Continuation of Our Punishing the Wealthy Conversation

cod6-class-warfareI felt that this was a really good discussion that unfolded on the open mic thread the other day so I was very interested in continuing it. Chris Devine was our antagonist for the day, and took a lot of flack for arguing his position. I appreciate his doing so as I think we are learning a lot from each other. I do ask that you all treat him with respect though. It isn’t easy facing down a whole group. During the day, someone was generous enough to send me an article that would help me to understand the left’s position a little better. I truly appreciated this person doing so, as it always helps to understand where people are coming from. As a result of reading the article that they sent, I decided that I would begin by addressing the article itself, as in my opinion, it was filled with false logic and reasoning. If this article provides any insight to the alternative viewpoint, I want to address it specifically and give those that oppose my point of view the opportunity to meet me and those who share my position on common ground, using the parts of the arguments that they themselves choose.
 

The article was written by Marc Rosenfelder, and entitled “Why the rich should pay more taxes”. I will pull specific points out of it and give my perspective on those points. This will allow those who disagree with me to defend those positions. Just as important I will include the link to the article here . This will allow any who want to read the original and get a better insight to the opposite point of view. You can judge for yourself whether the article has merit or does not have merit, plus you can see the parts of the argument that I chose to ignore because they either were refuted in other sections I wrote or were not relevant to the argument. Below, the statements pulled from this article will be highlighted in green

For more than a century it’s been generally recognized that the best taxes (admittedly this is an expression reminiscent of “the most pleasant death” or “the funniest Family Circus cartoon”) are progressive– that is, proportionate to income. Lately, however, it’s become fashionable to question this. Various Republican leaders have trotted out the idea of a flat tax, meaning a fixed percentage of income tax levied on everyone. And in their hearts they may be anxious to emulate Maggie Thatcher’s poll tax– a single amount that everyone must pay. Isn’t that more fair? Shouldn’t everyone pay the same amount? In a word– no. It’s not more fair; it’s appallingly unfair. Why? The rich should pay more taxes, because the rich get more from the government.

Consider defense, for example, which makes up 20% of the budget. Defending the country benefits everyone; but it benefits the rich more, because they have more to defend. It’s the same principle as insurance: if you have a bigger house or a fancier car, you pay more to insure it.

OK, I will start right here. This is completely false logic and there is no reason behind this sentiment what-so-ever. Correct, if you have a fancier car you pay higher insurance, and that is because if something happens to your fancier car, it will cost more to replace it. That is the purpose of insurance. The National Defense, however, is not insurance. The wealthy will not have their stuff replaced by national defense. It does not cost more to launch a missile to defend a billionaire than it does to defend a homeless man. Equating defense to insurance is a perversely faulty argument and the fact that this is the first thing Mr. Rosenfeld offers certainly puts the rest of his reasoning in question….

madoff-cartoonSocial security payments, which make up another 20% of the budget, are dependent on income– if you’ve put more into the system, you get higher payments when you retire.

Correct, since the government, in the form of social security, is returning money to me based on what I paid in, then I should get more if I paid more. Saying otherwise is akin to saying that we should start charging the wealthy $100 for a Big Mac. It is interesting that the author specifically used insurance in the example above. Because Social Security is a form of insurance. It is OK for those who pay more to get more in terms of protection for their homes and cars. It is even suggested that under his highly questionable definition of defense as some sort of insurance that the wealthy should pay more and get more accordingly. Yet in this instance, he suggests that the wealthy should pay more and get…. the same as everyone else. I shouldn’t even have to point out what a flawed perception of reality one must have to accept this.

Investments in the nation’s infrastructure– transportation, education, research & development, energy, police subsidies, the courts, etc.– again are more useful the more you have. The interstates and airports benefit interstate commerce and people who can travel, not ghetto dwellers. Energy is used disproportionately by the rich and by industry.

Again, this is bad enough logic to be laughable. The rich have more, so they should pay more for the same services. And this is based on the assumption that they get more use out of Interstate 95 than I do. The $100 Big Mac strikes again. Are the wealthy using the roads more? Perhaps, but I dare think that the infrastructure of our country is equally available to everyone. The wealthy don’t use roads more to the detriment of the poor, or have more access to the roads than the poor do. In fact, I would imagine that the wealthy don’t gain benefit from or use the majority of the roads in America, as the majority are rural road or neighborhood roads. 

Research and Development is not part of the nation’s infrastructure”. But since it is brought up, it seems that the belief of this author is that R&D is paid for with tax dollars. I don’t have any facts to dispute that, so let’s accept it as true. If the wealthy are the ones benefitting from R&D, why don’t we simply cut government funding if it isn’t fair. Then the wealthy can decide on their own what R&D they want to fund. Oh but that wouldn’t work with “the plan”. Americans, wealthy or not, are not smart enough to know what to do with their money. So government will decide what R&D is important, allocate the resources for it, and then take that money to fund it from the citizens whether they like it or not. Well, I say no. If my money is going to be spent on R&D, then I want to decide what is researched. No more funding to study the effect of gay men in Argentinian bars or to study the impact of sleeping pills on Desert Turtles.  

The interstates and airports benefit interstate commerce and people who can travel, not ghetto dwellers. Really, without interstate commerce, what exactly will those in the ghetto eat? Will they convert their playgrounds into farms? This notion of the wealthy only benefitting is ridiculous. Everyone benefits, and everyone benefits equally, although in vastly different ways. It would cost the wealthy more to do their business without the infrastructure. It would also cost the poor more to get the benefits of that business. A fact that those on the left fail to take into account. 

As for public education, the better public schools are the ones attended by the moderately well off. The very well off ship their offspring off to private schools; but it is their companies that benefit from a well-educated public. (If you don’t think that’s a benefit, go start up an engineering firm, or even a factory, in El Salvador. Or Watts.)

Bad Education PolicyPerhaps the moderately well off spend more time instilling in their children the benefits of an education. But regardless of whether that is true or not, as discussed yesterday, the public education system is broken and the problem is not money. The problem is a lack of alternatives and competition. Of course the wealthy choose to send their children to a better school. They have realized that thinking public education will improve as long as it is government run is simply foolish, so they take actions accordingly. And as for “it is their companies that benefit from a well-educated public”, since you are claiming that the well educated public comes from them that spend the money to go to private schools, I guess they have already paid for the education of their employees. 

The FDIC and the S&L bailout obviously most benefit investors and large depositors. A neat example: a smooth operator bought a failing S&L for $350 million, then received $2 billion from the government to help resurrect it.

A neat example, but an irrelevant and old example from the 1980’s S&L scandal was the best you could come up with. Show me something systemic, not a cherry picked example you found somewhere. It sure doesn’t seem as though the recent bailouts benefitted the investors and shareholder’s, just ask the Chrysler bondholders. 

Beyond all this, the federal budget is top-heavy with corporate welfare. Counting tax breaks and expenditures, corporations and the rich snuffle up over $400 billion a year– compare that to the $1400 budget, or the $116 billion spent on programs for the poor.

There is one of the problems: you can’t count tax breaks, since it is merely allowing them to keep the money that they earn, it isn’t the same as giving them money now is it? But since you are going to count all of that, let’s talk about the effect of tax cuts on the wealthy. It is my contention that the liberal economic theory plays on people’s economic ignorance, demonizing tax cuts and free trade. Unfortunately, as someone who has studied this a bit, I am immune to the idea of not studying the past to see the realities. The reality versus the theory is the problem. The “theories” of the left sure do sound good, but history shows them to be flawed. 

Tax calculatorThe reality is that reducing taxes has been proven to provide incentives for people to work, save, and invest. High taxes penalize entrepreneurial risk taking and investment. It has been shown that reducing the tax burden on the wealthiest Americans, the most productive members of society, gives them the incentive to invest their money instead of diverting it into some form of tax shelter. Tax burden low = increased economic activity. The more any good or service is taxed, the less it will be produced. And we all know what happens when supply goes down without a decrease in demand. The more the marginal tax is increased, the less incentive there is to work. The more gains on investment are taxed, the less investment there will be. These are simple concepts, yet they seem to not be understood by liberal economic theorists.

The 1920’s, 60’s, 80’s, and 2003 saw tax cuts across the board. In all four cases their was instant and substantial increase in the economy, and a corresponding increase in the tax dollars going to the federal treasury. That is a fact that sure doesn’t sit well with those the somehow think “trickle up” is the way to go. “Trickle up” gets votes, “Trickle down” gets proven results. I am certainly up for debate on the things the left tries to throw out there to discredit this fact. But be warned, the numbers are not in your favor, Mr. Rosenfelder, and neither are the financial data reports from the federal agencies responsible for reporting them.  

How about social spending? Well, putting aside the merely religious consideration that the richest nation on the planet can well afford to lob a few farthings at the hungry, I’d argue that it’s social spending– the New Deal– that’s kept this country capitalistic. Tempting as it is for the rich to take all the wealth of a country, it’s really not wise to leave the poor with no stake in the system, and every reason to agitate for imposing a new system of their own. Think of social spending as insurance against violent revolution– and again, like any insurance, it’s of most benefit to those with the biggest boodle. 

Rich give most to charityFirst, I think it is fair to say that the richest nation on the planet lobs more than a few farthings to the hungry. Trillions of dollars in social programs that are designed to create dependency rather than help those in need to improve their lot in life. The cancellation of the Clinton Welfare Reforms certainly showed that this administration is not interested in making things better, they are only interested in creating more dependency. Total giving to charitable organizations increased to $306 billion in 2007, a 1% rise over the previous year. So facts that I shared in the recent “Reality of Taxing the Rich” article: A couple of facts gathered by the The Center on Philanthropy at Indiana University based on 2005 data:

  • Households with an annual income between $100,000 and $200,000: 46.2% give to causes aimed at meeting basic human needs, giving an average household gift of $657, cumulatively making up 12.9% ($2.46 billion) of the funds raised to help meet basic needs.
  • Households with an annual income $200,000 and Above: 75.6% give to causes aimed at meeting basic needs, giving an average household gift of $3,076 for households 200k-1 Mil. and $12,673 for households 1 Mil. and up, cumulatively making up 38.1% ($7.27 billion) of the funds raised to help meet basic human needs.

It gets tiring to hear how the wealthy in America simply are greedy bastards who take advantage of the poor and trample the poor and don’t care about the poor, when it seems that those that have money are more than willing to help those that don’t. They simply don’t wish to have government take their 50% before that money gets distributed. The “evil rich” games works well for class warfare, but just is not reality. 

Come election season, Steve Forbes, among other millionaires, will be pushing plans for a flat tax. These proposals need to be absorbed with a carload of salt. A plan where everyone’s taxes are lowered is of course simply a tax cut. Here, once again, the question to ask as a voter and citizen is, what government services do you want to cut? Somehow I don’t think Steve is proposing to slash corporate welfare or defense. It’s more likely a way to attempt to cut social spending through the back door. People like to hear about tax cuts; they don’t like to hear about service cuts, even though they’re financially equivalent.

It is first of all disingenuous to say in one part of the argument that the rich are only rich if the poor are better educated and have more money to spend, and then at the same time make the argument that the rich want the poor to be dumb and have no money to spend. I don’t personally, at this time, support the fair or flat tax proposals. But if Steve Forbes and his evil conglomerate think it is a good idea, I am willing to listen, and then judge for myself. After all, if the rich prosper off of the back of everyone else, as the author claims, then who exactly is going to be there to buy the goods and services that the rich have to sell. The wealthy aren’t that stupid. They aren’t going to prosper if no one else has the ability to make them more wealth. So dismissing their thoughts seems like a pretty stupid thing to do. Besides, it never makes sense to me that the left tells us to ignore everything the people who have made fortunes tell us to do to make money, yet we are expected to believe that the government has a better plan. The same government that has never balanced a budget, or grown any money in any way without the use of a printing press. 

Government Agencies BillYou can’t exactly make the poor pay more taxes– they don’t have the money. That leaves only one way to flatten the tax rates– that is, reduce the taxes the rich pay: soak the middle class. If tax rates go down on the rich, and we’re not cutting total taxes, the middle classes have to pay more.

No, in fact that leaves two ways to flatten the tax rates. The other is to reduce spending and therefore reduce the need for collecting taxes. It is amazing that this option, which seems like common sense, is not able to be seen by this author. If he can’t see this as a viable alternative to his thought, I would suggest that he isn’t smart enough for us to bother reading what he has to say. Again I am not advocating flattening the taxes, but this statement from him sure calls into question the economic sensibilities of someone making the argument for the left. 

So Steve and the others want the government, already pretty much a subsidiary of the large corporations, to be subsidized even more by the rest of us. About all I can say is, if the American people are stupid enough to swallow this, they deserve to pay for it. (Fortunately, as we saw with Monicagate, the American people are not as stupid as their leaders.)

Perhaps he hasn’t been paying attention to what those smart American voters have allowed government to pull over their eyes lately. As for this statement from the author, it didn’t make much sense to me, so I cannot refute or confirm it. I would be willing to listen to arguments though. I don’t support subsidies either, so I probably wouldn’t bother in the first place. 

Bankrupt CaliforniaThis is pretty shameless, but it’s much of a piece with Republican practice in general. For years some nosy folks (such as Sen. Moynihan) have been investigating what states pay the most to the federal government, and which states get the most benefits back. What a surprise: the biggest winners are the western and southern states that vote Republican; the biggest losers are the northeastern states that vote Democratic. Those who whine the most about taxes are those who suck the most from the public trough.

I would sure like to see those reports. He provides no details and I suspect it is because if we apply his level of reasoning in the rest of this article to the results he sees from this “report” from nosy Senator Moynihan, we would find that the report shows nothing of the sort, and I would bet even money that he is jumping to many conclusions. Just off the top of my head I recall it being the highly democratic states (California) that are doing to most begging for a better spot at the public trough. 

They won’t be happy, I suppose, until they can reconstitute a truly medieval system, in which the nobles pay no taxes at all.

A stupid statement, meant to evoke an emotional response, and play further into the class warfare game. 

The marriage tax. While we’re at it, what about the marriage penalty? Why in heavens are we penalizing marriage? We aren’t. This is a good example of politicians’ weasel-talk. There’s no marriage penalty– there’s a double-income penalty. For instance, suppose you make $50,000 of taxable income (after deductions and exemptions) and your spouse doesn’t work. Together you pay $8500 in taxes. A single person with the same income pays $10,700. You’re enjoying a $2200 marriage bonus. (Even more, if you’ve taken the standard deduction.)

