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Thread: Trickle Down? Or Trickle Up? Which Economic Model is Better?

  1. #1
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    Trickle Down? Or Trickle Up? Which Economic Model is Better?

    Pretty much all of us are familiar with the concept of "trickle-down" economics of tax cuts for the wealth/businesses/job creators, so that they can do more, and theoreticly that wealth-generation will trickle down to the lower classes.

    However, recently Obama was on record saying he believed in a spread the wealth, "trickle-up" style economic system. His argument was that without the working class being able to afford say, a Plumber, the Plumber makes no business, and that trickles up. But if the Govt. supports the lower-classes via wealth-redistributuon/taxation, then the money/spending will trickle up from there to business and spur the economy.

    So I ask. What do you think is the better system, and why?

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    well trickle down clearly failed so we might as well try trickle up

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    Trickle down via no income tax, implementation of the FairTax, which lowers production costs, puts your money back in your pocket, brings international jobs back home, reduces government spending (no IRS), and restores personal liberties.

    Its a no-brainer.

    For those of you unfamiliar, read this for a brief summary: [url]http://en.wikipedia.org/wiki/Fairtax[/url]

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    [QUOTE=Tanginius;2804230]well trickle down clearly failed so we might as well try trickle up[/QUOTE]

    Incorrect. What failed was an attempt at both simultaneously.

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    [QUOTE=Guido Monzino;2804236]Incorrect. What failed was an attempt at both simultaneously.[/QUOTE]

    since the 1980s we've been on the failed path of 'trickle down' economics, and the wealth distribution has become MORE pronounced. The rich get richer and the poor (and middle class) get poorer under that system

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    [QUOTE=Tanginius;2804239]since the 1980s we've been on the failed path of 'trickle down' economics, and the wealth distribution has become MORE pronounced. The rich get richer and the poor (and middle class) get poorer under that system[/QUOTE]

    How would you make the Poor "richer" then?

    And should the Rich then, be made poorer do you think?

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    [QUOTE=Warfish;2804241]How would you make the Poor "richer" then?

    And should the Rich then, be made poorer do you think?[/QUOTE]

    honestly I don't care if they get richer, but for them to keep pace would be nice. As in to not fall further behind... like your favorite, John Edwards, said about the 2 Americas is true imho

    no the rich shouldn't be made poorer, but the rules are so tilted in their favor it's not funny. We just don't need to make them richer by taxing them less. Let the Bush disastrous tax cuts for them expire/sunset like they are going to and start paying normal tax rates again. They are smart enough and have enough capital to enrich themselves without us lessening their tax burden


    full disclaimer, I am a high income earner so I benefit from a 'trickle down' approach however I have no use for the extra cash so I donate it to environmental groups mostly. I'd rather someone who needs that cash have it and I still would give to those charities, just less.

    Also I think it's more meaningful if someone in my position wants to end 'trickle down', than if a low income earner wants to as it would benefit them so they can easily be biased. However since it would 'hurt' me (negatively affect my bottom line) , it's more meaningful, no?

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    [QUOTE=Tanginius;2804250]honestly I don't care if they get richer, but for them to keep pace would be nice. As in to not fall further behind... like your favorite, John Edwards, said about the 2 Americas is true imho

    no the rich shouldn't be made poorer, but the rules are so tilted in their favor it's not funny. We just don't need to make them richer by taxing them less. Let the Bush disastrous tax cuts for them expire/sunset like they are going to and start paying normal tax rates again. They are smart enough and have enough capital to enrich themselves without us lessening their tax burden


    full disclaimer, I am a high income earner so I benefit from a 'trickle down' approach however I have no use for the extra cash so I donate it to environmental groups mostly. I'd rather someone who needs that cash have it and I still would give to those charities, just less.

    Also I think it's more meaningful if someone in my position wants to end 'trickle down', than if a low income earner wants to as it would benefit them so they can easily be biased. However since it would 'hurt' me (negatively affect my bottom line) , it's more meaningful, no?[/QUOTE]

    Ok. So how would you make the Poor "richer" then?

