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Politics : Formerly About Advanced Micro Devices
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To: tejek who wrote (578380)7/28/2010 2:37:11 PM
From: TimF  Read Replies (1) of 1573086
 
Meanwhile, the Republican Party defends massive tax breaks for the wealthy

No, they oppose massive increases in taxes for the wealthy.

while blocking aid to the unemployed

While blocking such spending if they money isn't found by some other means than additional borrowing (spending unused TARP funds rather then leaving them as a slush fund for whatever the FED wants to spend them on, cutting spending somewhere else etc.)

So Jay's portrayal of the situation is distorted at best.

But even assuming it was right, its not like the policy combination doesn't make sense. Higher marginal tax rates discourage work and investment. Extended long term unemployment benefits (in the neighborhood of 99 weeks) also discourages work.

Having unemployment benefits, at least in severe downturns, makes some sense as a stimulus effort. But extending them for long periods of time, decreases employment, production, and wealth creation even before considering the costs of paying for them.

What you tax you get less of, so higher tax rates on income reduces efforts to generate income (or at least taxable income, efforts to shelter income from taxes increase, but while that makes sense for the individual, from the perspective of the wider economy and society its unproductive). If you subsidize unemployment you also get more of it.
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