If you call $2,200 dollars to support a second dependent a “bonus”, I submit that you need to cut welfare benefits substantially. This is one of the stupidest arguments I have read in a long time. The logic and reasoning doesn’t make one single bit of sense. 

Marriage talk with AccountantThe penalty comes for double-income marriages. E.g. you make $50,000, and your spouse makes $40,000. You pay $19,700 in taxes; if you were both single you’d pay a total of $18,600– about $1100 less. Is it fair to tax double-income households more? Well, why not? If you have a double income, you can certainly afford to pay more than those of us who have just one.

So then your answer is that their should be an incentive for the second person in the household to not be a productive wage earner. And there should also be an $1,100 incentive to live together as not married instead of taking the step of actually getting married. You have increased taxes to the point of damn near requiring both parties to work in order to support themselves, and now you think that they should be penalized for doing so. Again, the logical part of my brain just wants to explode at this point. Does anyone with an IQ over 70 actually buy into these flawed arguments?

And again, reducing this “penalty” for double-income households means increasing taxes on single-income households.

No, it means that the government simply gets to take less money. It only increases the burden on others in the left’s flawed thinking that the only way to operate going forward is to increase spending and therefore increase the amount of taxes collected. Lower all taxes, and lower all spending, and all of the sudden all of these types of statements get seen as the false dilemma fallacies that they are.

Exercises for the Republican reader:

  1. Write a rebuttal justifying the corporate subsidy of your choice, respecting the conservative principle that the tax system cannot be used for social engineering.
  2. Write a homily, suitable for use in Sunday school, explaining why Jesus should have condemned the sheep who demeaned the poor by feeding and clothing them, and blessed the rich man for living in splendor while Lazarus suffered.
  3. Take your favorite flat tax proposal and your last 1040, and have your acountant calculate how much money it will save you. Find the names of the five or six middle-class people who will have to make up that shortfall, and write them a nice thank-you note.
  4. Compare the GNP with the rate of taxation over the last fifty years– e.g. the boom years of the ’50s with their 90% marginal tax rate– and practice explaining that high tax rates discourage investment until you can do it with a straight face.

And to finish off his article he decides to write some smartass “exercises for Republicans. Well, I have a few of my own. 

  1. Write a rebuttal explaining how punishing the rich in America will have any lasting positive impact other than forcing them to take their business abroad or pass those punishments on to the consumer. In doing so please include a proposal for how wealth will be generated in this country when they all pull an “Atlas Shrugged” and tell you to piss off. Do so without using the liberal means of generating revenue, the printing press.
  2. Write a series of haiku’s, suitable for public school, explaining why Jesus should have used his position as God’s son to institute a series of reforms in the Roman government that would have ensured a 100% equal outcome for every single person regardless of personal effort or ability. Please include a summary of why you believe he did not take such moral and ethical steps. 
  3. Take your proposed increase in progressive taxes on the wealthy and take the time to ask them what their reaction will be to what you are doing. Find out what they will do with the wealth that remains. Ask them why they are taking their business overseas. Find the names of five or six middle class people who will lose their jobs to someone who doesn’t speak english and has the benefit of not living in a sociofascist country, and write them an apology note. 
  4. Obama-SocialismDo a quick search of the history of countries that have instituted socialist policies and income redistribution–e.g. the Soviet Union, Cuba, North Korea, and modern day Europe– and practice telling Americans that this time it is going to be different because this time “Obama is doing it right”. Keep doing so until you can do it with a straight face.

Sure I was just being a smartass with that last bit, just like he was. I have to admit that this article was simply too fun to do. The positions put forth by this author are so full of logical fallacies, and so devoid of the use of logical reasoning, that it was like shooting fish in a barrel taking them down. I don’t advocate a flat tax, but the reasoning put forth in this article shows the true lack of reasoning that many on the left suffer from. That being said, I don’t think less of the intelligence of those on the left on this site, because I am sure that they can see the fallacies as well. But I will sure be interested to debate these topics with them today!

Advertisements

Comments

  1. Today should be a very stimulating conversation.

    I have some questions. Why does Mr. Rosenfelder assume that all Republicans are rich snobs?

    Why does Mr. Rosenfelder not see that the current, complicated and brim full of tax loopholes, tax code is an instrument to soak the middle class and not the other way around? It is the rich who have the resources to avoid taxes, is it not?

    Why is state run forced “charity” more virtuous than individual voluntary charity?

    Why does Mr. Rosenfelder believe that American’s want tax cuts, but not spending cuts?

    Why does Mr. Rosenfelder believe National Defense is inferior to social programs?

    Why does Mr. Rosenfelder believe my property and life are less precious to me than the property and life of the rich is to them? Most rich people are rich not because of special breaks, but because of special talents and abilities, which also allow an opportunity for recovery, which less well off people could not so easily achieve.

    Why should the rich pay a larger percentage than everyone else? Mr. Rosenfeld puts forth the arguement that they should because they receive greater benefits from government funding. I think most rich people receive far less. No, corporations should not get govt help or special favors, but isn’t that part of the current tax code? How does preserving what we’ve got help?

    • I have another question for him.

      Why don’t you mention those who pay NO taxes and still get the benefits of those who do?

      • Sorry, previous post in wrong spot.

        Terry,
        Why are there so many people that pay no taxes?

        • Let me clear that up a bit…when I say no taxes, I mean no Federal Income Tax.

          As far as why…I imagine there are a myriad of reasons. Low income is what I believe you are eluding to(if it is not please let me know). However, I submit that even those with low income SHOULD pay a percentage of their earnings as Federal Income Tax. If one able bodied individual has to pay, then all should have to pay. This is of course my opinion. Also IMO it would promote a sense of accountability/responsibility in those who pay no taxes…

          • Terry,
            I was referring to federal income taxes too. Yes, low income is the reason I would sight. What else could be the reason? I don’t know any others!!! 🙂

            If those with low income paid a percentage of their earnings as taxes, do you really think they’d have a sense of accountability/responsibility? Or just more resentment and an expectation of more aid?

            I’m not sure about this, just thinking out loud…

            My solution is to improve their education and training so they can move up to better paying jobs and then start paying taxes.

    • Michelle,
      Aren’t there several contradictions in your comments/questions?

      Why does Mr. Rosenfelder not see that the current, complicated and brim full of tax loopholes, tax code is an instrument to soak the middle class and not the other way around? It is the rich who have the resources to avoid taxes, is it not?

      Why does Mr. Rosenfelder believe my property and life are less precious to me than the property and life of the rich is to them? Most rich people are rich not because of special breaks, but because of special talents and abilities, which also allow an opportunity for recovery, which less well off people could not so easily achieve.

      • No, not contradictions, but I probably did not use clear language. By the first I meant that the current tax code does exactly the opposite of what Mr. Rosenfeld, who apparently wants to preserve the status quo, is claiming it does. The rich use the loop holes to avoid taxes. Other tax proposals eliminate loopholes for everyone.

        I’m not sure where the second one has contradictions, but I’ll try to explain what I meant more fully. I was responding to Rosenfeld’s idea that the rich benefit more from national defense because they have more to lose. My property is even more important to me because I could not recover from a loss as easily as someone who is wealthy, even if we both lost everything. The rich person could recover more quickly and completely than I could. So the protection of my property actually has more value to me than the protection of the rich person’s does to him/her.

        • Michelle,
          For the first, I thought he was proposing that the rich should pay more taxes, and that the current tax code is unfair to the middle and lower class.

          For the second, if the rich are able to recover faster, that implies they have more to gain from defense? Even if they lose everything during that defense, but the country survives so they can rebuild?

          I also see your point on saving what you have.

          Thanks for clarifying.

  2. Sorry, for the hit-n-runs, but I’ll be gone for the day and most of the weekend.

    Would any of you consider answering the 4 questions?

    • USWeapon says:

      The four questions that he offered. No. They are not real questions, they are ignorant statements that attempt to misrepresent the postions of those that oppose him.

  3. My mind is blown. Under what rock has this fellow been living or more pointedly, have the rich kept him locked up somewhere for the past twenty years?.

    I can look at his comments from my own little empirical world where I grew up among the working poor where families with six kids lived in a three room apartment in a five story walk-up probably hot bunking. Yet today, at out reunions these same people, by and large are all at least middle class and in quite a few cases far beyond that. According to Mr. Rosenfelder, at the very least, this is impossible.

    Mentioning the late Senator Moynihan is interesting. I have actually seen documentation indicating that percentages of taxes raised in NY and NJ by Uncle are not proportional to tax money returned. Outside of the obvious that money is spent where it is needed (not a great argument) the problem is much simpler than that. In states where representatives are elected for life,(Think Alaska and West Virginia) the representatives mere staying power indicates that they will eventually rise to great influence and direct where money will go. That’s why there are “bridges to nowhere” and seventy five post offices named after Sen. Robert Byrd. Staying on this thread for awhile, most military spending is in the South. Again that is because the South tends to have more long term legislators but this time it goes beyond that. The Democratic pols in NY, NJ and Conn., most long term pols do not see the military as a high priority. Social welfare programs are their priorities despite the fact that a military payroll in your state, with the attendant civilian jobs and boost to a local economy has a long term far reaching effect that more food stamps does not. The Northeast has taken a huge hit on military spending since the days of LBJ and no one, except locals seems to care. Farewell Fort Monmouth.

    Sen. Moynihan was also the guy who pointed out the destruction caused by well intentioned social programs on the urban poor and minorities. Those programs gave us the disappearing fathers, multi-generational welfare families and larger ghettos than ever before. Mr. Rosenfelder did not seem to find these Moynihan statements, perhaps because they were published when, gadzooks! Moynihan worked for Nixon.

    Again, from a purely subjective point of view, I remember the first joint tax return I filed after we got married in late October. Despite the fact the bride and I had previously received tax refunds for all of our working single years, I suddenly found myself writing a $ 500 check to Uncle in April. To add insult to injury, within three weeks Uncle sent me instructions on paying estimated taxes in the future. As Bill Murray said in “Stripes” “That’s a fact Jack!”.

    • USWeapon says:

      SK,

      “My mind is blown”… that was exactly how I felt when I was reading this. The article seemed so full of contradictions and faulty logic that I thought surely this is some form of joke article. My disappointment in realizing that someone actually believed what this guy believed was somewhat shattering. I know that I often believe that those who don’t agree with me are wrong, I rarely feel that they are as seemingly stupid as this guys logic and reasoning are.

  4. Bama dad says:

    “They won’t be happy, I suppose, until they can reconstitute a truly medieval system, in which the nobles pay no taxes at all.”

    Here’s an interesting article on taxing the rich.
    http://online.wsj.com/article/SB121124460502305693.html

    😎

    • Excellent Mr. Bama Dad.

      And does anyone remember the “flat tax rate” proposed by Mr. Forbes when he ran for Pres?

      I believe you will find it was 19.5% of gross income (i.e., GDP).

      And contrary to the authors accusation to the contrary, the flat tax rate proposed was designed to maintain the existing tax revenues. It would have reduced the effective, actual tax rate, for most middle class families because they were paying more than 19.5%.

      As I recall Mr. Forbes also exepted the “poor” from the flat tax all together. Memory may be faulty here but it seems that was the proposal.

      • PeterB in Indianapolis says:

        JAC, 19.5% was the proposed number. Tax Revenue as a % of GDP has ALWAYS BEEN right at 19.5% regardless of the marginal tax rates. It seems that the government always ends up with revenues equal to 19.5% of GDP regardless of whether it sets the top marginal tax rate at 91% or at 35%.

        This is WHY Forbes chose 19.5% as his “magic number” for the flat tax. If the government is going to get 19.5% of all economic output ANYWAY, regardless of what we do, we might as well set everyone’s tax rate at 19.5%.

        • And the result would be NO CHANGE in the effective tax rate but a significant reduction in the cost of dealing with taxes, including reductions in IRS.

          Perhaps there was no sinister plot after all.

          • Black Flag says:

            No, this is a demonstration that it is a sinister plot.

            The tax code is purposely complex and immune to understanding so to ensure that you are always wrong in preparing your taxes.

            It allows them to target individuals at a whim.

    • USWeapon says:

      Bama Dad

      Excellent article. Thanks for sharing it. I found it really interesting and I am surprised that I had not read it somewhere prior to this. Then again, I am always surprised by just how much I don’t know, lol.

    • One of the arguments against major changes to the tax code – whether a flat tax, fair tax, sales tax, etc, is the unknown impacts on the economy. And I don’t mean who pays how much, but how the new tax system would change people’s habits.

      How would a 30% national sales tax change buyers’ behavior? If you want to pay less tax, buy less stuff. Would that decrease spending and tax collections, and there by create a recession?

      Everyone is used to the current system, and they THINK they know how certain changes impact buyers, sellers, etc. Change is scary, especially when it’s the core that’s changing, and big business doesn’t want to take this risk…

  5. Todd:

    Let me tackly your one question: Why are there so many people that pay no taxes?

    There are very few people if any who pay “no” taxes.

    We need to make sure we include all taxes when discussing this whole issue of “Fair” and “Benefits”.

    That means Local, State, and Federal.

    I will post a more complete answer on the main issue so you can find it upon your return.

    Have a nice weekend.
    JAC

    • PeterB in Indianapolis says:

      JAC,

      I believe what Todd is referring to is the fact that a large number of people pay no Federal Income Tax (or that they receive a refund even larger than the amount they pay in).

      I do not believe that Todd was including such things as gasoline tax, “sin” taxes on alcohol and tobacco, energy taxes, and the like.

      Taxes are broken up the way that they are so that people do not realize just how much they are really paying in taxes.

      • That is my point exactly.

        And don’t forget payroll taxes. The full 15+% not the half we get charged on our paycheck.

        Of course the discussion about rates and services is designed to hide the underlying philosophy that promulgates the argument in the first place.

        Now for the teaser, I do not disagree with the concept that the wealthy get more benefits and thus we can rationally and ethically defend higher taxes, if linked to those benefits.

        The problem is the examples given usually do not trully fit the concept. It is based on the “class warfare” view of the world.

        Any ideas on how to actually link tax to benefits?

        JAC

        • PeterB in Indianapolis says:

          The simple answer would be to run the government more like a business and have it charge for the services provided rather than tax people’s wages.

          The complicated part of the simple answer would be how to precisely calculate who is using what government service or benefit and exactly how much to charge them for it.