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    [QUOTE=Warfish;2804228]Pretty much all of us are familiar with the concept of "trickle-down" economics of tax cuts for the wealth/businesses/job creators, so that they can do more, and theoreticly that wealth-generation will trickle down to the lower classes.

    However, recently Obama was on record saying he believed in a spread the wealth, "trickle-up" style economic system. His argument was that without the working class being able to afford say, a Plumber, the Plumber makes no business, and that trickles up. But if the Govt. supports the lower-classes via wealth-redistributuon/taxation, then the money/spending will trickle up from there to business and spur the economy.

    So I ask. What do you think is the better system, and why?[/QUOTE]

    It depends what is the purpose of your tax system - you could well argue that changes to the tax system in the US has stimulated the economy over the past 3 decades. For example, that supply side economics (namely cutting taxes) championed by Reagan and Bush 1 and 2 led to a booming economy. Unfortunately, the tax cuts under Reagan and Bush 1/2 have led to the US government having a massive outsized debt. It has also arguably led to a decrease in living standards for many Americans.

    Actually, now I think about it, I think trickle down works best, but provided that 'trickle down' is not paid for by debt.

    If you look at the Irish experience, where they had high corporate and other taxes, and their economy was moribund for many years in the 1970's, to when they changed their tax system and slashed company taxes in the 1990's leading to a booming economy. From memory the Irish standard of living was 40% below the average of the rest of Europe in the 1970's, and they now have a standard of living 30% above the rest of Europe after the tax changes they brought in. Their system is now very much 'trickle down', where before it was 'trickle up'.

    I think corporations should pay low tax - companies can move across borders in a way that most citizens can't. Keep company tax low else the company will go to another country. I think also small business especially should have far less red tape and less tax.

    As for the rest - people should pay tax on the basis of their ability to pay - in other words rich individuals should pay more proportionally than poor. I think consumption taxes are a good thing (encourage people to save) and I think changes to the entire way people speculate with money (not just in terms of tax) would be a very good thing.

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    I think these are both oversimplifications. Anybody who uses only one or the other is going to fail. A smart approach will employ aspects of both philosophies.

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    [QUOTE=Warfish;2804254]Ok. So how would you make the Poor "richer" then?[/QUOTE]

    I said I don't care if they get richer and there is no good way for them to be made richer imho, I'd just prefer they don't fall further behind as has been the case over the past nearly 30 years. And since the laws are tilted to the rich, I'd prefer them tilted towards the masses

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    [QUOTE=Tanginius;2804262]I said I don't care if they get richer and there is no good way for them to be made richer imho, I'd just prefer they don't fall further behind as has been the case over the past nearly 30 years. And since the laws are tilted to the rich, I'd prefer them tilted towards the masses[/QUOTE]

    So how do you "tilt the law" towards the masses?

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    [QUOTE=Tanginius;2804239]since the 1980s we've been on the failed path of 'trickle down' economics, and the wealth distribution has become MORE pronounced. The rich get richer and the poor (and middle class) get poorer under that system[/QUOTE]

    And one of the "fixes" implemented was to encourage people to borrow money to buy houses that they couldn't afford. This was a "trickle-up" attempt. How'd that work out?

    It's too simple and one-sided to blame Republican policies on our current economic situation. Both sides have their hands in this.

    Read the link I provided. Your answers are in there.

  14. #14
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    [QUOTE=nuu faaola;2804259]I think these are both oversimplifications. Anybody who uses only one or the other is going to fail. A smart approach will employ aspects of both philosophies.[/QUOTE]

    I don't disagree, but we have two candidates right now, one who subscibes to one idea and one who subscribes to the other. neither is persuing a balanced ideology here, by their own viewpoint and words.

