Aswad
Posts: 9374
Joined: 4/4/2007
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quote:
ORIGINAL: MasterSlaveLA
So riddle me this, Batman... how do "consumers" gain income in order to purchase goods?!!
It helps to put the horse in front of the cart, rather than the other way around.
Reducing taxes for consumers increases spending, which increases demand, which causes businesses to expand in order to supply, which causes new jobs to be created. To maintain the same level of public services, the taxes are then collected from other sources, such as the wealthy. Business owners will never cease to attempt to meet demand, regardless of how much you tax them, because meeting demand is how they earn a living. They will always attempt to dispense with labor when they can, but this does not vary with taxation, because it's about decreasing their expenses to increase their profits, which is always a net gain. However, consumers with low tax rates can vote with their wallet, because they have the margins to do so, unlike consumers with higher tax rates.
Avoiding taxation for the rich is the classic response of the abused: if I don't offend him so much, maybe he'll stop beating me.
Fact of the matter is that the power relationship is the other way around. Just like with abuse, it's what they do to your mind that causes you to lose power by starting to believe you don't have it anymore and letting fear govern your actions. Appeasement is a strategy that doesn't work, because the only people you might want to appease are the ones hurting you, and they're not going to stop hurting you just because you stop fighting back. And in finances, you are hurt, unless your individual net economic growth- without the income from labor- exceeds the national inflation rate consistently in the long term.
Money isn't in direct correspondence to value. It is an IOU. A unit of money, whatever the currency, is a share in the production output of the nation that prints the currency, and thus a share in the indenture of its labor pool. Inflation rates are similar to interest on a loan in this regard, a business model that is well known from pimps that do this with their prostitutes. Any tax cut is handing companies a greater amount of indentured labor, or releasing private citizens from some of theirs, depending on whose taxes you cut. The same goes for inflation. Bring the inflation rate up, and you generate more indenture. Bring it down, and you generate less indenture.
You're asking the wrong question. It's not a chicken and egg thing, it's a water cycle thing. Water evaporates from the sea, rains down somewhere, collects in a stream, flows back to the sea, and then evaporates again. The way to regulate water cycles is to regulate the insolation that drives it. By shifting the tax burden from the consumers to the wealthy, you're requiring more to return to the cycle from them, while at the same time giving the consumers more spending power with which to create the demand that drives the production that keeps them in a state of ongoing gainful employment, which in turn raises income and thus creates even more spending power, driving the machine forward. Businesses can't earn without production or inflation, and they can't produce without consumption.
It's a zero sum game, and its inherent instability is what allows it to work, shuffling goods and labor and production back and forth.
Another zero sum game is poker without the rake, and like the finance game, it's about who can grab the most from the circulating money. The same money is going around the table all night, and a good player takes more money out of the game than they put in, while a poor player puts more money into the game than they take out. That's how you earn money playing it. Chance has nothing to do with it. Poker, like finance, is a game of skill. And, like finance, it's about beating the other guy. But here's the important thing: if you play poker too well, people won't play with you anymore, and the game stops; so, too, with finance. Take the greed down a notch, the game keeps getting played and everyone has a good time. And the skilled player still keeps on winning big.
Do you routinely play poker with high stakes, against more skillful opponents than yourself, with a high rake?
I may have to bet you do.
IWYW,
- Aswad.
_____________________________
"If God saw what any of us did that night, he didn't seem to mind.
From then on I knew: God doesn't make the world this way.
We do." -- Rorschack, Watchmen.
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