          • I wouldn’t call it “like a business” as much as changing our entire view about how to collect taxes to cover govt expenses. Make a closer link between the service and the cost.

            We have fuel taxes. That means those who consume more pay more. Of course volume of gas consumed has nothing to do directly with maintenance and repair costs but it’s closer than a general fund.

            How about a small % of each dollar of contract or loan values being used to support the court system. If you agree to the fee you are guaranteed access to the courts to resolve disputes. No payment no guarantee, your contract is only as good as the other persons integrity. This one results in the Rich paying more (total $ not a higher % rate) because they have greater use of contracts and debt instruments. Thus it is voluntary and it assigns cost based on values at risk.

            • Black Flag says:

              Income tax free countries use a number of different ways of tax.

              A “Stamp” tax for example.

              In the Turks and Caicos, they charge a 10% Stamp tax on all land transactions.

              So buying a $400,000 house there creates a $40,000 stamp tax – you, literally, buy a postage stamp that you put on the deed with the stamp costs $40,000.

              You then pay no land tax, either.

              So, you can amortize the stamp tax over the number of years you think you’ll own your home – and that is your annual ‘tax’ ….

              It causes a host of other unintended consequences though… but that’s another thread…

              • Black Flag says:

                Oh yeah,

                they also have huge import taxes – like 100% to 300% the cost of some items – like cars, for example…..

              • The tax on contract value would accomplish the same only be voluntary, well kind of voluntary.

                I don’t know if it would be considered trully optional to a rational person. I for one would pay it.

                How about tax on vehicles based on weight combined with fuel tax. It would be easy to construct a split tax based on ton mile for the vehicle size and expected gas mileage.

              • Black Flag says:

                Yeah, T&C has that too.

                Still a “Stamp Tax’ – but if you want to have a contract to be legally enforceable, you would get it “legalized” at the Stamp office.

                They stamp it, and charge a flat fee or a percentage of value of the contract – which ever was higher.

                If you didn’t care if it be enforced, you didn’t need the Stamp – but you couldn’t ask a court for adjudication either.

    • Terry bought up the issue of people who pay no taxes:

      I have another question for him.

      Why don’t you mention those who pay NO taxes and still get the benefits of those who do?

      I was asking Terry about his comment, not asking the question myself. My question was to draw out a clarification from him.

  6. Bama dad says:

    “Energy is used disproportionately by the rich and by industry.”

    This is goods and services that they are paying to use, how does that fit into the argument that they need to pay more taxes?????? Also there is a direct benefit for society (tax receipts) for all those blue collar workers that provided this energy. :shook:

    • USWeapon says:

      Amazing the false logic isn’t it. Also amazing how many fools will believe it.

  7. PeterB in Indianapolis says:

    I have a lot of thoughts on the issue of taxes, but I don’t have a whole lot of thoughts regarding the article. USW did a pretty good job of dissecting the article already.

    The biggest problems I have with taxation in general are as follows:

    For the majority of us, the government takes taxes directly from our income in the form of witholding. The money is gone before we even get a paycheck. This means that we do not “miss” the money, since it is gone before we even get it. If the government allowed us to receive our full paycheck and then sent us a monthly bill (or simply deducted taxes monthly from our savings or checking accounts) after we had already received our full pay, the citizens would revolt, even though they were paying the same amount of tax every month that they do now!

    The government has no REAL accountability for how they spend money or how much money they spend. Sure, they will put out the occasional story on “wasteful government spending” where they admit that the Navy paid $650 for a toilet, but then they will pass a 787 Billion dollar “stimulus package” without even reading the package they are signing, and without providing any significant detail to us about what the money is actually being spent on. They try to provide the ILLUSION of accountability while actually having none whatsoever.

    The mechanism to put a stop to this would supposedly be to vote the current people out of office, but as we have seen, at BEST this only slows the growth of the government, it IN NO WAY stops the process. This is why I am in increasing agreement with BF that the only purpose of voting is to legitimize the government, so if you do not wish to legitimize it, you should not vote at all. I know that quite a few people here disagree with that, and that is fine, but increasingly, I see BF’s point on this issue.

    I can see in the general population that a lot of people have “bought the Brooklyn Bridge” and actually agree with the idea that the rich are rich because they are evil and manipulate both the system and the poor in order to get rich, stay rich and increase their wealth. The poor are poor because the rich made them that way and do their best to keep them that way.

    As long as their are a large number of people that truly believe that, people will continue to vote for “government as Robin Hood” where it is the DUTY of the government to rob from the evil rich (who obviously obtained their wealth dishonestly) and give to the poor (who are obviously only poor due to their opression by the rich and otherwise would be much better off).

    Unless we make some major changes to the mindset of the general populace, Overarching Governmental Robinhoodism is here to stay. People believe that it is a virtue to help out those in need, and people believe that “the evil rich” would do nothing to help out those in need without being forced to do so, so having the government act as the “virtue enforcer” is seen as not only necessary, but good.

  8. To Just A Citizen

    To get off the subject here, you asked last night if I was related to any other Sabatini’s in town. I have one for you, do you know any? To answer you, yes, I have a brother-in-law named Gary, and another one named John, he’s my husbands twin brother. There are quite a few of us here in town, and was wondering if maybe you might have met one some where. Interested and curious to know. Will be looking for an answer. Thank you

    Judy

    • I do not remember the names or all I have met but there were quite a few. I did not go to school with any that I recall, I think some went to Reno HS and some to Sparks.

      My Dad knew the family, or families, and I met some of the elders when I was young. We would sit around the old feed store along the river next to Wells overpass and listen to my Dad and his friends talk about the world. (Giglieri’s not sure of spelling) Met many old families sitting there on the hay stacks and piles of oat sacks.

      I am quite sure I have met some of your family but could not be definitive about who. Of the two names you gave John sounds the most familiar but could be just memories playing tricks. I moved away 31 years ago, so you know how that goes. Reno was a much smaller place back then and still had strong agriculture roots, so it was a small town in its culture. I used to make it back at least twice a year and now usually once.

      Couldn’t help the question as the name just jumped out at me from my past. After your post last evening I sat here with great memories of old friends and acqaintences springing to life. It was a very pleasant and nostalgic evening.

      You know there is a saying that we all know everyone in the world throught Seven people. And that was before the internet. Perhaps we will meet some day by accident and have a few laughs.

      By the way, where do they hold the rendevous you mentioned?

      Until then, I hope your weekend turns dry and is filled with fun.
      I wish I was going to be there.

      JAC

      • Judy S. says:

        Hi JAC

        Just read your answer and my husbands brothers moved here in 1977, from Burbank Calif. His dad moved here in I believe in 1980 or around there somwehre. We’ve been here since 1990 as I told you that yesterday I think. His brother Gary is a CPA, and his twin who we work with has an Analytical lab that tests drinking water, soil, metals, and all kinds of other things. To answer you about where the rendezvous is being held at, it’s at Mills Park in Carson City. It would be nice if we could meet and chat about things. BTW< Jim, my husband and his 2 brothers went to high school in Burbank. The school was named John Burroughs, they also went to grade school there, considering that was where they were raised at. I met Jim when he was in the Army and I was still in high school. He was 19 and I was 15 and we've been together since. 40 years married this October. I lived in Northern Calif until we got married, then we moved to Southern Calif. Well got to go for now, leaving for work soon. Maybe we can chat again later if I see you on here. Until then, have a wonderful day and catch you later.

        Judy

        • Judy: I may not have crossed your husband or brothers given your info. You said you had an Uncle in V.C. in the old days. Perhaps it was his kin I met.

          Of course Iam guessing there also Sabatini’s you are not related to in town. Basque and Italians were very abundant in Reno when I was young.

          By the way I should clarify that I was raised in the Reno are but really didn’t grow up until I moved to Idaho. Of course, some say I still haven’t. LOL

          I used to play semi-pro baseball games in the field next to Mills park. Small world isn’t it?

          Best Wishes
          JAC

          • Black Flag says:

            “I used to play semi-pro baseball games in the field next to Mills park”

            Really??? I used to play semi-pro ball too! (Until I used my face as bat one game… crushed my eye socket and broke my cheek bone – had a black eye so huge, it went all the down into my chest and my back…)

            • Did that in a fight once. Still have bionic man parts in one eye.

              Guess I was quicker at getting out of the way.

              OK gotta tell a story. When I was first starting to play I was always getting hit by pitches. Had God awful bruises on my ribs and arms. Good Ol’ Dad decided it was time to teach me how to move on my feet.

              He took a bucket of baseballs and threw them at me until I started getting out of the way.

              Never got hit by a wild pitch again, unless I wanted them to. I could scramble quick as a cat in all directions.

              Told ya I had a big collection.
              Smiling Big
              JAC

          • Judy S. says:

            Hi JAC The uncle who used to own the Bucket of Blood was on my dad’s side, he was came from Spain, my uncle that is. His name was Max Goya, sound familiar? He was married to my dad’s half sister. My dad’s side of the family has all kinds of nationalities. I think they had a big party way back when. There are some Sabatini’s here in town that we don’t know, that’s true. Actually, we’re kind of curious to see if they are related some how, but no body has done anything about it. Ya never know. So, you and BF used to play ball at Mills Park, like you said, what a small world. We used to belong to the Nevada Civil War Volunteers, about 10 years ago, but quit when they started getting to nit-picky, so we quit. Besides, when our son’s got older and joined the military, wasn’t as much fun. I used to play a nurse and go on the battlefield until someone told me not to do that, because I’m the first one the enemy would shoot. We had a lot of fun doing that, but now we just go and enjoy ourselves and watch all the different events that go on there throughout the day. It starts today, and goes until Sunday early evening until about 5:00 p.m. ok, time for me to go home. Will chat with you later. In the meantime.

            Judy.

          • Judy S. says:

            Hey JAC, thought I’d continue what I was saying earlier. I have several nationalities in me, most from from dad. I have French, German, Italian, Irish, and Souix , and Polish from my mom. My dad’s father, my grandfather, married a Souix woman from the Dakota nation back in the 1800’s. My grandfather really had the Indian look to him, my dad had some and me, well, hard to tell. My mom’s parents came from Poland, and landed in New York. That’s where my husband’s father landed. He came from Italy when he was 12 or 13 years old. Came from a small town in Italy called Atina. So, do you still live in Idaho? What do you do there, if you don’t mind me asking?
            Gee, this nice to have a conversation with somebody without the name calling and deorgatory remarks. Going to go for a bit, my son is here for a while. He and his brother have drill this weekend, so I would like to spend some time with him, before he heads down to Carson City, then to Dayton to spend the night with his brother. Won’t be able to see them all weekend. Catch you later.
            Your friend Judy

            • Hi Judy:

              Been away all afternoon. I do remember the Goya name but don’t recall any direct contacts. My brother in laws Dad used to sell produce and eggs in VC during the days you Uncle was there so probably knew each other.

              As I hinted, my Dad and Uncles knew just about everyone in the county, well four county area (Washoe, Story, Lyon, and Carson)

              I now live in Montana by the way but as I said in my bio piece, where my house is, is nothing but base camp. I am from the Rocky Mtns and high Sierra/Great Basin country.

              I am leaving tomorrow for my annual short walk about to visit friends around my home region. This will continue through most of the summer with short trips back to base camp.

              I now see why you feel the respect you mentioned of my brothers (not blood kin, just adopted) at Pyramid and in the Colony there in Reno.

              Sounds like you live near where I lived on a small ranch as a child. We had a place towards Pyramid, just west of where the old Harold’s Club Gun Club was located. I know houses now go almost to Palamino Valley. It just blows my mind to see that valley filled with homes instead of pastures and cows.

              Hope you have a great weekend.
              I’ll think of you when I hit Reno/Carson area.
              Best Wishes and Live Free
              JAC

      • JudyS.NV. says:

        Hi JAC

        I will try again to answer your question from earlier. My husbands brother’s moved her in 1977, shortly after their mom passed away. Their dad moved here around 1980, and we moved here in 1990, and I think I mentioned that part to you yesterday. They went to school in Burbank Calif. High school was John Burroughs and elementary was Brett Harte, and junior high was Luther Burbank. They lived in Burbank for a good part of their lives until the move here. I met Jim, my husband when he was in the army stationed at Oakland, and I was still in high school. He was 19, and I was 15, been together since. We got married in October of 1969. The rendezvous will be held at Mills Park in Carson City. Yes, it would be nice to be able to meet some time and chat about things that we might have in common. Who knows. I’m praying that it won’t rain this weekend, but already heard that we might get more showers today and tomorrow, hope not anyway. Hope you have a pleasant day, and pleasant weekend. Take Care.

        Judy

  9. Bama dad says:

    “I’d argue that it’s social spending– the New Deal– that’s kept this country capitalistic.”

    Really? I’d argue that it was the punishment of the capitalist that could best end the depression that keep the country depressed for so long.

    Tax Rates during the Depression

    Low High
    1930-1931 – 1.125% 25% IRS
    1932-1933 – 4% 63% IRS
    1934-1935 – 4% 63% IRS
    1936-1939 – 4% 79% IRS
    1940 – 4.4% 81.1% IRS
    1941 – 10% 81% IRS

  10. It maybe better to reverse this reasoning. I think that the poor actually recieve the largest persent benefit of our taxes and yet the pay the least. Free healthcare, food stamps, free school lunches, free housing reduce utility rates, public parks ect. The also use the lions share of police protect. So by THEIR reasoning if a person pays zero tax yet reaps a yearly benefit of 50000 from taxes they have a 50000% use rate.
    So if the highest tax payer pays 1,000,000. in tax then he should also be able to reap at least his 500000% (just so he is treated equal) he gets a total of 50000000000. Wow reckon the rich get that many benefits????? I don’t think so

    • PeterB in Indianapolis says:

      Actually, if a person were to TRULY pay ZERO in taxes, yet receive $50,000 in services and benefits, his use rate would be infinite, since any number divided by zero is undefined (has infinite solutions). They would actually have to pay $1 in taxes and receive $50,000 in services and benefits for your number to be correct, but of course I am quibbling here.

      The point you make is still perfectly valid.

      • Peter….I thought about that when I did it…..but I wasn’t considering any kind of sales, use ect….but if you use electricity you pay a tax…..so I stand completely correct on the issue that everyones at least pay some tax. Also correct on the muliplier of 0. I was trying to hurry……I am suppose to be working 🙂

        • PeterB in Indianapolis says:

          Amazed1,

          I too am SUPPOSED to be working, but I work for the government (no joke, I really do :)) and it is Friday, so of course there isn’t a whole lot of work going on!

