Not entirely true.
According to
http://en.wikipedia.org/wiki/Recession it *is* entirely true.
That means fewer 'rich guys spending into the economy', meaning it's worse for the economy.
The fact is giving a rich guy a tax break is far less likely to improve the economy because they already have sufficient discretionary income to buy the things they want and need and usually they just put the tax cut into the bank. Now if your goal is to improve the economy then the best place to put the money is into unemployment benefits because it’s certain that money will be immediately spent and will thereby stimulate the economy to the maximum effect.
Now I'm assuming that by trickle-down you're referring to policies such as tax cuts focused on the rich or businesses being thought to benefit not just those people but also those under them.
Yep. That would be the voodoo.
The one point you make on which my opinion may surprise you is the concept of business taxes.
In reality taxes on businesses don’t really exist. Well they exist all right but they’re not paid by businesses themselves. In every case they end up being a hidden tax on the customers (i.e. individuals) that buy the product of that business. Within a reasonable range of values market forces require that someone make a reasonable profit on their effort. If the profit is too little no one will be interested in producing the product/service and if the profit is too high then others will enter the industry and offer the same product/service for less thereby keeping the profit reasonable. Of course there are barriers to entry and many other effects that come into play but like I said this is how it works within “reasonable limits”.
I *assume* that everyone here will agree with me on these basic capitalist premises and this similarly applies to every other *cost of doing business* like raw materials, labor costs and even employee health insurance benefits all of which are borne by the customer.
Now of course it is possible for the sum of all these costs to raise the price of a particular businesses’ product/service higher than people are willing to pay and if this happens then that particular industry will be unprofitable and no one will produce that product/service. But as long as that limit is not reached then business taxes are not paid by businesses but are really an additional hidden tax on individuals.
For that reason I’m basically against business taxes except where they are used to counteract “externalities”, the classic one being pollution, that represent a cost to society in general that otherwise are not reflected as a cost of production.
Another interesting point of this is the thing about the cost of employee health insurance benefits. By the above reasoning there is no charity going on here on the part of the business since these costs are borne by the businesses’ customers (assuming such costs aren’t high enough to put the company out of business of course). But not only that these costs are almost the same as if the employee paid them directly.
The reason is that no business hires an employee that costs more than they contribute to the company’s bottom line. Show me an employee that doesn’t and I’ll show you an employee that will be out of a job in *very* short order. Either that or they have some very good blackmail material but I digress.
Just like the market forces that ensure a company’s “reasonable” profit the same market forces ensure a “reasonable” wage that rises as the value of an employee’s labor rises. Again there are reasonable limits over which this model applies and there are also asymmetries of the employer-employee relationship that I believe make this a bit less true than the profit assumption but for the sake of argument I’ll ignore them for now.
So an employer must treat the cost of an employee’s health insurance benefit just as if it were true wages and if the employer did not have this expense then the market forces would tend to raise the employee’s wages the corresponding amount. In fact it’s even worse than this because there is an amount of overhead and management of the employee’s health insurance benefit that represents a cost to the employer that the employer must pass on to both the customer *and* the employee. Also this is magnified because this is usually *not* part of the core expertise of that particular business and so it’s not something they really want to do and that makes it even more inefficient.
So anyway all of this is why I don’t think the employer should be forced to be a middleman in the health insurance issue. Sure years ago when the cost of insurance was low it was a throw-in, a benefit for which the employer received a tax benefit and didn’t really cost him much. But now that is most certainly *not* the case and besides making the employer be in a businesses they’d prefer not to be in this puts US companies at a competitive disadvantage against foreign companies in countries with single-payer health insurance. Such countries in effect are providing a government subsidy to their companies that our companies don’t have.
To me this is the strongest argument for single payer health insurance that should appeal to *all* Americans, liberals and conservatives alike. Of course I realize that conservatives will find a way to shoot even this argument down but at the minimum I believe that we need to get the employer out of the health insurance business.
Hopefully there’s a point or two within all of this that even the most rabid right wingnut will be forced to grant. If not then I truly *am* wasting my breath here.
