New Thoughts About Trickle Down

[shostakovich]

"A few years back, our Congress, in it's infinite wisdom, initiated a 10% 'luxury tax' on things like yachts, luxury cars (defined as vehicles selling for more than $30,000), and private aircraft. The result of this was a decrease in demand for yachts, vehicles costing more than $30,000, and private aircraft, and a loss of jobs in those industries. To make matters worse, foreign car makers began marketing fully equipped luxury vehicles for $29,500, a price American car makers were unable to match, costing the American car manufacturers a significant share of the luxury car business. Congress very quietly repealed the tax.

V/R
Shapley"
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Our wages are too high, as I said. Otherwise we could have been competitive with the foreign auto makers.
As for the luxury tax itself, how long was it around? How much was it. If it was prohibitive, the initial boycott is not surprising. Maybe it was rescinded too soon for the natural resentment to dissipate. It's hard to imagine those desirous of yachts and planes would deny themselves indefinitely. Or did they go to foreign (lower wage) sources also?
Shos

[dai bread]

Originally posted by BigJon@Work:

Originally posted by dai bread:
[b] A rather hefty number of people here found themselves without any wages at all when when wealth was torrenting up. Now that the people who conducted the New Zealand experiment have found out what happens, we have more or less come right. There are still more unemployed now than there were before the experiment started in 1984, but wealth is now only trickling up.

Trickle down is a lie.

We've discussed the situation in your country before. Some of the newly wealthy stole their wealth and should be prosecuted. The others earned their wealth by your own admission. So are you saying you are comfortable with the government taking their wealth away and giving it to someone else?

As for the job loss, didn't you also admit that many of the jobs lost were of the make-work variety? Those jobs are typically not too good for long-term productivity of the country.

Please tell me who lied, other than the thieves. [/b]

Yes, I am comfortable with the govt. redistributing wealth. Like everything else, it has to be done in moderation. I wouldn't support the supertax that the Atlee govt. (I think) brought in in Britain- 19/6 in the £ at the peak.

Most of the jobs lost were not of the make-work variety, though it is true that some were. Most were lost because of what amounts to out-sourcing, something which is causing concern in the U.S. I believe. As I said, almost everything these days is made in China. American sources tell me everything there is made in China as well, so you know what I'm talking about.

Trickle-down proponents forget that the wealth which allegedly trickles down came from us in the first place. It wasn't created, just collected.

[dai bread]

The lie is that we unwashed plebs are told that if some people become rich, their wealth will trickle down to us and we will prosper.

Nothing is ever said about how much wealth will trickle down, though the word "trickle" in itself is an indication. Nothing is said about the origin of the wealth either. No mention is made of luxury or indeed any other goods or services. If some people are allowed to be rich, we will all benefit, so we are told. Most of us are still waiting.

Employers here tore their hair and rent their garments when the Engineers' Union (among others) wanted a 5% wage rise. That's gross before tax, so they were barely keeping up with the official rate of inflation, which is 3 and a bit %.

Unemployment is 3.something %, the lowest it's been for years. Skilled tradesmen are in short supply, many having voted with their feet and moved to Australia, where wages are about 20% higher, and where the culture is such that it's like moving next door.

We are lied to regularly on economic matters. For instance, some private entrepreneur, usually promoting a minor but expensive sport like motor racing or yachting, will run crying to the City Council saying "Please pay my costs"... ("so that I may pocket all profits" is unsaid). He then produces a report from a consultant saying that the event will be worth so many millions of dollars to the City and the Region.

As I'm not the only unbeliever in the place, someone soon breaks down the figure. It turns out that the money supposedly generated by the event is mostly already here. There are exceptions, notably the America's Cup yachting, and almost certainly the Rugby World Cup in 2011. Mostly though, it's just a matter of transferring money from one pocket to another.

Balance of payments is another. We are told that the sky is falling in because imports exceed exports. What we are not told, until someone goes digging, is that the balance of payments includes Air NZ's Boeings, power company generators and similar big-ticket items. Not to mention all the dividends and interest paid to overseas investors.

Trickle down is still a lie.

[Shapley]

Shos,

The tax was imposed in 1992, and repealed, retroactively, the next year. Here's a link to information on the repeal.

http://www.unclefed.com/Tax-News/1993/Nr93-66.html

There was much ado made about the passage of the tax, but little about its effects or repeal, except in the conservative press. It was, I believe, the tax increase that President Bush I was tarred with for breaking his 'no new taxes' peldge, even though he was pretty well forced into it with by the Congress, with the 'government shutdown' stunt that they pinned on the President.

V/R
Shapley

[Shapley]

I guess I hadn't really been paying attention to the economic news. I just realized that over 4,500,000 manufacturing jobs have been lost since President Bush took office. New job growth seems to be strong in the service sector industry, which offers higher paying jobs. Even so, 4.5 million jobs! Where have they gone? China?

No, I'm talking about China's economy, where manufacturing jobs are moving away to developing nations, as China replaces much of its labour force with automation. 15,000,000 manufacturing jobs have been lost since 1995. Job growth remains fairly strong, mainly due to a shift to a service economy.

Wow! It seems like someone on this forum said this type of thing would happen.

V/R
Shapley