[POL] Reason #1,456 I Can Never Be a Republican

[st.cronin]

Originally Posted by Hell Atlantic

what i don't get is this:

who says "the children" have to suffer as a result of weakening Big Government (i'm anti-Big Government, for the record)? shouldn't it be we cut programs we all deem to be excessive? i for one think our defense budget is quite unnecessary. i also happen to think our defense budget should be used for just that - defense, not proactively starting wars (but that's for another thread). i also happen to think we could stand to lessen the funding for our space program. i think space exploration should be a global responsibility, rather than nation by nation (again, we'll save that for another thread). so right there are two sectors from which we can lessen funding for without touching education and afterschool programs.

We have to keep in mind that the defense budget is only mostly for purposes of national defense. A large part of the defense budget is state-sponsored tech industry.

[Buzzbee]

Originally Posted by John Galt

Your first argument is in part why progressive taxation is not detrimental to the economy. As you continue to make more and more wealth, you still accumulate a substantial portion yourself. At some point, the incentive to gain more income decreases to a sufficient point that it is no longer worth your effort. However, based on modern American history, that rate is very high for most individuals. In the U.S., the top marginal tax bracket has been 90% at some times. At that rate, the marginal value of increasing your wealth is low. However, making another $100,000 at a 35% tax rate still nets you a crap load of cash.

Now, as to why it is "fair" or "good" to have progressive taxation, let me expand upon my previous post.

The rich get the most out of the American governmental system. The government gives the means to our population to accumulate wealth. The poor and middle class have less to lose by choosing an alternate political system. The wealthy, on the other hand, derive significant benefits that they should pay for.

For example, at a basic level, the very concept of money creates an efficiency surplus. If we used a strict barter system, our economy would look very different. We would have to constantly arrange trades for all of our goods and stores would have to need what we were offering. By using money, our system efficiency is GREATLY increased. This surplus value added to the economy is made possible only by government.

Similarly, a government that facilitates private industry competition creates signficant surplus to the people.

There are many such surpluses created by our form of government. These do not exist in the state of nature and are not the only way we can do things. To me, progressive taxation is the way for the rich to pay for the benefits they derive from the unique American system. They have no natural rights to their money, because their wealth is made possible ONLY by acts of the government.

Anyway, I was light on the economics, so hopefully that at least makes some sense to you (even if you disagree with it).

John - Your argument completely ignores the social aspects of government. I agree that the wealthy benefit from having a government that protects the stucture provided for them to make their wealth. A strong national defense protects the interests of the wealthy more than the poor, because as you said, the wealthy have more to lose. I don't argue that point.

However, as the government is today, the poor DO benefit from the government.

"The poor and middle class have less to lose by choosing an alternate political system. The wealthy, on the other hand, derive significant benefits that they should pay for."

While this is true, the poor and middle-class are better off because of the current political/economic system than most any other viable alternative.

Also, your argument ignores the fact that some of the income the wealthy pay in taxes does go to the poor. That, as far as I have thought it through, does not generally benefit the wealthy in any way that would justify them paying that tax.

You say the wealthy should pay more than the poor because they derive greater benefit from the government. I can buy that argument, but only as long as that extra amount goes to protect the structure, and not to benefit the poor.

Based on your justification for the wealthy to pay more in taxes, it seems that social programs would not be justified and should be cut or reduced. I haven't thought it through enough to make a definitive statement, so I'm open to alternative positions.

I am of the opinion that government expense is far larger than it needs to be, and as a result, government income is as well. I am in favor of tax cuts, only if government expense is reduced as well.

[John Galt]

Originally Posted by Buzzbee

"The poor and middle class have less to lose by choosing an alternate political system. The wealthy, on the other hand, derive significant benefits that they should pay for."

While this is true, the poor and middle-class are better off because of the current political/economic system than most any other viable alternative.

Is that really so? Are the poor better off in the U.S. than they would be in Great Britain? How about the middle class?

