Were Mao and Stalin Actually Socialists? (No True Scotsman)

[DunderMifflin]

12 hours ago, Altherion said:

 

The are two separate issues here. The reason to tax the 1% is only partly for the government to have more money. It is also so that they would be more inclined to share the wealth by, for example, refraining from creating structures in which the leadership gets paid hundreds of times more than the rank-and-file (these are not very appealing when the government will take most of the leaders' wealth).

I don't see how this would guarantee any sort of equality. I don't see the assumption that Buffets poor secretary's salary stays the same while the bosses are getting most of their pay taken away. 

-Is it better for a worker to clear 30k a year while the boss only clears 5 million

-or is it better for a worker to clear 80k a year while the boss clears 10 million

The first creates more equality while the worker and everyone gets less, the second doesn't make equality but everyone clears more.

Of course my numbers are completely made up, but the idea/guarantee that employee wages stay the same in the event that 1%ers get most of their pay taken away is also completely made up.

 

 

[OldGimletEye]

4 minutes ago, DunderMifflin said:

I don't see how this would guarantee any sort of equality. I don't see the assumption that Buffets poor secretary's salary stays the same while the bosses are getting most of their pay taken away. 

-Is it better for a worker to clear 30k a year while the boss only clears 5 million

-or is it better for a worker to clear 80k a year while the boss clears 10 million

The first creates more equality while the worker and everyone gets less, the second doesn't make equality but everyone clears more.

 

 

You assume this in what fact what happens. This is the old conservative argument of "cut rich people's taxes and the growth will be so awesome for everyone!"

But, it doesn't pan out, like ever it would seem, or at least, it's a long way to you're on the wrong side of the laffer curve.

Also, there is stuff out there in the public finance literature that suggest tax rates do affect pre-tax income.

[DunderMifflin]

6 minutes ago, OldGimletEye said:

You assume this in what fact what happens. This is the old conservative argument of "cut rich people's taxes and the growth will be so awesome!"

But, it doesn't pan out, like ever it would seem, or at least, it's a long way to you're on the wrong side of the laffer curve.

Also, there is stuff out there in the public finance literature that suggest tax rates do affect pre-tax income.

I don't assume. I just don't go along with the assumption that employee wages stay the same if you take away most of the pay of the bosses.

 

Then theres the added puzzlement of who gets all that money that the government takes away. Giving it back to the people in some way is a laughable claim imo.

[OldGimletEye]

4 minutes ago, DunderMifflin said:

I don't assume. I just don't go along with the assumption that employee wages stay the same if you take away most of the pay of the bosses.

No, you are assuming the employee wages will fall. And that is weak argument and pretty unfounded assumption.

The big experiment here was Reagan's tax cuts. And how did that pan out? Was there a bunch of super duper growth. No, not really. In real gdp terms he did about as well as Jimmy Carter did over his term (gasp).

[DunderMifflin]

5 minutes ago, OldGimletEye said:

No, you are assuming the employee wages will fall. And that is weak argument. 

The big experiment here was Reagan's tax cuts. And how did that pan out? Was there a bunch of super duper growth. No, not really. In real gdp terms he did about as well as Jimmy Carter did over his term (gasp).

No I'm not. Raising it as a concern is not an assumption. I'm not blatantly saying this in fact will happen. 

 

I honestly think that EVERY single government program could be paid for and exist as it does today several times over without any using any income tax. (This includes, schools, roads, welfare, all of it)

[SeanF]

21 hours ago, MerenthaClone said:

In the UK, the top 1% also make 21% of the income.  So while they're paying very slightly more as a percentage of their income, given the marginal utility of money, they're being less burdened by taxes than the rest of the country.  

They earn about 14% of pre-tax income.  The government does pretty well at extracting taxes from them. 

[OldGimletEye]

3 minutes ago, DunderMifflin said:

No I'm not. Raising it as a concern is not an assumption. I'm not blatantly saying this in fact will happen. 

 

I honestly think that EVERY single government program could be paid for several times over without any income tax. 

