Taxes.

[Lauren]

Was yours a proofreading business?

 

obviously not

[iwishiwascool]

However, if your comment is that we are placing a huge burden on the middle class and not enough on the upper class then instead of screwing those that make more by charging them more, how about we raise the bar and not give the poor so many freebies and increase our expectations that they too begin to raise their game and give back.

 

I'm going to try to break it down, tell me if I'm wrong.

 

I believe that our economic success as a country relies on demand, that a company given tax breaks and incentives only makes a more profitable widget, not more widgets. I believe that the economic engine of our country resides in the middle where a majority of income earners reside. I believe that strengthening the middle class drives economic growth and thus the success of the upper class. I believe that my business will be more successful if there is increased demand.

 

You believe in supply side theory. Decreasing burdens on the upper income earners incentivize them to make investments hire employees and "give back" to the middle class in the form of participation in the market. Again, tell me if I'm wrong. Reducing these burdens raises all ships because, you believe, wealth is not finite. Jobs are created, middle earners have more money to spend and demand increases.

 

So really we have a chicken and egg paradox. To improve the economy to you stimulate demand or incentivize the top? This is the quandary that has haunted economists for centuries. And I think this is the foundation of our disagreement.

 

So let's look at the constants before we get to the variables.

 

Most people really believe they are going to be rich. Most people here probably believe it too. Some may even vote based on their perceived future self vs. where they are now. However, there is a normal distribution of the typical factors associated with wealth (i.e. motivation, delayed gratification, etc). This normal distribution curve looks something like this:

http://upload.wikimedia.org/wikipedia/commons/thumb/8/8c/Standard_deviation_diagram.svg/325px-Standard_deviation_diagram.svg.png

Your argument that people can just "choose" to be wealthy is a misnomer akin to me choosing to have blue eyes. We are living in a time of the least economic mobility, ever. Those who have a combination of skill, connections and luck find themselves on the right side of the scale have a higher probability of becoming wealthy. The probability of mobility for those on the other side of the curve is far lower:

http://www.brookings.edu/research/articles/2011/11/~/media/Research/Images/F/FF%20FJ/figure2.jpg

Further, on a macro economic scale there is very little correlation between effort and reward. How much your father made is much more determinate in your lifetime earnings than your work ethic. Your retort has been "Well I did it" in the past. Great, you are exceptional, literally. Though I would hold doubt the statistical divergence is as great as a disparity as it feels to you.

 

Wealth inequality is not inherently bad. It is necessary for a functioning free society. The problem is when it becomes so dramatic that wealth concentration allows segments of activity to control regulators, regulations and legislation. We have reached that precipice:

http://graphics8.nytimes.com/images/2007/09/19/opinion/19krugman2.533.jpg

Income inequality has not been this extreme since 1929, remember what happened then?

 

A stable, energized economy requires a healthy middle class. As a business owner, no amount of tax breaks or incentives are going to compel me to hire more people and manufacture more widgets if there isn't demand to buy them. I simply make more profit on the widgets I am selling and further exacerbate the income inequality gap. This is exactly what has happened over the last 20 years. That nostalgic time Glen Beck hearkens back to, that's when the tax code was the most progressive and the middle class was the strongest.

 

I argue that sniffing the thrones of the top 1% is not only wrong but destructive to the foundation of the country. I would argue that creating a regressive tax system would do even more harm to the middle class gulf. If a solution isn't found to increase the vitality of the middle, this ship will crack and be sunk by each end.

 

That is what the barstool allegory fails to recognize. This is an incredibly complex issue with a multitude of very important variables that fall well outside this simplification. The worlds problems are not simple issues. Simplifications like these are based on qualitative or quantitative misunderstandings of global concepts or macro economics. Typically people want to be affirmed and not informed, affirmation is most easily found in simple explanations. Simplicity is most often confused with clarity.

[TTQ B4U]

I believe that our economic success as a country relies on demand, that a company given tax breaks and incentives only makes a more profitable widget, not more widgets.

 

I agree that life in general is going to follow the supply / demand theory but disagree that tax breaks will result in only more profitable widgets. Our company is doing quite well and we're adding new equipment left and right because of it. Sure, some companies will seek that profitability goal but many will reinvest it in some way.

