From: drevik@utkvx1.utk.edu (Drevik, Steve)
Newsgroups: talk.politics.misc,alt.politics.usa.misc,alt.politics.clinton
Subject: Re: Why Do Soak the Rich Schemes Always End Up Picking Everyone's Pocket?
Date: 15 Oct 92 20:10:00 GMT
Distribution: usa
Organization: University of Tennessee Computing Center
News-Software: VAX/VMS VNEWS 1.41

In article <JASON.92Oct15144542@ab20.larc.nasa.gov>, Jason C. Austin <j.c.austin@larc.nasa.gov> writes...
>In article <1992Oct15.172448.26837@cbnews.cb.att.com> jrm@cbnews.cb.att.com (john.r.miller) writes:
>-> In article <1992Oct15.061208.15888@nuscc.nus.sg>, ipser@solomon.technet.sg (Ed Ipser) writes:
>-> > 
>-> > 
>-> >   "Mr. President, Read Our Lips: No New Taxes"
>-> >   by J. Peter Grace
>-> > 
>-> >   ...
>-> > 
>-> >   If 100 percent of all untaxed income in this country above $100,000 of
>-> >   taxable income were confiscated today, we would generate only enough
>-> >   money to run the government for 19 days -- less than three weeks. There
>-> >   simply is not enough money raised in the highest brackets to contribute
>-> >   meaningful amounts of revenue.
>-> > 
>-> >   They once asked the famous bank robber Willie Sutton why he robbed banks.
>-> >   He answered, "That's where the money is." And if you want to raise
>-> >   serious tax revenue in this country, you have to go to where the money
>-> >   is. Ninety percent of all taxable income in this country is generated in
>-> >   brackets of $45,000 and under. More than 75 percent is generated by
>-> >   people who make $25,000 or less each year. If politicians raise taxes, it
>-> >   is these people, not just the rich, who'll be soaked.
>-> > 
>-> >   ...
>-> 
>-> Yet 10% (the rich) hold 90% of the wealth in this country. If what you say
>-> is true, then something is very wrong with our "tax" system. Those who
>-> have the least pay the most. I propose we tax the "holdings" of the
>-> rich and shake some of that 90% loose to cover the tax bill.
>-> 
>-> 			John Miller
> 
>	Think about what you're saying.  People, especially people
>that are going to keep it, don't hold wealth; they spend it in order
>to build on it.  When they spend money to expand their companies, they
>hire more people and buy more products from other companies.  If you


I popular fallacy of trickle-down economics.  In reality, personal
SAVINGS of the top 10% increased roughly 17% (indexed for inflation)
over 1980 - 1990.

IN short, they got more money, and they saved it all.  They put it
all into CDs, bonds, stocks, etc.  Some bit of this may have trickled
down throug the companies they invested in, but for the most part they
did not re-invest it to its true potential.

>tax these ``rich'' and take away a big chuck of that money, they are
>not going to spend as much.  Less spending means less expansion and
>less jobs.

Reverse logic.  If you threaten to tax HOLDINGS instead of income, 
they will be given a powerful incentice to spend the money, and thus
expand.

Of course, one of the major factors in this recession is the massive
federal debt.  It strangles the money markets, holds up long-term 
interest rates, and nobody invests.  Why invest in a factory that
may make 8-10% when the government has driven the cost of bonds so
low they can make you 14%???

> 
>	There isn't a golden mattress sitting on top of some big some
>of money somewhere.  The only thing the government relocating funds
>will do is take the money from where it can best expand the economy.
>--
>Jason C. Austin
>j.c.austin@larc.nasa.gov
> 
Newsgroups: talk.politics.misc