"In the end, the government gets richer and everyone else gets poorer."

Couldn't have said it better myself. Well said, Draugnar. The smaller the government is, the richer the people are.

VirtualBob - Unnecessary ad hominen?? tell me, what did this reply of your to me mean: "That link of krellin's was worth it just for the Obama goose step" One worthless reply to a post deserves another.

The fact of the mater is, the data in that link is *very* relevant to the thread discussion, and is information most of the uninformed masses:
1. Need to know and
2. Probably cant' comprehend and/or won't believe **because it disagrees with their beliefs**.

They cry for redistribution...and when you demonstrate that it is already happening (and NOT SOLVING ANY PROBLEMS, by the way...) they are silent, or deny the truth of it, etc. Either way, the only response will be to cry for more.

And your reply is some snarky bullshit....so you deserved your "ad hominen attack".

I think it's cute when the collected masses, upon not participating in a discussion, but instead just posting snarky replies, get their undies in a bunch when they get "attacked". I think you all just get off on crying "ad hominen...ad hominen..." like we're supposed to be impressed that you know the word.

Maybe if you contributed to the discussion, or commented on the data in the link you wouldn't be deserving of my derision.

@GF You too are incorrect...please tell me how a government that is $17 TRILLION in debt is "rich"? There is not government wealth...this is complete nonsense. They bring revenue in, and they spend it. This isn't some fantasy novel where the government is sitting on a pile of gold and a dragon's horde somewhere. The government is *broke*, and the more in DEBT they get, the poorer we get.

@krellin - Read GF's comment again. He was referring to smaller government. His and my point are both that big government means less money in the pocket of the people. What the government does with it is irrelevant. whether they spend it on Taiwanese hookers, blow, or government "entitlement" programs that just increase the size of those dependent on the government is irrelevant. Those who work and are responsible would have more without that government.

"Taiwanese hookers, blow, or government "entitlement" programs"

As far as I can tell, they spend it on all of the above.

@Draug....I stand partially corrected. He did say this:

""In the end, the government gets richer and everyone else gets poorer."

Couldn't have said it better myself. "

He agrees with rich government = poorer us.

But obviously we all agree...we're just discussing semantics.

Yeah, so stop attacking your allies, dufus! :-)

You do that in game too, IIRC. :-D

Attacking my allies? Mehhh...

VirtualBob is no ally - he has nothing of value to say
GF and You - I'm not attacking, I'm clarifying a point of language which I disagree with, that I think is a dangerous mistake.

I think it is *dangerous* to suggest in any way, shape or form that the government possesses wealth, that they are rich. By even usign the phrase "government wealth" "government is rich" etc you are giving thoughts to the Libtards that the government has something which they can take, that they "deserve". The government does not own anything...they only take...and once taken, they redistribute it. Period.

So I severely object to the phrase "the government gets richer" even if I know what you are suggesting, because to a Libtard it means "MORE HANDOUTS!!!"

Attack allies in a game? Hmmmm....preemptive strike against my ally that was going to attack me first...lol

"Yeah, so stop attacking your allies, dufus! :-)"

Damn, Draugner ... you're on a roll!!

krellin seems to be playing the forum hedgehog scheme.

@Draugnar: "In the end, the government gets richer and everyone else gets poorer."

Isn't your government virtually bankrupt?

"Virtually"? Lol. We're FAR beyond bankruptcy. We're so far off the debt deep end that we're in serious danger of France repossessing the Louisiana Purchase.

@ Gunfighter: And yet, in this thread, you and Draugnar both agreed that the current system ends up with the government getting rich.

How can both these things be true? Is the government rich, or is it bankrupt?

The government is filthy rich right up until the moment that they throw it down fiscal black holes. If our federal government was restrained to its historical, Constitutional size but current tax rates were maintained and its outstanding debt was disregarded for the purposes of this conversation, it would be the richest entity in the history of the world.

"The government does not own anything...they only take...and once taken, they redistribute it. Period."

No, they only distribute some of it. The rest they use to lone their cohorts pockets.

