IMF Study - Taxing the Rich is GOOD for the Economy

[DisgruntledGoat]

Well, a blow to conservative policy pretty much everywhere and yet another nail in the coffin of trickle down economics the International Monetary Fund has released a IMF staff discussion note on "Redistribution, Inequality and Growth". Details can be read here:

http://www.imf.org/external/pubs/ft/...14/sdn1402.pdf

If you want a run down there here is an article from the Toronto Star:

http://www.thestar.com/business/2014...searchers.html

The gist of the study is that wealth inequality limits growth. Now the study doesn't call for total wealth equality (aka communism) but what it does say is that redistribution of wealth via the taxation of the rich to promote better wealth equality will provide BETTER economic growth than our current systems. Why is this? Well, their study finds that redistribution via taxation is generally benign in terms of economic growth (i.e. no impact). There is evidence that EXTREME redistribution has a negative impact but obviously no one is promoting that agenda anyways. So with redistribution being a net zero and closer weather inequality providing better growth than larger inequality it stands to reason that taxation of the top income earners will provide more substantial growth.

Obviously this study isn't suggesting anything new, anecdotal evidence has shown pretty consistently that trickle down economics is a failed system. Now, if the IMF would just call this official policy rather than pussy footing around it so as to not upset the fat cats around the world then we might finally get some progress towards reducing wealth inequality in this world.

[Slydessertfox]

Does anyone really expect this to change the views of fans of trickle down economics? They will either pretend the study doesn't exist, or accuse the international monetary fund of being run by evil socialists and being biased-in fact, I can see that being the headline of Fox News, if they bother to even acknowledge its existence.

[Durnaug]

I've fallen in love with a thread. I do think that they always knew it was a load of crock.

[Slaytaninc]

Lol, the IMF are the fatcats.

[sleepyx732]

redistribution of wealth via taxation, meaning welfare is good for the economy.

I sure ing hope so..

[Basil II the B.S]

There's no reason to tax someone's income just because he makes ton of money. Inheritance however is another thing. Parents connections and wealth is what makes the system unfair, thus inheritance tax and a consequent redistribution should be high enough to grant people a relatively equal opportunity to succeed.

[hellheaven1987]

equal opportunity to succeed.

I thought that is why we can have guns privately in US.

[AqD]

There's no reason to tax someone's income just because he makes ton of money. Inheritance however is another thing. Parents connections and wealth is what makes the system unfair, thus inheritance tax and a consequent redistribution should be high enough to grant people a relatively equal opportunity to succeed.

Except inheritance tax is practically useless because people can always find ways to transfer their wealth to others they like.

[Phier]

Except inheritance tax is practically useless because people can always find ways to transfer their wealth to others they like.

Those transfers are taxable.

[UselessPoster]

There's no reason to tax someone's income just because he makes ton of money. Inheritance however is another thing. Parents connections and wealth is what makes the system unfair, thus inheritance tax and a consequent redistribution should be high enough to grant people a relatively equal opportunity to succeed.

I think people who exceed a certain wage each year should be taxed increasingly higher than people on much lower wages. Lets say Mr Phil is on 100k a year, this person should be taxed appropriately for his annual wage. where as Margaret is only on 15k a year, this person should be given benefits of some kind and have to pay a small tax fee as these are the people in need of dire support they have families to feed the latter.

[Phier]

I think people who exceed a certain wage each year should be taxed increasingly higher than people on much lower wages. Lets say Mr Phil is on 100k a year, this person should be taxed appropriately for his annual wage. where as Margaret is only on 15k a year, this person should be given benefits of some kind and have to pay a small tax fee as these are the people in need of dire support they have families to feed the latter.

If only that was done...

[UselessPoster]

If only that was done...

I have an idea...


Just send 9-10 of these towards them.

[Phier]

I have an idea...


Just send 9-10 of these towards them.

You know I was being sarcastic right? As in your idea already happens, for better or worse?

[justicar5]

If only that was done...

Given the various dodges and outright loopholes in the tax code, it isn't unusual to have someone on 200k paying a lower rate than someone on 20k, so it pretty much isn't.

[Denny Crane!]

Where did we say it would solve the deficit?

I didn't say you did.

What I was doing was implying that the obsession with the 1% is rather silly.

So if "almost every American billionaire" is doing it (I'm gonna need a source for that) why is it wrong to tax the rich?

Oh, brilliant. Good thing I'm not trying to solve the deficit or the debt then, as these are hardly things that have a panacea.

See above.

"The following guest post is by John Stossel, who will host a panel at The Bush Institute’s Tax Summit To Encourage Growth, c0-sponsored by Forbes, in New York City On April 10. Stossel also hosts a weekly Fox Business Network show, Stossel, and a documentary series on Fox News. "

John Stossel knows what the real issues in our economy are. Fake panhandlers!



Forbes editorials are a terrible reference, especially given that particular source's credibility.

It is a thing though. Happens in the UK as well, distracts from the really needy.

Given the various dodges and outright loopholes in the tax code, it isn't unusual to have someone on 200k paying a lower rate than someone on 20k, so it pretty much isn't.

How much money do you think you would raise closing all the loopholes? Genuinely curious here not trying to make a point. Say on the UK where we are both familiar (assuming there is no easier place for companies to slope off too this is, assuming other countries are working on similar strategies).

[Slaytaninc]

I think people who exceed a certain wage each year should be taxed increasingly higher than people on much lower wages. Lets say Mr Phil is on 100k a year, this person should be taxed appropriately for his annual wage. where as Margaret is only on 15k a year, this person should be given benefits of some kind and have to pay a small tax fee as these are the people in need of dire support they have families to feed the latter.

The US has had that for almost 100 years: http://en.wikipedia.org/wiki/Revenue_Act_of_1916

Other parts of the world have had it much longer.

[Derpy Hooves]

However, by the time my parents die, I will already be in the work force and the human capital I have accrued will already be sufficient enough that inheritance money will make very little difference.. Inheritance tax doesn't exactly even out the playing field.

[Denny Crane!]

Economies in the west are structured in a certain way that give advantages to certain areas and types of industry which creates the inefficiencies and taxes and redistribution address this somewhat but ultimately it means treating symptoms and not causes and the redistribution comes packed full of problems as well.

I do not think this is a blow to conservatism, I think this is just a show and tell of what works in our current distorted economy. If conservative groups or social democrat/left wing groups support this then they are all wrong as well. It isn't exactly moving deckchairs around on the titanic but it is pissing into a mild wind.

[Phier]

I've done what most here have not done which is try to read the paper. I only got through the gist of it, as I don't have the time to do so right now, but these are things I look at.

http://www.tradingeconomics.com/unit...tes/gdp-growth

http://www.tradingeconomics.com/sweden/gdp-growth

http://www.tradingeconomics.com/netherlands/gdp-growth

http://www.tradingeconomics.com/unit...dom/gdp-growth

The gist of the paper seemed to be first world countries perform well The US which was a middle of the road country, seems to be doing better in growth though currently.

I'm most likely not going to really get into the paper, I'm going to be playing Distant Worlds instead tonight, but I'll let others better suited for it take a deeper look.

[Slaytaninc]

There's more to inequality than a few percentage points on an income tax rate. Taxing the rich and giving to the poor doesn't really address inequalities in wealth, poor people on government programs tend not to be able to save up their money, and live from day to day on it and whatever employment they've managed to get for themselves.