    • Richmond Spitfire says:

      Amazed,

      I agree with you on your point.

      Regards,
      RS

  11. Oh this is far too much.

    “Consider defense, for example, which makes up 20% of the budget. Defending the country benefits everyone; but it benefits the rich more, because they have more to defend. It’s the same principle as insurance: if you have a bigger house or a fancier car, you pay more to insure it.” – Idiocy, its a country’s right to exist in its current form both politically and geographically, outside of change from within by its own populas, which is protected by its army. That the army’s purpose is to replace that which is lost, destroyed or stolen would be a point of view I’d expect to hear from a child once steered way from the immediate response of “to kill the bad guys”.

    “Social security payments, which make up another 20% of the budget, are dependent on income– if you’ve put more into the system, you get higher payments when you retire.” – Only if the current system in America pays out regardless of retirement income. If it pays out as it does here, many are in my own mother’s boat of having paid in maximum for 40 years only to be collecting the absolute minimum. The system is geared towards those who pay the least as reaping the greatest percentage of benefit.

    “Investments in the nation’s infrastructure– transportation, education, research & development, energy, police subsidies, the courts, etc.– again are more useful the more you have. The interstates and airports benefit interstate commerce and people who can travel, not ghetto dwellers. Energy is used disproportionately by the rich and by industry.” – Its fragmented structurally as it is indeed in logic… I’m going to guess an individual wrote this masturbating to a taped loop of president Obama’s “cap`n tax” rant. Thus the broken style a result of having to both type and think with the “other hand”.

    “As for public education, the better public schools are the ones attended by the moderately well off. The very well off ship their offspring off to private schools; but it is their companies that benefit from a well-educated public. (If you don’t think that’s a benefit, go start up an engineering firm, or even a factory, in El Salvador. Or Watts.)” – Again I’m having a fun time focusing on what the writer is trying to get across by fragmenting thoughts so badly. If its a matter of only the well to do attending private schools I’d point to many middle class making the necessary sacrifices in their own lifestyle in order to place their children in private schools of which president Obama both enjoys for his children and removes from the Washington school district’s voucher program for low income families. If its an educated work force is better than a non educated one, I’m not about to hand out kudos for stating the obvious. I’d gather we could get a consensus on wiping your bum after a number 2 and coming away with clean fingers as being equally laudable if we’re merely handing out praise without weighing merit.

    “Beyond all this, the federal budget is top-heavy with corporate welfare. Counting tax breaks and expenditures, corporations and the rich snuffle up over $400 billion a year– compare that to the $1400 budget, or the $116 billion spent on programs for the poor.” – I’ve just spoken to Robin Hood’s ghost and he too thinks the writer here a moron.

    “Come election season, Steve Forbes, among other millionaires, will be pushing plans for a flat tax. These proposals need to be absorbed with a carload of salt. A plan where everyone’s taxes are lowered is of course simply a tax cut. Here, once again, the question to ask as a voter and citizen is, what government services do you want to cut? Somehow I don’t think Steve is proposing to slash corporate welfare or defense. It’s more likely a way to attempt to cut social spending through the back door. People like to hear about tax cuts; they don’t like to hear about service cuts, even though they’re financially equivalent.” – I’d have thought any lefty worth his socialistic leanings more than willing to accept something the Russians have themselves adopted and found to work very well. If you are going to cite Steve Forbes you should have read him too which obviously is not the case here. There are no “outs” what so ever in his flat tax proposal. You start off having to pay 20 million, you end up paying 20 million and there is not a single structure to hide behind. While I personally would have the flat tax at the 20% rate and a 25% corporate, under such only the bureaucracy as a whole must fear. A wide swath of government jobs and others making good on a bad tax system become null and void. The poor need not worry here as those incomes alone would leave the coffers overflowing not including the growth a flat tax has been shown to have on an economy and in spite of those suddenly without these jobs drawing too from the public teat.

    “The marriage tax. While we’re at it, what about the marriage penalty? Why in heavens are we penalizing marriage? We aren’t. This is a good example of politicians’ weasel-talk. There’s no marriage penalty– there’s a double-income penalty. For instance, suppose you make $50,000 of taxable income (after deductions and exemptions) and your spouse doesn’t work. Together you pay $8500 in taxes. A single person with the same income pays $10,700. You’re enjoying a $2200 marriage bonus. (Even more, if you’ve taken the standard deduction.)” – A complete lack of comprehension is apparent here. As straws go, the world’s smallest set of locking tweezers (of a size equal to that needed to for picking Nancy Pelosi’s dignity from the floor as an example of scale) would be an absolute necessity.

    “The penalty comes for double-income marriages. E.g. you make $50,000, and your spouse makes $40,000. You pay $19,700 in taxes; if you were both single you’d pay a total of $18,600– about $1100 less. Is it fair to tax double-income households more? Well, why not? If you have a double income, you can certainly afford to pay more than those of us who have just one.” – In complete ignorance of the family unit and its historical purpose of procreation. Maybe dumbing it down to “making future tax payers in the best environment for developing earners” might work? USW could email this clod a copy of our gay marriage thread where it veers into the historical purpose of marriage.

    More “thought” should have went into organizing Mr Rosenfelder’s ideas as this reads like a heated response to something else than a piece meant to be read on its own. Its a type written conniption.

  12. Since taxes are an issue today, thought this would be an interesting read.

    http://www.foxnews.com/politics/2009/06/12/irs-considers-taxing-personal-use-work-cell-phones-fringe-benefit/

    I read Mr. Rosenfelder’s remarks with great confusion, because I think he may have a very flawed view of reality. I instantly wondered if “Dr. Smith” from “Lost in Space” may have had offspring!

    G!

  13. PeterB in Indianapolis says:

    Glen Beck has an iteresting opinion post over at Fox News (or as some liberals refer to it, Faux News :)) today.

    http://foxforum.blogs.foxnews.com/2009/06/11/beck_glenn_new_york_city_schools/

    In the article, he argues that New York should NOT give students monitary incentives for good grades. The primary argument he provides for NOT providing monitary incentives for good grades seems to be that they are receiving their public education free, and it is a gift.

    This relates to our tax discussion today. Where is Mr. Beck getting his numbers? Last time I checked, public education was far from “free”. Sure, the students are not paying tuition, but the majority of the families that have students in the public education system are paying the taxes that pay for that education, so the argument that it is “free” is fallacious.

    It could possibly be said that SOME of the student population is getting this education for free, if it can be demonstrated that their families are paying no taxes to support public education, but for the majority of students, their parents ARE paying for their education, it is just in the form of taxes rather than tuition.

    Since the education the students are receiving is not actually “free” in any sense of the word, his whole argument falls apart.

    What I want to know is:

    How does everyone here feel about the concept of the government providing monitary incentives to students as a means of improving their grades? Good idea, bad idea, indifferent? Why?

    • Black Flag says:

      The question before that needs answering:

      “What is it about grades that makes them important?”

      Is “Grades” a true or accurate measure of capability?

      Do “Grades” have any correlation with economic output?

      • Black Flag says:

        In other words, are grades worth buying?

      • PeterB in Indianapolis says:

        BF,

        There are many examples you could point to (Bill Gates, Albert Einstein, Thomas Edison, and others) in which grades and economic output do not correlate.

        There are also many examples you could point to where grades do correlate with economic output.

        A certain level of “grades” is generally required to get into a college or university. An even higher level of grades is necessary to get an academic scholarship to a college or university. Statistically, college or university graduates make tens of thousands of dollars (on average) more per year than non-college graduates.

        So, in spite of the fact that there are individual examples of people with no college education amassing great wealth and being very productive, and there are individual examples of people having a college education and being wastes of human flesh, I think that in general, grades do have a correlation with future economic output. IF we are going to have government-run education, then I do not see a problem with the government providing a financial incentive for academic performance.

        As we discussed yesterday, the government really has no business in education, and if government was out of the education business, then obviously the whole argument goes out the window.

        The interesting thing about the New York experiment is it seems to be working. Students are actually putting forth the required effort to learn and improve their grades because there is now money involved. If you look at “getting good grades” as their job, it makes a certain amount of sense to reward the students that do their job well.

        In the case of what is going on in New York, I also totally disagree with Glen Beck when he calls it Capitalism Run Amok. There is precious little capitalism involved in reality, the government runs the schools, and the government is providing the “performance bonuses”. There is a capitalist principle at work because students that perform their job (getting good grades) well, are compensated for doing that job well.

        One could argue that getting good grades and obtaining a quality education are NOT AT ALL the same thing. Under the current system, they probably are not the same thing. However, there is still a positive correlation between good grades and future wages and economic output for MOST students.

        I guess in conclusion my argument is that under the current system that exists, good grades are, on average, probably worth paying for at least to a certain extent.

        • Black Flag says:

          There are many examples you could point to (Bill Gates, Albert Einstein, Thomas Edison, and others) in which grades and economic output do not correlate.

          There are also many examples you could point to where grades do correlate with economic output.

          Hmm,

          Something cannot be both a ‘correlation’ and a ‘not correlation’.

          I hold that grades do not correlate with anything other than the ability to take tests.

          A certain level of “grades” is generally required to get into a college or university.

          Yes, university uses grades to cull the field – they could also use height and weight, but that is too obvious.

          An even higher level of grades is necessary to get an academic scholarship to a college or university. Statistically, college or university graduates make tens of thousands of dollars (on average) more per year than non-college graduates.

          Ah!

          Adding the cost of university and the debt most carry after their degree, I do not think university is a very good deal for most people.

          But this is another post – there is not good evidence that university delivers a better income, either.

          • PeterB in Indianapolis says:

            BF,

            I have seen quite a few studies in my lifetime of the annual and lifetime income of high school graduates vs. college graduates, and in every study I have seen, both the average annual income and the total lifetime income of college graduates is significantly higher than high school graduates.

            I do agree that the average college student also amasses a boatload of debt in the process; however, the most recent study I have seen claimed that the average high-school dropout had an annual income of about $22,500, the average high-school graduate had an annual income of $30,300, and the average college graduate had an annual income of $54,500. I have seen several other studies that mirror these numbers pretty well.

            The example of Bill Gates shows quite well that a college education is not necessary in order to amass great wealth, but do you actually dispute the income numbers from such studies as I mention above? If so, why?

            I am not saying you are wrong, I just want to see where you think that the studies go wrong.

    • Amazed1 says:

      I think it is a dumb idea….should I pay my kids to clean their bedroom? Some things are expected of us….good grades, cleaning your room and taking out the trash.

      • PeterB in Indianapolis says:

        Many people DO pay their kids for cleaning their bedrooms, mowing the lawn, taking out the trash, and washing the car. It is the grand old concept of the Allowance.

        Some people give their kids a set amount of money per week no matter what. Other people give their kids a set amount of money per week, but this set amount is reduced or even eliminated if they fail to make their beds, get good grades, clean their rooms, etc.

        If you have kids, and if you give them money on a regular basis, and if you have EVER reduced the amount of money you give them for a given week because they did not perform all of their chores to your satisfaction, you just tied that monitary incentive to the things that were formerly “expected of them”.

        Not saying that you have done this personally, but to anyone who has, that is what you just did 🙂

        • Amazed1 says:

          Well there are people who do that….but I always expected my kids to clean up after themselves. Their room and any mess they made it the bathroom was thiers to clean up. The got an allowance for taking out the trash, vaccuming washing dishes or doing the laundry. Yes their allowance was reduced if they did not do their work….but if they didn’t clean their room they did not get to go anywhere…..wheter they did their allowance chores or not. My kids were also given “A” money they got money for “A’s” on their report card. If they made straight A’s they got a special trip. I figured if they did not do their homework they wouldn’t be making A’s so no money till the report card came in.

    • Peter, you said:
      “This relates to our tax discussion today. Where is Mr. Beck getting his numbers? Last time I checked, public education was far from “free”. Sure, the students are not paying tuition, but the majority of the families that have students in the public education system are paying the taxes that pay for that education, so the argument that it is “free” is fallacious.”

      In my opinion, Mr. Beck is correct. Since the ones who would be receiving the “payments” would be the students and not the parents who are paying, in essence their education is free. This discounts the fact that later in life when these students are taxed, some of those stolen dollars will go to educate others…Is that possibly what you meant?

      • PeterB in Indianapolis says:

        Terry,

        By your argument, all education (at least through high school) is “free”.

        Yes, it is the parents (and the rest of the taxpayers) who are paying for the education, and not the students themselves.

        However, by the same argument you just made, all children receive “free” housing. They aren’t the ones paying the rent or the mortgage 🙂 However, SOMEONE is paying for their housing.

        Yes, the students (who are not PERSONALLY paying for their own education, and the students are the ones receiving the monitary incentive, so I do actually see your point to a certain extent.

        The way my parents used to put it to me was this (to loosely quote my dad), “Your job is to go to school, get good grades, and behave in a reasonable manner while you are there; MY job is to pay for it.”

        If one looks at it in this way (the job of the student is to get good grades) then getting a bonus for a job well done seems reasonable.

  14. Black Flag says:

    Phil Donohue:
    When you see around the globe the maldistribution of wealth, the desperate plight of millions of people in underdeveloped countries.

    When you see so few haves and so many have-nots. When you see the greed and the concentration of power.

    Did you ever have a moment of doubt about capitalism? And whether greed is a good idea to run on?

    Milton Friedman:
    Well first of all tell me, is there some society you know that doesn’t run on greed?

    You think Russia doesn’t run on greed?

    You think China doesn’t run on greed?

    What is greed?

    Of course none of us are greedy. It’s only the other fella that’s greedy.

    The world runs on individuals pursuing their separate interests. The greatest achievements of civilization have not come from government bureaus.

    Einstein didn’t construct his theory under order from a bureaucrat.

    Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty that you are talking about, the only cases in recorded history are where they have had capitalism and largely free trade.

    If you want to know where the masses are worst off, it’s exactly in the kind of societies that depart from that.

    So that the record of history is absolutely crystal clear, there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.

    Phil Donohue:
    Seems to reward not virtue as much as the ability to manipulate the system.

    Milton Friedman:
    And what does reward virtue?

    You think the Communist commissar rewards virtue?

    You think a Hitler rewards virtue?

    Do you think… American presidents reward virtue?

    Do they choose their appointees on the basis of the virtue of the people appointed or on the basis of political clout?

