why is raising taxes on the rich and corporations bad?

i just want to understand the libertarian perspective more and see how i'm wrong. so i hear a lot opf conservatives and libertarians say like if we raise the taxes on the rich and on corporations they will leave or cut back or whatever but how come when the taxes were high before , like it was almost like 90% on them, they didn't leave? what makes you think they will leave now? and even if they do leave so what? that leaves room for new businesses.

besides they only pay tax on profits and not revenue, the reason they dont create jobs is because profit demand isnt there right?

tell me how i'm wrong

Here we go again.

Easiest way to understand:

They have their money invested in other companies. If you take that and give it to government, they have to take it out of their investments. Which means less capital for businesses to use.

You don't help the economy by taking money out of it. It doesn't matter which side of the bucket you remove the water from.

Many of them also own small businesses that they expect to be self sustaining. If they have to start injecting their own capital they could just shut the businesses down. Many will be. My boss has already cancelled our health benefits and laid off 2 key people. Our owner is going to sell one of the properties he owns here which 20% of my salary comes from. My husband works for a large hospital here that is thinking about selling to another hospital 100%due to pending healthcare benefit costs.

Its not just the tax rate going up..its deductions being scaled back or eliminated amid a declining dollar.

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Originally Posted by ftwliberal

i just want to understand the libertarian perspective more and see how i'm wrong. so i hear a lot opf conservatives and libertarians say like if we raise the taxes on the rich and on corporations they will leave or cut back or whatever but how come when the taxes were high before , like it was almost like 90% on them, they didn't leave? what makes you think they will leave now? and even if they do leave so what? that leaves room for new businesses.

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What makes you think that you can tax the (truly) rich when they control the tax writing process and always leave loopholes for themselves?

p.s. My opinion is my own, I am not representing any particular group.

Taking money from people is wrong.

How about this: taking someone's money by threatening to kill them if they don't give it to you is wrong. It does not become less wrong because you hire thugs to do the threatening for you. It does not become less wrong when you call the thugs "government". The proper question is NOT "how much can you steal from people before they find ways to wriggle out of the trap."

The proper question is "what is the absolute minimum amount of government we need to have our liberty protected?" Once you have an answer to that, then you know how much revenue is needed. THEN you can formulate some policy for assessing fees to cover it.

Raising taxes on companies isn't necessarily bad IMO so long as the business tax is exactly the same in every town in the world. Obviously, that isn't true. When different areas have different tax rates, businesses use that those tax rates when considering where to start, expand, relocate to and so on. The higher the business taxes are in a town, all other things being equal, the less attractive the town is compared to areas with lower taxes.

Here's another (liberals usually get this one):

Corporations do not pay taxes. They just add it to the prices they charge for their products so the consumer ends up paying more. When the things that the middle class and poor buy cost more, they can buy fewer things. When they buy fewer things, the economy slows down.


Ok, so you have heard some utilitarian arguments, some moral arguments, and some real life examples. Are you convinced yet that this philosophy of "just make the rich pay more" is flawed?

Remember these rules ; Govt is too big , too wasteful, giving them more money , bad idea.Money taken from the private sector , in the end , always leads to less opportunity for those who need it most.

If , I own a corporation , I will pay no tax , the consumers who buy my product are going to pay it , it will be priced in.My tenent pays my property tax on that property , it is in the rent.

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Originally Posted by ftwliberal

i just want to understand the libertarian perspective more and see how i'm wrong. so i hear a lot opf conservatives and libertarians say like if we raise the taxes on the rich and on corporations they will leave or cut back or whatever but how come when the taxes were high before , like it was almost like 90% on them, they didn't leave? what makes you think they will leave now? and even if they do leave so what? that leaves room for new businesses.

besides they only pay tax on profits and not revenue, the reason they dont create jobs is because profit demand isnt there right?

tell me how i'm wrong

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Thank you for politely coming here to hear our views.

They may not be physically leaving in large quantities, but when was the last time you called customer service for a large company and didn't get connected to a foreign country? Outsourcing is happening, and physical relocation is next. Also, any time you have businesses leaving an economy you will have a negative impact. There is a lag between when markets barriers fall and new businesses enter those markets.