Well, raise the concern all you want. But,again, there is no evidence we are any where near the wrong side of the laffer curve.

Secondly, me thinks, you are bit off in your understanding of the federal budget. Sorry, but cutting off international aid or meals or wheals or whatever isn't going to fix our long term deficit issues. 

[SeanF]

22 hours ago, OldGimletEye said:

I'd say if you are skeptical of the Chamely-Judd results of capital taxation then there are potentially large gains to laborers from taxing capital. And if corporations are able to avoid paying taxes because of international tax arbitrage and are encouraging "a race to the bottom" among nations, then I'd say this is generally a problem, to the extent international tax compliance and enforcement is worth talking about among nations.
 

I'm certainly certainly willing to live with some wealth or income inequality. But, in my view, saying the "rich aren't a problem" isn't quite the same thing as saying that growing wealth inequality isn't a problem. And saying well wait, but the top 1% pay 28% or 35% of all the income taxes isn't a convincing argument. Because it begs the question of why income is so distributed at the top that the top 1% pay that much. Also, such a statement implies that pre-tax income is independent of the tax rates. And I'm not sure that is true, like say for instance if higher tax rates deter rent seeking behavior.

Here in the US, at least for a long time, discussions about income inequality, among the economics profession, was kind of considered a taboo. I don't think that is longer the case. And in fact you see a growing discussion about it. 

Also, there is some growing evidence that it can be a drag in growth. Here in the US, at least for a long time, there was the general opinion that there was an growth income equality trade off. So for instance, if you preferred more equality, you had to trade off some growth. I think that view is changing now.

Conservatives have long argued that income is just simply the result of the first order condition of the firm's maximization problem. But, there are reasons to doubt the simple old story that people are simply being paid their marginal product. Certainly, there is evidence that CEO's are payed more than the actual value they deliver. And of course there is some growing evidence, here in the US, at least, that growing monopoly power is a problem. And while I don't consider my self a Marxist, I do not think he was completely wrong to believe that wages may be set, in part, at least, by class power.

Efficiency, arguments, aside, however, growing income inequality, can also endanger the political system at least through two channels, as I see it. One is that people don't believe in the legitimacy of the system, and they do stuff like, elect an orange swamp thing. David Autor has documented that places hit by the "China Shock" have become more radical in their politics. I'm generally a free trader, but your run of the mill free trade models do predict wealth redistribution. There are winners and losers. The standard recommendation has been to compensate the losers. But, that really wasn't done, nor was the problem acknowledged, even though the theory was there. The second channel is that the extremely wealthy  can engage in rent seeking behavior, which can potentially undermine both economic efficiency and legitimacy of the system.

Rent-seeking in the UK is indeed a problem.  Above and beyond a certain level, in both private and public sectors, it seems that you can't fail to be rewarded.  Even if you screw up horribly, you'll get a big pay off and become a consultant (unless you're guilty of a serious criminal offence).

[DunderMifflin]

7 minutes ago, OldGimletEye said:

Well, raise the concern all you want. But,again, there is no evidence we are any where near the wrong side of the laffer curve.

Secondly, me thinks, you are bit off in your understanding of the federal budget. Sorry, but cutting off international aid or whatever isn't going to fix our long term deficit issues. 

If the the plan is to use income tax to pay off debt thats a whole other level of futile wtf-ness. 

And please layoff of the superior hubristic understanding of the budget, you look like someone who just read ayn rand for the first time.

[SeanF]

19 hours ago, MerenthaClone said:

Why? Organized public spending is absolutely necessary for basic infrastructure and services that cannot adequately be provided by the free market.  We get so many goddamn returns from our taxes that I simply do not understand the people who would throw that all away.  I like having roads and schools and a functioning water system and court system and garbage disposal and regulation of predatory businesses and basically the entire everything that make up society!  I like knowing that old people aren't dying because I pay Medicare taxes.  I like knowing that kids are getting food at school when they can't afford to at home.  And I like knowing that all of this is provided by a group that is (supposed to be) doing this without religious, economic, or racial biases, unlike a ton of charities.  