    Is it really true that political self-interest is nobler somehow than economic self-interest? Y

    ou know I think you are taking a lot of things for granted.

    And just tell me where in the world you find these angels that are going to organize society for us?

    Well, I don’t even trust you to do that.

  15. I know this is not necessarily part of this article, but the New Deal has been mentioned.

    I pulled this off Wikipedia concerning the depression that occurred in 1937.

    Business-oriented observers explained the recession and recovery in very different terms from the Keynesians (government spending as a vehicle for recovery). They argued that the New Deal had been very hostile to business expansion in 1935-37, had encouraged massive strikes which had a negative impact on major industries such as automobiles, and had threatened massive anti-trust legal attacks on big corporations. All those threats diminished sharply after 1938. For example, the antitrust efforts fizzled out without major cases. The CIO and AFL unions started battling each other more than corporations, and tax policy became more favorable to long-term growth.[48]

    When the Gallup poll in 1939 asked, ‘Do you think the attitude of the Roosevelt administration toward business is delaying business recovery?’ the American people responded ‘yes’ by a margin of more than two-to-one. The business community felt even more strongly so”[35] Treasury Secretary, Henry Morgenthau, angry at the Keynesian spenders, confided to his diary May 1939: “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and now if I am wrong somebody else can have my job. I want to see this country prosper. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this administration, we have just as much unemployment as when we started.[49] And enormous debt to boot.”

    Apparently the BO administration does not learn from history. Or maybe they only read the version taught in our school system.

  16. Chris Devine says:

    I understand your confusion with his national defense/insurance analogy. However, your rebuttal isn’t much better. Insurance is about replacement costs. Insurance doesn’t stop house fires or earthquakes, but it does help you recover from them. National defense is a protective/preventive measure. I think his analogy is meant to show that those who have more to lose should pay more to protect it. You might still disagree with this, but you need to address this issue directly.

    I’m unsure how you interpret his social security argument to say that the rich should pay more for less. It seems pretty explicit to me that if you pay more you’ll get more. In addition there’s a cut off at around $100k/year so that if you make more than that you don’t have to pay FICA on that portion.

    The use of public resources argument seems valid enough to me. He isn’t suggesting that rich people pay more for the same benefit. He’s saying that those who use the resources more (SUV drivers, trucking firms, frequent fliers, etc.) should pay more for the management of those services (DOT, ICC, FAA, et al.). Regarding the R&D issue consider the internet. It was developed using taxpayer money as a defense dept. project. Shouldn’t the taxpayers be able to use this resource since we paid to have it developed? This is the source of the oft misunderstood ‘Al Gore invented the internet’ misquote. He never said he invented the internet, but he and others in congress were instrumental in having it made available to us.

    There are agencies who use taxpayer money to fund research (DoD, NASA, NIST, et al.) All he’s saying is that if taxpayer dollars paid for the research then we should get a cut of the profits. Most companies I know of will have you sign something to the effect of ‘if you invent X while you work here, we are the owners of X.’ The government is no different. I had to sign the same statement as a DoD civilian.

    I think you have misunderstood his public education argument. He’s saying that business owners (as the ones who profit the most from business) should pay for the educational system that makes their businesses possible and successful. Remember, the people who work there pay taxes too. But since they don’t profit as much they don’t pay as much. Seems fair to me.

    As far as the private education issue goes there is something to the argument that funding is the primary issue. When I was in the SF Bay Area we lived right down the street from De La Salle High School. That place had funding like you wouldn’t believe. They had the same multi-million dollar artificial turf as my university’s football team. It currently costs $13,500/year to attend. Granted they have financial aid for those in need, but any school with those resources is bound to be better than most public schools. I’m not suggesting throwing money at anything, but if we could match that level of per pupil spending in public schools we’d have some pretty good schools (as long as we don’t spend our money foolishly on football fields).

    The S&L bailout example shows how dated this article is, but it doesn’t necessarily negate his argument. I’ll see if I can dig up some recent figures. As far as tax breaks go, I think that should count here provided they aren’t universally available. If Congress is sweet-talked into massaging the tax code in favor of wealthy donors, that’s a lot like robbing ‘middle class Peter’ to pay ‘rich-guy Paul.’ In addition, no-bid contracts and other such deals that allow public money to be transferred into private hands seem rather unfair. However, I understand that these aren’t really arguments for a progressive tax structure as much as they are arguments for fixing the way tax revenues are spent.

    Do you have figures on charitable donations that show them as percentages of income as opposed to dollar amounts? It makes sense to me that if you make $14k/year (minimum wage) and you donate $500 (3.5%) then you’re more generous than someone who makes $100k/year who gives $3500. The guy who makes minimum wage could probably use the $500 more than the guy who gave $3500. Regarding the Clinton/Gingrich welfare reform you should really read Nickel and Dimed by Barbara Ehrenreich. As an investigative reporter she actually tried to live on the types of jobs people found after they were kicked off welfare.

    Regarding the flat tax issue, you point out the irrationality of the rich trying to slash social programs since it would likely cause long term problems. I think we’ve all seen that rich people (or just people in general) often go for the short term sure thing at the expense of long term stability. That’s the whole point behind any sensible policy: make sure that all things are considered before you consume. The simplest example here would be hunting/fishing quotas. If you let people take as much as they want without regard for nature’s ability to replenish its stocks, you end up with extinct species.

    His argument for the marriage penalty/bonus is correct. If you’ll look close he says ‘taxable income.’To have a taxable income of $50k with a dependent you’d have to earn considerably higher than $50k. I don’t think he’s trying to say that a single earner family should pay more. DINC’s (double income-no kids) do get an advantage over single individuals. They get to pool their resources and have more disposable income. There is no incentive for a spouse to stay at home because you aren’t be taxed the full amount of the second income (at the most it’ll be around 30%).

    Marc Rosenfelder isn’t the best spokesperson for this issue, but what do you expect from the first page of hits on Google?

    • Chris, Good day to you sir! National Security and the rich paying more because they have more to lose? National Security is there to protect our nations soverienty (SP?) and Life, Liberty, and the Pursuit of Happiness. It was never intended to protect one’s personnal possesions, that’s what insurance is for. Equating National Security and insurance is much like having an orgy to promote virginity.

      G!

    • PeterB in Indianapolis says:

      “It currently costs $13,500/year to attend. Granted they have financial aid for those in need, but any school with those resources is bound to be better than most public schools. I’m not suggesting throwing money at anything, but if we could match that level of per pupil spending in public schools we’d have some pretty good schools (as long as we don’t spend our money foolishly on football fields).”

      Chris,

      Public Schools actually spend MORE money per student than private schools do, which is why programs like the Milwaukee Voucher Program actually save the State of Wisconsin $10 Million per year. So we ALREADY DO match (and even exceed) that kind of per-pupil spending in public schools, and it has NOT made them great.

      Other than that, I actually agree with you on quite a few points (and disagree on others, but what else is new :)). I do not think it can be argued that the rich use more government services than the poor; HOWEVER, much like your charitable giving question, how much do those services cost compared to what they are paying in? There is no disputing that the bottom 20% of wage earners pay no federal income tax whatsoever, and the top 20% of wage earners pay over 90% of the total federal income tax collected. While I do not disagree that they use more services and derive more benefits, how do we calculate what their “fair share” actually is? I am not arguing that the current system is perfect, nor am I arguing that any of the proposed replacement systems are perfect. I am, in fact, genuinely asking what you would propose.

    • I’m confused about the marriage penalty. If two people are living together and not married they pay less in taxes than they do if they decide to get married? Is this correct? How does this make sense? Why would we penalize them for getting married?

      • Black Flag says:

        Jennie,

        You’re suffering from an illusion called “it has to make sense”.

        When you start trying to understand government, do not apply your standards to it.

        Ask the question another way – “What is government trying to manipulate by taxing marriage?”

        • Okay, I think I’ve got it figured out now. The main reason two people would get married rather than living together is for religious reasons, so it’s a tax on religion. I’m going to start calling it the “chastity tax”.

          • Black Flag says:

            There you go!

            I think your logic makes sense! A tax on religion….

          • PeterB in Indianapolis says:

            I like that! The Chastity Tax 🙂

            So, the question is, if we live in a country that supposedly has religious freedom and supposedly has separation of Church and State, what reason would the government have to implement a back-door tax on religion?

            • It is now a tax on non-religion as the married couple pay less tax than two single people.

              • I remember hearing about the “marriage penalty” quite a few years back, and I thought that they had changed it. I guess this was an old article by Mr. Rosenfelder. It just figures that they would change it so that now we penalize people for being single.

              • The elephants changed it when they got in. Which of course supports BF’s contention that the tax code is used for reasons that go beyone raising revenue.

                Which of course spawns massive quantities of lobbyists.

                JAC

    • Just a quick one Chris, do you know where De La Salle (Christian Brothers School obviously) gets its money? That is very important. Most Christian Brothers schools in NY have had to close down over the past 25-35 years due to lack of funds including my old school, Manhattan Prep.

      Mt son went to St Peters Prep in Jersey City. Outside of incredibly generous alumni who have prospered due to their educations there, they also have attracted corporate sponsorship because of their success rate and open door admission policy for the potentially talented but not rich. they also have a nice field and a kick ass football team which the local public schools are jealous of.

      My old Grammar school, smack dab in the middle of what now resembles downtown Santo Domingo also attracts huge corporate gifts due to their success rates.

      I would propose to you that the reverse of your statement is true. The school has those resources available precisely because it is better than the Public Schools. Remember the old adage, nothing succeeds like success. Over here in fair lawn, NJ we are throwing more than that $ 13,000 per pupil per year at them and showing less and less for it every year.

      • Chris Devine says:

        I’m not going to get involved in a ‘chicken or the egg’ argument. The fact remains that private schools have more resources and can exclude students who don’t perform well. Any statistic that claims to show better success rates amongst private schools must take these factors into account (regardless of any underlying causes).

        • USWeapon says:

          Is it accurate to say that private schools are spending less per pupil to provide that education? Let’s start with that.

        • Foolish of me to try and get you to think the answer to the “Why?” question. What you say is a “fact” to you and apparently must be the same thing to everyone else too lest you think them an idiot. Never question the “fact”. Sort of like that Snopes thing yesterday. A thorough reading of the article showed it was not bogus, the 1895 test, merely that the commentator did not like it test and thought it irrelevant. Throwing in a word like purported never makes it so. But you had to read it past the first paragraph to get there and discover, Lo! the commentator was stating an opinion, not a fact.

          I have eclectic tastes in subject matter as I do in music. I think most things are interrelated and I actually like to find out “Why?” on almost anything. Spinning wheels maybe but it helps with the old big picture.

          Incarnation School on 175th Street and St. Nicholas Avenue in upper Manhattan DOES NOT have more resources than the three public schools around it. Because you say it does, does not make it so. Incarnation will take in any student so long as they abide by the rules.

          Check it out!

          http://incarnationnyc.org/

          • Chris Devine says:

            Just like yesterday you have misunderstood my point. The exam article didn’t try to say that the exam was a hoax, only that the conclusion drawn about declining levels of education was flawed. I didn’t say all private schools have better resources than all public schools. But if you seriously think that on average private schools have less than public you are kidding yourself.

            What the hell do I know about your school? I spoke of a school I had experience with. If anybody is having a hard time seeing the complexity of these issues it is you.

            Incarnation won’t take in every kid. It doesn’t have infinite space or unlimited resources. “Incarnation School accepts children without regard to race, color, creed, nationality or ethnicity.” All this says is that they don’t discriminate. Besides, isn’t poor academic performance related to not abiding by the rules? I’m not saying this school in particular excludes poor performers, but it could if it wanted to. Public schools are required by law to take all kids regardless of how much (or little) they succeed in their studies.

            • They said false, you said bogus. The impression given to the average reader would be that the exam was fake. Owning a few early 20th century grammar school texts, I know what was taught. I also know that the average person in the US was not likely to finish High School. Therefore it would be incumbent to jam as much useful knowledge down kids throats as could be done. I will try to find the Heinlein testimony because I’m sure we will revisit this topic.

              Another thing I know but can’t attribute, the average High School grad in 1945 had a vocabulary of 25,000 words, by 1990 that was down to 10,000.

              Lastly, Incarnation used to handle a whole lot more kids back in my day. They could but didn’t turn anyone down. I am trying to get you my friend to accept that there are other alternatives, that’s all, I am not proposing we close Public Schools, merely that we A., complement them and B. expose them to some competition.

              Why in the name of the Almighty people jump to the conclusion that those of us who, let’s say favor vouchers are against Public Education, I don’t know. Knowing the least bit about public finance would tell you that if I can save half the cost of a child’s education by giving him/her a voucher to the local Yeshiva , Charter School or religious school, then I would have THE OTHER HALF available to spend on the kids who need it more. If folks can’t see that, they are either blockheads or have another agenda.

    • Chris:

      I want to tackle one for now as it relates to the discussion of the other day: “If Congress is sweet-talked into massaging the tax code in favor of wealthy donors, that’s a lot like robbing ‘middle class Peter’ to pay ‘rich-guy Paul.’”

      If the tax deductions given to the wealthy, due to their sweet talking, do not change the amount of tax paid by the middle class then there is no “robbing” or other “harm” done to the middle class. The net effect is less cookies than might have been available to spread around, whether in cash or tax cuts for someone else. But there is absolutely no impact to the lower income earners.

      The use of this example fails to recognize that what is really going on is not any different than the store that raises the prices before announcing their 20% off sale. Raise the tax on the rich, give it back in deductions, now you have control of the wealthy’s pocket book to use to your advantage. And as an added bonus you can now play class-warfare when the rich start to bitch.

      • Chris Devine says:

        The rich don’t bitch, they lobby. When was the last time you saw Bill Gates on TV crying foul? How many millionaires or billionaires did you see at the tea parties? They go straight to the source with brown envelopes and suitcases. Until we limit the influence of money in politics we can forget any chances of real reform. We can squabble all day long about who lobbies more: labor or corporations, senior citizens or tree-huggers. The fact remains that politicians spend too much time worried about reelection and the funds required for a successful campaign.

        • USWeapon says:

          Agreed

        • And just what the hell do you think ACORN does for the poor? Or how about any one of another hundred thousand or so not-for-profits?

          I was thirty five before I realized what a fraud the not-for-profit sector was. Sure there are actually Mother Theresa types out there, but for every one of her there are two NFP directors who have or want to have summer houses in the Hamptons.

