A new economic era?

[piezoe]

. I gave the example but you are in a state of denial. It is the overall tax rate that is progressive. If i make 100k and the first 50k is exempt from taxes because of my family size I pay 1000 in taxes My overall tax rate is 10%. 1000/100,000= .10
if I make 2million Ipay 400,000 which is 20%. A 20%rate is twice a 10% rate that is the progression from 10% to20% rate.

I think I already pointed out the defect in this thinking. Your ignoring return on capital > economic growth rate. Do the calculation for a family that pays on 70% of their income at 20% -- far more realistic than your example based on an atypical family. At a fixed, flat rate of 20%, for example, the wealthy would enjoy a tremendous windfall, compared to current rates -- they would pay just under 20%, approaching 20% asymptotically -- whereas the net middle class rates would be little changed from where the are now. Do you really think that giving a further huge windfall to the wealthy is a great idea in a democracy? Is this the direction you'd like to see the country go in? Do you want Bill Gates to be able to dictate to the government, even more than he can now, or would you like your vote to count for something.

 

[piezoe]

I have a comment to add as an addendum to my earlier post re negative rates. I used an example where the CB subsidized banks with negative wholesale rates to allow them to maintain their usual spread at very low retail rates. That was being nice to banks. Maybe too nice. After thinking about this awhile. There are other things the CB can do to get banks to loan at very low rates. it is more realistic to think that the CB might stop paying interest on reserves. They typically don't, but they can pay a very low rate to put a floor under interest rates and keep them from going to virtual zero -- I think the U.S. fed is doing that right now in fact, though they have removed the fixed reserve requirement. Alternatively a CB could charge a negative rate on bank reserves over some base amount -- call anything over the base excess reserves if you like. This is exactly the same as charging banks money to deposit excess funds at the central bank. If you want to push banks to loan at very low rates that's something that would certainly encourage it. In any case when someone is talking negative rates they are talking C.B. rates, not retail rates which will never go negative. They can go lower than any limbo stick however.

 

[zdreg]

I think I already pointed out the defect in this thinking. Your ignoring return on capital > economic growth rate. Do the calculation for a family that pays on 70% of their income at 20% -- far more realistic than your example based on an atypical family. At a fixed, flat rate of 20%, for example, the wealthy would enjoy a tremendous windfall, compared to current rates -- they would pay just under 20%, approaching 20% asymptotically -- whereas the net middle class rates would be little changed from where the are now. Do you really think that giving a further huge windfall to the wealthy is a great idea in a democracy? Is this the direction you'd like to see the country go in? Do you want Bill Gates to be able to dictate to the government, even more than he can now, or would you like your vote to count for something.

nobody pays at 70%. again you distort reality to suit your politics.

 

[piezoe]

nobody pays at 70%. again you distort reality.

You misread.. It's 70% of their 100K income is taxable. this, at a 20% tax rate leads to ~14% tax rate on gross income of 100K not far from what people pay now. Just using your example with more realistic values. Not many big families nowadays.

 

[maxima120]

We definitely are coming to New era. It's gonna be called Sino-Russian empire.

20yrs ago exactly I said that China and Russia will be ruling the world by 2030.. Everyone was laughing..

The millenials will grow into representative power soon. However it will be of no consequence. Like who cares what sort of economic turbulence is consuming an obscure Amazon indigenous tribe..

England will become museum country of old civilisation with zero economy and political weight. US will self isolate to the point of collapse one day (when Chinese and Russian will have their own tech and science and no need to bother stealing it). Europe will become a socialist state friendly to Russia. India will be neutered by Chinese. Middle East will withdrawn from the limelight as Muslims will be squeezed by non politically correct new masters of the earth by the balls (which is about time I'd say) and (hopefully) oil dependant will be resolved by that time.

This show is still on time. I expect China to finalise their navy by 2030. They gonna take Taiwan back around then. Other things as the above are just probable and would take another couple decades.

All in all by around 2050 life in Western world is going to be very sad and gloomy like Dickens novel..

So who gives a fuck if millenials will want to redistribute wealth.. There won't be any. Good luck to them.