Goal vs Means

[rowyn]

[Poll #1763592][Poll #1763593]
If you answered 'no' to either question, I would be very happy to hear your reasons.

I know that these scenarios are ridiculous; I am not 100% convinced about pretty much anything in my life.  But I am curious if anyone finds the non-economic reasons for these things (and ones certainly exist!) to be compelling even in the absence of economic benefit.  I tend to look at reasons like "high taxes on the rich are akin to stealing and therefore wrong" or "the rich benefit most from social order and therefore should pay more" as less 'sufficient justification by themselves' than as an explanation of why one system or the other would be better from a total economic perspective. I am curious whether or not others feel the same way.

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Comments

[tuftears.livejournal.com]

Well, that's not so bad!... Complicated to calculate, but not so bad.

If I were doing that sort of thing, I might provide tax credits for sinking money back into job creation, so if you were a football player making like $2 millions a year, if you just deposited it to your bank account, you'd be taxed at a pretty high rate, but if you invested in, say, a sports bar, and hired 10 employees at $50k apiece, you'd get the payroll part, $500k taken off your effective income.

If you set up a shell corporation and made yourself or your family employees, I don't think it'd matter since you'd then have to pay income tax on the fictional payroll.

Maybe there is something like that already. I dunno, I don't make millions a year. x_x

[rowyn]

The existing tax code does work that way, more or less: a business can deduct expenses from its gross and only pay on the net. If you own a business, you can do the same thing, more or less. I think it depends how you structure your taxes.

I am not sure that any of it makes sense. If I buy a yacht, I am keeping the yacht-makers employed. I am not sure that putting the money into my own small business instead of buying from someone else's makes a lot of difference, barring a superiority in my personal business acumen, or other factors not easily measured by government taxing agencies.

[tuftears.livejournal.com]

I think the argument is a lot of people are just stashing their income in bank accounts etc. instead of buying things.

Of course banks invest money too, or else they couldn't pay interest, but with interest rates so low, evidently banks are terrible at investing.

[rowyn]

Interest rates are largely dictated by the Federal Reserve; they are low because the Federal Reserve's rate is almost zero.

For the most part, banks are in the business of lending money, not buying stocks. Since the Fed's rate is low, banks do not pay much interest on their deposits and don't charge a lot more interest to their borrowers.

Investing in the stock market is considerably more risky, and the stock market# returns have been wildly varied by period since 2008. The average return on stocks for the last few years has been unspectacular, too.

Or put another way: in a down economy, few people have a good formula for making money. This is tautological: if a lot of people knew how to get a consistent and good return on investment right now, we'd have an up economy. :D

[terrycloth.livejournal.com]

Personal deductions are supposed to be the equivalent of business costs, I think? They're supposed to cover what you need to live, with the rest of the money (that you're taxed on) being your 'profits'.

The assumption is that a business is only going to buy necessities and distribute the rest to its owners or shareholders, while an individual is going to spend lots of stuff on things to make themselves happy.

Of course, they don't really cover it at all. If they did then a progressive taxation system would be less necessary (although probably still a good idea from what I've read on the subject).