I cannot understand people who wish to pay nothing, or very little, towards the running of the societies which they live in.  Life is good (in general) for almost everybody in Western democracies, particularly the rich,  and that's worth paying for.  Being very rich in London or Munich is way better than being very rich in a lawless society where you can be kidnapped, imprisoned, asset-stripped, or murdered, notwithstanding that taxes may be higher.

But, in general, I would consider it reasonable for rich people to object to paying more than half of their income to the State (except in cases of national emergency).  

[OldGimletEye]

7 minutes ago, DunderMifflin said:

And please layoff of the superior hubristic understanding of the budget, you look like someone who just read ayn rand for the first time.

Then what do you think are the biggest items and drivers of the federal budget and or deficits?

Also, I don't worry about paying off debts per say. I think more in terms of reaching a debt/GDP ratio.

Also for reading Ayn Rand for the first time: 

[DunderMifflin]

1 minute ago, SeanF said:

I cannot understand people who wish to pay nothing, or very little, towards the running of the societies which they live in.  Life is good (in general) for almost everybody in Western democracies, particularly the rich,  and that's worth paying for.  Being very rich in London or Munich is way better than being very rich in a lawless society where you can be kidnapped, imprisoned, asset-stripped, or murdered, notwithstanding that taxes may be higher.

But, in general, I would consider it reasonable for rich people to object to paying more than half of their income to the State (except in cases of national emergency).  

Cue the creation of a national emergency

[James Arryn]

5 minutes ago, DunderMifflin said:

If the the plan is to use income tax to pay off debt the thats a whole other level of futile wtf-ness. 

And please layoff of the superior hubristic understanding of the budget, you look like someone who just read ayn rand for the first time.

People read her more than once?

[OldGimletEye]

1 minute ago, James Arryn said:

People read her more than once?

Some people must be gluttons for punishment.

[DunderMifflin]

3 minutes ago, OldGimletEye said:

Then what do you think are the potential items and drivers of the federal budget and or deficits?

Perhaps you were unclear on my plea. I said please stop it, not double down on the dick measuring contest

[OldGimletEye]

Just now, DunderMifflin said:

Perhaps you were unclear on my plea. I said please stop it, not double down on the dick measuring contest

That's not what I'm doing. I am just not sure where you think we can get all these "savings" from.

[Altherion]

11 hours ago, MerenthaClone said:

And you think this would be better if it was a private entity somehow?

Technically, it is a private entity even now -- just one that is closely tied to the state and with a charter that includes a public benefit mandate. I guess what you're asking is whether it would be better if it were a more typical for-profit corporation and no, it would not: it would be mostly the same. The leadership of all of these structures is staffed by the same kind of people who follow very similar philosophies. Certain structural properties of the public and semi-public entities force them to jump through additional hoops, but they've been quite adept at such hoop jumping.

28 minutes ago, DunderMifflin said:

I don't see how this would guarantee any sort of equality. I don't see the assumption that Buffets poor secretary's salary stays the same while the bosses are getting most of their pay taken away. 

-Is it better for a worker to clear 30k a year while the boss only clears 5 million

-or is it better for a worker to clear 80k a year while the boss clears 10 million

The first creates more equality while the worker and everyone gets less, the second doesn't make equality but everyone clears more.

Of course my numbers are completely made up, but the idea/guarantee that employee wages stay the same in the event that 1%ers get most of their pay taken away is also completely made up.

Actually, in your example, the second does create more equality, at least relative to the first. In the first scenario, the worker's salary is 0.6% of the boss's while in the second scenario, it is 0.8%. This is basically the optimistic scenario promised by the capitalists 40 years ago: everyone is richer and inequality is lower. If you look at what actually happened (example article), the historical scenarios are closer to this:

Then: worker makes 40k, boss makes 1 million

Now: worker makes 41k, boss makes 10 million

Of course, nobody knows what exactly will happen if the 1% is heavily taxed. As I said above, they have nearly complete control of the system and have the means to retaliate. However, it is highly likely that the employees are already being paid close to the lowest wages that are possible without serious unrest.

