In addition to agreeing basically with Ken, I agree with one statement of Paul's, namely the wealthy should pay more because they can without affecting there ability to enjoy the basic needs of life -- food, clothing, shelter.<br>
<br>Further, the deficit spending that has led to our horrendous national debt appears to have benefited the wealthy more than others. When money goes to the poor and middle class, they basically spend it on goods and services that benefit the wealthy economically more that others. And then there's military spending -- who do you thinks benefits the most economically from this from this? Who benefits the most from spending on healthcare?<br>
<br>w.<br><div class="gmail_extra"><br><br><div class="gmail_quote">On Mon, Nov 26, 2012 at 4:16 PM, Kenneth Marcy <span dir="ltr"><<a href="mailto:kmmos1@frontier.com" target="_blank">kmmos1@frontier.com</a>></span> wrote:<br>
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
<div text="#000000" bgcolor="#FFFFFF"><div class="im">
<div>On 11/26/2012 11:37 AM, Donovan Arnold
wrote:<br>
</div>
<blockquote type="cite">
<div style="font-size:12pt;font-family:times new roman,new york,times,serif">
<div><span>I don't get
it!</span></div>
</div>
</blockquote>
<br></div>
That's correct.<div class="im"><br>
<br>
<blockquote type="cite">
<div style="font-size:12pt;font-family:times new roman,new york,times,serif">
<div><span>How can you
tax the people that control the prices of everything and not
expect prices to rise?</span></div>
</div>
</blockquote>
<br></div>
First, since very few people operating as sole proprietors have
monopolist or near-monopolist pricing control, one doesn't tax the
"people", one taxes the business organizations they control.<br>
<br>
Second, not all prices are equally controlled. In markets where
there are many buyers and sellers meeting regularly, and often
electronically, such as in the commodities markets, price control by
any one individual is difficult. (Not impossible, if they have a lot
of money, but usually difficult.) On the other hand, in markets
where there are just a few major major suppliers, supplier
sensitivity to other suppliers' pricing activities may well lead to
effective price controls at levels that would not occur were there
more effective competition in those markets. Encouraging competition
by various means would have the effect of lowering prices. <br><div class="im">
<br>
<blockquote type="cite">
<div style="font-size:12pt;font-family:times new roman,new york,times,serif">
<div><span>If you tax
business owners and stock holders, they will simply make up
for their loss in revenue by increasing the price of their
goods and services.</span></div>
</div>
</blockquote>
<br></div>
Businesses engaged in competitive markets will be restrained from
raising prices too much because they will lose market share to their
competitors. It matters not whether costs for employees or for raw
materials or for interest on borrowed money, or taxes increase, the
effect is the same. In less-competitive, monopolist-controlled, or
in oligopolist-managed markets, cost increases can be passed on to
consumers with profit margins maintained. Competition is what keeps
consumer prices reasonable.<div class="im"><br>
<br>
<blockquote type="cite">
<div style="font-size:12pt;font-family:times new roman,new york,times,serif">
<div style="font-size:16px;font-style:normal;background-color:transparent;font-family:times new roman,new york,times,serif"><span>This means the poor and middle classes absorb the tax
increases by rising costs of their goods and services they
need and consume.</span></div>
</div>
</blockquote>
<br></div>
Poorer classes do have more difficulty avoiding higher prices
containing higher costs because a larger portion of poorer classes
consumption consists of required expenditures. They have less
disposable income, and therefore fewer actual choices concerning on
what to spend income. Competitive and efficient markets are more
important for people of more modest means because they have to rely
on markets to present them with the best products for them, not the
products that are most profitable for the products' suppliers. Quite
obviously, many less-rich people are disappointed by that reliance
when their choice of suppliers is limited, and managed-oligopoly
decisions, for all practical purposes, make their choices for them.<div class="im"><br>
<br>
<blockquote type="cite">
<div style="font-size:12pt;font-family:times new roman,new york,times,serif">
<div style="font-size:16px;font-style:normal;background-color:transparent;font-family:times new roman,new york,times,serif"><span>Further, it doesn't change the quality of life at
all for the poor or middle classes if you tax rich people
out of <span><span>existence</span></span>.</span></div>
</div>
</blockquote>
<br></div>
No one is suggesting taxing anyone out of existence. On the other
hand, incremental property taxes on very large, and especially on
otherwise inert and very large capital accumulations, would keep
money in circulation that could be used, prudently and
competitively, for a variety of public purposes.<div class="im"><br>
<br>
<blockquote type="cite">
<div style="font-size:12pt;font-family:times new roman,new york,times,serif">
<div style="font-size:16px;font-style:normal;background-color:transparent;font-family:times new roman,new york,times,serif"><span>What matters is the cost of living, the price of goods
and services that we need or consume. The price of food,
clothing, shelter, health care and medicine, transportation,
and education need to be as low as possible. </span></div>
</div>
</blockquote>
<br></div>
Yes, costs of living are important considerations. However, income
statements and balance sheets are two different, and interacting,
points of view. Each needs to be considered with both economic as
well as ethical lenses.<div class="im"><br>
<br>
<blockquote type="cite">
<div style="font-size:12pt;font-family:times new roman,new york,times,serif">
<div style="font-size:16px;font-style:normal;background-color:transparent;font-family:times new roman,new york,times,serif"><span>We should reduce taxes on the wealthy if the price of
these needed goods and services is less than 60% of family
income, and raise their taxes for entitlement programs when
it goes above 75% to subsidize the loss in quality of life.
There would be a strong motive for businesses to keep the
cost of living <span><span>affordable</span></span>
while getting rich.</span></div>
</div>
</blockquote>
<br></div>
Your economics is confused. Businesses have some, but not
overwhelmingly controlling, incentives to "keep the cost of living
affordable" in the face of market competition. Generally, it is the
business of business to earn money, to satisfy stockholders and
other stakeholders. Businesses don't control the macro-economy, they
are only the formative basis of it.<br>
<br>
It is the business of consumers, of citizens, and of governments to
provide assistance and guidance to businesses for their benefit, and
for the benefit of the societies that allow the businesses to exist
and to operate. Society generally should not concede control over
our economic lives to unelected, and often unaccountable, in the
markets or otherwise, managers, officers, and directors of private
capitalist corporations.<br>
<br>
Governments have many uses, and they are even more useful if they
are controlled by the people whose sovereignty created them and
allows them to exist. When Benjamin Franklin told a woman at the
Constitutional Convention that they had given "a Republic, if you
can keep it," that idea certainly encompasses keeping control of its
commerce and fiscal affairs in the interests of all of the parties
involved.<br>
<br>
<br>
Ken<br>
</div>
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