Originally Posted by
Shaudius
Pay their "fair share"? The top 20% of the country controls 93% of the wealth. With that in mind, how much do you think the bottom 50%'s "fair share" is? If the top 20% control 93% of the wealth, how much do you think making the bottom 50% pay would dent the debt or the deficit?(yes I know personal wealth and income aren't the same thing, but having a high personal wealth means you don't need the income nearly as much). The answer is that the reason that the bottom 50% pay no federal income tax(keeping in mind that the working ones are disproportionately paying Medicare and Social Security "tax"), is because they need all the money that they have to eat, and to have shelter. The bottom 50% are for the most part living paycheck to paycheck, and making them pay more in taxes would do exactly what we don't want to do, stifle demand. The people at the bottom use a non-proportional amount of their income on things that stimulate the economy, food, necessary consumables, consumer goods, while the rich on the other hand do not need nearly the same percentage of their income on these things.
I've used this analogy before, but it bares repeating. And no it is not a dig against Mitt Romney, but think of it this way, if you give Mitt Romney one million dollars, how much of it do you think he will spend on consumer goods and other things that increase demand for products and services? On the other hand, if you give $500 to 2,000 people making $25,000 a year, how much do you think they will spend of it doing activities that stimulate demand? The answer is obvious to anyone with any grasp at all about how people of varied income classes spend their resources. The people making $25,000 spend everything, the people who make millions like Romney do not, and the Mitt Romneys of the world certainly do not spend nearly the same percentage of the money they receive on things that stimulate demand. The logical step from this is that if you increase taxes on the people in the lowest income strata, as your pay their "fair share" would seem to indicate you want to, it will stifle demand, since they will no longer have that money to spend, on the other hand, if you increase taxes on someone at Mitt Romney's level it will not have nearly the same stifling effect on demand.
The ultimate issue comes down to this, cutting taxes(or taxing the poor at a higher rate) is a supply side argument. The issue isn't that supply side doesn't necessarily work, it is that the problems we are facing are not problems with the supply side. Its a problem with the demand side.