Monday, 21 May 2012
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SuperFreakonomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance
By Steven D. Levitt, Stephen J. Dubner
see relatedThe Economic Debate in Six Minutes
This all jives with what I've known since I took economics in 10th grade: you give a billionaire a 10% tax break, it goes into the bank (or stock market, trust fund, whatever); you give a thousandaire a 10% tax break, it goes right back into the economy because they're living hand to mouth.
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Comments (19)
I don't know. I work for an international company. The owners of the company are not citizens of the U.S. They came here to make money. It is that simple. In coming here to make money, they created businesses and those businesses did create jobs. They created a business with a product that wasn't really marketed much in this country but was in their own country. My wife also works for a company where the owners are not U.S. citizens. They came here to make money. They felt this was a good place to make money.
Both of our organizations have expanded over the last few years. Both of our organizations have opened new locations in the last few years. Both of them will probably continue to open new locations in the next few years. Each location they open, creates a new set of jobs.
If the government taxes them at a higher level, they will have to figure that in their bottom line. They will decide if the U.S. is the best place for them to make money. But other people that know them from their own countries will also hear about the U.S. and whether it is the best way to make money.
Organizations in the U.S. are so complicated anymore. They are often fueled by oversea factors.
If people decide they can make more money somewhere else, they will move their business to the place where they can make more money. That takes the jobs with them. So to say that businesses don't create jobs is sort of silly.
ha i posted this same video a few hours ago. "If it was true tax cuts to the wealthy creates jobs today we'd be drowning in jobs."
@TheTheologiansCafe - i also worked for a multinational corporation, Lehman Brothers started by U.S. citizens. the company and the others in the industry began outsourcing jobs to where they could pay pennies on the dollar. it turned into losses anyway but that's another story. so it seems that by your logic in order for corporate jobs to stay in the U.S. workers here would need to be paid pennies on the dollar too but then what happens when U.S. workers no longer have purchasing power. i'm of the opinion if a company doesn't feel the U.S. is important enough to pay more to invest in their businesses let them take their business elsewhere. there are enough people wanting to start businesses here.
and the same reply to you as on my post, the wealthy don't use their additional personal income to hire employees. as Hanauer says, if that were the case we'd be drowning in jobs right now.
@TheSutraDude - But if companies are growing then eventually smaller companies come in and compete and smaller companies do create more jobs. So there is a trickle down in that smaller companies follow the path of the larger companies creating more jobs. I think you understand that smaller companies have been started at a much slower pace but that is related to the fact that the little guy is struggling to get a small business loan right now. Lending is beginning to free up again and that will allow the little guy to start his small business which will cause job growth. I am of the opinion that the banking industry has had a larger impact on this slowdown than most people even realize. But I also am more optimistic about growth because I see lending freeing up and I tend to connect that to smaller businesses starting up again which I feel does create jobs.
All this to say that I feel the large companies should pay taxes at the same level as small companies. But I am not sure I tend to blame large companies for the current unemployment rates or the stagnation of income for some Americans. I tend to think that some people are not increasing in salary because our economy has been turning into a global economy for years. With more low income people around the World being added to the job market, you are seeing the incomes of some Americans decreasing or at least stagnating. They are competing against lower income people. The lower income people around the World are impacting your income. I am not sure there is anything you can do to stop that. But there comes a point when it stabilizes. At some point, the Chinese are going to want some of those products they are creating and that will cause them to insist on more money. More money for those workers will mean an increase in product cost coming out of China.
so compare the economy during the Clinton years when he raised taxes and the Bush years when taxes were cut. a great disparity in wealth preceded both the Great Depression and the Great Recession. the proof's in the pudding.
perhaps in 20, 100, or 500 years Chinese workers will unify enough that their demand for higher pay will get them higher pay but is that what we want to gamble our future on? and who knows, the Chinese government might then simply take a page out of our book and call the rich, job creators. they need to get their shit in order as do we. if we look at the global economy it's the same deal in most countries. the rich have gotten richer and the poor, poorer be it through capitalism, communism, or fascism. that does not have to be a given unless we let it be a given.
the point of what Hanauer says is cutting taxes to the rich does not create jobs. republicans in Congress keep saying over and over and over again we can't raise taxes on the job creators. i know Alan Greenspan, the guy on whose every utterance wall street reacted for decades, apologized for being wrong on the economy. i just learned Stockton, the man behind trickle down economics also apologized and admitted trickle down economics does not work.
