Proč daňové škrty pro bohaté nic nevyřeší

Jul 27, 2017 Joseph E. Stiglitz

NEW YORK – Američtí pravicoví plutokraté se sice možná neshodnou na pořadí hlavních problémů země – jako jsou třeba nerovnost, pomalý růst, nízká produktivita, závislost na opioidech, žalostné školy a chátrající infrastruktura –, ale řešení je vždy stejné: snížit daně a deregulovat s cílem „stimulovat“ investory a „uvolnit“ ekonomiku. Prezident Donald Trump sází na to, že právě takový balíček vrátí Americe velikost.

To ale nedokáže, protože to nikdy nedokázal. Když jej v 80. letech zkoušel prezident Ronald Reagan, tvrdil, že zvýší příjmy z daní. Místo toho zpomalil růst, daňové příjmy klesly a pracující utrpěli. Velkými vítězi v relativním smyslu byli bohatí a korporace, jimž dramaticky osekané sazby daní prospěly.

Konkrétní daňový návrh ještě Trump nepředložil. Na rozdíl od přístupu jeho administrativy ke zdravotnické legislativě mu ale chybějící transparentnost nepomůže. Zatímco z 32 milionů lidí, kteří při současném návrhu mají přijít o zdravotní pojištění, mnozí zatím nevědí, co se chystá, neplatí totéž pro společnosti, které na Trumpovu daňovou reformu doplatí.

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Joseph E. Stiglitz

Writing for PS since 2001
266 Commentaries

Joseph E. Stiglitz, University Professor at Columbia University, is the co-winner of the 2001 Nobel Memorial Prize, former chairman of the President’s Council of Economic Advisers, and former Chief Economist of the World Bank. His most recent book is People, Power, and Profits: Progressive Capitalism for an Age of Discontent.

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0 Comments on this paragraph, 69 in all 69 Comments on this article

Greg Kramer Aug 6, 2017

G.A. Pakela,
St. Ronnie and the Congress that passed his tax cut legislation for the plutocrats while increasing taxes for the rest of us, such as a payroll tax, unemployment compensation, et al, in the end resulted in charging the nation's credit card $3b.

President Clinton and that Congress had a better track record of job creation and at the end of Clinton's Administration there was a budget surplus vis-a-vis St. Ronnie's.

The rich pay more in taxes because they have increased the size of their wealth and income. You aren't arguing against that they should pay more are you?

Yes, on tax reform. How about a progressive VAT? How about zero corporate income taxes but stockholders pay a progressive income tax up to 70% depending on their quantile?
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G. A. Pakela Aug 2, 2017

Dr. Stiglitz's contention that in the 1980s growth slowed, tax revenues fell and workers suffered under Reagan's tax cut policies is untrue. After the Fed inflation fighting efforts induced a recession that exceeded the most recent Great Recession, inflation collapsed and economic growth accelerated. Tax revenues as a percentage of GDP indeed fell during the recession, but quickly recovered. In fact, the Reagan tax policy has never been reversed, and top rates remain lower than the 50% top rate that persisted throughout most of his two terms. A comparison of tax revenue as a percentage of GDP between the pre- and post-Reagan eras shows that they are equivalent at about 17% of GDP. It is bad economics to contend that tax reform would be ineffective. Currently, marginal tax rates are much higher than the percentage of income actually paid by the rich. The CBO has calculated that the top 1%, with an average income of over $1.5 million only pay about 30% of their income in taxes. This is in spite of the fact that the CBO assigns responsibility for paying corporate taxes to shareholders. Aside from overpaid athletes, entertainers and CEOs, there are millions of small business owners whose business income flow through their personal taxes. To suggest that tax reform that lowers the after-tax return on investment would have no impact does not comport with economic theory.
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Mauricio Duran-Loriga Aug 1, 2017

How devious.

You call the tax (income) structure inefficient and unfair.

I wonder what you think about how taxpayer money is recklessly burnt.

You forgot to mention that implementing a tax hell for the rich is tantamount to falling asset prices (stock market first), higher unemployment, capital flight, currency disorderly fluctuations, financing mismatches, frozen long term investments...

By election 2008, Obama endlessly promised to "go line by line in the budget". Void as a Hollywood script.

Instead of messing around with increasingly stealing people's income, why not better manage what the taxman collects. Take away inefficiencies, corruption, bribes, repeal what is tied to the electoral cycle, all built into the budget.

You will not only look more ethical, but you will end up advocating for much lower taxes for all, including both the greedy "rich", and the left behind "poor".

Or instead, try the opposite mantra, and tax the poor. Tax all these millions of "poors" that pay no income tax in developed countries. To make them really understand how expensive it is to fund all the public services they use in exchange for nothing. Oh I see..they wouldn't be re-elected !