There is sometimes a disconnect between fairness and empathy. Both nebulous and subject to interpretation but I'd have a hard time arguing that Draugnar's vision of a flatish tax isn't fair. However, I think I can confidently say that the super rich who fight vehemently against a massive redistribution of wealth lack my interpretation of empathy.

@GunF - what is a 'fiscal black hole', is it real or imaginary?

"Couldn't have said it better myself. Well said, Draugnar. The smaller the government is, the richer the people are." - we can see who the rich people are that is not the point, this is in reference to redistribution of existing wealth, not a bigger or smaller govt, the actual size of govt here is irrelevant.

"the Government produces *zero* in the economy - they add value to nothing - and therefore the only thing they can do, in the end, is destroy wealth" - how do we measure value added? The police, the army, the emergency services, schools, hospitals, local govt, the FBI, CIA, FDA, FSA, the courts of Law, etc, etc. The building of roads and transport infrastructure, local govt, licensing, planning, management of elections, etc, etc, etc, etc.

"Taxes should *only* be on income" - no they shouldn't, this is exactly the problem that exists now and it didn't make things better. Net wealth should be taxed because it is idle wealth that gives no value added to the economy, sloshing around in some bank account in Liechenstein or Switzerland, why would US citizens go to all this trouble with these offshore anonymous accounts if they were not trying to hide something, in a democracy why are these accounts anonymous? is that legal?
The most ridiculous comment I saw was from Draug that seemed to suggest that by using a simplistic view of the law of supply and demand that if we tax wealth then less of it will be made (just like taxing cigarettes).
It's so beautiful I have to look at this.
Person has £100m of net wealth - govt says we need 3% to invest in our infrastructure.
Rich person thinks, they're taxing my wealth, I want less of that now, I'm going off that idea of wealth, my demand for wealth is falling dramatically based on that natural law of Supply & Demand ...... this year I will make a lot less wealth than I had planned, I am hoping for a huge dip in my stock portfolio and all my other investments to go bad, I'll show that govt. how wrong they were to tax my wealth.
This is of course complete nonsense, people will never get tired of being more wealthy because it's takes fuck all effort to achieve it. Stocks go up while you're sleeping, your wealth has increased, what value did you give to the economy or society to deserve that, absolutely nothing.
The demand curve for wealth is completely inelastic meaning it will not be affected by a change in the Supply of wealth, this is human nature, people will demand more wealth regardless of the amount they currently have, especially if they have to do very little to get it. This is why it is the perfect taxable item, a product with a completely inelastic demand.
Don't let your disdain for taxation or government colour your judgement here, the simple facts are that if you redistribute wealth from the super-rich to the poor consumer spending will increase leading to growth and the economy will improve, whether you like that fact is a different issue. Of course the super-rich will get even richer because they own everything, then you tax their wealth again at 3% and the story goes on ...... you could probably set a level of net wealth of say under $5m where no-one paid the tax.

Nigee - I agree with you on many points, but you have some bad economics behind your thinking. Income is not a perfectly inelastic good. There are two effects that work opposite to each other here - the income effect (I'm making less money, so I have to work harder for the things I want) and the substitution effect (My payoff from work is lower, so I have better things to do with my time). You're right in the sense that in most observations the income effect trumps the substitution effect. But as the tax penalties increase, the substitution effect grows larger and eventually is greater than the income effect. Nigee is also right in that the best items to tax are the items with the most inelastic demand. This leads to the least amount of deadweight loss in the economy.

Nigee is also right in that putting the billions that rich people have in the hands of the poor will dramatically increase consumption and stimulate the economy (which will further reward the holders of capital)

Now, as for the government doesn't give any value to the economy, that's nonsense. GDP is composed of Y = C + I + G + NX. Notice the "G" for government. More practically, the government takes care of the private sector's failure to provide a public good. Clean air and clean water, for one. Salted and sanded roads during the winter. The government doesn't destroy wealth. Inappropriately uses or redistributes it, maybe. But it doesn't destroy it.