Either way, my point was never that the poor and middle class are WORSE off. I simply said they have a lot less to lose compared to the rich.

Originally Posted by Buzzbee

Also, your argument ignores the fact that some of the income the wealthy pay in taxes does go to the poor. That, as far as I have thought it through, does not generally benefit the wealthy in any way that would justify them paying that tax.

I didn't "ignore" that fact. My original post compares the benefits of the wealthy with the receipt of something like a welfare check. On balance, I argued the rich receive FAR more than the poor receiving a check directly. The difference is that the benefits to the rich aren't as commonly observed. And I'm not sure why you should only be taxed for things that are directly beneficial to you. That seems like a horrible way to set up a government/society.

Originally Posted by Buzzbee

You say the wealthy should pay more than the poor because they derive greater benefit from the government. I can buy that argument, but only as long as that extra amount goes to protect the structure, and not to benefit the poor.

First off, I would say that you can't have one without the other. From a pure self-interest standpoint, the rich cannot survive without the poor and middle class letting them get away with it. Now, I don't defend the idea that the rich are just buying off revolution. I think that is a bad way to approach government too. However, I'm not as naive to believe that the rich don't also benefit by appearring benevolent.

More importantly, the safety nets make people play the game that make people rich. The American experiment works because everyone has something to aspire to. As it is now, class mobility is falling apart. Decreasing taxes on the rich will only exacerbate that trend. Compare these:

Child A:
In East St. Louis
Inner city school (99% non-white)
Violence constant
Parents are drug addicts
Struggles and graduates high school

Child B:
In Westchester, NY
Goes to private pre-school in Manhattan (his classmates will almost all end up in Ivy League schools) - with all white kids
Goes to private schools in elementary and high school levels
Despite underperforming at all levels, admitted to Yale because of parent's legacy

Who is going to succeed in our society 999 times out of 1000?

Without mobility, the system fails. Right now, I think we are close to having too little mobility to make our form of government continue to work. We are probably fine, but it is something that concerns me.

Originally Posted by Buzzbee

Based on your justification for the wealthy to pay more in taxes, it seems that social programs would not be justified and should be cut or reduced. I haven't thought it through enough to make a definitive statement, so I'm open to alternative positions.

I am of the opinion that government expense is far larger than it needs to be, and as a result, government income is as well. I am in favor of tax cuts, only if government expense is reduced as well.

I believe certain areas of our government are too large. I also believe bureacracies tend to grow and never shrink. I believe a lot of things should change. However, progressive taxation is not one of them, IMO.

[st.cronin]

Semantic clarification: Shifting the tax burden is a long way from an alternate political system. It's just a drift/shift in fiscal policy, which is constantly happening in minor ways.

[Buzzbee]

John Galt - I'm not arguing against a progressive tax system. Nor am I arguing that people should only be taxed on what is beneficial to them. You seemed to be the one arguing this point, as your justification for a progressive tax system was based on the premise that the wealthy benefit more and therefore should pay more. In fact, I'm not arguing for or against any system of taxation. The government has to have revenue to function. Most, if not all, systems of taxation are going to be inherrently unfair to someone. So, I'm not really concerned with the 'fairness' of the tax system.

So, I was simply trying to make a point that while I agree that the wealthy benefit more from the protection of the government, using that as a justification for a progressive tax system does come in conflict with the government's current structure in certain areas.

I wasn't necessarily calling for all social programs to be eliminated. There are many that are very valid and worthwhile. You seemed to be trying to spin my comments in that direction with your student A and B example, and that is not accurate.

[ISiddiqui]

Originally Posted by Buzzbee

So, I was simply trying to make a point that while I agree that the wealthy benefit more from the protection of the government, using that as a justification for a progressive tax system does come in conflict with the government's current structure in certain areas.

