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View Diary: Senate Democrats to produce budget seeking new revenue without threat of filibuster (80 comments)

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  •  Taxing The Wealthy (1+ / 0-)
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    Eric Blair

    By taxing the wealthy and easing the tax burden on the non-wealthy, Obama is stimulating the economy by taking excess money from wealthy people whose needs are already met and will therefore have no need to spend the money, and giving it to non-wealthy people who still have many needs and therefore WILL spend the money.

    Look at Table 3 “Bang for the Buck” in this Moody’s Analytics report.  It shows that every dollar spent on unemployment benefits generates $1.52 in economic stimulus. This is because the unemployed will immediately spend the money, thus kicking off the “multiplier effect” as that money moves through the economy and creates jobs along the way. However, a dollar spent on benefits for the rich, such as making dividend and capital gains tax cuts permanent, generates only 39 cents worth of economic stimulus because wealthy people already have more money than they need and thus tend not to spend any additional funds they receive.

    The wealthiest 1% have a whopping 34.5% of the assets in this country, and the wealthiest 10% have 74.5%. That means the other 90% have only 25.5%. And the lower 50% has only 1%.

    The way to stimulate the economy is to prevent the excessive accumulation of wealth. $6 million per person amounts to $50,000 a year for 120 years. That ought to be enough money for anyone, but let’s say $10 million just to be sure. Tax laws should ensure that anyone wealthier than $10 million either pays enough taxes or gives enough away to friends, family and charity to ensure that their personal net worth is no higher than $10 million.

    “The top 1%… saw their average wealth grow to $16.4 million in 2010″ –

    If the 1% had no more than $10 million per person, that’s $16.4 million – $10 million = $6.4 million that the average 1%-er could contribute to public investments or charitable contributions. The US population is 312 million, so there are 3.12 million 1%-ers. Multiplying, $6.4 million * 3.12 million = $20 trillion.

    The total national public debt of the United States is 16.432 trillion as of January 10, 2013. Therefore, taxing away the excess wealth of the 1%, leaving them with a mere $10 million each (that’s $100,000 a year for 100 years), would COMPLETELY PAY OFF THE NATIONAL DEBT, with $3.5 trillion more still left over for public investments!

    •  Still austerity... (0+ / 0-)

      Just increasing taxes whether on the wealthy or others is still austerity. To be economically neutral whatever taxes are raised on the wealthy have to be offset by proportionally more spending on something more stimulative.  So, if taxing the wealthy is $.39 of stimulus on the dollar and unemployment is $1.52 then for every dollar of taxes on the wealthy unemployment should be increased by 1/3 whatever is raised by increasing taxes otherwise it is still austerity.

      I am by no means for lowering taxes on the wealthy.  But, saying just raising taxes without increasing spending is going to help the economy is false. It will hurt the economy.  Perhaps not as badly as other choices, but it will still hurt.  There are 25 million people underemployed. I don't think we need to be making that worse.  So, my preference if we can't get stimulus is to do nothing.

      Also, paying off the national debt is a BAD THING.  The national debt is nothing but an accounting of private sector wealth.  Every period of government surplus in the history of the nation has been followed by a Depression with the Clinton being the only exception. "The Clinton surplus was followed by the Bush recession, a speculative euphoria, and then the collapse in which we now find ourselves"

      Maybe it is coincidental.  But, I doubt it.  There are only two places to get the surplus to pay the national debt.  The private sector has to stop saving or via a trade surplus.  Austerity drives the private sector to save, so it won't come from the private sector.   Driving the country into a depression via austerity, so no one has any money to buy foreign goods and wages are driven down to nothing might reduce imports and increase exports enough to get the needed surplus.  But, you have to figure 50% unemployment.  

      I have absolutely no interest in "paying off" the national debt.  I would prefer that is be changed from interest bearing IOUs to non-interest bearing IOUs, also known as dollars.

      I will say it again.  Anyone trying to reduce the deficit by raising taxes and lowering spending is advocating for higher unemployment and the suffering that comes from it.  Austerity is like bleeding a patient that already has several stab wounds.

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