Truth and myths about democratic and republican parties
"trickle-down" economics is a straw man argumentThe "trickle-down" theory cannot be found in even the most voluminous scholarly studies of economic theories -- including J.A. Schumpeter's monumental "History of Economic Analysis," more than a thousand pages long and printed in very small type.
It is not just in politics that the non-existent "trickle-down" theory is found. It has been attacked in the New York Times, in the Washington Post and by professors at prestigious American universities -- and even as far away as India. Yet none of those who denounce a "trickle-down" theory can quote anybody who actually advocated it.
The book "Winner-Take-All Politics" refers to "the 'trickle-down' scenario that advocates of helping the have-it-alls with tax cuts and other goodies constantly trot out." But no one who actually trotted out any such scenario was cited, much less quoted.
One of the things that provoke the left into bringing out the "trickle-down" bogeyman is any suggestion that there are limits to how high they can push tax rates on people with high incomes, without causing repercussions that hurt the economy as a whole.
But, contrary to Mayor de Blasio, this is not a view confined to people on the "far right." Such liberal icons as Presidents John F. Kennedy and Woodrow Wilson likewise argued that tax rates can be so high that they have an adverse effect on the economy.
In his 1919 address to Congress, Woodrow Wilson warned that, at some point, "high rates of income and profits taxes discourage energy, remove the incentive to new enterprise, encourage extravagant expenditures, and produce industrial stagnation with consequent unemployment and other attendant evils."
In a 1962 address to Congress, John F. Kennedy said, "it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now."
This was not a new idea. John Maynard Keynes said, back in 1933, that "taxation may be so high as to defeat its object," that in the long run, a reduction of the tax rate "will run a better chance, than an increase, of balancing the budget." And Keynes was not on "the far right" either.
The time is long overdue for people to ask themselves why it is necessary for those on the left to make up a lie if what they believe in is true.
Income taxes don’t reduce income inequalityIncome taxes don’t reduce income inequality. Instead they do quite the opposite, according to December-dated analysis published by the National Bureau of Economic Research.
The paper looked at three major 20th century U.S. tax reforms and found that they did nothing to decrease income inequality and everything to increase it.
“I find that all the considered tax policy reforms raised economic inequality, instead of lowering it, as was intended by the policymakers,” states the paper titled “Do Taxes Increase Economic Inequality? A Comparative Study Based on the State Personal Income Tax” by Ugo Troiano, professor of economics at the University of Michigan.
The tax policy reforms he references are the introduction of state income tax, the introduction of tax withholding along with reporting by employers, and the agreement between the federal government and the states to coordinate audits.
Why did income inequality increase when that wasn’t the goal of the reforms?
“The fact that the only effect that these reforms had in common was raising the revenues from income tax and making the government bigger and the private sector smaller, suggest that a bigger government, at least in the recent history, had the effect of higher inequality,” the report states.
In other words, bigger government ends up retarding the private sector and reducing the size of the wealth pie. Naturally, the poorer come out worst in such a situation, while the well-heeled can get top tier advice to dodge the tax bullet. Hence, the rich get richer and the poor stay skint.
About Scandinavian SocialismScandinavian countries—specifically, Norway, Sweden, Denmark, and Finland—are perceived as socialist because their citizens pay very high income taxes. However, these countries still suffer from many of the social and economic ills that socialism is supposed to prevent. Additionally, the United States taxes wealthy Americans at much higher rates than Scandinavian countries tax their similarly wealthy citizens, yet leftists such as Sanders are still displeased with how our tax system is organized.
Scandinavian Countries Aren’t Socialist
One of the reasons it is incorrect to refer to countries like Sweden as “socialist” is that these countries were once far more progressive than they are now. The Economist says Sweden was once a “tax-and-spend” economy in which author Astrid Lindgren (of “Pippi Longstocking” fame) was required to pay more than 100 percent of her income in taxes. This heavily progressive tax rate stunted economic growth, and Sweden fell from the fourth-wealthiest country in the world to the fourteenth-wealthiest country in just 23 years.
The government recognized the cause of the trouble and instituted several capitalist reforms to resuscitate Sweden’s economy. According to The Economist, following the success of Sweden’s relatively right-leaning Moderate party, “Swedish GDP is growing strongly, and unemployment is falling. The budget is heading into surplus next year.” The article notes that many Swedes support moderate and right-wing reforms: “The centre-right has made welfare payments less generous, cut taxes for the lower-paid and trimmed the numbers on sickness benefit. Voters seem to approve.” The electoral success of moderate and conservative parties throughout Scandinavia is at once a rejection of progressive policies and an endorsement of free markets in what some consider to be the most progressive region in the world.
In some ways, Sweden is now less progressive than the United States. Harvard professor Gregory Mankiw writes that the wealthiest decile of Swedes carries 26.7 percent of the tax burden. In The United States, the figure is a whopping 45.1 percent. Additionally, wealth inequality is more pronounced in Scandinavian countries than it is in the United States. In Sweden, Denmark, Finland, and Norway, the top decile of earners own between 65 and 69 percent of the country’s total wealth, an astonishing figure. Sanders is apparently unaware of this reality, given that one of his primary reasons for praising Scandinavia was their low levels of wealth inequality.
