The Economics of Joe

A lucid point about the Joe the Plumber taxation thing is made by John Seery at HuffPo:

Joe versus Sam. You could line up economists spouting elegant theories for each side, but the basic arguments can probably be reduced to Joe’s and Sam’s respective positions on very gut levels. Joe’s never made $250,000, but he feels that if he ever reaches that threshold, he shouldn’t be “penalized” for his success. He seems to believe that cutting taxes for wealthy individuals somehow serves his current financial interests and his aspirations for the future. Sam’s already lived those trickle-down and dream-up Republican talking points but now rejects them with hard-won conviction.

I’m not going to say there aren’t business owners over the $250k range that wouldn’t disagree with this, but I think it’s anecdotal evidence of what I talked about yesterday.  The real recipients of the high-income taxation message are middle class voters who are encouraged to project their fantasies of wealth into Obama’s tax plan. It simplifies a complicated issue of the effects of taxation into meaninglessness.

There are cases where appropriate spending of fair taxation helps everyone, just as there are cases where inappropriately high taxation can hurt an economy, just as there are cases where an imbalance in tax proportions unfairly benefits a minority of Americans.

Sam’s point stands, though.  If your consumers can’t afford to buy from you, a difference in 4% taxation isn’t what’s going to cause you to lay off workers.  We could cut your taxes to nothing and you’d still go out of business.

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