          NFP, for those uninitiated merely means you have to have a zero bank balance at the end of the year. If you don’t, you can always award bonuses.

          You will never, repeat never limit the influence money has on politics. Corporation X may contribute dollars to a candidate, but “Friends of left handed, blind transgendered people” (FLHBTP for short)will go out and ring doorbells, threaten people or make phone calls. Both have a financial value.

          • Chris Devine says:

            You see the world in black and white. It’s easier to understand that way but usually wrong. Do you seriously believe that ‘for-profit’ necessarily means better? Or that ‘non-profit’ necessarily means worse?

            There are a few more criterion for designation as a non-profit organization than a zero bank balance:

            http://www.irs.gov/charities/nonprofits/content/0,,id=132157,00.html

            I didn’t say that you would completely limit the influence money has on politics. But this doesn’t mean you can’t reduce its effects considerably. Your example is confusing one form of influence for all forms of influence. I was talking about the direct effect money itself has on legislators, not how grass-roots organization indirectly affects the agenda of legislators.

            • I believe I used Mother Theresa as an example. Logic would therefore assume that I would not be knocking all NFP’s. Nor, would I knock all for profits. I am merely pointing out that the general public ASSUMES that NFP’s are all holier than thou and brother, from personal experience, they ain’t.

              Your final paragraph is complete disinformation. You had better believe my NY and NJ politicians know exactly the worth of so called “grass roots” organizations. If they had to pay for it they know exactly how much they would have to raise.

              • S.K.

                Just wanted to clarify something for everyone.

                Not for Profit does not require a Zero bank balance at the end of the year. It in fact does not preclude profit at all. It does preclude distributing those profits to shareholders or to officers or directors based on profit as a criteria. In short, no pay or bonus based on profits.

                Have a good weekend
                JAC

              • Thank you for the clarification. I appreciate it. When I worked for NYC I monitored a number of the NFP’s that had City grant money. They always made it a point to be broke by the end of the contract year. I had assumed that was a requirement. I shall henceforth not be so dumb. None of my contractors ever made a dime.

                Gracias Amigo.

        • “The rich don’t bitch, they lobby.”

          The rich do bitch and it is called Lobbying. They also complain publicly through various means. If they start making too much noise the left wing talking heads and politicians ramp up the class warfare and “fairness”, “inequity” rhetoric.

          No regulations or attempts to take their money and you get…..no bitching…..no lobbying. You constantly reverse the cause/effect relationship.

          Of course your answer is to eliminate the rich persons ability to complain and protect themselves, which is by lobbying and supporting those who will not attack them. So please explain how this is not the use of force on one tribe to suit the needs of another?

          If you really want the politicians to stop worrying about money and handing out favors to get it then all you have to do is eliminate their ability to use force on one segment of the population to provide advantage to another. Very simple actually.

  17. Chris Devine says:

    I understand your confusion with his national defense/insurance analogy. However, your rebuttal isn’t much better. Insurance is about replacement costs. Insurance doesn’t stop house fires or earthquakes, but it does help you recover from them. National defense is a protective/preventive measure. I think his analogy is meant to show that those who have more to lose should pay more to protect it. You might still disagree with this, but you need to address this issue directly.

    I’m unsure how you interpret his social security argument to say that the rich should pay more for less. It seems pretty explicit to me that if you pay more you’ll get more. In addition there’s a cut off at around $100k/year so that if you make more than that you don’t have to pay FICA on that portion.

    The use of public resources argument seems valid enough to me. He isn’t suggesting that rich people pay more for the same benefit. He’s saying that those who use the resources more (SUV drivers, trucking firms, frequent fliers, etc.) should pay more for the management of those services (DOT, ICC, FAA, et al.). Regarding the R&D issue consider the internet. It was developed using taxpayer money as a defense dept. project. Shouldn’t the taxpayers be able to use this resource since we paid to have it developed? This is the source of the oft misunderstood ‘Al Gore invented the internet’ misquote. He never said he invented the internet, but he and others in congress were instrumental in having it made available to us.

    There are agencies who use taxpayer money to fund research (DoD, NASA, NIST, et al.) All he’s saying is that if taxpayer dollars paid for the research then we should get a cut of the profits. Most companies I know of will have you sign something to the effect of ‘if you invent X while you work here, we are the owners of X.’ The government is no different. I had to sign the same statement as a DoD civilian.

    I think you have misunderstood his public education argument. He’s saying that business owners (as the ones who profit the most from business) should pay for the educational system that makes their businesses possible and successful. Remember, the people who work there pay taxes too. But since they don’t profit as much they don’t pay as much. Seems fair to me.

    As far as the private education issue goes there is something to the argument that funding is the primary issue. When I was in the SF Bay Area we lived right down the street from De La Salle High School. That place had funding like you wouldn’t believe. They had the same multi-million dollar artificial turf as my university’s football team. It currently costs $13,500/year to attend. Granted they have financial aid for those in need, but any school with those resources is bound to be better than most public schools. I’m not suggesting throwing money at anything, but if we could match that level of per pupil spending in public schools we’d have some pretty good schools (as long as we don’t spend our money foolishly on football fields).

    The S&L bailout example shows how dated this article is, but it doesn’t necessarily negate his argument. I’ll see if I can dig up some recent figures. As far as tax breaks go, I think that should count here provided they aren’t universally available. If Congress is sweet-talked into massaging the tax code in favor of wealthy donors, that’s a lot like robbing ‘middle class Peter’ to pay ‘rich-guy Paul.’ In addition, no-bid contracts and other such deals that allow public money to be transferred into private hands seem rather unfair. However, I understand that these aren’t really arguments for a progressive tax structure as much as they are arguments for fixing the way tax revenues are spent.

    Do you have figures on charitable donations that show them as percentages of income as opposed to dollar amounts? It makes sense to me that if you make $14k/year (minimum wage) and you donate $500 (3.5%) then you’re more generous than someone who makes $100k/year who gives $3500. The guy who makes minimum wage could probably use the $500 more than the guy who gave $3500. Regarding the Clinton/Gingrich welfare reform you should really read Nickel and Dimed by Barbara Ehrenreich. As an investigative reporter she actually tried to live on the types of jobs people found after they were kicked off welfare.

    Regarding the flat tax issue, you point out the irrationality of the rich trying to slash social programs since it would likely cause long term problems. I think we’ve all seen that rich people (or just people in general) often go for the short term sure thing at the expense of long term stability. That’s the whole point behind any sensible policy: make sure that all things are considered before you consume. The simplest example here would be hunting/fishing quotas. If you let people take as much as they want without regard for nature’s ability to replenish its stocks, you end up with extinct species.

    His argument for the marriage penalty/bonus is correct. If you’ll look close he says ‘taxable income.’To have a taxable income of $50k with a dependent you’d have to earn considerably higher than $50k. I don’t think he’s trying to say that a single earner family should pay more. DINK’s (double income-no kids) do get an advantage over single individuals. They get to pool their resources and have more disposable income. There is no incentive for a spouse to stay at home because you aren’t be taxed the full amount of the second income (at the most it’ll be around 30%).

    Marc Rosenfelder isn’t the best spokesperson for this issue, but what do you expect from the first page of hits on Google?

    • Chris

      Those who have money (wealthy, super-rich, etc) pay more than their fair share as is. Considering your point that “they use more so they should pay more” I offer that they do.
      As consumers the consuption rate per individual/household equates to the taxes paid out. For almost everything we buy, use or consume there is a tax. Entertainment, home purchases, cars, boats, planes, gas, utilities, travel, education, sewer and water, property tax, gasoline, etc, etc.

      It is factual that those who utilize these materials and services more pay more in some form of tax for doing so.

      In addition to the amount that they contribute there are additional taxes levied on the funds used to acquire/use these services. They buy a house in the Hamptons and the realtor pays income tax and business tax. The mortgage company pays taxes on the profit earned for mortgaging the home. The town/city and state garner funds to use to promote and/or maintain the community in which they live. Wages are paid to city workers who do the work and their incomes are taxed while they are taxed on the services they use.

      It’s out of balance alright, but not to the side you preach.

      In short it is a horrific tornado that continues to gobble up more and more revenue as it progresses.

      I think that the great majority of those who promote more taxes on the rich are more greedy than those they dispise. I think a great majority of them believe that since they don’t have what the wealthy have they don’t think the wealthy should have it either. I believe a great majority of them are using the “tax the rich” ploy to hide their own hatred for those that have, and would rather not see anyone have an excess of cash.

      If there was a Flat tax or Use tax invoked I think that you would find that the wealthy still wind up paying 80% of the tax paid into society today. And at the same time those in the lowest tax bracket pay the least.

      • Chris Devine says:

        I didn’t say that the rich don’t pay more, I said they should pay more. Personally I don’t think they should pay more because I’m jealous. I’m not saying there aren’t people out there who feel that way, but they are just as deluded as people who think being rich means you necessarily deserve to be (or being poor for that matter). It’s Calvinist predetermination applied to economics via Max Weber.

        • If it is not jealousy or envy then why is the word “fair” used so often in these discussions?

          These two feelings are the root of how the word “fair” is used.

          • Chris Devine says:

            Perhaps that’s how you interpret them, but it is not the only way to perceive the use of ‘fair.’ If someone says of a murderer who is falsely acquitted that it’s not fair, would you think he was jealous? If someone told you that it’s not fair that ‘Joe’ got a job by lying on his application do you think he’s jealous? When somebody is crying over the loss of a loved one after an accident and says, “it’s not fair, God,” do you see this as a sign of jealousy?

            • The first two I would assign to “justice” as opposed to “fairness”. Perhaps that is our main difference. If both teams play the game according to the rules and one loses, it is fair. If one cheats then it is not fair per our use of the term.

              But if everyone plays the tax game according to the rules, then why is the winner deemed to be unfair?

              Your last exampley of death is somewhat linked to jealousy and envy at a very deep level is it not? However, I think we use that term losely due to cultural norms, much as you suggested regarding language and learning the other day. We learn catch phrases without ever really thinking about what they mean. The example you give is like “life is not fair”. Life can be neither fair or unfair yet we accept this without question. My point is that Fair requires a standard of comparison. Without the rich there is not discussion. Without two teams on the field it is moot.

              My other problems with how the “liberal” crowd use the word is that it does play off of the feelings I mentioned. It is evident in most writings and commentary. It also is a subjective term that has no concrete meaning. Thus subject to interpretation and thus manipulation by politicos.

              You see I was following along with your discussion about certain folks getting more benefits and thus it would be just to charge them more, then you used “fair”. At this point folks like me now believer you are just rationalizing your desire for “fair” by using some straw man argument.

              By the way, I argued against your position on this the other day not because I necessarily disagreed with the concept but because the examples you gave really don’t fit the rationale. If you look back I think you will see I said something to the effect of “bad example” somewhere.

              Now I challenge you to think of how such a “progressive tax” concept could be constructed within my ethic of freedom and no force by govt. It can be done but it will be very difficult. But only if you accept that govts only legitimate role is to protect our rights.

              • Chris Devine says:

                To put it simply, if one side has more influence when the rules are written then it is neither fair nor just (take your pick).

                Check out John Rawls’ A Theory of Justice to get an idea of what I’m talking about. Then you can read Robert Nozick’s Anarchy, State and Utopia for a rebuttal.

                Look for phrases like ‘distributive justice’, ‘original position’, ‘veil of ignorance’, and ‘birth lottery’.

              • USWeapon says:

                phrases like the ones you offer here are phrases that I find faulty from the beginning. “Birth Lottery”? Really? So now being jealous that someone was born to a family with more money is justified? Forget that those parents probably worked harder to put themselves in that position. Victim mentality. Nothing more, nothing less.

              • Chris Devine says:

                They’re not my terms and they will help you find the relevant info quickly.

                Distributive justice states that inequity is only permissible if it benefits the least well off. For instance, we pay doctors more money because they worked hard to become physicians and we all need good doctors. Everybody benefits.

                The original position is a hypothetical starting point where those who write the laws are behind a veil of ignorance where they have no idea about any personal attributes that may or may not grant them an advantage in society. The idea is that if people don’t know how the rules will affect them they are more likely to draft rules that treat everybody as fairly as possible.

                The birth lottery refers (as you suspect) to the advantage that some may have based upon who their parents are. The idea is that you had nothing to do with it, so why should you feel justified in claiming it as yours? It’s not about jealousy. It’s about recognizing that success in life is often determined by things out of our control and many people forget this when they think about inequity. Not all poor people deserve to be poor and not all rich people deserve to be rich. It is in our best interest to reward effort and risk more so than chance.

              • USWeapon says:

                Thanks for clearing that up a bit. The funny thing is that when you describe some of the bigger picture things this way, in your own words, I am able to understand where you are coming from and, therefore, where our paths are similar. It has long been my belief that the left and the right see many things similarly, but differ on the tactics to achieve mutual interests. That is why I prefer to tackle the issues a step at a time. Overall, I find that the logic and reason used is often faulty on both sides. But if we keep it to a conversation between all of us we can eliminate that portion by pointing out faulty logic and reasoning and demanding that of each other.

              • Chris Devine says:

                There is no reason to believe that any given family deserves (or doesn’t) their place in the class structure. You can’t argue from there. I’d say there are just as many people who are wealthy through pure luck as there are poor people due to bad luck. There are probably just as many people who are rich through hard work and perseverance as there are people who are poor despite all their hard work and perseverance.

                This isn’t about jealousy, envy or class warfare or whatever you want to call it. It’s about recognizing and mitigating the effects of anything but effort. And I’m not talking about T-ball rules where everybody gets to bat and everybody gets a trophy. I’m talking about encouraging people to do their best and giving them a hand when things don’t work out as planned.

              • USWeapon says:

                And I don’t have time to read a book every time I have a question. I want to know your position and why. Then I can argue it with you, lol

              • Chris Devine says:

                It can’t be summed up succinctly. It’s really hard to carry on a conversation with someone who doesn’t share your background or perspective.

              • “To put it simply, if one side has more influence when the rules are written then it is neither fair nor just (take your pick).”

                If it has no real affect on me then it is neither unfair nor unjust.

              • Chris Devine says:

                Keep on telling yourself that this or that doesn’t affect you and you might actually believe it someday.

  18. Black Flag says:

    Oh no! Another double dose of Chris – antidote please!

    😆

  19. Black Flag says:

    Any discussion around taxes always will lead to the discovery that all tax is unfair to some person or group.

