I 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….
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.
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.)
Perhaps 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.
The 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.
First, 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.
You 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.
This 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.
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.
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:
- Write a rebuttal justifying the corporate subsidy of your choice, respecting the conservative principle that the tax system cannot be used for social engineering.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Do 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!