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[Max White]

No, we are analyzing the plot of Spice and Wolf.

[Trollheiming]

You really need to explain why raising taxes doesn't raise revenue, because right now you're implying that no matter how much money is taken from people, the government will end up with the same amount, which is completely bonkers.

EDIT: It's as if Jimmy had 100 apples and the government is currently taking 10. But if the government decided to take 20 instead, the extra 10 would fall into a dimensional vortex and the government still ended up with 10. Taking 30 apples? 20 to the void. 50? The void takes 40. All of Jimmy's apples? Well then the vortex gets greedy and eats 90 apples, and that's a lot of apples.

Having apples is wealth. If you have a million apples, you give none of them to the government.

Picking apples is income. That is taxed. Picking them takes time and effort, and the tax rate is graduated; so if you pick 30 apples you keep them all, and if you pick 100 apples then you give 50 to the government. More and more people decide they're happy with 30 apples instead of picking 70 more to get only 20 more for their own purposes, and the government gets the same amount of apples because that proportion of apple-pickers scaled back on their ambitions.

You need all tax sources if you are doing total income for GDP.

No. Not necessary. The capital gains tax also varies and also... has no effect on total revenues! You could argue that they're always--over the course of 80 frigging years of data--without fail in various administrations with various ideologies prompting the changes, always adjusted in opposite directions. But that's actually not how it usually plays out. The fact is, revenue stays in a predictable band from 18% to 20% of GDP in many different administrations with many different policies.

There's a certain amount of total apples being picked that people on average are willing to give up to the government, and that's where is stays.

[Max White]

Look, both Freddie and Jimmys rates have varied, with no change to total apple income! Clearly the tax rates have no effect! Right?

[Angle]

Picking apples is income. That is taxed. Picking them takes time and effort, and the tax rate is graduated; so if you pick 30 apples you keep them all, and if you pick 100 apples then you give 50 to the government. More and more people decide they're happy with 30 apples instead of picking 70 more to get only 20 more for their own purposes, and the government gets the same amount of apples because that proportion of apple-pickers scaled back on their ambitions.

lolwut? Citation needed, badly. If i was making a million dollars, there's no way I'd scale down just because the government was taking more of it than if I was making a hundred thousand. That's crazy talk.

[Trollheiming]

Look, both Freddie and Jimmys rates have varied, with no change to total apple income! Clearly the tax rates have no effect! Right?

Actually, I'm just humoring the crazy idea that apples are comparable to taxes. Oranges, on the other hand...

[Max White]

See the bit that you missed is that the total number of apples picked? That is your GDP. If people are obliged to pick less apples, then smaller GDP, and even if the flat rate of tax income for the government stays the same, the percent of total GDP will rise.
The fact that GDP (Apples picked) has continued to rise renders your theory a sunder.

[Cthulhu]

We're all adults here, there's no need for ridiculous analogies.

Also, incentive traps in progressive taxation are a myth.  The tax for each bracket is assessed separately, if up to $50,000 is 20% tax and past that is 50%, and you earn $50,001, only that dollar is taxed at 50%.

[Trollheiming]

lolwut? Citation needed, badly. If i was making a million dollars, there's no way I'd scale down just because the government was taking more of it than if I was making a hundred thousand. That's crazy talk.

Yeah, you would scale back. Opportunity costs. Work is time; and time is money. If you use more precious irrecoverable time to make easily replaceable money than the pay-off in green is actually worth, you scale back, if you are a rational being.

This is especially true of small business owners. They don't have hundreds of assistants. They often run their own show and put in their own hard hours.

See the bit that you missed is that the total number of apples picked? That is your GDP. If people are obliged to pick less apples, then smaller GDP, and even if the flat rate of tax income for the government stays the same, the percent of total GDP will rise.
The fact that GDP (Apples picked) has continued to rise renders your theory a sunder.

See the mini-crash of 1937, when FDR raised taxes and sent the economy into a double-dip depression. What you described does happen.

[Angle]

lolwut? Citation needed, badly. If i was making a million dollars, there's no way I'd scale down just because the government was taking more of it than if I was making a hundred thousand. That's crazy talk.

Yeah, you would scale back. Opportunity costs. Work is time; and time is money. If you use more precious irrecoverable time to make easily replaceable money than the pay-off in green is actually worth, you scale back, if you are a rational being.

What? When did time spent come in to it? I was talking about quitting a higher paying job for a lower paying one, at the same hours. And even when you factor time spent in, that extra 30 apple tax would not change the equation - either id still work as much, or I would never have worked that much in the first place.

[Trollheiming]

We're all adults here, there's no need for ridiculous analogies.

Also, incentive traps in progressive taxation are a myth.  The tax for each bracket is assessed separately, if up to $50,000 is 20% tax and past that is 50%, and you earn $50,001, only that dollar is taxed at 50%.

Thats where you stop putting in so much effort. We all know how taxes work.

[Angle]

You also seem to think that work correlates to income in much to simple a way - work spent immediately and directly effects how much money you make. In actuality, work effects income rather differently - you put in lots of work going to school and climbing corporate ladders and all that, and then you can enjoy increased income with only minor changes (sometimes negative ones) to the amount of work required.

[Trollheiming]

What? When did time spent come in to it? I was talking about quitting a higher paying job for a lower paying one, at the same hours. And even when you factor time spent in, that extra 30 apple tax would not change the equation - either id still work as much, or I would never have worked that much in the first place.

Generally, we're talking top rate. This consists largely of business owners who have scalable businesses. It's not that they go into work for someone else and get the same amount regardless how hard they work. They put in extra hours, they earn more. They can work hard and expand if they think the return is worth their time, or relax a bit and maintain, maybe even go into retirement.

You see, you're also considering the effect on one person, but these are millions of people. Maybe some continue working just as hard, but others see the increased effort after a tax raise as a good time to cash it all in and retire. Average these together and you have an adjustment proportional to the tax increase.

[Trollheiming]

You also seem to think that work correlates to income in much to simple a way - work spent immediately and directly effects how much money you make. In actuality, work effects income rather differently - you put in lots of work going to school and climbing corporate ladders and all that, and then you can enjoy increased income with only minor changes (sometimes negative ones) to the amount of work required.

The real face of American business is not a CEO. It's a small business owner with a scalable business and only a few assistants. He works hard, dude.

[Nadaka]

Individuals do not operate in a vacuum. If Mr Lazy McMoneybags decides that the extra effort spent swindling his indentured servants isn't worthwhile, there will always be another Mr Lazy McMoneybags the 2nd esquire willing to exploit his slaves in order to fill the market niche left by the inaction of the first Lazy McMoneybags.

In the real world, capital does not create wealth, labor creates wealth, and the leaching class are the exploitative fucks who have rigged the system to their advantage. Taxing those fucks more does nothing to change the productive capacity of the workforce, and when those taxes are reinvested in the market through government jobs and assistance to people barely making it, the productive capacity of that labor actually does increase because the number of people capable of participating in the market as both laborers and consumers is increased.

[Jerick]

We all know how taxes work.

Yes.
However you don't seem to know how people work.
More is always better, even in the face of diminishing returns.
This is the idea that drives many MMO players and buisness men.
We humans are natural horders and will general go for more if ever given the opertunity regardless if it has a higher effort/profit ratio.
If you believe otherwise I must question the amount of contact you have had with the rest of the human race.