 

I'll say this too, I know many business owners that in the end have a huge nut on the line and will not allow the gov't to hit them harder in their wallet without adjusting. I remember when a local company I was for quite some time at let go 20 people of the 250 we had, which was the first instance of such cuts. I know the owner as a friend and have it straight from him that he hated to do it, but in the end changes within the economic climate forced him to do that. It was do-able and within his means and he isn't ashamed to say he's looking out for his interests first. I would do the same thing if needed.

 

I believe that the economic engine of our country resides in the middle where a majority of income earners reside. I believe that strengthening the middle class drives economic growth and thus the success of the upper class. I believe that my business will be more successful if there is increased demand.

Fair enough.

 

You believe in supply side theory. Decreasing burdens on the upper income earners incentivize them to make investments hire employees and "give back" to the middle class in the form of participation in the market. Again, tell me if I'm wrong.

As noted above yes/no. I will say if you hurt a company, they will do what it takes to take back that loss. To think otherwise, especially today, isn't a wise bet.

 

Reducing these burdens raises all ships because, you believe, wealth is not finite. Jobs are created, middle earners have more money to spend and demand increases.

My company provides every employee a 10% bonus based on their W2 earnings if we achieve plan. We've not missed this goal for quite some time. If we're impacted by taxes, etc. and they will take that loss back as noted above, it will hurt employees. If not or if we can't hit those goals, you will once again hurt every employee by a significant amount.

 

I managed the manufacturing division of our company and hire a lot of people as we grow, but if we're not in a position to hit our goals for any reason, we will not. Most every company would much rather scale back on production and be more profitable. I can say for sure I run our location based on profitability. I don't want to be the biggest, I want to be the most profitable.

 

So really we have a chicken and egg paradox. To improve the economy to you stimulate demand or incentivize the top? This is the quandary that has haunted economists for centuries. And I think this is the foundation of our disagreement.

Not always, but I will say if I take thousands $$ from your bottom line and you have means to get it back by adjusting how you do business, you will. You won't allow all your hard work and efforts to take a hit at the bottom line if you can control correcting it.

 

Most people really believe they are going to be rich. Most people here probably believe it too. Some may even vote based on their perceived future self vs. where they are now. However, there is a normal distribution of the typical factors associated with wealth (i.e. motivation, delayed gratification, etc). This normal distribution curve looks something like this:

 

Your argument that people can just "choose" to be wealthy is a misnomer akin to me choosing to have blue eyes.

 

I don't make an argument that ALL people can 'choose'. I already was clear that not everyone will achieve those goals but we shouldn't lower the bar. Not every kid playing soccer gets a trophy.

 

A stable, energized economy requires a healthy middle class.

Then you better not vote for Obama because what's he has done so far and looking to do is killing off the middle class and lowering the bar.

 

As a business owner, no amount of tax breaks or incentives are going to compel me to hire more people and manufacture more widgets if there isn't demand to buy them. I simply make more profit on the widgets I am selling and further exacerbate the income inequality gap.

I disagree.

[iwishiwascool]

Anecdotal examples aside, I'm not arguing to lower the bar or give everyone a trophy. Income inequality is the problem, reducing taxes for the top 1% is not the answer. There is higher probability of a stimulus, yes spending, to embolden the middle class and increase demand. The jobs bill was a nice example of something that could have been done to stoke demand, Republicans could have suggested how they would have changed it rather than kill it in cloture. Their only counter was to introduce HR 2911 which did nothing but repeal corporate income taxes. Please.

 

The reality is that Republicans wanted the economy to stall until next month to clear a path for a republican president. If you really think Mitt is going to get in there and start focusing on revitalizing the middle class then you are as naive as the tea party voters that voted in legislators who promised to create economic change only to spend all their time on social issues. If he were to win he would have many debts to repay, none of those are in the interests of those are in the interests of the little guy.

The elected legislators of the Republican party have crushed the middle class, and don't give me that lack of leadership bullshit. It takes two sides to negotiate.

 

As for your last "disagree" you can do so all you want, but the number are not on your side. Corporate liquid holdings have increased 59% since 2008 to the tune of 2.2 trillion dollars. The money is not moving as a result of the lack of demand. Not regulations, not uncertainty... just simple lack of demand.