I have just finished reading this article here at Kos. And I went to comment and there were over 300 of the dumbest comments I have ever seen. Why is it that outer moonbatia absolutely refuses to learn anything at all about money, and taxation, and actual government. And then when I visit outer rightardia I find people that "know" just about everything (wrongly). Maybe the left refuses to learn economics because they actually BELIEVE the total pig swill trumpeted by the rightarded. After all, the rightarded economists are backed by Heritage, Cato, the Brookings institute, the Hoover institute and countless other studious maximus centers of retardation. The left therefore turns to their on own form of fascism. Much, much easier to just make everything a MORAL issue. For the moonbat and the rightard it most certainly IS about "winning" the righteousness war.
So Here I am again pissing off every person at this site. It is a crappy job but somebody has to do it.
I am going to attempt another brief lesson in economics and probably be stoned for it. But that's OK.
We start with MICRO econ because everyone is supposed to be able to understand the basic concepts which are so well employed by the Classicals and the Austrians. Unfortunately, the point of disagreement between these two "schools" of economics gets down to the proper disposition of something called "economic rent".
Most pointedly defined, economic rent is a flow of "funds" created by natural or by political forces outside the control of any individual. As such "economic rent" is never EARNED but is simply "appropriated" by ownership or enforcement.
Consider the Texas oil millionaire that inherited a ranch under which an oil company or oil prospector found a pool of oil. The ranch owner receives $35K a week for_ALLOWING_ an oil "producer" to pump the oil out from under the ranch. The ranch owner did absolutely nothing to earn a nickel and will never do anything to earn anything at all. (S)he can be comatose and the money still flows into her/his bank account. This is a quintessential "economic rent". Economic rents can be taxed at very high rates and PRODUCTION IS NOT ALTERED. If the government taxes the $35k at 80% then the oil "owner" is less rich. But the oil still flows and the cost of gasoline remains the same. This is so because all of the money received by the owner is FREE money. If the owner refuses to participate then there here are other owners that will. (S)he can take 20% or $35k or nothing. Whatever (s)he gets is FREE.
People do not typically EARN extremely large incomes. This is especially true for incomes above a million bucks a year. Most of this sort of income is UNEARNED in varying degrees like "economic rent" is unearned. And taxing it at a high rate does not change the underlying production activities. Succinctly: High tax rates on extreme incomes DO NOT adversely effect the IMMEDIATE economy because the recipient of the income will not give up even a small unearned income. (S)he will not give it up (stop producing), because (s)he was doing nothing, or next to nothing, to receive the income in the first place. Care must be taken here in defining HIGH income. Many entrepreneurs do EARN high incomes. But incomes in excess of a million a year are not typical entrepreneurial incomes.
Here we assert another example of what the neoclassical nutters call "Paretian rent".
In this case the baseball player is paid 5 million a year to play baseball. If the player did not play baseball then the player's abilities would only qualify him to bus tables in a fast food joint. The difference between what he receives for playing baseball and what he would get for waiting tables is a "rent". A very large percentage of this rent income can be taxed away and the baseball player will STILL play baseball. The cost of tickets to watch the player perform remains unchanged.
The bottom line is that taxing extreme ordinary incomes does not adversely affect the real economy in the near term because the VAST MAJORITY of such incomes are "economic rent", or "Paretian rent". The economic results of this sort of thing are totally dependent upon what the government will do with the funds. If the private individuals were to have kept the funds then perhaps there would have been more Leer Jets and Limousines and Yachts in the world or perhaps just bigger bank accounts. If the Government gets the money then there will be other things that we HOPE will raise the standard of living for MORE of the people. But that does no make it so. The people on the right are not totally incorrect when they assert that government misuses money. War is not a good use of money.