As a Nobel laureate you benefited a maximum from the merit culture. However, when you fly the anathema flag against the "rich", you end up pissing against the wind and your intellectual credit sadly dives into the red.

In any case, pink elephants will learn to fly way before politicians go "line by line" in the budget. It's a lost case. Such is human condition.
- Greg Kramer Aug 6, 2017
  
  The article is about revenue is not about expenses.
  
  Let's try staying on the topic.
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Robert Bostick Jul 31, 2017

We have known for over 70 years that Taxes have nothing to do with government spending. However it is an idea that has taken root again in the recent past, and we really need to get beyond it if we are to build the society of the future. There is a faint whiff of punishment in a lot of tax proposals, which is very reminiscent of the treatment that the Greeks have received in their recent attempts to improve the lot of their population. Most unpleasant.

The following is a simple précis of the points from the Beardsley Ruml, (former Chair of the Fed Reserve Bank of NY,) article from 1946 and the Bill Mitchell piece on the same article from 2010 - and targeted at the UK. Readers wanting more details should click this link. http://www.3spoken.co.uk/2015/07/taxes-for-revenue...
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Lester Soss Jul 30, 2017

If tax cuts are helpful, then I conclude from Mr. Robert's remarks that tax decreases are better.

At some point surely the decreases will encourage the incentive to take risks to create tax-generating wealth. I hope he explains what this point is and how he determined it

Mr. Roberts, I love your logic in your first paragraph, which I have tried to use in mine. If A, then not C. Or maybe D or E, or even F. I also appreciate the inventive use of logic to discover causality.

In terms of the second, which I have paraphrased, I suggest you read again, though more carefully, Dr. Stiglitz's brief economic argument. It will provide you with a model on how to proceed to explain your points and determine them.
- Jimm Roberts Aug 6, 2017
  
  Mr. Soss, You are getting close to an epiphany. When you realize governments do not create wealth -- they consume it -- then you'll appreciate why giving them more ever money via tax increases is economically unhealthy. Their employees already squander a disturbing amount of the tax revenue now remitted to them.
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- Greg Feigel Jul 31, 2017
  
  Your first sentence is irrefutable - most economic argument these days are easy to dismiss via a 2600 year tool: reductio ad absurdum.
  
  With my actual experience filing US returns for all sorts of entities, and international returns, I find Stiglitz article dumbfounding. His understanding of the global and territorial method lead to a truly unique economic argument: lose value but feel good waving the flag.
  
  But the investment argument is truly priceless: decrease tax cash flow burden across all time periods, and present value DECREASES! Who would have thought?
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Peter Ellis Jul 30, 2017

Capitalism, as evinced by neo-liberal economics, is an unpleasant and highly destructive beast.
- Greg Feigel Jul 31, 2017
  
  This is a problem created by the tenure system, and not unique to Prof. Stiglitz.
  
  Eventually intellectual laziness sets in, incentives disappear and persistence and rigor go with it. New thought is blocked until someone dies.
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wally grigo Jul 30, 2017

Why is there a corporate tax at all? Profits are dispersed in 5 ways: bonuses to employees, dividends to shareholders, expansion or addition of manufacturing facilities, office space, network capabilities, etc., corporate takeovers, and hoarded cash. Why not simply tax all this economic activity as those profits flow through the economy? As for hoarded profits, corporations could be told: "You've got 3 years to plow those tax free profits back into our economy. After that, we're going to tax those profits at the going rate. This would provide incentive to push that $3 trillion off the sidelines and out onto the playing field where it belongs.
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B Wilds Jul 30, 2017

Stiglitz is a big government and free trade economist that promotes globalism. He is biased on many issues.

Trade policy has massive long-term ramifications on the strength of a nation's economy. Often people fail to note the difference between free and fair trade. In many ways, the global economy has become an ill-regulated business model tilted to favor big business and giant conglomerates. We should not lose sight of the fact that while free trade is important, fair trade is far more so and should be the main issue.

Developing a long-term sustainable economic system that is balanced would contribute to both global cohesion and the world economy. The article below is in response to a slew of comments from my recent article titled, "Higher Prices On Import Goods A Fair Cost For Jobs". Today many people supporting past trade agreements mistakenly use low consumer prices as a battle flag around which to rally.

http://brucewilds.blogspot.com/2017/02/free-trade-and-fair-trade-are.html
- Greg Kramer Aug 6, 2017
  
  Stiglitz is not for free trade.
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Jimm Roberts Jul 30, 2017

If tax cuts are harmful, then I conclude from Mr. Stiglitz's remarks that tax increases are better.