Finally, redistribution of wealth is just wrong. If I do well financially, I have to give a larger percentage of my money away? That's just absurd to me.

Maybe this will illustrate the concept:

http://www.youtube.com/watch?v=lOyaJ2UI7Ss

When income taxes were 90% there were so many deductions that the tax rate was lower than it is today. Taxing wealth is ALWAYS bad.

The libertarian view point is that, in a truly free society, I am entitled to keep the fruits of my labor. In most peoples cases, that is money... that money is my property and therefore I, and I alone, am entitled to use it as I see fit.

A tax, is the government using force to take my property. Some may not agree, but the reality is that at some level there will always be government, the question then becomes how do you fund it. Historically that has been taxes, tariffs and usage fees. While all taxes are theft, my personal opinion is that there is still degrees of morality in taxes.

For example, the property tax is one of the worst taxes (inflation tax may be the only thing worse - simply because it is unseen). But to tax someones property means the ownership lies with the government and we are merely renters. This, then in my opinion, is much less agreeable than something like a sales tax which would allow me to opt out as I saw fit.

Income tax is similar to the property tax, in that what it says, is that the government controls the fruits of your labor and is merely allowing you to keep what it deems you are allowed to. That is morally wrong and thus, it has nothing to do with whether or not someone is willing to leave or not...even if they arent willing to leave doesnt make it any less morally wrong. There are slaves or kidnap victims who dont leave when given an opportunity to do so, does that make the act of slavery or kidnapping any less immoral or wrong?

Well, I voted for Gary Johnson who would like to toss out the crazy income tax code and have a Fair consumption tax.

But if you want to put more tax on Warren Buffet, he will surely use every tax shelter he can to avoid it.


Also, sometimes I wonder if this is part of a vicious circle trying to chase after the effects of inflation. What if there are fundamental problems with monetary policy that contributes to the shift of money to the upperclass? Instead of addressing that we try to pull the money back with higher taxes.


Another way I look at it is from reading The Law by Bastiat. It suggested that government and law can become part of a system of legal plunder for upper and lower classes trying to take advantage of the system and each other. I think when the rich receive a subsidy or special tax break it creates resentment from the lower classes so they come demanding a piece of the government welfare pie. Then we come to the point where the government has to consider raising taxes because they're over extended in spending trying to please everyone.

Seriously, Bastiat made me really think about the role of The Law as being for the common security of society and individuals. It should not become a tool that individuals use the force of law to take from other individuals. The tricky part is obviously that the government and law can't all be voluntary, it does need funding. So that is why I voted in support of Gary Johnson's fairtax. I also accept the idea of some excise taxes or licenses.

Warren Buffet does not even pay the tax he owes.He is only concerned with you paying more.

Corporations don't pay taxes, their shareholders, employees and customers pay.

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Originally Posted by ftwliberal

i just want to understand the libertarian perspective more and see how i'm wrong. so i hear a lot opf conservatives and libertarians say like if we raise the taxes on the rich and on corporations they will leave or cut back or whatever but how come when the taxes were high before , like it was almost like 90% on them, they didn't leave? what makes you think they will leave now? and even if they do leave so what? that leaves room for new businesses.

besides they only pay tax on profits and not revenue, the reason they dont create jobs is because profit demand isnt there right?

tell me how i'm wrong

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I think there are two problems with it, the issue of freedom, and the issue of economics.

It is a fundamental principle of Freedom that we own our property. Attempts to take it by force without our consent are oppression. I do think each individual rationally consents to a limited government with the purpose of protecting his freedom, and so each person should be taxed the minimum amount required to pay for the protection of his freedom. How those taxes are applied should be an issue of economic concern.

On the economics side of it, it is quite simple. A business typically does not waste human capital. (Well in today's climate they do but only because the government makes it profitable for them to do so). But in a free market with floating interest rates, businesses do not waste human capital. By that I mean they do not create unproductive or pointless jobs, like the government does. So when you take money from a business, and give it to the government, and the government spends it hiring thousands of people to "fix roads and bridges" or something (when the roads and bridges work just fine), then you are taking human capital from the productive sectors of the economy and putting it into unproductive jobs, which do not give us products of value.