I think the argument is also that the social programs to the poor ALSO protect the wealthy. Without them, the poor may decide to get a bit uppity (I don't mean revolution necessarily, but mass voting for far left parties, who would necessarily hurt the rich by making them pay more to the entire system, because they think it is unfair for people to make so much while others don't have enough to eat). A little social programs spending may prevent a lot more given up. And it isn't only because the poor may start voting mass left, but the middle class may get disgusted at the treatment the poor are recieving (and seeing masses of them on the city streets) and also work to change that.

And, social programs allow the poor to be relatively healthy so that they may be used as a labor force for when times are good and more people are needed for jobs (like in the late 90s).

[Galaxy]

If taxes were to rise, what is it to stop a rich citizen to leave the country to a tax-friendly country (Switzerland, Monaco, ect.). They do this already in some ways, but could it happen?

[JonInMiddleGA]

Originally Posted by Galaxy

If taxes were to rise, what is it to stop a rich citizen to leave the country to a tax-friendly country (Switzerland, Monaco, ect.). They do this already in some ways, but could it happen?

Well, nothing off-hand ... other than some of the practicalities.

Although I'm a long way from being that level of "rich", I've looked into it a little bit on several occasions (usually after I go through the annual round of company & personal taxes).

[Buzzbee]

Originally Posted by ISiddiqui

I think the argument is also that the social programs to the poor ALSO protect the wealthy. Without them, the poor may decide to get a bit uppity (I don't mean revolution necessarily, but mass voting for far left parties, who would necessarily hurt the rich by making them pay more to the entire system, because they think it is unfair for people to make so much while others don't have enough to eat). A little social programs spending may prevent a lot more given up. And it isn't only because the poor may start voting mass left, but the middle class may get disgusted at the treatment the poor are recieving (and seeing masses of them on the city streets) and also work to change that.

And, social programs allow the poor to be relatively healthy so that they may be used as a labor force for when times are good and more people are needed for jobs (like in the late 90s).

Ummm...I think it might be a safe argument that this has already happened. I don't think it is a coincidence that more and more people are removed from tax obligation every year. I think this is more political than economic, but there are some economic aspects as well. Politicians looking out for their own constituents as well as general political popularity tend to create programs that will benefit voters. If the poor and middle-class outnumber the wealthy, then it seems logical to expect politicians to cater to those voters.

Look at Social Security. Mention eliminating it and seniors and baby boomers get in a tizzy. So, the politicians tip-toe around the issue to avoid losing votes. However, just about everyone knows it needs to be drastically changed for it to survive.

It is also an example of how Social programs tend to continue to balloon. No one wants to willingly give up money, and more and more people will line up to feed at the government teat. Not saying that every program is like this, just that it is the tendency.

Closing of military bases could even be tossed out there, as an example of how this applies to non-social programs. Communities come to depend on that government money to fuel their economy. So, when a decision is made to close a base or discontinue purchasing a plane manufactured in a particular area, those communities fight to keep that government money. They don't want less, they want more.


Sorry for the ramble. This is one reason I feel that talks about economics, in this day and age, are intrinsically tied to politics. The government spends sooooo much money that our economy is heavily dependent on it. Severe cutbacks in rapid fashion would send us into an economic tailspin. I would greatly be in favor of long term pruning of government functions coupled with close supervision of new growth.

[MrBigglesworth]

Originally Posted by John Galt

Now, I'm not opposed to greatly limiting certain types of welfare (I would be perfectly happy to eliminate social security, for instance).

How can you call SS welfare? I don't think that is fair.

[MrBigglesworth]

Originally Posted by Galaxy

If taxes were to rise, what is it to stop a rich citizen to leave the country to a tax-friendly country (Switzerland, Monaco, ect.). They do this already in some ways, but could it happen?

Well what if they do? Who cares? If they are earning their money, it is most likely from some type of corporation, and the corporation will still be doing business in the USA, which means the economy and the tax revenue keeps coming in.

[JonInMiddleGA]

Originally Posted by MrBigglesworth

How can you call SS welfare? I don't that is fair.

