Money in the hands of the wealthy is good;money in the hands of the poor

[KlatooBNikto]

is bad. This is economics 101 in Republican theology.

That this has been refuted by people of the caliber of Warren Buffett and Bill Gates Sr. does not seem to matter.

Because the Republicans keep claiming that the wealthy deserve the tax cuts because they pay more, it would make sense to argue that eliminating taxes entirely for people making up to $40,000 per year would not affect the Treasury's revenues and create an enormous demand for goods that would be good for our economy. What is wrong with this approach, as a Democratic alternative?Any economists want to deal with this?

[Sirveri]

1. that's actually a great plan. Really close to my plan.

On your first 40k you only pay 10%. On your first 20k you pay nothing. Instant economy booster. Though employers would then simply hire people on at lower wages. You're making the same ammount of money right, suckers.

[KlatooBNikto]

3. You have highlighted an added advantage of the idea. That is,

small businesses would benefit by being able to hire people at low wages and be able to afford to give them benefits. It would be such a great boost to the economy I don't understand why the big time economists can't propose this. What is really striking to me is that we can clearly argue that removing taxes on the $40000 and below wage levels won't even affect the Treasury's revenues, using their own logic.If anything, it is going to improve local economies by increasing demand for goods.

[whistle]

2. Republicans want to eliminate income tax altogether...

...and implement some form of national sales tax or tax on consumption:

BUSINESS/FINANCIAL DESK | February 8, 2003, Saturday

White House Floats Idea Of Dropping Income Tax

By EDMUND L. ANDREWS (NYT) 809 words
Late Edition - Final , Section C , Page 14 , Column 5

ABSTRACT - Pres Bush suggests that time might be near to drop income tax as whole and replace it with some form of consumption tax; idea is outlined in White House's annual economic report to Congress, prepared by White House Council of Economic Advisers and signed by Bush; report offers scathing critique of current system and exuberant description of radical alternatives (M)

<link> http://query.nytimes.com/gst/abstract.html?res=F70A13FA395F0C7B8CDDAB0894DB404482

The problem with this whole scheme is that the poor because they are poor, consume everything they earn so they end up being taxed on everything they buy. The wealthy are wealthy because they are able to earn more then they would ever consume and so they are able to save and invest their surplus thus adding to their wealth. Of course, all things are relative. However, the progressive income tax has historically been a fair way to collect needed revenues for the government to operate and to act as the economic engine for the U.S. Individual economic discipline I believe is the answer. For decades the wealthy have lacked this degree of character and now are demanding that the poor and middle class pay for their extravagance.

[KlatooBNikto]

4. My proposal is to retain the current tax structure, even the tax cuts Bush

has handed down to the wealthy but, eliminate all taxes on those earning $40K and below. If that is implemented we can retain the progressive nature of our tax code and generate the demand which will surge because of the increased demand for goods that those in the 40K and lower bracket will bring to the table.

We can call it Demand Side Economics.

[Florida_Geek]

5. problem being that the Rich will want exceptions

"boats" over $50,000

"houses" over $150,000

"cars" over $20,000

"drinks" over $20 a bottle.

..
..
..
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[Joe Chi Minh]

7. There is absolutely no

substitute for income tax. Flat taxes are iniquitous, and there has never been a justication for taxing people in lower income brackets.

What is essential is that the richest are properly taxed. However hight the rate, they will still be buying their ocean-going yachts, you can bank on that. At present, the middle-income people on both sides of the pond are being punished.

In the UK, after WWII, the super-rich moaned because they had to pay 19 shillings and six pence in the pound (= 20 shillings), but their "jet-set" life-style never seemed to suffer. And I don't know if their tax lawyers could do a lot for them, at that time - if indeed tax lawyers existed then. There can't have been much need for them pre-war.

[Joe Chi Minh]

6. A few cheering words

for Christians, formal and informal, from one of David's psalms, Psalm 36:

"Do not fret because of the wicked;
do not envy those who do evil:
for they wither quickly like the grass
and fade like the green of the fields.

If you trust in the Lord and do good*,
then you will live in the land and be secure.
If you find your delight in the Lord,
he will grant your heart's desire.

Commit your life to the Lord,
trust in him and he will act,
so that your justice breaks forth like the light,
your cause like the noonday sun.

Be still before the Lord and wait in patience;
do not fret at the man who prospers;
a man who makes evil plots
to bring down the needy and the poor.

Calm your anger and forget your rage;
do not fret, it only leads to evil.
For those who do evil shall perish;
the patient shall inherit the land.

A little longer - and the wicked shall have gone.
Look at his place, he is not there.
But the humble shall own the land
and enjoy the fulness of peace....".

*In an evolved democracy, peaceful protests of all kinds, against such rampant and outrageous fraud, would surely qualify as "doing good", in God's eyes.