    Thus, the swirl – flat is unfair to the poor; progressive is unfair to the rich; unfair to married; unfair to middle class; unfair – unfair – unfair…..

    Simply, there is no tax that doesn’t harm someone – because it is rooted in a human right violation and is evil – that is theft.

    It is no surprise, then that evil harms.

    • Chris Devine says:

      Unpleasantness is a part of life. Avoiding the dentist will only make you toothless (and cause a great deal of suffering).

      • Black Flag says:

        It’s more than suffering – it’s evil …. and so is taxes! 😉

        • Evil, evil, evil…you keep using that emotional word.

          • Black Flag says:

            Yes and no.

            I have defined it specifically, so No, it describes exactly what I mean it to….

            and Yes, I know it holds connotations for others, to emphasis how horrific the target actually is.

  20. TexasChem says:

    Someone please tell me why the money I make is mandated by law to go to helping other communities families when I could put that money to use for MY own community and family?

    My kids do go toa private christian school.That’s because I busted my rear-end to make something out of myself.I strive to give my kids more than what I had growing up.Not really material things but better oppurtunities through better education.

    U.S. I agree with every point you made in your article.This free ride mentality arguement the libs use really ticks me off.Getting something from nothing is impossible.Taking from those who work hard is criminal in my opinion.Especially giving benefits to freeloaders on welfare for years and years.Call me cold hearted if you choose but it is not the wealth earners responsibility to support every dadblamed loser in America that’s too lazy to get out and change thier fortune.

    They did away with the requirement to be searching for a job while on welfare plus increased the benefits.What kind of liberal idioacy is that?Where is the motivation for them to go out and search for a job or to better educate themselves to compete in the job market by going to school?Just a ploy by Obama administration to say “See we increased the no to low income peoples wealth!”Vote for me again!

    Marriage tax increase ticks me off as well.Most married people have children and need a tax break for the added expenses of raising children.In essence, instead of being financially responsible for ONE person from one income as a single person is a married couple with 2 children has the added burden of 2 more people to be financially responsible for even though they have a “dual income”.Doing the math thats 4 people living off 2 incomes vs 1 person living off 1 income.So who’s really getting the shaft here again Mr. Liberal greedmonger?

    • chiefopiner says:

      “dadblamed”

      That brought a smile to me. I haven’t heard that word used in years! Great word.

      And a dagnabbit good post too!

  21. Judy S. says:

    JAC I answered you, but I must have hit something and my response didn’t come up, so I’ll try again when I get to work. I’ll be leaving shortly and then I can answer your questions. Until then, have a wonderful day.

    Judy

  22. TexasChem says:

    Social security is theft by the American government of the American people.By the time most are able to retire a large percentage die before EVER getting back anything near what they paid in.

    • Chris Devine says:

      You have just indicted insurance in general. I’d say the current health insurance system is far worse because there is no guarantee that you will get what you pay into it. On the contrary, I spent more on health insurance premiums than what they have paid for my medical costs.

      • TexasChem says:

        Chris you need to find the guy that beat you down with the Liberal bat and… sue him! 🙂

        I’m not talking about insurance in general.We wouldn’t even need insurance at all if it weren’t for the hyperinflated costs of medical care, automobiles, homes and the cost of a funeral!!

        Social Security is supposedly supposed to be a retirement income for the American citizen when they stop working but where does the majority of that money end up?

        • Chris Devine says:

          Your argument applies more to insurance than it does social security. Nobody beat me with anything. I came to my own conclusions through my own experiences and learning.

          So do you think that if your house burns down it should just be really cheap to replace it?

          • TexasChem says:

            It is not an arguement it is a fact.You nor I nor our spouses or our children will ever get all the money we have paid to the federal government in social security.We will be dead before then.The feds are counting on it so they can use the money elsewhere.

      • Chris is absolutely correct if you consider the original Social Security as implemented.

        In order for it to work about half the population has to die and never collect for the other half to live 10 to 15 years past the retirement date.

        Of course, I don’t recall any politician explaining it in these blunt terms when I was a pup.

        Part of our current problem is the other bells and whistles added to Soc Sec and no money to pay for them. And the fact that the 50% of us who are supposed to die early are outliving the actuarial tables.

        There is a crime Tex but the next biggest one is not in the collection of Soc Sec, it is in Congress’ borrowing the money to spend on other things with no real plan to pay it back.

    • Black Flag says:

      Most people are completely confused about the concept of Insurance.

      Social Security is not Insurance.

      • PeterB in Indianapolis says:

        Social Security is the REVERSE of insurance. The government is betting that most people will die before they are able to collect a Social Security benefit, which is why you see them periodically raise the “full eligibility” age when they realize that average life expectancy is starting to exceed the current “full eligibility” age by more than 5 years.

        • True: Life insurance is me betting I am going to die, the insurance company is betting I won’t, and I am hoping they win.

          Soc Sec is me betting I won’t die, the Govt is betting I will, and I am hoping I win.

          But of course I am playing with the Govt so I have no chance of winning, because they don’t play fair.

          • Black Flag says:

            I don’t agree –

            Life Insurance is not betting that I die – it is mitigating the loss of my income for my family should I die prematurely.

            • Missing your sense of humor today?

              Your foot must be throbbing.

              My little ditty was loaded with fun and you swallowed it like an old catfish.

              LOL
              JAC

              • Black Flag says:

                (Glup-yummy)

                Yes, it is annoying – it got kicked by accident 😥

                Anyway – it’s Friday!! Maybe a rousing game of Poker will help!

      • Black Flag says:

        Insurance is ALWAYS a voluntary purchase. If it isn’t voluntary, it cannot be called ‘insurance’

      • Chris Devine says:

        I didn’t say it was. I said his argument was an indictment of insurance.

      • We had a wise financial advisor many years ago (refer to previous post on our need for this 🙂 and he said to consider SS nothing more than a tax and if some is there when we retire, great!, but not to count on it.

      • USWeapon says:

        When I refer to it as social security insurance I am merely using the official terminology. That is what “they” call it in government.

  23. Black Flag says:

    Also, people need to recognize that taxation is more than revenue grab by government.

    Governments have much more effective, alternative, ways of stealing than having to tax (print money->inflation; bonds; treasuries->borrow, etc.)

    Taxation, in today’s fascist systems, is used for public manipulation.

    By pushing high taxation in one area, and giving tax breaks in another, the government is twisting the People into economic decisions supporting political outcomes.

    Once the People stop seeing taxation as a matter of revenue, and see taxation as a matter of manipulation, you will begin to see with clarity why government organizes its taxes in the manner it does. Then debate over ‘fairness’ disappears and the debate can be focused on understanding the manipulation and the real goal of government in establishing a tax or atax break.

    • TexasChem says:

      Well, if thats the case then they are pushing me to vote ultra conservative.

      • Black Flag says:

        Remember – the conservatives use exactly the same manipulation as the liberals.

        You will find no respite in their corner.

  24. PeterB in Indianapolis says:

    http://online.wsj.com/article/SB124458888993599879.html

    For those of you that haven’t fully understood the mechanics of why inflation is about to get REALLY BAD because of recent economic policy, this is pretty explanatory.

    • TexasChem says:

      Quite possibly this was a predetermined plan by the current administration to cause more “crisis” so they could move ahead with more radical social changes with even more speed than what they have been using.Instead of not letting a crisis go to waste they want to create crisis to move agendas quicker.I’m so sick of hearing Obama say “We need to move quickly to solve this problem.”My hair stands on end every time I hear that BS.

      I know most of you do not come from a country living lifestyle so may not understand this comparison I am making to a chicken and people.When baby chicks are left outside and it rains they will look straight up into the sky the first couple of times they are exposed to rain.A chickens nostrils are located so that if they are looking up and rain is coming down they will stand there and drown.That to me is what the American people are doing to themselves with allowing themselves to accept the current administrations agendas.We are drowning ourselves in stupidity.

  25. TexasChem says:

    There would be no need for high tax rates if the size of the federal government were not as large as it currently is.

    Phase social security out.Phase wellfare out and implement tax breaks for contributions to private charities.Do away with non essential government organizations.Implement a flat tax rate for all citizens.I believe that if just these few items were addressed the boost to consumer spending and job growth would be astronomical.

    Oh and as a side note let me decide as a parent whats best for my kids education and future instead of trying to let the imbeciles in charge of our education system now ruin it for them please.

    • Black Flag says:

      Tex,

      You’ve missed the point of taxation – it has nothing to do with the size of the federal government.

      Federal tax code

      The Federal tax law is administered primarily by the Internal Revenue Service, a bureau of the Treasury. The U.S. tax code is known as the Internal Revenue Code of 1986 (title 26 of the United States Code).

      ….

      While the main intent of the law is to provide revenue for the federal government, the tax code is frequently used for public policy reasons i.e., to achieve social, economic, and political goals

      • TexasChem says:

        Well that code has me ready to throw tea into the harbor.If their intent is to create social discontent they have achieved their goal with me.

        • Black Flag says:

          Yes, that is one of the goals – create class conflict; rich vs poor – with each side claiming the other is abusing the other.

          Governments most effective strategy:

          – divide and conquer.

          • PeterB in Indianapolis says:

            Government is a bit like a chess game. I was taught by a very good chess player that all you have to do to win the game is to continually control the four squares in the middle of the board.

            Controlling the populace is much like this. The government doesn’t have to worry about controlling absolutely everything and everyone. As long as it contols the four sqares in the middle of the board, the rest of the pieces are already under control (even if they do not realize it).

  26. JudyS.NV. says:

    Oops! sorry about the double posting people. When I sent the first one, didn’t see it go through, so I redid it, and resent it. Please forgive me. Thank you.
    Judy

  27. I’ve recently come to the firm realization that if you want a program or project to run inefficiently, be mis-managed, or to generally not work then put the governement in charge.

    Doesn’t matter who’s in charge. Government is so incredibly wasteful and mis-managed that they wouldn’t survive very long as a private company.

    Businesses are always striving to become more efficient, more profitable, leaner, etc…. none of that is present in government. There is absolutely no incentive for them to run more efficiently, make more money, have fewer people, and so on.

    • Edward, they control the money, so why would they care. All they want is more power over you and I, that might be the one thing they are efficient at.

      PEACE!

      G!

    • Chris Devine says:

      So tell me then why we need to bail out the banks and auto manufacturers if “[b]usinesses are always striving to become more efficient, more profitable, leaner, etc.” Government is no more or less efficient than business. They both suffer from the same tragic flaw—they’re run by human beings.

      • Black Flag says:

        Government is incredibly worse than business.

        Government has no economic measure to direct it. If it makes uneconomical choices, it ignores them, since all it has to do is steal more money.

        Hence, there is no motivation to prevent uneconomical choices – in fact, it encourages them.

      • The reason they are in the fix is due to govt intervention in the system.

      • Chris Devine says:

        There are reasons besides economics for a great deal of things. You can’t expect everything to turn a profit (how should fire and police depts. stay profitable?) and being profitable doesn’t necessarily mean the service is worthwhile. All it means is that people are willing to pay more than it cost to produce. As P.T. Barnum said, “there’s a sucker born every minute.”

        Care to see the egress?

        • Black Flag says:

          I agree, Chris, there are a great many reasons for people to do what they do.

          However, economic understanding is vital if what you want to do requires sustainability. I can certainly entertain living in a $1,000/day hotel room – but it is unsustainable if I don’t provide some economic ability to fund it.

          Yes, I do expect the fire dept. and police dept. to turn a profit. What is a profit? BY the division of labor – resulting in expertise and optimization – I would expect a fireman to be a far better putting out a fire than I. He should be able to deliver his service at a price lower than I could do it myself.

          It no different than any service – no different then the service I provide my clients.

          There is FAR more than a mere cost that determines a price. I will dump a few pieces of equipment on your door step – and let’s see if you have the ability to make it work. In about a week of effort, I doubt you’d have accomplished anything substantial – whereas in probably an hour, I’d be finished the task.

          The point is – government attempts to replace economic intelligence with another measure, that is a political rational – and therefore it is no surprise that the consequence is not economical, even though it may have satisfied its political task.

      • TexasChem says:

        Chris did you forget that the federal government sets the policies these banks have to operate by?Especially AIG.AIG is and always has been operated with almost total government control.

        • Chris Devine says:

          Did you forget that the finance industry had successfully pushed for less and less regulation since Reagan took office? Many of the regulations that were put in place after the great depression were rolled back and look where it got us. If you think that the banks failed because of too much regulation you are deluded.

          • TexasChem says:

            Exactly Chris.They wanted LESS regulation from the federal government that was telling them to give loans to high risk, low income people.

  28. Black Flag says:

    Also remember, there is a huge class of people who live, essentially, tax free.

    The are government employees. Sure, it appears they pay tax – but

    $65,000 paid to you by the government, and they take back $10,000 is merely $55,000 paid to you by government tax free.

    • BF, Not to change the subject, what do you think N. Koreas response will be to the new sanctions?

      G!

    • PeterB in Indianapolis says:

      Watch it there BF, I resemble that remark 🙂

    • For the first four months of each year, while in the employ of the U.S. Government, I essentially worked for free. One third of what I earned went out in income taxes, so don’t ever say that a government employee never had to pay taxes!

      • Black Flag says:

        It goes back to the government – essentially you were paid tax free but 2/3 less than what you thought you negotiated.

        • When we were in the military, I always thought it was stupid that the gov paid us and before we even got the money they took a portion back out. Even then I realized it was just manipulation. Stupid.

    • Black Flag says:

      Wow

    • I’m financially illiterate,so could someone please explain the implications of this in simple terms? Is it a govt scam/conspiracy of some kind? If so what would be accomplished?

      • Black Flag says:

        $135 BILLION in bonds is huge!

        The question is, where did it come from? This isn’t a HDTV “falling” of the back of a shipping truck… this is equal to the entire financial reserves of the largest banks in the world.

        This just doesn’t “walk out the door” and no one notices it.

        If its theft – it a new record. And given no one has piped up and said “HEY, THAT’S MINE!” is very worrisome.

      • Black Flag says:

        Remember, banks do not need to ‘sneak’ things in suitcases. If this was a bank transfer, it is couriered – and yes, banks do move amounts this huge via couriers all the time.

        Governments don’t need to sneak things around like this either.

        Somebody got a hold of some USA “bailout money” and if this is tied back to the inability of the FED to account for billions – maybe they just found it….