F'n A ... me & Biggles agreeing on something.
Sonuvabitch, who woulda thunk it?

[Dutch]

Social Security is currently an investment the worker makes towards his/her future. But in a couple of decades, it will be a subsidized welfare program.

[MrBigglesworth]

Originally Posted by John Galt

Revrew and others,

There is one area of the flat tax that I always find lacking. One of the basic questions in tax law is defining income. The flat tax defenders don't seem to realize how many "loopholes" exist just by virtue of the definition of income.

Do you count capital gains? If you do, it is really a form of double taxation since the money was already earned once. If you don't, you really protect the rich who just invest their money over and over again. If you treat capital gains differently, how do you do it?

What if companies switch to providing income in-kind? That is, what if they pay your rent, loan you a car, and offer free health care? Are those income? If not, that is an enormous loophole? If yes, then you need to craft a very clear series of definitions about what in-kind services are income. You would never count the cost of water you drink at work, but would you count the company paying for meals on business trips? What if they use a reimbursement system for payment of such expenses?

Do you offer any special circumstances exceptions? What if you have $40,000 in health care expenses one year and you only earn $40,000? What if you are a small business owner and you record a major loss?

These are only a few basic questions. There are many, many more. The flat tax defenders often end up crafting so many exceptions that the simplicity of their system ends up lost. Sure, they have obliterated progressive taxes, but that is actually the least complicated part of the whole system. The rest of it still needs to be fleshed out and that is the source of most of the confusion regarding taxes.

This is what I was talking about with apples and oranges. You can argue a flat tax based on you not liking progressive tax brackets, but not on the basis of simplicity. A flat tax can be just as complex as a progressive tax, it's kind of dishonest to compaign for it based on how easy it is.

[ISiddiqui]

Originally Posted by Buzzbee

Ummm...I think it might be a safe argument that this has already happened.

I wasn't saying it hasn't. In fact some speculate that a lot of the New Deal projects were enacted to stave off the prospects of a Communist revolution. Remember back in the early half of the 20th Century, the Communists and Socialists were gaining some major votes. Eugene V. Debs comes to mind.

My argument was that reducing that amount of welfare could have disasterous effects politically, which is what you basically said (if I get your meaning plainly).

[MrBigglesworth]

Originally Posted by Dutch

Social Security is currently an investment the worker makes towards his/her future. But in a couple of decades, it will be a subsidized welfare program.

Technically, the SS trust fund holds enough to cover costs according to some projections. The only reason the government would have to cover the costs is because they spent the surplus already, but that is hardly SS's fault.

[Galaxy]

Originally Posted by MrBigglesworth

Well what if they do? Who cares? If they are earning their money, it is most likely from some type of corporation, and the corporation will still be doing business in the USA, which means the economy and the tax revenue keeps coming in.

They would be taking the high personal tax dollars with them....Would lower the income revenues, and potential future jobs/revenues.

[Galaxy]

Originally Posted by MrBigglesworth

How can you call SS welfare? I don't think that is fair.

What type of SS are we talking about?

As for retirement, why do we have to rely on the government for our retirement? Wouldn't it be better to invest it ourselves (even a simple mutual fund, ect.)?

[Glengoyne]

Originally Posted by Galaxy

What type of SS are we talking about?

As for retirement, why do we have to rely on the government for our retirement? Wouldn't it be better to invest it ourselves (even a simple mutual fund, ect.)?

That is essentially what Bush's SS privatization revamp would have allowed for. Not exactly, but effectively. Too bad it was demonized by its opponents. Sometimes change is good.

[MrBigglesworth]

Originally Posted by Glengoyne

That is essentially what Bush's SS privatization revamp would have allowed for. Not exactly, but effectively. Too bad it was demonized by its opponents. Sometimes change is good.

