Economics: Supply side vs. Demand side?

Economics: Supply side vs. Demand side?

by SouthernFriedInfidel Published on October 19th, 2008, 8:09 am Rift: NEWS

I understand that when "Joe the Plumber" asked about Obama's tax plan, Obama replied that he was going to try and reverse the course of tax policy that has been in place since Ronald Reagan brought "supply-side" economics to the table nearly 30 years ago. The idea to put more money in the hands of consumers, while increasing the burden paid by very wealthy people (recall that nearly half of the total wealth of this country is controlled by a mere 400 people) is being called "socialism." Mostly by the very wealthy and those people who want to protect them, but perhaps that's another story.

But is it "socialism" to give the middle class a little more access to the money they supposedly earn and expect them to spend it? Does taxing a billionaire really hurt him in any way?

Just wondering.

[Matt]

I think the when the candidates pitch separate tax rates/cuts so hard, it polarizes the various income groups. Make it seem like if someone has worked hard and been successful, they are the bad guy.

[Nfidel]

Maybe this is OT, but I think it's relevant. It seems a little clarification is in order here. When you're told small businesses making over $250,000 (an astronomical number to me)will have their taxes raised, everyone seems to ignore the fact that the $250,000 is net. Before figuring its taxes, a business gets to subtract the price of supplies, employee pay, fleet costs, equipment costs. The republicans would like us to think that all small businesses are plumbers working out of an old storefront, when in truth many gross in the millions. Just some perspective.

[A Person]

Let's also remember that he's talking about marginal taxes. When you get over $250,000, income in excess of that will be taxed at a higher rate.

This is exactly what happens now, the US has six tax brackets ranging from 10% to 35%. The simple idea that has been adopted by every Western country is that as your income rises you pay more taxes on the upper portion of that income.

However given the current financial situation it's obvious to me at least, that any spending/tax campaign proposals are moot. Either the US is going to run enormous deficits, print money and go into hyper inflation, or spending will have to be cut drastically or taxes will have to go up drastically across the board.

Neither candidate will publicly acknowledge this before the election and both have refused to answer the question. Disappointing, but given the very hostile campaign, the first to acknowledge reality will be trashed by the other

[SouthernFriedInfidel]

I agree there's no denying that spending will have to be cut. Ending the wars ASAP will need to be art of that, because at least one war effort was purely optional. Figuring out where other cuts will come is going to be an interesting question -- because no one wants THEIR favorite stuff cut.

[A Person]

Call Joe the Plumber

[Questioner]

I understand that when "Joe the Plumber" asked about Obama's tax plan, Obama replied that he was going to try and reverse the course of tax policy that has been in place since Ronald Reagan brought "supply-side" economics to the table nearly 30 years ago. The idea to put more money in the hands of consumers, while increasing the burden paid by very wealthy people (recall that nearly half of the total wealth of this country is controlled by a mere 400 people) is being called "socialism." Mostly by the very wealthy and those people who want to protect them, but perhaps that's another story.

But is it "socialism" to give the middle class a little more access to the money they supposedly earn and expect them to spend it? Does taxing a billionaire really hurt him in any way?

Just wondering.

No, it is not. The old philosophy used to be that those who benefitted most from America should be required to provide the highest level of support for the country. Supply side economics is merely a huge transfer of wealth from the middle class and poor to the wealthy. It is literally a way to take back a portion of the middle class's income and give it back to the wealthy. Sort of a reverse "Robin Hood" procedure.

Obama misspoke badly when he called it "spreading the wealth around". What he should have said was "sharing the cost of having a free country fairly among all its citizens". The very wealthy who personally make millions and millions every year used to be in the 90% tax bracket. That still left them with millions and millions. But a very well orchestrated disinformation campaign (obviously paid for by the super-rich) has now convinced the middle class that the wealthy should be allowed to keep all their money but the middle and lower income people should lose theirs to pay for the cost of running the country. Stupidly, the middle class failed to understand that meant they would have to have huge tax increases. So when that happened, they screamed. But instead of restoring fairness to our tax code, "W" just borrowed more and more billions every year from the Chinese.

This is very scary because the only way we can pay back the Chinese is to either institute ruinous taxes, which Americans will not stand for, or to deflate the value of the dollar so that America can pay them back with virtually worthless dollars. Of course, that means ruinous hidden taxes on the American people in the form of ruinous inflation. Which Americans can't do much about--except make elected office a revolving door until the debt is paid off and some balance can be restored. Of course, I suppose we should admit that default on the loans from China is an option, but that is clearly unthinkable.

[SouthernFriedInfidel]

Obama misspoke badly when he called it "spreading the wealth around".

He said THAT? Yeah... that was a pretty bad gaffe. I bet he won't repeat it.

[Questioner]

Obama misspoke badly when he called it "spreading the wealth around".

He said THAT? Yeah... that was a pretty bad gaffe. I bet he won't repeat it.

In context, it wasn't as bad. He was talking about the incredible tax reductions Bush had given to the super-rich, and saying that the middle class shouldn't have to pay more taxes, the rich should pay their fair share. That was the context of "spreading the wealth around" that he used. I'm guessing what he meant to say was "spreading the tax burden around fairly" but unfortunately, the words he used are now being inaccurately used against him.

[Matt]

That's funny... if McCain goofs up, he's an evil GOPer. If Obuma says it, it was in "context".

[A Person]

Joe the hopeful Lottery Winner

http://www.gocomics.com/tedrall/2008/10/25/