[jthomas1600]

Remember this from the Reagan era? I don't know if I believe that giving more money to the rich results in money trickling down to the poor. But I definitely believe that when you take money from them they will find a way to recoup that loss. It really drives me nuts when people seem to think that taxing the rich doesn't affect us poor people. Here's an excerpt from an AP article (here's the whole article The Facts ) In 2011, a family of four with an income of $800,000 a year would get a $24,000 tax increase, when the new tax is combined with an increase in the top two tax brackets proposed by President Barack Obama and other scheduled tax changes, according to an analysis by Deloitte Tax. That's a 12.5 percent increase in federal income taxes. So, here's my point about trickle down economy....let's say this guy making $800,000 a year, facing a $24,000 tax increase owns a small apartment complex with 24 units and he doesn't really want to loose $24,000 worth of income....hmm, what to do? How about just raising rent by $100 a unit? So now, who's really paying the extra money to fund health care reform?

[TunerSteve]

I tend to agree with your assessment.

I believe that trickle-down economics had some flaws, but was dramatically changed by other developments like trade agreements such as NAFTA. Owners of large companies that were given the chance to invest in their facilities to create more jobs, suddenly find that re-locating those same jobs to Mexico was a better investment, so in essence the trickle down didn't 'trickle down' to jobs here in the US.

Any tax increase will eventually find it's way to those on the lower economic areas of our economy. Whenever they raise the minimum wage...prices will also go up on products to cover those increase in wages. (I DO believe that companies should raise those wages however) I certainly noticed when the price of diesel fuel was near $5/gal, grocery prices shot up rapidly, but since the price of fuel decreased, the prices at the store sure haven't subsided.

[Epaphras]

I agree: NAFTA changes everything with "Reaganomics".

I also agree that taxes -- corporate, wealth, etc. -- are almost universally passed on to the consumer. Just like the OP said, a new tax burden is covered by raising prices or covering it in some other way.

In your example, the wealthy landlord would raise rent by $100 to cover the tax increase; her taxes would then be used to fund a new social program aimed at rent-subsidy, because rents are going up (at 20%+ administrative overhead and incalculable bureaucratic waste). Strange.

What would be ideal is if the wealthy could be trusted (if there were an ethic or creed among them) to voluntarily redistribute wealth. So for example, if the landlord make more profit than she projected, she could plow that money back in to improving the apartments, or just lower rent. She can still make a profit, just give back 1-2% that you didn't plan on. That can't be forced (or enforced), it just has to come voluntary. I would hope today's wealthy would have enough compassion to hold that kind of ethic.

[bravesfan007]

Originally Posted by Epaphras

I also agree that taxes -- corporate, wealth, etc. -- are almost universally passed on to the consumer. Just like the OP said, a new tax burden is covered by raising prices or covering it in some other way.

That was one of the first things I learned in economics and it makes both sense and cents. In many cases the supplier will pay a little bit of the tax, but the vast majority will be paid by the consumer of the good whatever it may be.

[Bryan]

Originally Posted by Epaphras

I agree: NAFTA changes everything with "Reaganomics".

I also agree that taxes -- corporate, wealth, etc. -- are almost universally passed on to the consumer. Just like the OP said, a new tax burden is covered by raising prices or covering it in some other way.

In your example, the wealthy landlord would raise rent by $100 to cover the tax increase; her taxes would then be used to fund a new social program aimed at rent-subsidy, because rents are going up (at 20%+ administrative overhead and incalculable bureaucratic waste). Strange.

What would be ideal is if the wealthy could be trusted (if there were an ethic or creed among them) to voluntarily redistribute wealth. So for example, if the landlord make more profit than she projected, she could plow that money back in to improving the apartments, or just lower rent. She can still make a profit, just give back 1-2% that you didn't plan on. That can't be forced (or enforced), it just has to come voluntary. I would hope today's wealthy would have enough compassion to hold that kind of ethic.

unfortunately, I don't think they do. We need a paradigm shift in American culture (of biblical proportions) to make trickle down economics work.

[JerryLove]

First: trickle-down doesn't work. It never has. It takes great governmental effort, or secret societies, to have a middle class at all.

Second: the "who pays" is so misleading I don't know where to begin. Money is just IOUs for stuff. All stuff is made by the people who make stuff. No stuff is made by people who don't make stuff. So the farmer and carpenter and doctor, who produce goods, will be where all goods come-from. The "pass the burden on" discussion already assumes that money itself is stuff: it isn't.

Finally: landlords don't get to just pick a rent. It's decided by market forces. The unequal power in capitalism means that money tends to flow to the rich. The amount of money is fixed (well, arbitrary at least). What matters is that goods and services are produced and traded. If someone is holding a lot of money, then they are not trading for goods and services. In other words: if they are rich with actual capital, they they are hurting the economy. You maight say that taking their money and giving it to the poor will just cause the money to go back to the rich... but if you can repeat that without exponential inflation: you have a working economy.

[metropolis4]

Trickle Down Economics really works