Scandinavia Has High Taxes and High Personal Debt
Despite their rates of wealth inequality, it is true that the citizens of Denmark, Sweden, Norway, and Finland devote more of their income to taxes than American citizens do. According to the Organization for Economic Cooperation and Development, the average American spends 9.8 percent of his income on taxes; Swedes spend 12.3 percent, Danes 26.4 percent, Norwegians 10 percent, and Finns 12.9 percent. Perhaps because of these measures, government debt is less of a problem in Scandinavia than it is in the United States.
However, Scandinavian rates of household debt are astronomically high. OECD figures also show the average Dane has a household debt equal to 310 percent of his disposable income; the number is 173 percent for Swedes. In America, the average is 114 percent. While America’s economic problems cannot be ignored, it is noteworthy that Scandinavia’s progressive tax systems fail to protect their citizens from staggering personal debt.
Finally, and perhaps most surprisingly, Sweden’s public education system is ranked lower than that of the United States. According to the OECD, Sweden ranks 30 of 37 in math and 24 of 37 in reading. The United States, meanwhile, is 27 of 37 in math and 25 of 37 in reading. Norway and Denmark are both ranked better than the United States, but not by much. These realities destroy the pervasive myth that “socialist” Scandinavian schools are the best in the world. Despite what Sanders might believe, educational institutions in Sweden are not superior to those in the United States. Sweden’s high tax rates have not ensured educational excellence, and many Swedes likely pay the equivalent of college tuition for their children in the form of taxes anyhow.
The Non-Socialist European Success Story: Switzerland
This evidence is quite as compelling as the success story that is Switzerland. Unlike its neighbors, Switzerland is one of the most capitalist countries in existence. Its citizens only pay 8.6 percent of their personal incomes in taxes annually, and its economic climate is particularly well-suited to entrepreneurship. The Huffington Post writes that 99 percent of Switzerland’s economy is made up of small and medium-sized enterprises, which also employ three-quarters of the country’s workforce.
Switzerland is ranked best in the world on many categories related to economic development, including “innovation, on-the-job staff training, attracting talent from elsewhere, and for government-provided training.” Ultimately, The Huffington Post claims, “Switzerland is home to one of the world’s most thriving economies and also one of the happiest populations on the globe.” Many leftists extol the limited successes of Sweden and Finland without ever acknowledging Switzerland, although it outperforms much of Europe in various economic and social metrics.
Although it is very capitalist, Switzerland boasts many of the advantages that socialist Scandinavian states are supposed to claim exclusively. Switzerland’s unemployment rate is just 4.5 percent, which is one of the lowest rates in the world. The country’s poverty rate is similarly low (XLS). Those who immigrate to Switzerland have an average employment rate of 76 percent, which is much higher than the European average of 62 percent.
Furthermore, the Swiss educational system is ranked third in the world by the OECD. Only Korea and Japan are ranked higher, which means Switzerland’s educational system is the best in the Western world. Many claim this distinction belongs to Finland, but Finnish schools are in fact ranked 10/37 in math and 4/37 in reading.
Additionally, income inequality and debt are both quite low in Switzerland. This reality persists although Switzerland’s wealthy have the lowest tax burden in the world; the richest decile in the country pays only 20.9 percent of the country’s taxes. Remarkably, even though the tax burden on the wealthy is minimal, Switzerland’s national debt as a percentage of its gross domestic product is lower than Finland’s, Sweden’s, and Denmark’s.
Switzerland is the closest to “paradise” of any European country, yet it remains one of the most capitalist economies on Earth. Its success is a powerful antidote to socialist claims about the benefits of progressive taxation, and all but destroys the assumption that Scandinavia as a bastion of socialism shows that only collectivism can produce success.
More fair and more safe?Quite ironic. The solutions which were created to fight the war on poverty ended up causing more problems than they solved. Since the 1960's, America has passed tax after tax, law after law, regulation after regulation, all in effort to increase safety and fairness. And though we are somewhat safer, few would say things are more fair. If you want to know why middle class jobs have left America, and gone overseas, here are two reasons, a tax code, which in 2016 was 74,608 pages long, and a federal code of rules and regulations which has grown by more than 60,000 pages per year for more than 20 years. Today in America it takes at least one decade to open a new factory, and existing factories face increasing regulation every year. If an automaker wants to create a new car model, it also takes a decade, and costs upwards of $1 billion. Since the post-war years, when federal regulations exploded, how many new car companies have been created in America? How many airplane companies? How many motorcycle companies? How many bicycle companies? The sad fact is that we have far fewer of any of these than we did 50 or 60 years ago. When it is extremely difficult and expensive to manufacture things in America, and virtually impossible to expand or create factories, how in the hell are we supposed to end up with more jobs, higher wages, and less inequality?
