Jeff42: *I find it interesting to see a variety of people posting the idea that the rich gain more benefits than the poor from taxes. So far not ONE person has pointed to any specific instance where this happens. *
Jeff, I think quite a good case can be made that more of the government’s funds are spent on things that benefit the rich more directly than they benefit the poor. Say you’re a wealthy executive and we’re comparing your “social wage” (the total benefits you get from society) to that of a very poor urban woman.
On the one hand, she gets food stamps, Medicaid, perhaps some federal housing assistance, free clinics, none of which assistance is ever used by you. That sort of expenditure goes to people like her and not to people like you.
On the other hand, she hasn’t got a car and can’t afford to fly. Thus, government expenditures for highways and the FAA (not to mention artificially low gasoline prices) are much more for the use of people like you and not for people like her. If your company is heavily dependent on road or air transportation, you benefit still more from these things. The Federal Reserve Bank, federal deposit insurance, and the Securities and Exchange Commission exist to help safeguard the assets of people like you; they’re pretty much irrelevant to her, since she has no investments. If she shoplifts something from a convenience store, we can arrest, try, and sentence her quite easily and cheaply. If you commit white-collar crime, we will have a much bigger and more expensive job bringing you to justice, and you can drag the process on year after costly year with appeals and legal maneuvering. The Food and Drug Administration spends a whole lot on testing and approving “luxury” drugs and treatments, like Viagra and anti-aging procedures and new antidepressants, that will never form part of the minimal and standard medical care she gets. Government scholarships and federally insured college loans go to your kids, not hers, who never even managed to get a high school diploma. When the National Science Foundation or the National Institute of Standards and Technology develops a new technique or standard that your business can make large profits from, it puts no money in her pocket.
I could go on and on, but you get the picture. Here’s a breakdown of total federal expenditure from the FY 2000 budget (exclusive of debt reduction):
- Social Security 23%
- Medicare 12%
- Net interest 11%
- Defense discretionary 16%
- Non-defense discretionary 19%
- Medicaid 7%
- Other means-tested entitlements (e.g., AFDC) 6%
- Other mandatory 6%
All means-tested entitlements, therefore—expenditure that’s earmarked specifically for the needy—add up to no more than 13% of the total expenditure. Leaving aside Social Security, Medicare, interest, and defense as benefits that are truly universal (which isn’t quite fair, because in addition to direct benefits to individuals they also help support people like doctors and defense contractors, who tend not to be poor), we still have 25% of total expenditure for everything else. And it seems pretty apparent to me that a good deal of the “everything else” benefits the wealthy and middle-class much more significantly than the poor.
(Since I started typing this I note that Dinsdale has said some of the same things, but they can stand a little repetition. :))
*I also might point out that no one has picked up the glove I dropped and answered the question of whether they feel there is a point where taxes become too much or whether they feel no amount is too much as long as the person is left with a ‘lot’ of money afterwards (a ‘lot’ of money being open to definition). *
Confiscatory taxation, you mean; after a certain income level the government simply takes everything. Well, it’s probably not very useful to collect opinions on this, because it won’t make much difference in terms of practical tax revenue. But you can have my opinion anyway: I’d be against a 100% tax or surtax rate at any income level, because it’s essentially establishing an income cap, for which I see no practical need and which seems arbitrary and puritanical. Sure, personally I quite concur (puritanically) that nobody really needs to make more than, say, a thousand times the official poverty-level income; but hey, if anyone feels differently and wants to go for the record I won’t try to stop them. “The theory of taxation,” to quote the Tennessee Shad or Doc Macnooder or some such philosopher, “is to soak the taxed all they’ll stand for, but leave them just enough so they’ll come again.”