At some point, surely the increases will suffocate the incentive to take risks to create tax-generating wealth. I hope he explains what this point is and how he determined it.

Curious too why equality has to be among his concerns. Since it doesn't exist in any species, why does it have to be among the reasons for a tax increase?
- Greg Kramer Aug 6, 2017
  
  Mr. Roberts,
  
  As Joe Friday said, "Just the facts ...."
  Stiglitz's other articles have argued about taxing the plutocrats to invest in education, infrastructure and the social safety net for the purposes of balancing the economy from the current barbell economy to a more evenly distributed income stream.
  
  If you think the plutocrats made their money the old fashion way by earning it as the late John Houseman use to say, you are sadly wrong. They made money the old fashion way but more like in early Colonial America when pirates were a scourge. Yes, the plutocrats plundered the working, poor and middle classes by bribing legislators, state judiciaries, and executive departments across this country to pass and sign legistlation or rule in favor of them.
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- Peter Ellis Jul 30, 2017
  
  It is so depressing reading a dyed in the wool capitalist.
  
  "If tax cuts are harmful, then I conclude from Mr. Stiglitz's remarks that tax increases are better."
  
  Perhaps, but that is a misleading statement, as most right-wing, Breitbart -similar, arguments are. There is not an immutable logic as you try to make out.
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louis calvez Jul 30, 2017

How can the state solve any problem while it manages state resources with negative liability? The institutions exercise defacto ownership by social contract and tenure of insiders with defacto negative liability: The institutions are too good to fail; problems grow larger for more people in the future-- In particular, because the institutions extend negative liability to over leveraged, highly dissipative industries.

The intelligentsia who analyse but are not responsible for working designs are excused from learning about the environment, but then they blame the environment for their failed analyses. They can radically discount the value of the environment by analysis and then blame the environment for their own radical discount of the environment when a design cannot be realized.

The intellectuals cannot declare and specify the extraordinary processes of evolution or special thermodynamics that could make their analyses work. They are irresponsible designers with negative liability.
- Peter Ellis Jul 30, 2017
  
  Largely, a load of convoluted nonsense. What are you trying to say? Does you environment allude to climate change?
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Data DrivenFP Jul 29, 2017

Indeed, WEALTH inequality is even greater than income inequality, and taxing income misses the very wealthy who cover their living expenses through 'Wealth 101'-borrowing on assets, then passing on those assets at a stepped up value, tax free at death.

Thus taxing wealth and corporate GROSS income would make for a more equitable system. For difficult to assess corporate or private properties, make them available for general purchase at 5x their declared value. Allow auctions, whereby bids by the current owner (sale-declared) would be paid to the Fed.
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Mark Kuperberg Jul 29, 2017

I am afraid Stiglitz got the Senate's reconciliation rule wrong. It has to be budget neutral outside of the 10 year window. In other words, the tax change has to be budget neutral in year 11. This is why the Bush tax cuts had to end after 10 years. Within the 10 year window, they were never budget neutral.
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Wayne Davidson Jul 28, 2017

Taxation and its inequities are insignificant compared to whats been done in the name of represetative democracy.
The hierarchical system that underpins this plutocracy has no political or social affinity to the people it represents and the totality of this unmitigated affiliation makes a mockery of democracy.
- Wayne Davidson Jul 30, 2017
  
  #peter Ellis #Dik Hed.
  Grand Canyon
  How many years have I hemorrhaged?
  Staring across this bridgeless divide
  Between who I am and what I seem
  It’s so deep and hopelessly wide
  
  How many anxieties have I torched?
  To warm myself on the rim
  Of a canyon so vast and mocking
  Swallowing my echoes with stoic grin
  
  But human nature is often obtuse
  Under false assumptions hypnotized
  While hobbled with this condition
  Simple things seem heavily disguised
  
  So stumbling becomes the main method
  Of blundering into veracity
  Whereupon this hapless and aimless oaf
  Acquired some extra capacity
  
  To perceive the folly of his desperation
  Ego bridges cannot be built
  The answer had always been obvious
  False selves must simply be killed
  
  © Bruce Newman
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- Peter Ellis Jul 30, 2017
  
  As in Louis Calvez's comment above, this is largely gobbledygook. You'retrying to sound impressive but the result doesn't really make sense.
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Enrique Woll Battistini Jul 28, 2017

