Tax rate effects on salary - Tilted Forum Project Discussion Community

filtherton · 04-25-2011, 06:51 PM

So we all know that everyone always acts completely rationally based on the perfect information that they have. And that the market self-corrects. And that prices for labor and goods set by the market are always ideal. This is because we all never took more than econ 101.

Based on these premises, a few questions:

Why are income taxes viewed as theft? Clearly, the market sets prices for goods and services at the lowest tolerable cost for whomever has the power in a particular transaction. The market sets your salary and it takes into account your tax rate when it does so. Regardless of what you make per year before taxes, your take home pay is what the market cares about, because that is your salary's real value to you. So, say that the government cuts your tax rate, wouldn't your employer, being fully aware that you're used to working for 80% of the sticker price of your salary then have an incentive to lower your salary? Or to hire new folks at a lower salary with take home pay equal to what yours was before the tax cut? Would the net result be a steady decline in pre-tax salaries? Is this why the average american worker is making less in inflation adjusted $$ than they were 50 years ago?

And shouldn't we automatically discount the opinions of folks in upper tax brackets when they say that raising their taxes will be bad because they have a large economic incentive to convince us that raising their taxes will be bad? It's kind of like asking a five year old whether they've had enough candy. Don't most of the folks (and the corporations who employ them) who get paid to talk about the economy make a nice amount of money doing so? Doesn't an econ 101 understanding of the world require that we assume that they're lying to us whenever they advocate policies which protect their bottom line? Why would you ask the CEO of GE how to improve the economy? He's just going to tell you to invest in GE.

Ooooooh oooooh and wouldn't the natural desire of the oligarchs in charge of the united states be to see our economy more closely resemble the type of third world outfit that they've been shipping american jobs off to? Why do we think these folks have our best interest in mind? The want cheap labor with no worker protections and no environmental regulations.

Does anyone else have questions based on their perfectly adequate econ 101 understanding of the simple economic system that we live in?

blktour · 05-23-2011, 10:37 PM

OMFG. i just posted a big long post and it made me log in with nothing. nice TPF!!!

basically, watch these two:

part:1

YouTube - ‪"Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem‬&rlm;

part: 2

YouTube - ‪Fight of the Century: Keynes vs. Hayek Round Two‬&rlm;

keynesian economics was to never be questioned. now a days we observe the symptom and not the cause.

taxes are theft, read below.

The Grace Commission - Wikipedia, the free encyclopedia

Grace Commission Report (PPSS)

dippin · 05-25-2011, 07:16 PM

while those two videos are well made and often accurate, they get some major things wrong. Keynes was never for central planning of any kind, for example.

blktour · 05-25-2011, 09:16 PM

Quote:

Originally Posted by dippin

while those two videos are well made and often accurate, they get some major things wrong. Keynes was never for central planning of any kind, for example.

Quote:

Inside the General Theory
Keynes' "General Theory" will forever be remembered for giving governments a central role in economics. Although ostensibly written to save capitalism from sliding into the central planning of Marxism, Keynes opened the door for government to become the principal agent in the economy. Simply put, Keynes saw deficit financing, public expenditures, taxation and consumption as more important than saving, private investment, balanced government budgets and low taxes (classical economic virtues). Keynes believed that an interventionist government could fix a depression by spending its way out and forcing its citizens to do the same, while smoothing futures cycles with various macroeconomic techniques.

Giants Of Finance: John Maynard Keynes

just ONE view on his way.

that seems like they "plan" things. that is my interpretation anyways.

dippin · 05-25-2011, 09:54 PM

Keynes only supported "central planning" if you consider any and all government spending "central planning."
Keynes' basic point was that during recessions, when production is far below output, governments can help kickstart demand with deficits (either through tax cuts or spending) and lowering interest rates. Keynesiasm neither requires a large government nor governmental control of production. Keynesianism simply posits, speaking in simple terms, that in some recessions there is a vicious circle of high interest rates, potential deflation, and increasing unemployment, and that in these situations government can help by lowering interest rates or promoting demand. It does not advocate endless deficits either, but that governments should run surpluses during expansions and deficits during crises.

04-25-2011, 06:51 PM	#1 (permalink)
filtherton Junkie Location: In the land of ice and snow.	Tax rate effects on salary So we all know that everyone always acts completely rationally based on the perfect information that they have. And that the market self-corrects. And that prices for labor and goods set by the market are always ideal. This is because we all never took more than econ 101. Based on these premises, a few questions: Why are income taxes viewed as theft? Clearly, the market sets prices for goods and services at the lowest tolerable cost for whomever has the power in a particular transaction. The market sets your salary and it takes into account your tax rate when it does so. Regardless of what you make per year before taxes, your take home pay is what the market cares about, because that is your salary's real value to you. So, say that the government cuts your tax rate, wouldn't your employer, being fully aware that you're used to working for 80% of the sticker price of your salary then have an incentive to lower your salary? Or to hire new folks at a lower salary with take home pay equal to what yours was before the tax cut? Would the net result be a steady decline in pre-tax salaries? Is this why the average american worker is making less in inflation adjusted $$ than they were 50 years ago? And shouldn't we automatically discount the opinions of folks in upper tax brackets when they say that raising their taxes will be bad because they have a large economic incentive to convince us that raising their taxes will be bad? It's kind of like asking a five year old whether they've had enough candy. Don't most of the folks (and the corporations who employ them) who get paid to talk about the economy make a nice amount of money doing so? Doesn't an econ 101 understanding of the world require that we assume that they're lying to us whenever they advocate policies which protect their bottom line? Why would you ask the CEO of GE how to improve the economy? He's just going to tell you to invest in GE. Ooooooh oooooh and wouldn't the natural desire of the oligarchs in charge of the united states be to see our economy more closely resemble the type of third world outfit that they've been shipping american jobs off to? Why do we think these folks have our best interest in mind? The want cheap labor with no worker protections and no environmental regulations. Does anyone else have questions based on their perfectly adequate econ 101 understanding of the simple economic system that we live in?

05-25-2011, 07:16 PM	#3 (permalink)
dippin Crazy, indeed Location: the ether	while those two videos are well made and often accurate, they get some major things wrong. Keynes was never for central planning of any kind, for example.

05-25-2011, 09:54 PM	#5 (permalink)
dippin Crazy, indeed Location: the ether	Keynes only supported "central planning" if you consider any and all government spending "central planning." Keynes' basic point was that during recessions, when production is far below output, governments can help kickstart demand with deficits (either through tax cuts or spending) and lowering interest rates. Keynesiasm neither requires a large government nor governmental control of production. Keynesianism simply posits, speaking in simple terms, that in some recessions there is a vicious circle of high interest rates, potential deflation, and increasing unemployment, and that in these situations government can help by lowering interest rates or promoting demand. It does not advocate endless deficits either, but that governments should run surpluses during expansions and deficits during crises.