"Sarg: just make it very simple. You give food for any poor people today, what will he eat tomorrow? And if those people double themselves, because they get used to your aide, will you feed them as well?

You may sleep better by the fact people don't starve and die somewhere, but you haven't solved the problem at all, and you will just create a bigger one later."

Roka. Please respond to the things I have said, rather than making up your own arguments to respond to. I have never suggested anything of what you are speaking against. That has not been my message here.

I have never said it is as simple as "tax the rich aid the poor". I have said that it is not that simple.

And, briefly, people in India (for a generic, over-generalised example) are poor not because they have lots of children, as you say, but because they receive very little pay. If you have $1 a day to live on you will be poor whether you have 3 children or no children.

It is not an issue of children - it is an issue of equal pay for equal work, it is an issue of exploitation, an exploitative system where some people work for very little and others make huge profits because of it. That needs to be addressed, in my opinion, much more, than an end-chain taxation system that would only compensate for the systemic inequalities.

Sarg: if people would receive the same pay for the same work, there would ne no overseas work at all, and ZERO chinese and indian employees were hired. Beleive me, those people over there are happy they have a job at least. If West were receding from east, because they have to pay the same amount of money, the poverty rate over there would be even higher.

What you demand is called communism. And it's provenly not working.

I don't believe that's true. This is not a perfect system.

"What you demand is called communism. And it's provenly not working."

The slightly patronising tone, aside. Communism has only been implemented in a few limited ways - most all of which have centered around shoring up power for a new ruling class rather than truly targeting inequalities.

"If West were receding from east, because they have to pay the same amount of money, the poverty rate over there would be even higher."

Only because you're looking at it from the perspective of the current system.

Well, I will be mean a little bit now, but what you BELEIVE and what economics, math and real world shows are different. You can't build a society on faith, but you can engineer one with knowledge.

Fun fact: many factories are pulling back manufacturing from china in the recent years, because they are not that cheap now and they make shitty stuff. I grew up and live in Hungary. In the 90s many western factories came here, because we were cheap. As salaries rose they started to pull out and move further east.

If Apple have to pay more for manufacturing an iPad then Microsoft have to pay for manufacturing one Surface then Apple has to move to the cheaper one. It's all Game theory (not faith at all rather science)

Your world, although sound very idealistic, simply doesn't work. Because if everybody gets the same amount for their work, then a group of people will stand up, and say, "well, we do it for 10% less". And the moment they stood up, is the moment when you created capitalism over socialism.

And you know, there will be always someone who stands up, to get more work, even it's less paid.

Roka, I don't have a 'world'. There is no one strategy I am suggesting.

"There will be always someone who stands up, to get more work, even it's less paid." This is of course true.

To combat that, for example, it wouldn't be difficult to have a 'minimum wage' (more than current standards) rather than a 'set wage' akin to the ideal communism you were thinking about.

I think we want the same thing. We want everyone to be prosperous. The current system does not allow for that.

We didn't choose "free market capitalism." It evolved because it matches human behavior. It's the way human beings trade that works. Other structures, be they communism, or mercantilism, or socialism, are human constructs attempting to apply some rational purpose to what is actually an organic, chaotic, but nonetheless efficient system.

What is needed is a simple, fair tax. Quit using the tax code for social meddling, with credits for approved behaviors. Subsidize the lowest levels of society with a negative tax rate, if you like. Make it progressive--with higher rates at higher levels of wealth. But the best thing would be simple, non-punitive tax rates. Eliminate all the drag on the economy that goes into tax preparation and tax avoidance.

"We want everyone to be prosperous."

Do we? Or should the prosperity of a person not be directly linked to the value they contribute to society?

Sarg: until there no world goverment you can't do it. For example Hungary imposed very little tax on filmmaking a couple of years ago to grab moviemaking from the Czechs. Now we have a lot of movies produced here. Die Hard 5 is currently shooting in Budapest everyday with Willis, but Spielber shot Munich here, Jeremy Irons literally lives here (shooting Borgia).

All I'm saying if not people then countries will stand up they'll do something cheaper than their neighbours. It's competition on all levels and you can't regulate them. If you regulate, you take away the freedom of choice.