It would be evident to any kindergartener that if you want your neighbor to stop breaking into your henhouse, you have to help him get his own: It would be evident to any child that building a USD 25,000,000,000 wall to keep your neighbor from trespassing would be a very stupid and the most expensive solution! So, in The Americas, "A Partnership for Development with the United States of America" is what the doctor ordered. It should soon keep unwanted northern and southern neighbors home, prospering symmetrically:

https://www.academia.edu/23094646/OFA_At_the_Brink_of_Recovery_or_Conflagration_The_World_at_a_Tipping_Point_2011111506

https://www.academia.edu/26966465/An_idea_set_forth_in_1992_written_up_in_1993_and_upgraded_in_1997_A_Partnership_for_Development_with_the_United_States_of_America_-_1997030103

https://www.academia.edu/13062837/La_Reforma_Tributaria_del_Siglo_XXI_The_XXI_Century_Tax_Reform_-_2011100411

https://www.academia.edu/13062623/Informal_Proof_of_Thomas_Pikettys_Thesis-2014060802

https://www.academia.edu/12823841/Mathematical_Model_and_Simulation_for_A_Partnership_for_Development_with_the_United_States_of_America_-_December_1999
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Enrique Woll Battistini Jul 28, 2017

It would be evident to any kindergartener that if you want your neighbor to stop breaking into your henhouse, you have to help him get his own: Building a USD 25,000,000,000 wall to keep him from trespassing! So, in The Americas, "A Partnership for Development with the United States of America" is what the doctor ordered. It should soon keep unwanted neighbors home symmetrically:

https://www.academia.edu/23094646/OFA_At_the_Brink_of_Recovery_or_Conflagration_The_World_at_a_Tipping_Point_2011111506

https://www.academia.edu/26966465/An_idea_set_forth_in_1992_written_up_in_1993_and_upgraded_in_1997_A_Partnership_for_Development_with_the_United_States_of_America_-_1997030103

https://www.academia.edu/13062837/La_Reforma_Tributaria_del_Siglo_XXI_The_XXI_Century_Tax_Reform_-_2011100411

https://www.academia.edu/13062623/Informal_Proof_of_Thomas_Pikettys_Thesis-2014060802

https://www.academia.edu/12823841/Mathematical_Model_and_Simulation_for_A_Partnership_for_Development_with_the_United_States_of_America_-_December_1999
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Michael Cohen Jul 28, 2017

All of this is true enough. The main action of the well to do as a population seems to be to bid up the prices of stocks and other assets increasing price earnings ratios and preparing for the next crash. This would be more compelling if the government was treated as the last investor and some hypothesis was made about what education and what infrastructure is worthwhile. We invest often wisely in wartime and wise investment at this point incuding in education as we fall more and more behind China as the worlds largest economy in purchasing power. Whatever advantage we have by having the worlds reserve currency is likely to end in 10 years or less.
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vivek iyer Jul 28, 2017

Reagan's early years saw a monetary contraction to squeeze out cost push inflation arising from the second oil price shock. Like Thatcher's monetary contraction it was mistimed and had a bigger negative impact than 'Rational Expectations' models predicted. Still, Reagan's tax cuts did impact expectations and permitted some deleveraging. On balance, growth went up.

Stiglitz pretends that the monetary contraction was not cushioned by tax cuts. 'When President Ronald Reagan tried it in the 1980s, he claimed that tax revenues would rise. Instead, growth slowed, tax revenues fell, and workers suffered.' This is a bit misleading. Tax Revenue did rise over the period as did Growth. Workers suffered so much that they enthusiastically re-elected not just Reagan but also Bush. Why were American workers so masochistic? Perhaps they did not live in Stiglitz's universe.

On the other hand, some middle class people with an understanding of new Technology did become very very rich during the Reagan and Bush era. No doubt, lower taxes helped them. However, the Economy also benefited. True, a marked duality between 'Sunset' and 'Sunrise' industries took hold. There was also an increase in rent seeking behaviour and a further ratcheting up of a corrupt Beltway culture- the so called 'Washington Swamp' that Trump has promised to drain.

It must be said that Trump's performance in office confirms Stiglitz's gloomy view. We no longer believe he can carry out some of the sensible reforms that were touted just a few months ago. However, in a context of incompetence and corruption at the top, tax cuts are still a good thing. Why? If Trump is an idiot, he should have less, not more, money to play with. It appears Revenue Neutrality can always be achieved at the expense of the poorest or with Govt. shutdowns. Again, this is a good thing. Voters have the blinkers removed from their eyes. They have an incentive to get rid of Incompetent or corrupt leaders.