"Nigee is also right in that putting the billions that rich people have in the hands of the poor will dramatically increase consumption and stimulate the economy (which will further reward the holders of capital)"

Most of those billions are tied up in productive assets, and not in disposable cash that can be used to stimulate the economy. The act of tying to redistribute these assets would actually stifle investment. I think it could strangle the economy instead of stimulating it.

To avoid confusion we must have a good distinction between 'idle wealth' as opposed to productive capital assets, two very different things. Most productive assets are owned by companies, most idle wealth is owned by individuals and organisations such as the Church, etc.
Goldie there is a trade-off between income and time for the working classes i.e. people who earn money based on the hours they contribute, but this is not the same for the wealthy as their wealth has no or very little relationship to the time they spend doing a job, many of them do not have to work, their money works for them.
But the demand for wealth (as opposed to income) I would say was very inelastic, if not perfectly inelastic.
The truth is that over 95% (probably over 98%) of the public would be unaffected by a wealth tax because they do not have net wealth of over $5m.
It would affect very few people but would yield huge amounts of money. You could offset the costs also if you gave them tax breaks for providing funding for low interest long-term infrastructure projects such as schools, roads, etc. There is always a deal to be done with the super-rich because they have so much to gain and lose they will play ball and negotiate on tax, and they will pay the tax for one very simple reason..... THEY CAN AFFORD IT.

Define "productive assets". Stocks are not productive assets. Bonds are, and real estate is, but not stocks.

I think stocks are productive assets. If I own stock in a company that make mobile phones, I own a small piece of a productive asset. It is a productive asset because that company actually makes something.

On the other hand if I own a basement full of expensive wines that is not a productive asset. Or if I own my own private golf course that is not a productive asset (not very productive anyway - it keeps the greenskeeper employed, I suppose).

Now I suppose you could make a case for saying that share in start-up that actually made any money yet, twitter for example (does Twitter actually have a source of revenue?), you could argue that that is not productive, but in this case the share price represents the belief the shareholder have that it will become productive.

Let's say in our severely wealth-unequal society a few people own an enormous number of shares in some valuable stock - our popular mobile telephone company for example. I suppose we could redistribute ownership of those shares to masses. But what about the future? Our hypothetical angel investor is going to think twice about investing in a promising start up if the end result is going to be a substantial portion of realized wealth will be redistributed away from him. So he doesn't invest. That is not good. So yes, I think shares should be considered productive assets (the shareholder obviously think so otherwise the shares would be worth nothing).

typo above... you could make a case for saying that *shares in *a start-up that had *NOT* made any money yet...

The thing is that aside from the first several years of a company's existence, they spend much of their time buying back shares of stock from the market. They very rarely issue new shares and thus it is only on these new issues that companies actually raise capital from stocks.

But I disagree that higher taxes will lead to lower levels of investment. What it may do is lead to different types of investment - be it safer or riskier - or investment via intermediaries. This all depends upon exactly how the tax pans is instituted. Capital gains taxes are lower than income taxes for the exact reason you mentioned, but nobody is going to stop investing due to lower returns. What they will do is change the amount of risk they are willing to accept in investing.

But you're only looking at one side of the issue - where holders of capital lose money to the government. But lets go back to this mobile telephone company example. Let's say taxes on capital gains went up to 50%, so your profit per dollar drops from $.90 to $.50. But with their new wealth, millions more will be able to afford more expensive phones and data plans. Shares of the company rise 40%. If that's the case, do the wealthy really lose? No. Rather, we get a higher standard of living for everyone via an increased velocity of money.

@ NigeeBaby

A fiscal black hole is something that the government needlessly pisses away money on. For example, welfare, healthcare, and pork projects.

@goldie - The problem is that, sure, the cellco made you 40%, but it could also have lost 40%. If taxes mean you only get 20% ROI and then only if you managed to make 40% (highly unlikely) then you may be better off investing it in the banks via a CD. Raising taxes on cpital gains means people will only do safe risks and only where they believe they will make more after the taxes than if they put it in a bank account somewhere. It stifles entrepreneurship because no one is going to make a high risk venture when, if it happens to pay out, they only get to keep 50% of the profit and the government takes the rest.