MangoMan wrote: ↑Tue Jan 08, 2019 2:58 pm
Moda,
Thanks for the skooling. You, of course, missed my point. Maybe super high tax rates aren't
technically communism (perhaps socialism would have been a better choice of words), I was drawing an analogy that the effect was the same, i.e., redistribution of capital with the disincentivization of production. Pretty sure the 'group' would do the same as I.
Well we're talking about pretty different extremes here. I mean I guess this is getting into semantics, but it seemed like you were saying they were very, very similar. I don't find them similar at all, though you do raise a point that it
could disincentive production.
Oddly though, it was Stalin's attempts to
incentivize production (at the point of a gun) that are among the Soviet Unions greatest atrocities. Millions died due to his attempts to industrialize the economy and meet production quotas/timelines.
I actually sort of doubt their economy would have modernized that fast had the White Russians won. But I could be wrong. And to be clear I don't find that to be a "good thing" considering the number of lives it was achieved on the back of.
I'm not sure why you zeroed in on Poland, but even the link you provided says their income tax rate is 32%, so I'm not sure what your point is. But I had a college kid who is the child of pre-Iron Curtain Russian immigrants shadowing me yesterday, as he wants to go to dental school, and he told me first hand that his community does not believe in socialism.
Poland struck me as the quintessential example of an eastern-block country. I just picked it and got a little bored with finding sources.
And the "income tax" rate is 32%, but as you did, making sure that all taxes on income are applied is important, as what you walk away with is what drives incentives (or so we're told, right?). And that does get close to 70% when you take all the Social Security. Further, a 24% sales tax is obscenely high, and that's on top of all the other taxes. If they don't like socialism, and high taxes is "basically" socialism, then we have quite the mystery here...
Why don't you provide an example of a modern country where income tax rates are 70% or higher and how much the citizens love it. Perhaps Venezuela?
Interestingly, Venezuala's taxes don't appear to be that high, and their government spending isn't that high of a portion of GDP. Yes, they owned some industries (mostly around natural resources), but Venezuela doesn't appear to be that "socialist" considering the measures you're talking about... and it's certainly not in the more hippie version of socialism where "the workers own the means of production." But no state socialist models really seem to work like that.
https://en.wikipedia.org/wiki/Economy_of_Venezuela
Finland's on the other hand appear to be around 51% NOT including Social Security, but closer to 80% if you include the SS tax total. Similarly to Poland, they also have a very, very high sales tax. Oddly, you'd want to re-figure the denominator for employer-paid Social Security taxes. So $80/120 = about 67%. Not quite 70%, but I we're sort of arguing peanuts at this point right?
https://tradingeconomics.com/finland/pe ... e-tax-rate
These are what we would consider obscenely high tax rates in countries that seem to be doing ok.
Sorry I'm not Kshartle.
Let's all be glad you're not.
So maybe Krugman and other lefties HAVE thought of the disincentive-to-produce argument and simply come to conclusions that this is why the "optimum rate" for tax-revenue is 70% instead of 75%, 80%, etc.
Once again, I'm not advocating for 70% tax rates necessarily, or even that it's the clear optimal rate for tax-revenue... just that we probably can rid ourselves of the "we can't raise taxes any more without reducing revenue" argument, because they're often made with weak evidence.