Consider what happened to Suharto when the IMF refused to cushion the blow to the poorer Indonesians. Suharto fell. Indonesians were better off. Stiglitz objected at that time to 'Neoliberal' cruelty. But that cruelty was a good thing for Indonesia.
- vivek iyer Jul 30, 2017
  
  I meant to write 'the Byrd Rule' not 'the Byrd Act.
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- vivek iyer Jul 30, 2017
  
  @Rajendran. It is you who write bs- that too of a very confused and illiterate sort. I pointed out that Stiglitz was disingenuous because he fails to look at monetary policy in conjunction with fiscal measures. You ignorantly make the following wholly illiterate statement- 'Need not waste all the time and effort on all the rigmarole from time immemorial'. Your reasoning as bad as your grammar. I am commenting on Stiglitz's article which makes a historical argument. You are just writing nonsense.
  
  What is this supposed to mean?- 'To appreciate that you will need to get yourself planted into an environment where companies prepare investment evaluation sheets - your economic profit and NPV to arrive at EV. IN that schema the last item in the line is the implication of taxes.' You are describing low level grunt work of a sort which leads to systematic errors- e.g. thinking companies with underfunded pensions are a good buy. This has nothing to do with what determines the level of Investment in Macroeconomics. The interest rate matters- which is why Stiglitz should have referred to the monetary policy context of the tax cuts he mentions. Marginal tax rates and entitlement traps do affect Aggregate Supply. No doubt, some exaggerate their short run importance but if the marginal product of Government expenditure is low or negative- as is likely if the State is in the hands of fools and knaves as Stiglitz suggests- there is still a good case for cutting taxes.
  You think that Sunrise industries don't require high initial capital outlay and quote Google and Facebook as examples. You don't seem to understand that those two companies could only succeed because of massive investment over many decades. One reason the private sector was able to take over much of the R&D investment in new technologies was because of the Reagan and (both) Bush tax cuts and their continuation in defiance of the spirit of the Byrd Act by Democratic administrations. Trump, at one time, talked of a taxing Corporate overseas cash piles and imposing an A.J Auerbach type 'border adjustment tax'. Stiglitz refers to these in his essay without mentioning their left of centre intellectual antecedents. In view of Trump's shambolic performance in office, it appears unlikely that any such 'progressive' measures will be implemented. Instead we will have tax cuts for the rich and then a fiscal cliff which will entail cutting entitlements. However, Stiglitz is wrong in saying that cuts in corporation tax are always a bad thing. On the contrary, multi-lateral agreements to curb avoidance and reduce the salience of tax shields should go hand in hand with reduced marginal rates so as to improve allocative and dynamic efficiency. Distributional efficiency should be treated separately. The EU may well be on the point of going down this road. Stiglitz's pessimism re 'beggar my neighbour' policies is unwarranted.
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- Rajendran Vasudevan Jul 30, 2017
  
  my my the capacity for some guys to bullshit! Need not waste all the time and effort on all the rigmarole from time immemorial. just think of what the current effort at tax cuts will do.The bush tax cut was intended to augment investment and it did not do any of that. The current one too would not do any of that. To appreciate that you will need to get yourself planted into an environment where companies prepare investment evaluation sheets - your economic profit and NPV to arrive at EV. IN that schema the last item in the line is the implication of taxes. LOcational preferences do matter to some extent, keeping in view the tax breaks. The more important drivers are of course the attractiveness and the stability of the key revenue and the operational cost drivers. Manufacturing having moved to China is a case in point. NOw then, manufacturing is not coming back to the US. The other forms of investment of the google and the facebook variety do not require huge capital investments at the outset. More over the choice of the decision to set up the facility in the bay area or bangalore is driven more by the easy availability of the kind of talent specifically required for the "projects" in question -definitely not the cost. The low cost "coding" being a competitive advantage is aleready a thing of the past. Thus what ever "little" that would be deemed appropriate for the not so robust demand pattern for the next decade or so will come in tax break or no tax break to the rich --no more no less. Tax break offered, therefore, is just to please the "constituency" of the section of the "Republicans" represented by Paul Ryan. This is all pretty black and white. one needs to be really deeply committed to that kind of a world view to support this tax cut proposal. And you happen to be one of them, then there is no need for any further discussion.
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Lee Tabin Jul 28, 2017

Mr. S,
Are you seriously suggesting Reagan didn't have a successful economy? I know you belong to ha d left and value EQUALITY over growth, but if you say Reagan wasn't successful we must have an awfully dumb country. He won 49 states his second term.
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Alex Leo Jul 27, 2017

Very sad how little substance there is in the article and how poor the author's understanding of the modern day tax systems is, especially how the US compares to the rest of the developed world. Also how do you define rich? In the NorCal BayArea, a family of a police officer and RNP easily makes more than 200K, maybe 250K. Are they rich and should they pay more? Are you suggesting that a software engineer who has been in the top 10 percentile in academics for 18-25 years (school and college, potentially PhD) should pay more tax to equalize their income with those who were less able? Calling names is the easy part, understanding the changing world at an old age is the hard part, even before you get to symptoms and cures.
- David Garland Jul 28, 2017
  
  Ha Ha, no. I live in Norcal. Show me a police officer (or police officer and spouse), making 200-250k. I know a fire chief who retired making that much, but that's because California has this weird law allowing him to collect two separate pensions for two jobs.
  
