "solution" to this problem is to expand government power even further, as if that weren't the source of the problem to begin with.

Hey I am a limited government guy.

 

[Astronuc]

As Congress still wrestles with the tax law -

Google's $3 Billion Tax Loophole
http://abcnews.go.com/WNT/video/goo...e-rpofits-overseas-taxable-tax-dodge-11941673

45 'Patriotic Millionaires' Call for Bush-Era Tax Cuts to Expire
http://abcnews.go.com/Business/patr...ion-obama-bush-era-tax-cuts/story?id=12195201

Debt Commission Co-Chairman Defends Tax Hike
http://abcnews.go.com/GMA/video/debt-commission-chairman-erskine-bowles-defends-tax-hike-12149672

http://www.fiscalstrength.com/

 

[WhoWee]

As Congress still wrestles with the tax law -

Google's $3 Billion Tax Loophole
http://abcnews.go.com/WNT/video/goo...e-rpofits-overseas-taxable-tax-dodge-11941673

45 'Patriotic Millionaires' Call for Bush-Era Tax Cuts to Expire
http://abcnews.go.com/Business/patr...ion-obama-bush-era-tax-cuts/story?id=12195201

Debt Commission Co-Chairman Defends Tax Hike
http://abcnews.go.com/GMA/video/debt-commission-chairman-erskine-bowles-defends-tax-hike-12149672

http://www.fiscalstrength.com/

Do you think they would support a one time net worth/equity tax - say 20 percent?

 

[Astronuc]

Do you think they would support a one time net worth/equity tax - say 20 percent?

I have no idea.

I'm sure some are comfortable with paying more taxes, while others aren't.

There seems to be a lot of inertia in keeping the things the way they are until the economy gets to the breaking point.

The government has to cut spending. But nobody wants their part cut.
Nobody wants to pay taxes, but too many want their government subsidy.

How about this - "Diabetes is projected to cost $500 billion by 2020. That's a tenth of all health care spending -- $3.4 trillion in total costs over the next 10 years."
http://marketplace.publicradio.org/display/web/2010/11/23/pm-diabetes-to-become-most-expensive-disease/

Whatever happened to preventative care - diet and exercise.

 

[turbo]

My wife and I were beneficiaries of the Bush tax cuts (top 2%) though I am unsure why. We need a lot more marginal rates at higher and higher income levels. The tax code has not kept up with the exploding income of the highest earners. Similarly, the income cap on SS payments is not realistic any more. SS doesn't need to be saved by making people work longer and longer and cutting their benefits. SS can easily be saved by not exempting so much of the incomes of the wealthy. Reasonable, fiscally conservative measures that the GOP will fight tooth and nail to oppose.

It is a mystery how rational middle-class wage earners can be persuaded to vote for people that want to shift the burden of providing for the wealthy to the lower classes.