Minimum wage works inside your countries' borders, but the world and economies don't stop at borders, just your jurisdiction.

Lando +1

Roka, a free market is not necessarily an unregulated market. The two ideas are not mutually exclusive.

A lot of international economics is based on competitive advantage. Hungary clearly has a competitive advantage over The Czech (Republic) in its ability to offer low cost filmmaking locations.

2wl: I agree regulation is needed in most cases. That's why we have WTO, EU, WHO, and many organizations. But generally countries, just like people, are sovereign. The moment you regulate them without their expressed agreement, their rights are restricted and will fight against it as dipplayer wrote. Itás in human nature, to compete with the otherone.

Usually those are the ones who want to regulate and build socialism who are nable to compete. But the fact is, if they don't accept the challange and try to solve thing by law, they'll fall behind and the world will move on.

The Law of Nature. The stronger, faster wins. And no law can override that one. So the only thing you can do is to try to be better, faster, stronger, more clever.

No laws can override the laws of nature *except* for the laws of economics. Like I said, competitive advantage drives international economics. An example: Germany has a tremendous competitive advantage over Angola in manufacturing vehicles. Germany has the industrial capacity, skilled workforce, materials, and knowledge to efficiently and cheaply make high quality cars. Angola has none of this. Germany has a large number of regulations and laws regarding production, export, imports, taxation, and other limits on factors of production. Angola has very little regulation on anything. Yet, Volkswagen has not shipped production to Angola, despite high levels of German and EU regulation on the automobile industry.

In short, a lack of regulation does not equate to prosperity, nor does a low cost of doing business automatically mean a company will up and leave their current location for one of less regulation and lower input costs.

@kentmccallum

Here's a link to the alleged author of your cut 'n' paste denying his authorship of it....

http://davidk.myweb.uga.edu/

Seems as if someone decided to include some random professor's name on the piece in order to give it an unearned gravitas.

2wl: you've got the point. I mixed up regulation with socialism. For example whale hunting needs regulation also, otherwise they were extinct. But that doesn't mean within the regulated rules members should compete and should get the same wages.

I just wanted to point out regulation can't be based on faith and emotions. And balancing inequalities based on feeling is all but scientific. And taxing the rich has nothing to do with economics for sure. But I'm not an anarchist! ;)

"shoudn't compete"

@rokakoma

The thing is, the long-term alternative to taxing the rich to aid the poor is shooting the rich to aid the poor. Because the poor have numbers, and they will not quietly starve to death so that the wealth of the nation can be funneled into ever smaller numbers of the rich. Capitalism's a rigged game, and eventually the imbalance grows too great for society to abide.

@Lando-

I didn't realize you were a fan of a 100% estate tax.

Yep, it [society] will explode I know, still I don't think taxing the rich is a solution.
What I see recently is many companies are paying their employees very well. I mean VERY well, even on the lower levels, because they know the true knowledge is the human workforce. So at the end I think those who work hard will get paid far better then nowadays.

But still, those who are not willing to give anything inr exchange for money, just demand more, will remain poor. The way out from poverty is not money, it's working and learning and competing. If the superrich fear the poors will overthrow them they simply pay the middle class more, which I think has already started.

@roka, you may think the superrich are paying the middle class more, but for America, you'd be wrong. See, e.g.

http://money.cnn.com/2012/07/09/news/economy/wealth-income-inequality/index.htm

I am not, you misunderstand. All money is earned at one point, once that money is earned a tax will be levied on it. I completely buy into the progressive tax idealogy. Once this money is earned then it is owned by that person who then has the ability to use it as he or she wishes. Supporting family members, etc. is a legitimate use of the money. The person who earned it has paid tax and therefore it is simply a piece of property.

I think this discussion devolved a bit away from tax schemes, which I would enjoy discussing, and more towards the occupy-movement, which I disagree with in its entirety.

Bob: don't mix up moving up on the "economic ladder" with moving up in lifequality.