  ...and I have been in I.T. since bulletin boards were invented. Look I don't want to judge, but you knda come across as another self-entitled silicon valley millenial that the Bay Area has been so up in arms about these last years. You know the economics if you are from here: anyone who isn't making 'the money' is commuting 2-3 hours to their jobs because they can't afford to live here: manufacturing, construction, teachers, restaurant workers...even police officers.
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Jose araujo Jul 27, 2017

Even worst is when we are in the middle of a liquidity crisis and they are calling the Hawks...
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Jose araujo Jul 27, 2017

We all know that, but somehow many think that just all the ignorant think the same, it must make it the truth...

in times where there is excess capital, its most bizarre that some think corporate tax cuts would accomplish anything...
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Martin Screeton Jul 27, 2017

Same old song and dance... decade after decade... while we continue to deteriorate into oblivion. Fully half of the population of the United States is now poor... while the mega rich get even more rich. This is the roman empire just before it's fall.
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Michael Public Jul 27, 2017

Income tax is a bad social system. It taxes the salary man and the corporations use accountants and lawyers to easily dodge it. A rethink of how wealth is balanced needs to occur. Even a 70% income tax on corporations would achieve nothing because 70% of nothing is still nothing. To beat this switch to taxing assets. Land. Enduring brands (e.g. like Nike). Equities. Cash.
- Data DrivenFP Jul 29, 2017
  
  Indeed, WEALTH inequality is even greater than income inequality, and taxing income misses the very wealthy who cover their living expenses through 'Wealth 101'-borrowing on assets, then passing on those assets at a stepped up value, tax free at death.
  
  Thus taxing wealth and corporate GROSS income would make for a more equitable system. For difficult to assess corporate or private properties, make them available for general purchase at 5x their declared value. Allow auctions, whereby bids by the current owner (sale-declared) would be paid to the Fed.
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- Michael Public Jul 28, 2017
  
  @Alex - your comments assume bad implemtation which is not exactly fair criticism. Heart surgery done badly is a terrible idea.
  1. I don't see why Trump's failings should mean humanity cannot tax land - especially on death of owner.
  2. You would set the tax rate at a rate that prevents them (say) falling below 20% of the market and climbing about 50% - the point is not to drive them out of business.
  3. Just like all large businesses the DCF of Google remains identical regardless of who owns it.
  4. You are correct - taxing salaries is easy and taxing companies is hard but it is creating enormous social issues which cannot be solved with incremental style thinking.
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- Alex Leo Jul 27, 2017
  
  1. Taxing land. Before you know, Trump and the like will be building on federal and state land and there will be a very complicated system of differentiated land rates by location, usage and other factors where the main result will be corruption.
  It is really impractical to rely on taxing something that is illiquid. If you tax the Nike brand, its value will plummet as it is in really life driven by a DCF analysis. Any residual profitability will be attributed to other intangibles without a physical or legal embodiment.
  3. You will tax Google stock by taking away a portion each year - very soon you will be in Putin's Russia where the state can lay their hands on anything the want. And the road to success will not be creating a Google but being empowered to take it away.
  4. the current system may not be fair but easier and more practical to administer - you part with your money (figuratively speaking, I am referring to those who earn income) as you receive it.
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- Alex Leo Jul 27, 2017
  
  This is actually a very flawed observation causing a very stupid idea.
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- Kapil Narula Jul 27, 2017
  
  Totally agree with Michael Public. Taxing income will not achieve anything as corporates always show close to zero profit. Taxing assets is the right way forward to address income inequality
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Anthony DeAngelis Jul 27, 2017

I am shocked this person is an economist. What a joke.

1) Corporations pass through taxes, they do not pay taxes. Corporate taxes should be zero. Their employees pay taxes on their earning, investors pay taxes on dividends or capital gains. Taxing companies is simply a pass through cost that raises the prices of goods/services or lowers wages.

2) This "expert" starts his diatribe with an insult. Automatically discredit his overall message.

3) Taxes on companies and individuals are two different things. Conflating these two is on purpose.

Cutting income taxes on the richest people do not create jobs simply because very rich people save > spend. Therefore giving them more money doesn't increase spending which in turn would increase jobs.