[DunderMifflin]

33 minutes ago, Altherion said:

Technically, it is a private entity even now -- just one that is closely tied to the state and with a charter that includes a public benefit mandate. I guess what you're asking is whether it would be better if it were a more typical for-profit corporation and no, it would not: it would be mostly the same. The leadership of all of these structures is staffed by the same kind of people who follow very similar philosophies. Certain structural properties of the public and semi-public entities force them to jump through additional hoops, but they've been quite adept at such hoop jumping.

Actually, in your example, the second does create more equality, at least relative to the first. In the first scenario, the worker's salary is 0.6% of the boss's while in the second scenario, it is 0.8%. This is basically the optimistic scenario promised by the capitalists 40 years ago: everyone is richer and inequality is lower. If you look at what actually happened (example article), the historical scenarios are closer to this:

Then: worker makes 40k, boss makes 1 million

Now: worker makes 41k, boss makes 10 million

Of course, nobody knows what exactly will happen if the 1% is heavily taxed. As I said above, they have nearly complete control of the system and have the means to retaliate. However, it is highly likely that the employees are already being paid close to the lowest wages that are possible without serious unrest.

According to that chart., to me it points more towards income tax irrelevancy.(or at least not the magic wand its being sold by some as) The first two periods of inequality according to the data provided occurred before the US had an income tax

[Altherion]

2 hours ago, DunderMifflin said:

According to that chart., to me it points more towards income tax irrelevancy.(or at least not the magic wand its being sold by some as) The first two periods of inequality according to the data provided occurred before the US had an income tax

The income tax is not a panacea for inequality (think I've said this multiple times now). However, assuming that the elites actually pay up rather than evade or retaliate, it is one way of dealing with capitalism's most glaring flaw.

Data from a century ago or more must be taken with a huge grain of salt because the further back one goes, the more its interpretation is distorted by factors that you probably didn't even think of because they have no modern analogs. For example, did you know that in the early 20th century, the US had a genuine socialist party that won elections for mayors of large cities, many seats in state legislatures and a few in Congress as well as 6% of the Presidential vote in the 1912 election? And this wasn't Bernie Sanders type socialism, it was relatively pure Karl Marx. Unions were also relatively prominent at this time -- not the tame, low-tier members of the establishment that we see today, but real enemies of the elites who feared them and often employed both violence and abuse of the law to attack them.

[DunderMifflin]

1 hour ago, Altherion said:

The income tax is not a panacea for inequality (think I've said this multiple times now). However, assuming that the elites actually pay up rather than evade or retaliate, it is one way of dealing with capitalism's most glaring flaw.

Data from a century ago or more must be taken with a huge grain of salt because the further back one goes, the more its interpretation is distorted by factors that you probably didn't even think of because they have no modern analogs. For example, did you know that in the early 20th century, the US had a genuine socialist party that won elections for mayors of large cities, many seats in state legislatures and a few in Congress as well as 6% of the Presidential vote in the 1912 election? And this wasn't Bernie Sanders type socialism, it was relatively pure Karl Marx. Unions were also relatively prominent at this time -- not the tame, low-tier members of the establishment that we see today, but real enemies of the elites who feared them and often employed both violence and abuse of the law to attack them.

I didn't post it I just commented on it. I agree century+ old data doesn't say much but it got posted and I just mentioned the very first thing I noticed. Id probably even shorten that time frame. The further away you go beyond yesterday the more statistics become distorted by unknown or unmentioned factors. Other more or less obvious reasons i noticed were that one of the high points of equality according to the chart was a time of slavery, native American slaughtering, an unfathomable amount of land yet to be "Europeanized", and where the US wouldnt see income tax for another century. The highest point of trending towards equality has a starting point that coincides with the Great Depression.  Also, it counts housing and food for slaves as part of a slaves wealth which renders the entire thing fishy for obvious reasons. The idea that a slave in America had it better than an English peasant is not going to get a lot of people on board, particularly with the modern day eat the rich crowd.