People live far better then 20 years ago, and I'm pretty sure most people can afford a lot more things then their parents. If you are jealous of not being higher in the ranking then your are truly not fighting against poverty, you are fighting against your self confidence.

When you make $100.000 a year does it really matter to you you are not in the top 25% anymore??? Because if it does, you are a true socialist instead of fighting imbalances and poverty.

If every men would have cars, apartments, enough to eat, drink and party, etc on this planet, and there were some superrich, they would still whine about they ar poor. So please don't mix up greed with breaking out from poverty.

The scale of rich-poor can widen only, since poors cannot go under zero, rich can get richer always. But that doesn't mean humanity is not wealthier.

In 2011 there were less children born than in 2010, the first year for many decades, projecting there will be a population maximum on the planet in a few decades, while wealth will be still created. So in terms of decades what we see, is there will be no more people on the planet while we will have a lot more wealth to distribute. So I don't see the problem. Those who remain poor in such environment are simply incapable of breaking out.

@Lando

No, I didn't misunderstand; I was highlighting a ramification of your question as to "or should the prosperity of a person not be directly linked to the value they contribute to society?" Once you get inheritance into the issue, you're decoupling prosperity from contributory value.

Right, but the value was created by someone, the gift giver. This person has chosen to allow others to be prosperous beyonf just him or herself (likely, they value highly family, or giving, etc. and as such are only icnreasing their prosperity by increasing the amount of satisfaction in their life).

The person who has earned the wealth has also earned the ability to chose what to do with it.

I understand that value to society can therefore not be linked directly. But you must agree that there is a relationship in there that needs to be maintained.

Must I? I'm a pretty big fan of extraordinarily punitive estate taxes. I don't see how it's especially socially useful that 5th and 6th generation descendants of Cornelius Vanderbilt never have to do anything other than be born in order to be wealthier than 99.99% of the rest of America.

Seems like there are lots of different cases. A father who works hard to make lots of money so his children can use this money to educate themselves. he succeeds but unfortunately gets hit by a car and passes away. His money is then taken away from him by the tax authorities and his children are not able to afford university. Does this not unfiarly punish this man who in effect worked hard his whole life for nothing? His only goal was seeing his children succeed.

Your example, on the other hand, is very, very different and I tend to agree mor with your thinking in tht context. I do not believe that Cornelius' descendants are entitled to that wealth, but I do believe that Cornelius should have some say on what happens with his earned wealth once he passes.

OK, so we're out in abstract land if we're going to debate the merits of a 90% estate tax like I advocate. But in your first example, we already have the 529 plans to obviate the need for direct inheritance to provide money for college. I'd guess that college costs would be more manageable if we had a punitive, not easily-dodged estate tax as well, at least for public universities, and likely for private ones as well, given the downward cost pressure that massive and inexpensive state university systems would exert. Tangentially, if we're really concerned about collegiate funding, we probably need to stop providing federal funds in the forms of grants and loans to suckers, erm students, at for-profit "universities". University of Phoenix is essentially a gigantic scam perpetrated upon the taxpayers and the students desparate enough to enroll.

The '90% estate tax' that you advocate for is really a marginal tax rate, so you need to be more specific. I'm assuming that you're referring to the highest estate tax bracket on obscenely high levels of inheritance, otherwise, hardly any estates reach the maximum marginal 'death tax' level that so many GOP members gripe about.

The collegiate funding was an example I used to illustrate direct family support. The tax acts do cover things like support payments for family members with disabilities, elderly care, child care and all sorts of other things. there are things that are not covered, though, and for that reason I think that you can't impose a specific rate for "estate distributions." Currently they are not taxable, at least not in Canada. that doesn't meean they shouldn't be, but there should be really specific rules on these things.

What about a father who was loaning his son some money so his son could start a business. Likely there would be no contract in place or anything. Maybe there would be no repayment even planned, maybe there would be. But if this man passes away and in effect wills this loan to his son, the loan ould then be taken away (as there was nothing in writing and the real beneficiary - the government - would never enter into the loan). So the venture would be stopped and the kid would have to send the money he had been using, which is probably sunk, to the government.

This doesn't seem right now either, does it?