Cutting taxes on companies will 1) reduce the prices of goods/services, 2) increase profits -> higher dividends/share price -> higher personal income taxes, 3) increase investment in positive IRR investments, 4) increase wages/increase hiring.

This author is why people generally mock economists. If Stiggy was so wise he wouldn't be in academics, but in the market, making money and putting skin in the game. instead he writes for this site, flailing with his hatred for Trump or anyone who disagrees with him and basically venting his hatred.

Sites a joke as is this individual.
- Anthony DeAngelis Jul 28, 2017
  
  Riveting replies by the peanuts gallery. Thought changing perspectives.
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- Michael Public Jul 28, 2017
  
  I was just seeing if I could make you write 100 words by just writing one. Seems like it worked.
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- David Lloyd-Jones Jul 28, 2017
  
  "I am shocked this person is an economist. What a joke.
  ...
  "2) This "expert" starts his diatribe with an insult. Automatically discredit his overall message. "
  
  Anthony,
  
  There's a word for that. It's called "projection" when you accuse other people of exactly what you are doing yourself.
  
  -dlj.
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- Alex Leo Jul 27, 2017
  
  Well he is making more money peddling his stuff than he would be able to in the market with his understanding of the world. He has decent analytical abilities but a twisted perception of the world, like anyone in an ivory tower
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- Ariel Tejera Jul 27, 2017
  
  There's the argument that very profitable corporations are sitting in vast wealth reserves, diverted to tax havens. Should we believe that ?
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- Anthony DeAngelis Jul 27, 2017
  
  Is unconvincing supposed to be a counter argument? Taxing assets has some merit as automation becomes more advanced and wages decrease. But the reality is taxing a company simply increases the cost of goods or decreases wages / employment. Corporate taxes are taxed as the flow to the owners or the workers.
  
  Hence why dividends are the worst use of capital. Better to buyback shares and increase EPS than pay out (double taxation).
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- Michael Public Jul 27, 2017
  
  Unconvincing.
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Russell Brown Jul 27, 2017

please insert the word "to" after "comparison" in my comment.
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Russell Brown Jul 27, 2017

Professor Stieglitz's analysis is at the least succinct and comprehensible in comparison the the critical comments.
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Jerry F. Hough Jul 27, 2017

We will see. Silicon valley led by Bezos has really angered Trump, and whatever his weaknesses, Trump has access to the best tax lawyers in the country.

The Stiglitz of the past thought the international globalization did not always benefit the average American. He did not seem indistinguishable from Summers. Now that Schumer has wisely decided that the abandonment of pure negativism is needed to prevent the Republicans from getting close to 60 Senators in 2018, it would be good to read what we should do.

In fact, the supply side taxation of the last 35 years has not just benefitted the super-rich. The market is up 27 times since 1982, and that has enormously benefitted the broad rich--the top 25% with family income over $110,000 who own most of the stocks.

Maybe we should cut corporate taxes by taking Cruz's idea of abolishing the extraordinarily regressive Social Security taxes and replacing with a VAT to tax the consumption of the top 25%, raise capital gains back to the 28% of Reagan and apply it to inherited capital gains like is true of those of us with our money in 401 ks. How about cutting corporate "taxes" by relieving them of the cost of health care and putting it on the budget?

Why must all the new ideas come from the far right?

And Stiglitz used to be against the Iraq War. Obama was worst, and we have had 16 years of war that have not served American interests and have left the Mideast worst off while destabilizing EU with refugees.

Now the callow, craven plutocrat has made great strikes towards the greatest transformation of American foreign policy in 55 years--and while standing up to a McCarthyism worst than Joe's from those who have benefitted from the wars of the 16 years.

Stiglitz needs to step back and reflect--and help.
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Roger Lewis Jul 27, 2017

Considering Tax without looking at Endogenous money creation by the financial sector is always going to end in a process of Circular reasoning with the circles becoming ever larger and more convoluted a sort of reversion to the mean of Ptolemaic epicycles of Debt.
Professor Richard Werner in this excellent exposition on the purpose of spending debt based money into the productive economy is an excellent starting point. https://vid.me/fEw7t . The Usury mistake remains but at least the taboo of what Prof Stiglitz calls "avaricious moguls, the greediest of whom include those who owe their fortunes to scummy activities, like gambling" will at least see some flesh placed on the bones.
Beardsley Rumel
- Roger Lewis Jul 28, 2017
  
  Jose araujo JUL 27, 2017
  Roger, what would be the difference between spending Debt base money and equity base money?
  
  Still can't figure the difference... and I still have not found any theory that factors debt on economic development.
  