Keynesians try to argue that it doesn't matter, because when you the government pays workers who are not doing productive jobs, they spend that money on products and it circulates around into the productive sector. But that misses the point - it is the wasted HUMAN capital - that is if those people were doing jobs that are producing something valuable, we would be producing as a nation more valuable products and thus have a higher standard of living. And it is not the corporation or business who pays the wages for these unproductive workers - it is you and me. Because any tax is passed on to the consumer. It just means things are more expensive for you and I.

Btw all these dumbass politicians always talk about spending money on roads and bridges as the big answer for everything. But the roads and bridges already work pretty well, maybe not perfectly but people can get where they want to go. It's like hiring a guy to re-tile my roof when what I've got is a pipe leak. We could have used the stimulus funds for instance to buy and build capital goods - factories, plows, machines, refineries, etc etc. Maybe that way we could have got our pathetic trade deficit balanced. But no the stupid fucking government spend it on upgrading traffic lights that already work and building fish museums and shit like that. That's where the government goes wrong basically - it's not that they have bad intentions or are immoral people, it is that they are FUCKING STUPID. And the fuck up the economy.

So I hope that answer helps.

Unfortunately, the OP is gone forever so he or she can continue to bury his or her head.

It's sad, but they don't really want to understand this stuff.

The question is about taxes but a bit of information on the "90% income tax". The tax rate is a marginal tax rate- it is the rate applied to the last dollar you earned- it does not apply to every dollar you earned. Up to a certain amount, your income is exempt and subject to zero tax. Then you add in your various deductions and other exemptions and this further reduces the amount the marginal tax rate applies to. Your "average tax rate" is what applies to all of your income earned and is always lower than the "marginal tax rate".

The 90% rate only applied to amounts of money earned over $250,000 a year (this was a huge sum of money back then though it doesn't sound like as much today). Only a handful of people in the entire country made that much at the time. Median income was about $2300 a year and less than ten percent even made over $35,000 a year. (this source says that only 1.3% of the population in 1945 made even $10,000 or more- that is when marginal tax rates were 90%). http://www2.census.gov/prod2/popscan/p60-002.pdf So basically nobody really paid 90% in income taxes.

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Originally Posted by CT4Liberty

A tax, is the government using force to take my property. Some may not agree, but the reality is that at some level there will always be government, the question then becomes how do you fund it. Historically that has been taxes, tariffs and usage fees. While all taxes are theft, my personal opinion is that there is still degrees of morality in taxes.

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I agree with the rest of your post but I'm going to disagree that ALL taxes are theft. My point of view is that free men and women rationally consent to the protection of their freedom. And so we consent to the minimum amount of our property taken required for the protection of our freedom. That means a small and efficient government that taxes little, and provides a military, police force, fair and just judicial system, and emergency services.

Of course we are a long, long way from that level of government and taxation, and people will have to slowly be weaned off government dependency, and it will come in little steps probably instead of big leaps. But that is my view of the role of government, and I believe that free people do rationally consent to that level of government for the protection of their freedom.

A lot of the theory has to do with risk as an entrepreneur an investment looks like this

%success x payoff of success - %failure x cost of investment= Expected Value of investment

increasing taxes decreases the payoff of success which in turn lowers the expected value of the investment

Everybody shares in government so should't everybody have to pay for it? A flat tax percent applied to everybody with no deductions and no exclusions would be the "fairest". But the government has tried to use tax policy to try to encourage (or discourage) certain types of behavior. They think people should own a house so they allow them to deduct the interest they pay on a loan they took out to buy a house. They think people should use less energy so the add a tax onto gasoline. These distort the resulting real (average) tax rates for people. Those at higher incomes are better able to utilize deductions so if you want to flatten out the true average rate then you need a higher marginal tax rate on higher incomes.

If you don't pay your own share of government costs, you may demand more services from government since somebody else will be paying them for you. This encourages a bigger government and higher taxes for everybody. If everybody is required to pay their share, they will tend to demand less and have a theoretically smaller government. Theoretically- not necessarily in reality.

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Originally Posted by Zippyjuan

Everybody shares in government so should't everybody have to pay for it?.

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As long as I can opt out if I want. If government is such a great thing, then people, when given a real choice, should generally decide that the benefits outweigh the burdens and opt in. The problems start when governments can force people to participate in their little game. That's when it stops being about everyone enjoying the benefits of delegating certain joint function to an agent and starts being about one group plundering the property and freedom of others.