California Senate Votes 28-8 to EXEMPT ITSELF From All California Gun LawsThe California State Senate agrees with Charlie Rangel that they “deserve” to own guns but the citizens do not! Every year they pass more and more gun control laws and NONE of them apply to themselves!
They voted 28-8 to exempt themselves from the gun-control laws that apply to the rest of the California.
You think maybe this will cause Californians to rise up? NOPE! It happened 5 years ago and since then, California has passed a plethora of other gun laws…that only apply to citizens.
Yes, you heard me right! The exemption was created in 2011 and the California legislature has passed a number of gun laws since. Pretty easy when you are passing bills that do not apply to you!
It is not the only special privileges California legislators provide themselves!
They do not pay red light camera bills or for gasoline!
How does it all happen so easily in California? The Washington Post explains:
Attempts by a handful of reformers to require politicians to provide a full annual disclosure of the benefits received from the public treasury have been rebuffed. Currently, government officials must file a statement of economic interests revealing income from any source other than a local, state or federal government agency. Gifts worth more than $50 also must be disclosed, but lawmakers rejected a bill that would have prohibited acceptance of concert and sporting event tickets, gift cards, spa treatments, golf outings and other benefits from lobbyists trying to buy votes.
Bills of this nature never meet an honest fate in which roll-call votes put members on the record as favoring or opposing each idea. Instead, reform measures are held in committee to die quietly as legislative deadlines pass. As of last week, it’s effectively impossible for a bill to become law if it hasn’t already passed in at least one of the chambers.
…and it just goes on and on!
Red Skelton said so eloquently in his commentary on the Pledge of Allegiance:
And to the Republic — A Republic: a sovereign state in which power is invested into the representatives chosen by the people to govern; and the government is the people; and it’s from the people to the leaders, not from the leaders to the people.
California has it backwards, they are running with the method of “from the leaders to the people.”
That is why I joined the 5 million people who have fled California within the last decade.
You can take me out of Texas in a pine box, and even then I will be kicking and screaming!
InteractiveBrokers TWS programmers are stupid monkeys.Today TWS decided to update before market close (I ran it this morning too and there was no update) and failed to update under Linux, I switched to Windows laptop, it updated, forced JRE update but then failed to start the session - was freezing during parameters request. I had 1 hour before the close but I did not manage to login until the market closed. This is outrageous. I understand we all make mistakes, but who are those morons who decide to roll out updates before market close? They do this all the time. They always put out updates near 1 or 2 p.m. The update is often slow and therefore very annoying even when it works. I never sure if I will make it if I launch it too close to the EOD. Retards. Or am I the only one who launches TWS only before market close? I have installed "stable" versions that do not update on both laptops afterwards, indeed...
Libertarians are NOT RepublicansI'm getting really sick and tired of propagandizing media liberals intentionally misrepresenting the Libertarian Party to the people who are increasingly dissatisfied with the status quo from the two "major" parties.
Libertarians are NOT Republicans. What the author of this article described is NOT Libertarianism is crony capitalism where the rich use the power of the government to artificially control a not at all free market.
Libertarians are those who want only to be left alone and for the government's role to be more limited and clearly defined. The Federal government should have absolutely nothing to do with your everyday life. Your state government should have very little to do with your life. Your local goverment(s) should be the only ones you truly have to care about.
No one should be able to use the power of the state to gain an unfair advantage over others and no one should be able to coerce others into their own view of accepted behavior. THAT is the core philosophy of Libertarianism.
For anyone interested, you can find a detailed breakdown of the Libertarian Party platform at www.lp.org/platform//
As for you David Horsey, f you're going to condemn the political views of others, at least have the courtesy of doing some basic research first. Your straw-man arguments are pathetic.
Alternative to MailWasher for UbuntuAlternative to MailWasher for Ubuntu - executable and source code.
that's not real socialism, yeah, right…Do you remember when LIBERALS not only praised the Chavez regime but pointed to it as an example of what the USA should be? Today, when you confront liberals with this reality, their proforma response is--> that's not real socialism, yeah, right… Every failure is never “real socialism”, after more than 100 million people killed by socialist regimes, and after many broken socialist nations in financial crisis, liberals insist on socialism. Liberals claim to oppose authoritarian regimes, but history has shown that they always had love affairs with ruthless communist and socialist dictators and mass murderers: Do you remember Hanoi Jane Fonda supporting the Vietcong during the Vietnam war? Do you remember Oliver Stone’s apologetic movie about Chavez? Do you remember other liberals praising Chavez: Bernie Sanders, Noam Chomsky, Naomi Klein, Sean Penn, Jesse Jackson, Michael Moore, Jeremy Corbyn, Naomi Campbell, Joseph Stiglitz, Danny Glover. Do you remember all the liberals that praised Fidel Castro? What about all the idiotic liberals who wear clothes with the image of the psychopathic mass murderer, Che Guevara?
from the comments