        • Perhaps this is how the Fed plans to reduce the money supply and avoid hyper inflation?

          OK folks, that was just sarcastic humor, or maybe not. I opine, you decide.

        • On a slightly more serious note, my guess is N. Korea, although I am dumbfounded by the Japanese connection.

          Given the reported quality of N Korea’s counterfieting of US currency it is not a stretch to assume they could achieve the same quality with fake bonds.

          Any bets on how long before the “culprits” die due to some unforseen circumstances?

      • Michelle:

        Someone holding the bonds could demand payment, if they are the right type of bond, which would create a global run on banks for the US dollar.

        Value of the dollar might increase short term placing us at a huge trade disadvantage. More imports less exports. Thus sending more dollars out.

        Then the question is what would “the person” who held the US money do with it. If they dump it you have huge “devaluation” of the dollar.

  29. Black Flag says:

    College Is a Waste of Time, Says Charles Murray, of The Bell Curve Fame.
    http://online.wsj.com/article/SB121858688764535107.html?mod=opinion_main_commentaries

    Imagine that America had no system of post-secondary education, and you were a member of a task force assigned to create one from scratch. One of your colleagues submits this proposal:

    First, we will set up a single goal to represent educational success, which will take four years to achieve no matter what is being taught. We will attach an economic reward to it that seldom has anything to do with what has been learned. We will urge large numbers of people who do not possess adequate ability to try to achieve the goal, wait until they have spent a lot of time and money, and then deny it to them. We will stigmatize everyone who doesn’t meet the goal. We will call the goal a “BA.”

    You would conclude that your colleague was cruel, not to say insane. But that’s the system we have in place.

    Outside a handful of majors — engineering and some of the sciences — a bachelor’s degree tells an employer nothing except that the applicant has a certain amount of intellectual ability and perseverance. Even a degree in a vocational major like business administration can mean anything from a solid base of knowledge to four years of barely remembered gut courses.

    Here’s the reality: Everyone in every occupation starts as an apprentice. Those who are good enough become journeymen. The best become master craftsmen. This is as true of business executives and history professors as of chefs and welders. Getting rid of the BA and replacing it with evidence of competence — treating post-secondary education as apprenticeships for everyone — is one way to help us to recognize that common bond.

    The solution is not better degrees, but no degrees.

    Young people entering the job market should have a known, trusted measure of their qualifications they can carry into job interviews. That measure should express what they know, not where they learned it or how long it took them. They need a certification, not a degree.

    • Black Flag says:

      http://www.csmonitor.com/2008/1204/p02s01-ussc.html

      I believe this articles is misleading by saying that we must produce more college grads — the standard pro-college guild mantra.

      On the contrary, we need far fewer.

      We need more plumbers and craftsmen.

      At the end, the article reports:

      Except in fields such as engineering, many employers demand a college degree as “a screening mechanism, [because] there’s such a glut of college graduates that there’s no point even bothering to interview people who don’t have a college degree,” says George Leef, director of research at the John William Pope Center for Higher Education Policy, a conservative-leaning reform group in Raleigh, N.C. Colleges need to focus on quality of learning, not quantity of graduates, he says.

      George has it right.

      Half of college students do not graduate in six years. Add 50% to the price of a degree. If they graduate — over half do not — the job market is terrible.

    • Black Flag says:

      http://www.truthdig.com/report/print/20081208_hedges_best_brightest

      The Best and the Brightest Led America Off a Cliff

      The multiple failures that beset the country, from our mismanaged economy to our shredded constitutional rights…to our imperial debacles in the Middle East, can be laid at the feet of our elite universities.

      Harvard, Yale, Princeton and Stanford, along with most other elite schools, do a poor job educating students to think.

      They focus instead, through the filter of standardized tests, enrichment activities, advanced placement classes, high-priced tutors, swanky private schools and blind deference to all authority, on creating hordes of competent systems managers.

      The collapse of the country runs in a direct line from the manicured quadrangles and halls in places like Cambridge, Princeton and New Haven to the financial and political centers of power.

      The nation’s elite universities disdain honest intellectual inquiry, which is by its nature distrustful of authority, fiercely independent and often subversive. They organize learning around minutely specialized disciplines, narrow answers and rigid structures that are designed to produce certain answers.

    • Black Flag says:

      http://www.forbes.com/forbes/2009/0202/060_print.html

      The Great College Hoax

      College graduates will earn $1 million more than those with only a high school diploma, brags Mercy College radio ads running in the New York area.

      The $1 million shibboleth is a favorite of college barkers.

      Like many good cons, this one contains a kernel of truth. Census figures show that college grads earn an average of $57,500 a year, which is 82% more than the $31,600 high school alumni make. Multiply the $25,900 difference by the 40 years the average person works and, sure enough, it comes to a tad over $1 million.

      But anybody who has gotten a passing grade in statistics knows what’s wrong with this line of argument. A correlation between B.A.s and incomes is not proof of cause and effect.

      It may reflect nothing more than the fact that the economy rewards smart people and smart people are likely to go to college. To cite the extreme and obvious example: Bill Gates is rich because he knows how to run a business, not because he matriculated at Harvard. Finishing his degree wouldn’t have increased his income.

      All the while students have been lulled into thinking of the extra $1 million that will be theirs, they have been forced to disgorge an ever larger fraction of it in pursuit of the degree.

      While the premium that college grads earn over high schoolers has remained relatively constant over the past five years, the cost of acquiring a degree has risen at twice the rate of inflation, dramatically undermining any value a sheepskin adds.

      Offsetting that million-dollar income discrepancy is the $46,700 four-year cost of tuition, fees, books, room and board at a public school and $99,900 at a private one–even after financial aid, scholarships and grants. Add all this to the equation and college grads don’t pull even with high school grads in lifetime income until age 33 on average, the College Board says.

      Even that doesn’t include the $125,000 in pay students forgo over four years.

      “I call it the million-dollar misunderstanding,” says Mark Schneider, vice president of the American Institutes for Research, of the prevailing propaganda.

    • Black Flag says:

      So, here is my strategy for my daughter:

      I have set aside $60,000 to send you to college. But I will give you an option. You can live at home for free, apprentice with a local small businessman and learn the basics, study for college exams in your off hours, and complete your college degree by exam for under $4,000 a year. Your salary will pay for that. On the day you graduate, I will give you a graduation present of $30,000.

      You can use this to attend grad school, start a business, or make down payments on two or three investment rental houses.

      • Black Flag says:

        PS: the $30,000 would actually be 50 1 oz. gold coins …. 😉

      • For our kids: apprenticeships while still in HS in their prefered area. Then college courses and subject test and so ofrth to test out of as much college work as possible. I hope to have them through two years of college before they hit 19. Then working theri way through college, which should be doable becasue of the enhanced income due to their previous apprenticeships. Unfortunately, no cah in any form will be forthcoming. I can give them education but we are only rich in kids, not money.

  30. I am a fan of the flat tax proposal that says that we all pay a dime on the dollar earned, no exceptions, no deductions, no shelters. For every dollar taken in, a dime is payed out to tax. This would include all businesses, churches, etc. No exceptions, we all pay.

    However, since Mankind is essentially greedy and does not want to be fair about supporting our government – this will never happen. And since it will never happen – well, then this conversation is pointless.

    Enjoy your greed.

  31. Black Flag says:

    http://online.wsj.com/article/SB124458888993599879.html

    Get Ready for Inflation and Higher Interest Rates
    The unprecedented expansion of the money supply could make the ’70s look benign.

    • “There is zero reason why a government needs to tax.

      As the creator of currency, they can print and spend how much they want.”

      Is this what you meant by the above statement?

      “Get Ready for Inflation and Higher Interest Rates
      The unprecedented expansion of the money supply could make the ’70s look benign.”

      Nixon devalued the dollar, is that what obummer is planning? And for what purpose? I will be the first to admit that I do not understand any of this garbage about printing more money so you can raise taxes and if you can print as much money as you need, then why raise taxes at all? When Nixon devalued the dollar that kicked inflation into high gear and by the time we got Carter out of office – well you know the history. It seems to me this is all done just to make all the people miserable. Why? I do not see the logic in any of this = taxes out of control, printing money like it is nothing, and BF declaring loudly that all we have to do is ignore them . . .

      Just don’t make any sense at all.

      But then I am just a 65yo geezer who does not see any reason to make a mountain out of a molehill.

      We all should contribute just one dime out of every dollar we earn. Simple solution for a simple problem.

      • Black Flag says:

        G.A Rowe,

        I appreciate that not everyone knows economics and theories of money and finance.

        There’s a saying from a very wise man that I believe is a truth.

        “Read all you can, and if YOU cannot understand it, ignore it – it is not important to you”

        There are reasons behind this statement that are very deep that makes this strategy successful.

        The question, then, is if you’re willing to give up a dime, what about a dime and two pennies? How does that sound?

        • BF, I am so sorry that you continue to miss the entire point so many times. I know that you are not ignorant, in fact I know that you are a very intelligent man – much more intelligent than I could ever be. I now believe that you just lack a little bit of common sense – and that is not putting you down at all.

          If “We The People” take back control of our government, then put safeguards in place that will not allow those that we hire by election of running away with it like they are now, then there won’t be any more “one penny here and two pennies there” legislation snuck in under the table . . .

          Thats all there is to it. Simple and to the point. We do not have to make it lawyer complicated. Just keep it simple and to the point.

          I know that your very intelligent and complicated mind cannot fathom something so simple, I know that to you everything is complicated and wrought with what I call “ifs, ands, or buts”, that nothing can be ever set in concrete – but it can, I know from first hand experiance that things can be made simple and to the point – the USMC has been doing it for neigh on 233 years now.

          All you need to do is open your mind to the concept.

          • And WHAT safeguards will you put in place?

            How are you going to put them in place, when you so adamately argued that we SHOULD NOT AMEND the Constitution in your previous posts?

            How are you going to sell this idea to the public?

            How are you going to defend yourself against the philosophical foundation of folks like Chris when they attack you?

            And most importantly, how long do you think this will take?

            • Chris Devine says:

              What makes you think I’m interested in attacking anyone?

              • Allow me to clarify so there is no confusion about what I meant.

                How are you going to defend yourself against the philosophical foundation of folks like Chris when they attack your principles and postions?

            • “How are you going to put them in place, when you so adamately argued that we SHOULD NOT AMEND the Constitution in your previous posts?”

              I believe I said “do not scrap it and start all over” . . .

              I have, in fact, proposed several amendments to the constitution . . . Which of course were immediately dismissed by all who read them.

              The safeguards are already there, all we have to do is implement them.

          • Black Flag says:

            G. A. Rowe

            BF, I am so sorry that you continue to miss the entire point so many times.

            I doubt that I do.

            I believe you do not understand the implications of your demands.

            You seem to hold firmly on to what – to you – may fix a problem, with little regard to the consequences you will set into place that will, in all likelihood, create a far worse problem

            I now believe that you just lack a little bit of common sense – and that is not putting you down at all.

            As I noted awhile a go – common sense is often used as an excuse to not think for one’s self.

            If “We The People” take back control of our government, then put safeguards in place that will not allow those that we hire by election of running away with it like they are now, then there won’t be any more “one penny here and two pennies there” legislation snuck in under the table . . .

            How can you prevent that?

            Explain how the “People” can ‘take back control’ – when Chris is exactly right on this point (as are others) – People run the government.

            It is not the People or the people, G. A. Rowe – it is the principles that people hold themselves up to…. and if you are not clear about yours, then there is no way it will exist in government.

      • Black Flag says:

        And G.A, do believe me when I say

        I consider you one of the “Good Guys” – so don’t ever think otherwise, even if I may appear to be antagonizing you.

        • You and I pick on each other occasionally, and that is a good thing.

          Sometimes, as you have most likely noticed, I tend to stick thorns in folks sides . . . sometimes not intentionally.

          Please do not take it personally, it is only my frustration showing through.

          Solutions, even political ones, to most problems can be so simple that most folks miss them entirely.

          Complicated solutions to simple problems do nothing but add to the problem. Most often a straightforward approach to a problem is the best and most effective method of solving it. Most people do not see that either.

  32. Black Flag says:

    House Health-Care Bill to Include $600 Billion in Tax Increases
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aqLNecbH0dcg

    • TexasChem says:

      This will cause the amount I pay for insurance through my employer to rise to offset the amount that employers are going to have to pay to cover their employees due to them not getting income tax exclusions for the employers contribution towards employee healthcare.PLUS the bill would allow income tax to be taken from insurance premiums.So I lose money from my income if this bill passes AND pay more taxes.No details other than they plan to cut back currrent government medical aid and CREATE an entirely new one.Ok people where is the straw that broke the camels back going to come into play?This is complete and utter lunacy on the democrat partys part.This will affect the middleclass tremendously and I hope every single liberal democrat will get a slap in the face from this bill if it passes and turn more moderate and conservative in their political views.

  33. Black Flag says:

    Red Alert from STRATFOR:

    Iran’s Election Results (Open Access)
    June 12, 2009 | 2116 GMT

    The Iranian election is currently in turmoil. Both Iranian President Mahmoud Ahmadinejad and challenger Mir Hossein Mousavi are claiming to be ahead in the vote. Preliminary results from the presidential vote show Ahmadinejad leading; Iranian Election Commission chief Kamran Danesho held a press conference at 11:45 p.m. local time and announced that with some 20 percent of the votes counted, the president was leading with 3,462,548 votes (69.04 percent), while his main challenger, Mousavi, had 1, 425,678 (28.42 percent). Sources tell STRATFOR that these preliminary numbers pertain to the votes from the smaller towns and villages, where the president has considerable influence, as he has distributed a lot of cash to the poor.

    However, Iran’s state-run Press TV is saying that only 10 million of 24 million votes, or around 42 percent of the vote, have been counted. At the same time, they are also claiming that 69 percent of the vote has been counted. Obviously the numbers are not adding up, and the agencies themselves appear to be in chaos.

    Prior to the announcement of the results, Mousavi held a press conference in which he said he was the winner of the election. The opposition camp is greatly concerned about fraud, and STRATFOR has been told that Mousavi has vowed to resist any fraud, even if it entails taking to the streets. This means there is considerable risk of unrest should Ahmadinejad emerge as the winner. But so far there is no evidence that the government is mobilizing security forces to deal with any such eventuality.

    The situation is being monitored carefully, as it is potentially explosive.

%d bloggers like this: