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Old 10-07-2010, 10:13 AM   #65 (permalink)
aceventura3
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Location: Ventura County
If a person can take a $1 million gross income per year business and turn it into a $2 million gross income business in terms of real net business activity, do we (society) want him to do that? Yes, or no? Why or why not.

I say yes, because that additional gross income does more to benefit others than it does for the business owners bottom line.

If there are people who can generate real economic growth do we want to create disincentives for them to do that (not talking about an allocation of the real costs to society because of the business activity - which is a fair allocation in my view)? Yes or no? Why or why not?

I say no, because real economic growth is beneficial to common standard of living of everyone. if you have a goose that lays golden eggs, you take care of that goose.

Are excessive tax rates a disincentive? Yes or no? Why or why not?

I say yes. At some point a rich person or anyone will redirect activity to non-productive areas if the disincentives to productive activity is too high.

The notion that human are like bees, in that bees are programed to do what they do, they will make honey - and they will make it regardless of how much the beekeeper takes. People shut down, they would have to be forced to produce a surplus of anything for others without fair compensation. There is clearly a hypothetical marginal tax rate where that happens. Tax cuts above that point will lead to greater economic activity - tax cuts below that point will not make much difference in economic activity.

I can remember a summer construction job I had while in college. There was a two week period where we worked 12 hour days, for 12 out of the 14 days. There was a point where we got double time or 2x our normal hourly rate - After taxes, union dues (yes I was in a union once), and expenses - the effort was not worth it, and we swore never to do it again. In fact the older guys, called us idiots for working so hard - we got the message. I bet even you guys have a point, where you would just shut it down - so why don't you think rich people do too?
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