While what you said is probably an oversimplification of the effect of tax breaks...I agree that's generally the case. Like the video/talk... on what is an important and timely issue. Hanauer makes a lot of good points and what he says is simple and straightforward....and (to me) almost intuitive. Though I can see how some of his points may seem counter-intuitive....most of it... just makes sense.
So to me personally, I don't necessarily view this video as explicitly partisan (at least not necessarily so...though I'm not going to argue with anyone that thinks it is). But here is another TED talk (Richard Wilkinson: "How Economic Inequality Harms Societies") that I think is nonpartisan, data-driven, and relevant to the issue.
http://www.youtube.com/watch?v=cZ7LzE3u7Bw
You didn't study economics, you studied Marxism. That's why what you are saying is total nonsense.
@PrisonerxOfxLove - A beautiful ans sensible rebuttal. I like yor incisive logic.
I loved these books, and thought they were both brilliant, though I liked the first better than the second. If you enjoy behavioral economics, you should look up econgirl.com. I have been following Jody Briggs for years, and I love her.
BTW - Where have all the criminals gone was my favorite chapter.
the top 1% in the USA pays an average income tax of 24.01% and pay 36.7% of all income taxes
the top 50% which includes that top 1% pays an average income tax of 12.50% and pays 97.7% of all income taxes
the bottom 50% pretty much pays nothing but they average a 1.85% tax rate
What is it you want to change? what would be the benefit? and do you think that top 1% just might find better places to use that money than the USA
We also have the highest income tax rate in the world, but that is not so much a tax on the rich but a tax on US consumers. and a reason that firms that export tend to base themselves in other countries if they can
@trunthepaige - Now who's the one who is lying? If you look at this chart, you can see about two dozen countries with higher income taxes. In fact, we have an income tax rate about half of Belgium. HALF. So you see, we're nowhere NEAR the "highest income tax rate in the world."
And you're right, the problem here is that we're not taxing the poor enough. We should start taxing the people just above the poverty level (so around $23,000 for a family of four) so that we don't need to drop the Bush tax cuts and maybe cost Mitt Romney one of his 11 mansions, or at least the elevator in his garage for his cars.
When our country was prospering in the Clinton years, there was a higher tax rate on the top 1%. And we actually had a surplus. Then George W Bush enacted his austerity measures, and we've been sinking into further debt since. Obama didn't help by letting himself get blackmailed by the GOP into renewing the Bush tax cuts on the upper class. We can also see the effects of austerity measures overseas in Ireland, Greece, the UK and Italy.
We've seen, time and time again, that our country prospers when working at growth, and stagnates under austerity.
I said corporate taxes, you should try reading what I write before telling me I am wrong. I check my facts they are always well sourced.
I was asking you what you wanted. the top 50% pays it all, the bottom nothing and the top is paying 37% what do you want what should the top pay? and do you see no down side?
@trunthepaige - [I said corporate taxes, you should try reading what I write before telling me I am wrong.]
This is what you wrote, literally TWO comments up: "We also have the highest income tax rate in the world"
Maybe you should read what you yourself write before getting pissed at me.
@trunthepaige - [I was asking you what you wanted. the top 50%
pays it all, the bottom nothing and the top is paying 37% what do you
want what should the top pay? and do you see no down side?]
Yes, but the bottom 50% only OWNS 1.5%, whereas the top 1% owns 42%. I think that's far more pertinent than just saying that the top 50% pays all the taxes. Repealing the Bush tax cuts on the rich would raise the same amount as taxing the bottom 50% HALF of all they are worth.
If you're so upset about the bottom 50% paying no taxes, shouldn't you also be upset about the top 0.1% paying LESS taxes than a middle-class family?
@GodlessLiberal - sorry that is not true the bottom has more than that and that was not my point anyway as we do not have a national property tax.
Could you answer the question?
@GodlessLiberal - Sorry I screwed up, that was a typo and I understand why you called me on that
@trunthepaige - It is true. Let's look at it more broadly, and say the bottom 80%. That bracket has 7% of our nation's wealth, with the top 1% having 42%.
Now what question are you so insistent on asking?
I would be supportive on all of your articles and blogs because they are just upto the mark.china economy