Originally Posted by patteeu
How does it do any of that?
For example, the top target of people who seem to think income inequality is bad is our tax code. Specifically, those people claim that our tax code isn't progressive enough and that the rates on investment income (cap gains and dividends) are too low. You're telling me that the problem with inequality is a lack of upward mobility. Increasing progressivity and increasing rates on investment income both hinder upward mobility.
So again, what's the problem with income inequality?
And since upward mobility is important to you, do you agree that we should flatten the tax code further and reduce taxes on investment income instead of increase it?
I disagree with your economic theory. I will expand on this later.
First, I don't feel you answered my questions.
Let's assume we both agree that the U.S. suffers from third world level income inequality (remember I said assume). How, in your opinion, does that strengthen the American Economy. What positive benefit do you believe it gives our country?
On to your economic theory and the question you asked me in another post. What time frame? Let's go with from 2000 to present. you can start at 1990 or 80 if you want as well.
Show me where, during this time frame, lowering the tax code of top earnings resulted in a trickle down effect in --1)a growth in middle class, 2) growth in median wages, 3)growth in employment.
On to your economic theory. I believe in a progressive tax system because I believe it is the most fair form of payment for the services provided by society that increase wealth.
For example: A restaurant cannot make any money if there is not a basic road to connect it to customers,if it doesn't have basic utilities, a educated workforce, reasonable certainty of security, etc. All these things have in common is they are supported by our government and society, for the benefit of economic prosperity. We all benefit. I challenge you try to become a multi-millionaire in a country lacking basic infrastructure or a country without a strong police force.
Now, some benefit more. Since the American society played a role(one aspect of many) in someone becoming successful, I believe their taxes should be proportional to that. The rich just have more to lose if American Society goes down. Remember, that all income is taxed the same up to certain levels. My twenty thousand a year is taxed just the same as Trumps first twenty thousand. Hence progressive.
I also believe that a higher top tax rate promotes reinvestment into companies and businesses, as seen in the 1960's.
I also am aware that the Chicago School of Economics (which is generally your theories) have failed in the past. I would encourage you to look at Chile between 1973 and 1989.
Source: http:// www.huppi
"Chile: The laboratory Test"
"Many people have often wondered what it would be like to create a nation based solely on their political and economic beliefs. Imagine: no opposition, no political rivals, no compromise of morals. Only a "benevolent dictator," if you will, setting up society according to your ideals.
The Chicago School of Economics got that chance for 16 years in Chile, under near-laboratory conditions. Between 1973 and 1989, a government team of economists trained at the University of Chicago dismantled or decentralized the Chilean state as far as was humanly possible. Their program included privatizing welfare and social programs, deregulating the market, liberalizing trade, rolling back trade unions, and rewriting its constitution and laws. And they did all this in the absence of the far-right's most hated institution: democracy.
The results were exactly what liberals predicted. Chile's economy became more unstable than any other in Latin America, alternately experiencing deep plunges and soaring growth. Once all this erratic behavior was averaged out, however, Chile's growth during this 16-year period was one of the slowest of any Latin American country. Worse, income inequality grew severe. The majority of workers actually earned less in 1989 than in 1973 (after adjusting for inflation), while the incomes of the rich skyrocketed. In the absence of market regulations, Chile also became one of the most polluted countries in Latin America. And Chile's lack of democracy was only possible by suppressing political opposition and labor unions under a reign of terror and widespread human rights abuses.
Conservatives have developed an apologist literature defending Chile as a huge success story. In 1982, Milton Friedman enthusiastically praised General Pinochet (the Chilean dictator) because he "has supported a fully free-market economy as a matter of principle. Chile is an economic miracle." (1) However, the statistics below show this to be untrue. Chile is a tragic failure of right-wing economics, and its people are still paying the price for it today. "
/the article continues, citing all statistics.