What do you really think about tax cuts for the wealthy?

Question

Some economists say that giving tax cuts to the wealthy influences investment back into society. I don't know that I agree. I think that people line their own pockets before that investment occurs.

Consult a tax table to see what I mean by tax cuts for the rich. If you do not understand.

Answer 1

Heres a little ditty by Walter E. Williams that not only shows the absurdity of the rich getting an unfair tax break but one of the reasons they take their bussinesses elsewhere. I hope you take the time to read it!
Suppose that everyday 10 men go to dinner. The bill for all ten comes to $100. If it was paid the way we pay our taxes, the first four men would pay nothing; the fifth would pay $1; the sixth would pay $3; the seventh $7; the eighth $12; the ninth $18. The tenth man (the richest) would pay $59.
The 10 men ate dinner in the restaurant every day and seemed quite happy with the arrangement until the owner threw them a curve. Since you are all such good customers, he said, I'm going to reduce the cost of your daily meal by $20. Now dinner for the 10 only costs $80.
The first four are unaffected. They still eat for free. Can you figure out how to divvy up the $20 savings among the remaining six so that everyone gets his fair share? The men realize that $20 divided by 6 is $3.33, but if they subtract that from everybody's share, then the fifth man and the sixth man would end up being paid to eat their meal.
The restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount and he proceeded to work out the amounts each should pay.
And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of $59. Outside the restaurant, the men began to compare their savings.
"I only got a dollar out the $20," declared the sixth man pointing to the tenth, "and he got $7!"
"Yeah, that's right," exclaimed the fifth man. I only saved a dollar, too. It's unfair that he got seven times more than me!
"That's true," shouted the seventh man. "Why should he get $7 back when I got only $2? The wealthy get all the breaks."
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor."
The nine men surrounded the tenth and beat him up. The next night he didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were $52 short!
And that, boys and girls, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are lots of good restaurants in Switzerland and the Caribbean

























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Answer 2

So what RichDadfan is saying is that when a rich person buy's a airplane they are helping the economy and for that they need a tax cut but when a regualar hardworking but not seeing the benefits person buys a car or even a roll of toilet paper they are doing nothing. Last time I checked the rich guy buying the plane needed regular hardworking nobody's to buy his car or toilet paper in order to get rich so in reality we should be getting the tax break because not only that he needed the regular hardworking but not seeing the benefits people to BUILD HIS DAM Plain the only reason someone should get a tax break is if they do something that they can in no material way benefit from doing i.e. charity yeah they can have a tax break if they bought a plane to fly little league teams around the world for competitions or something like that but why is the rich person getting help for buying a plane so that they could go to the bahamas if i was rich and i wanted to go to the bahamas i should have to pay full price for my jet just like the not so rich guy that buys a touring motorcycle or a mobil home to drive across the country for his vacation. Tell me this who does paying taxes hurt worse the student or parent with 2 dollars that wants to buy a 1 dollar note pad for class and has to pay a extra (in michigan) 6 cents or multi millionaire that wants to buy a jet for business but still has millions sitting in the bank afterward's. If rich people want to have big boy money and buy big boy toys they shouldnt have a problem paying big boy taxes. Do you know how much I would love to be able to say I paid $700,000 in taxes on a jet than to say I paid 100 dollars in taxes on a computer.

Answer 3

... well... the trick is... how confident are the "rich" in the economy... it's all well and good as long as they are confident, but as soon as a scare comes up... then no more investment and the poor and paying a much larger percentage of the taxes (per disposable income) than the wealthy... and the economy goes into the tank...

And Jose *: I was just looking at the stats last week... and the unemployment for some of the most socialist countries in Europe have an unemployment rate right about where our rate is? (like sweeden for instance) I don't know what stats you're looking at... If I remember correctly I was looking at wikipedia... where are you looking?

Answer 4

AH yes the trickle down theory. Well, the gap between rich and poor has been getting bigger since 2000. And anticipating those people who will say "I got a tax cut check and all my freinds did"
I have a few questions: What did you do with your $300? Do you have capital gains? Do you get stock dividends? Well the people that do get a much bigger tax break than you did. The tax cuts were much larger had a far greater impact on unearned income than on people who work for a living. That's why the rich are getting richer and it's not because of "hard work".

Answer 5

I agree with easternlauren. The trickle-down effect did not work for Reagan, nor did it work for Hoover. It is unfair to have income tax percentages vary based on different income amounts. If tax percentages were even across the board, the U.S. federal deficit would be smaller and social security wouldn't be in nearly as much trouble. As it stands now, the only people tax cuts for the rich really help are the rich and those that cater to the rich (Hummer manufacturers, etc.).

I do, however, agree with tax write-offs for charitable donations, because then the donations at least help people.

Answer 6

To the Victor go the Spoils. Big Business and the Rich filled the Republican Campaign coffers.
When the Republican won, it was payback time - Tax Cuts for the Rich, Lucrative contracts for Haliburton, friendly legislation for Drug Companies and Car Manufacturers etc.
That's Politics in the USA. Apparently it is the amount of money that determines the outcome of USA elections.

Answer 7

Theoritically it should work that way.

And "trickle down" is a political term. The idea is not that money should trickle down, but that the primary business should expand employing more, and raise wages (because the employer will want to attract the best employees). Additionally, supporting business will emerge employing even more.

The problem is that those who are in the position of determing if more money gets reinvested are not just hindered by the amount of money, but other governmental regulations, such as EPA, OSHA, and various local, state, and federal codes. Thus, the net result is for business to reinvest their money in the market and not directly in their business.

Answer 8

1) Please define "tax cuts for the wealthy." I do not understand accusatory statements without definition.
2) Rich people don't just sit there with wads of money just laying around using it for toilet paper. It is re-invested into other companies to allow them to grow, allowing for the rich person's money to grow as well.

Even if rich people did not invest the money by buying or investing in another business, their money is going somewhere, right? Perhaps they buy an airplane. The aircraft manufacturing company just made money and can expand and hire more people to sell more planes.

Answer 9

It's not really fair to tax the wealthy more than anyone else anyway. I mean, how can we say that because you have become successful and made a lot of money, we're going to punish you for that success by taking a greater percentage from you than others. Not only that, but we're going to reward people with money they have not earned and probably won't be grateful for it.

Answer 10

I agree with those economists that you mention.

Not all of them would reinvest, but a certain percentage will, and that always boosts the economy and creates jobs.

Europe, in the other hand, is more socialist, and you see what happens when investment is not the priority, sooner or later you have social problems because of unemployment.

Answer 11

Republicans and Democrats alike can't come before the country and say, "Elect us because we want to cut back everything that benefits the general population." But, they can come before the country, they think, and say, "Because we're defending you from imminent disaster, we had to spend all this money, and there's just nothing left for all these things you'd like. We'd love to give them to you, but it's a fiscal disaster and we have to be responsible. And so you're going to have to cut back your wages and benefits and so on. And don't look at those rich people over there who are having a ball."