As long as my "share" of government is actually being rammed down my throat, then, no, I don't feel any obligation whatsoever to help pay for it.

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Originally Posted by Odin

I agree with the rest of your post but I'm going to disagree that ALL taxes are theft. My point of view is that free men and women rationally consent to the protection of their freedom. And so we consent to the minimum amount of our property taken required for the protection of our freedom. That means a small and efficient government that taxes little, and provides a military, police force, fair and just judicial system, and emergency services.

Of course we are a long, long way from that level of government and taxation, and people will have to slowly be weaned off government dependency, and it will come in little steps probably instead of big leaps. But that is my view of the role of government, and I believe that free people do rationally consent to that level of government for the protection of their freedom.

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I do view all taxes as theft... someone made the analogy earlier. If someone came in and robbed your house, that is theft. If they hire a couple of goons to rob your house, that is still theft. If those two goons had the 3 of you vote on if its ok for them to take your TV and you lost 2-1, that is still left. If the government does it...its still theft.

I would be interested to know what taxes arent theft? It sounds more like you are referring to the amount taken, rather than the way its taken. If I am starving and I steal a loaf of bread, just enough to survive but leave the rest, is that not still theft? Sure, I didnt go overboard and steal all the food, but I still stole.

As I mentioned, certain taxes are more or less overtly immoral than others, but that doesnt change the fact that the government uses force to take something that isnt theirs in the first place...that is the definition of theft.

Instead, why don't we raise taxes on the individuals who earn their income by the State? This would of course mean lowering all their incomes. Raise taxes on the wealthy - the state!

Somehow I doubt the OP will even read this, but when you give gov't more money (power) it is used for unethical things, like war, suppressing people (drug war, police state) and rarely used for things that liberals deem "good" like welfare or education.

Do you that that Barack "Drones!" Obama is going to help the downtrodden with this money? I don't.

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Originally Posted by ftwliberal

i just want to understand the libertarian perspective more and see how i'm wrong. so i hear a lot opf conservatives and libertarians say like if we raise the taxes on the rich and on corporations they will leave or cut back or whatever but how come when the taxes were high before , like it was almost like 90% on them, they didn't leave? what makes you think they will leave now? and even if they do leave so what? that leaves room for new businesses.

besides they only pay tax on profits and not revenue, the reason they dont create jobs is because profit demand isnt there right?

tell me how i'm wrong

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"and even if they do leave, so what? that leaves room for new businesses"

Ummm, no it doesn't. Just because they outsource production does not mean that the company doesn't still exist and sell here, and in fact, they will have a strategic advantage of cheaper production than the competing companies you're talking about.

Further, the point is that no one should have to pay drastically mroe than anyone else jsut because they have the means. In fact, having the means already means they pay far more just with a flat tax.

The government's debt is not because they don't have enough money. It is because they spend way too much. The solution is not to turnaround and increase taxes of anyone. Much less the small businesses that create the vast majority of the jobs in this country.

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Originally Posted by CaptUSA

Here's another (liberals usually get this one):

Corporations do not pay taxes. They just add it to the prices they charge for their products so the consumer ends up paying more. When the things that the middle class and poor buy cost more, they can buy fewer things. When they buy fewer things, the economy slows down.


Ok, so you have heard some utilitarian arguments, some moral arguments, and some real life examples. Are you convinced yet that this philosophy of "just make the rich pay more" is flawed?

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This is correct. There are also many other problems with corporations as a whole but this sums up an area in easy to understand terms

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Originally Posted by VIDEODROME

Well, I voted for Gary Johnson who would like to toss out the crazy income tax code and have a Fair consumption tax.

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Personally I think a consumption tax is a terrible solution, as people who make less will see far more of their money taken to non-discretionary spending (in other words, necessities), and those on the fringe of lower-class will have much less discretionary income to spend as they please. It is only those with the means who will beneift from that system, when the goal should be a more "fair" system (if there is such a thing).

Further, as much as I dislike having an economy driven on consumption rather than production, we would need much more of a shift than just tax breaks to return to a production-based economy where consumption is not so vital to keeping the economy moving.