Are you suggesting that we should tax the poor? Wouldn't that just make it more difficult for them to pay off debts and collect the capital required to escape poverty?
I'm suggesting we stop subsidizing all but the abject & existential poor.
Welfare entitlements have grown so profitable there's a huge disincentive to working. Do nothing, profit. Start working, entitlements are withdrawn and you face a huge net income drop, made worse by taxes on earned income. Hence much of the bottom 50% are literally incentivized to minimize income & wealth - explaining in part why so much of their wealth has migrated to other classes.
I'm also suggesting we cut taxes so those who do earn aren't losing so much of their income.
While technically subject to the lowest tax rates, the bottom 50% have the lowest income & wealth rates, so find it harder to replace & augment what little they have that's taken from them by "embedded taxes" passed on from higher economic classes (corporate taxes -> higher prices, property taxes -> higher rent, etc). What they earn & retain is being siphoned away by taxation.
The question my prior post was trying to answer was: why has the wealth of the bottom 50% dropped so much? Well, between rewarding (subsidizing) unemployment and dis-incentivizing (taxing) earned income, we're giving the bottom 50% good reasons to earn & keep less. The result should not be surprising.
No he's pointing out that we 'anti-tax' the poor currently via entitlements and maybe we shouldn't as much because it allows them a sustainable way to not escape poverty.
We're giving people reasons to stay in poverty: don't work, and their food/housing/healthcare will be provided for; start working, and all that gets yanked away and whatever is earned is diminished by taxation (direct and indirect). Faced with that, there's little reason to "escape poverty".
"Stop subsidizing so much" does not equate to "start taxing them". I'm all for massive reductions in both subsidizing and taxation. Help the abject & deserving poor, yes; the rest should have their disincentives to work removed and their punishment by taxation relieved.
You're talking now of an effective marginal rate > 100%, which is not what you said originally ("If you want less of something, tax it. If you want more of something, subsidize it.").
I agree marginal rates should always be < 100% for the obvious reasons. I haven't seen numbers that it ever happens, but it is to be avoided in theory, yes.