Bush's SS plan was dishonestly proposed, which was one of many reasons it fell out of favor. He originally said it would help the solvency problem, which was catagorically untrue, and he later admitted it. It was also projected to get a lower rate of return than SS, because of the fees and the three percent clawback. It was just bad policy, rooted more in philosophy than actual results, and the people saw that. I'm not sure how it was demonized by those opposed to it, during the debate I heard more misinformation by those in favor of it than by those opposed.

[Galaxy]

Originally Posted by MrBigglesworth

Bush's SS plan was dishonestly proposed, which was one of many reasons it fell out of favor. He originally said it would help the solvency problem, which was catagorically untrue, and he later admitted it. It was also projected to get a lower rate of return than SS, because of the fees and the three percent clawback. It was just bad policy, rooted more in philosophy than actual results, and the people saw that. I'm not sure how it was demonized by those opposed to it, during the debate I heard more misinformation by those in favor of it than by those opposed.

I agree with that to a degree. I want it so I can invest ALL of my money. Let me keep it, and take care of my future.

[revrew]

Originally Posted by John Galt

I believe if everyone felt as you do that no one would be left in such a state. However, I don't believe such a world exists and I have little hope it ever would.

Okay, bunny trail coming up, but the phrase "I have little hope it ever would" just stuck in my mind. I believe in most countries, such a lack of hope is fully justified. I believe, however, that there is cause for hope in the U.S., as evidenced by the following story. Mind you, this story isn't an attempt to further the arguments made in this thread, but to address the issue of hope:

Ten days after Pearl Harbor, a group of citizens in North Platte heard a rumor that their boys, part of the Nebraska National Guard Company D, would be coming through on a troop train on their way to the West Coast. Five hundred people showed up at the train depot with food, cigarettes, letters, and love to give the boys.

When the train showed up, it was not the Nebraska National Guard Company D boys on board; it was the boys from the Kansas National Guard Company D.

After a few awkward moments, someone handed a young man she’d never seen the gifts intended for her own son. Everyone else followed that lead, and there were hugs and prayers and love shared all around. It was a spontaneous act of genuine devotion that touched both the soldiers and the people who came to the depot that day. That alone would have been a beautiful illustration of the willingness to “sacrifice for one another.” But the story continues.

A few days later, a 26-year-old woman named Rae Wilson wrote a letter to the editor of the local paper, recounting the profound experience they’d shared that night, then suggested that the town organize “a canteen” so they could do something similar for every troop train that came through. She volunteered to lead the effort in a voluntary role.

What happened next seems impossible to our 21st century, jaded hearts. For the next four and a half years, the people of North Platte and the surrounding communities met every troop train that came through their town. Every day they prepared sandwiches, cookies, cold drinks, and hot coffee. They had baskets of magazines and books to give away to the soldiers, and snacks for the train. There were even birthday cakes for whoever’s special day it was. And they did this, some days, for as many as 8,000 soldiers and sailors.

The statistics are staggering. By the time the last train was served on April 1, 1946, six million soldiers were served from the North Platte Canteen. Forty-five thousand volunteers served faithfully until the war was over and most of the troops had been transported home.

This was all accomplished without any government funding. The volunteers were farm folks for the most part, and they gave what they had—meat, eggs, and milk. They grew the wheat to make bread. Most everything else was rationed. They’d save their gas coupons for the days that their team would drive to North Platte to serve. And they did without at home so they’d have enough sugar to bake cakes and cookies for the boys.

Many of those who volunteered regularly had lost husbands and sons in the war, and for them, serving these troops was a tangible way to cope with their loss.

Most of the troops had only ten minutes to sprint from the train, grab some food, maybe dance with a pretty girl, hear the appreciation of those present, and sprint back before the train left without them. But in that ten minutes, they got more than a meal. They received a dose of unconditional love that they remembered during the heat of battle, and decades after the war was over.

Bob Greene, whose book Once Upon a Town, made the North Platte Canteen story known to the world, wrote that as he interviewed those few surviving soldiers who had experienced the canteen first hand, there was a universal reaction from these men now in their late seventies and eighties. They cried.