  Hi Jose,
  The main point of Werners is that In Germany lots of small banks evenly distributed across Germany mean that locally Small and Medium Enterprises have access to the Capital they need in a symmetric system which is very Robus. Highly centralised Banking models lead to asymmetric risk profiles and lack of skin in the game leads eventually to moral hazard becoming a trivial consideration ( To Big to fail , To big to Jail.``
  Werner does not go into the differences between Debt based and credit based money but it does make a difference. The point which Werner does raise and that is relevant here iuis that Banking is extractive of value and not additive, this presents the Statistatic ians caluclating GDP a value added measure witrh a problem because the FInancial Services Sector as a profit centre does nothing to add to real wealth.
  On the question of Usury, or the usury Mistake, my views on this are aligned with Bernard Leitaer and his parable of the 11th round, creating money through making loans without creating the interest element to pay for the loans adds competition for money into the System which serves only to commodity money when its real benefit to a market system is to function as an accounting device.
  I think Carol Quigley statement Money and Goods are different from Tragedy and Hope makes this point pretty well.
  Money and Goods Are Different
  ”Thus, clearly, money and goods are not the same thing but are, on the contrary,
  exactly opposite things. Most confusion in economic thinking arises from a failure to
  recognise this fact. Goods are wealth which you have, while money is a claim on wealth which you do not have. Thus goods are an asset; money is a debt. If goods are wealth; money is not wealth, or negative wealth, or even anti-wealth. They always behave in opposite ways, just as they usually move in opposite directions. If the value of one goes up, the value of the other goes down, and in the same proportion.”
  The Relationship Between Goods and Money Is Clear to Bankers
  In the course of time the central fact of the developing economic system, the
  relationship between goods and money, became clear, at least to bankers. Thisrelationship, the price system, depended upon five things: the supply and the demand for goods, the supply and the demand for money, and the speed of exchange between money and goods. An increase in three of these (demand for goods, supply of money, speed of circulation) would move the prices of goods up and the value of
  money down. This inflation was objectionable to bankers, although desirable to producers and merchants.On the other hand, a decrease in the same three items would be deflationary and would please bankers, worry producers and merchants, and delight consumers (who obtained more goods for less money). The other factors worked in the opposite direction, so that an increase in them (supply of goods, demand for money, and slowness of circulation or exchange) would be deflationary.”
  http://letthemconfectsweeterlies.blogspot.se/2016/02/usury-hells-fuel-and-mans-oppressor.html
  
  With respect to the difference when money supply continues to expand because Banks continue to make sufficient loans to maintain velocity of money sufficient in the system to allow sufficient time for all debtors to meet their interest payments there is not a problem, When the level of loans reduces to the Point where velocity of money slows as hoarding of money becomes "Prudent" the problems of the difference between Debt based money at interest and Credit based money shows up radically, these events are Known as Recessions, but are baked into the debt based money cake.
  Here is a link to Lietaers Parable of the 11th round.
  
  http://www.lietaer.com/2010/09/the-story-of-the-11th-round/
  http://www.lietaer.com/2010/09/effects-of-interest-based-currencies/
  Three Main Effects.
  Encouragement of Competition
  Need for endless growth
  The concentration of Wealth.
  For a most detailed empirical view of the problems of Usury based monetary creation systems Helmuth Kreutz is I believe the Leading researcher in the field,
  Kreutz money syndrome and other important monetary texts are included and embedded at this link.
  http://theconquestofdough.weebly.com/some-important-texts.html
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- Jose araujo Jul 27, 2017
  
  Roger, what would be the difference between spending Debt base money and equity base money?
  
  Still can't figure the difference... and I still have not found any theory that factors debt on economic development...
  A new reply to this comment has been posted.
- Roger Lewis Jul 27, 2017
  
  http://letthemconfectsweeterlies.blogspot.se/2017/05/taxation-for-revenue-is-obsolete.html from the early 1940´s this is not new knowledge.http://letthemconfectsweeterlies.blogspot.se/2017/07/ceterum-censeo-carthaginem-esse.html . If we are to return to a functioning political economy it is high time we start listening to the Professor Werner´s and Professor Leitaers of the world rather than the Sophists of the dismal science.
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Steve Hurst Jul 27, 2017

I thought Trump was trying to give the USA a grate time
I'm confused if it was meant to be great
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M M Jul 27, 2017

One option and one option only, tax the assets and this applies to all western economies. Trade is not the main issue but rather has become the scapegoat as the writer quite rightly mentioned it, to disguise the "wheeling dealings" taking place behind the scenes. The cost of living has become exhorbitant, regulations and rules are hindering everything, individual incomes have gone down the the drain, inequality is blatant across the board, a dismal situation all round.
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