    And it raises a second question: What IS the purpose of Taxation? Should the Govt. even be using Taxation as a Tool for Economic change?

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    [QUOTE=Warfish;2804270]I don't disagree, but we have two candidates right now, one who subscibes to one idea and one who subscribes to the other. neither is persuing a balanced ideology here, by their own viewpoint and words.

    [/QUOTE]

    That, too, is an oversimplification.

    Neither of these guys is particularly doctrinaire if you look at their proposals rather than their rhetoric. Yes, Obama has criticized "trickle-down" economics, saying the Bush policies have gone too far in that direction. (I obviously agree.) But he's also proposing certain things --like a big small business tax cut-- that have some trickle-down overtones to them.

    McCain, meanwhile, spends an awful lot of time criticizing tax-raising liberals, but he himself originally opposed the Bush tax cuts and has said quite recently, for instance, that increasing payroll taxes to save social security is "on the table."

    The fact is, both of these guys have the potential to be a take a less doctrinaire, more case-by-case approach to economics than the unthinking ideologue currently in the White House. Which is why either would be an upgrade.

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    [QUOTE=Warfish;2804265]So how do you "tilt the law" towards the masses?[/QUOTE]

    well the first step in any sane fiscal or economic policy is always the abolishment of the "Federal" Reserve and a return the to gold standard. Instantly inflation will become a minor nuisance, and therefore fixed income people and/or lower income people will be squeezed less over time

    then I'd remove any laws that restrict third parties from getting on ballots or exclusions from debates

    work to remove money from politics ala McCain-Feingold but expand upon it

    start closing loop holes in the tax scheme

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    [QUOTE=Warfish;2804270]
    And it raises a second question: What IS the purpose of Taxation? Should the Govt. even be using Taxation as a Tool for Economic change?[/QUOTE]

    As far as that question goes: Taxation is the revenue government needs to fund what ought to be a baseline of services it provides. The question, of course, is where to draw the baseline.

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    [QUOTE=Guido Monzino;2804266]And one of the "fixes" implemented was to encourage people to borrow money to buy houses that they couldn't afford. This was a "trickle-up" attempt. How'd that work out?

    It's too simple and one-sided to blame Republican policies on our current economic situation. Both sides have their hands in this.

    Read the link I provided. Your answers are in there.[/QUOTE]


    I know all about VATs so I don't need to read the wiki on them, and personally I am not opposed if implemented correctly. Then again I'm also a Canadian citizen and working on getting my Croatian citizenship (for future EU citizenship) and I travel extensively so I am very used to paying VATs

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    [QUOTE=Warfish;2804254]Ok. So how would you make the Poor "richer" then?[/QUOTE]

    warfish people seem to be dodging your question, ill take a swing at it

    -education makes everyone richer in the long run hence easier/better student loan backed by federal gov't

    -middle class income tax cut, upper class gets tax hike - closes the gap a little

    -universal or affordable healthcare - eliminates or lessens a huge and possible bankrupting expense for the middle/lower classes

    -alternative energy - it seems like not relevant but really if we aren't tied to middle eastern oil to get to work every day that helps the middle/lower classes

  20. #20
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    [QUOTE=Tanginius;2804239]since the 1980s we've been on the failed path of 'trickle down' economics, and the wealth distribution has become MORE pronounced. The rich get richer and the poor (and middle class) get poorer under that system[/QUOTE]

    This is an interesting point and the trickle down tax strategy has had a big hand in the rich getting richer.

    On the other hand, the poor getting poorer IMO, was driven by the shift in government policies over the last 8 years of Bush/Cheney to make the corporations more powerful.

    Excessive corporate tax cuts, huge bonuses for CEOs, free trade agreements and incentives for mergers has created a situation where the large corporations have more power than ever before in our lifetimes.

    These policies have allowed the corporations free reign to outsource many jobs to reduce labor costs thereby drastically reducing the wealth of the middle class and further concentrating the wealth in the hands of the few.

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