If Obama's tax plan is socialist, then why isn't McCains?

Great Debates
#1

On some other forums I frequent with less… intellectual rigor, a lot of McCain supporters have jumped on the “Obama is a socialist” bandwagon. Fueled, specifically, by the “spread the wealth around” comment. He’s going to tax the rich and give to the lazy, they say.

Deeper analysis aside, is that any different from what we do now? Don’t the rich already pay a higher percentage of their income in taxes, and isn’t that extra money ultimately spread around? Won’t things be pretty much the same under McCain?

I’m just testing this out here to see how it flies. It strikes me that if people are willing to accept that taxing the rich more than the poor is socialism, that means America has been socialist (by their definition) for a long time, and will continue to be so even if Republicans remain in power.

#2

It comes down to the reason you tax. Generally progressive taxation is justified because of the diminishing marginal utility the rich have for their money. Thus the government needs a certain amount of money to operate and the desire is to get that money while causing the least amount of pain possible. Since the rich and poor have different marginal utilities for the money, the way to cause the least amount of pain is to have progressive taxation.
If the reason for the progressive tax rates are not to fund the government but rather to transfer funds from the wealthy to the poor then it becomes socialistic. Obama wasn’t saying he wants the money to fund a needed government program but rather to spread the wealth around. Thus the socialist label.

#3

It’s political posturing on McCain’s part. We do plenty of “spreading the wealth around” right now, and McCain’s tax plan will do some, too. Apparently Obama wants to do a bit more, but how that makes him a socialist is beyond me. Socialism can mean different things, but generally it should mean that the state, rather than the private sector, owns the means of production (factories).

What’s a lot more “socialist” is what Bush is doing right now wrt the banks-- ie, taking an equity position in them. Both McCain and Obama signed up for that, so I guess they’re both socialists (when it suits them).

#4

But we already do this “transferring funds from the wealthy to the poor” in our current tax code, and it wouldn’t stop under McCain either. See one of the many concurrent threads that discuss the Earned Income Tax Credit.

It astounds me that so many people who confidently affix the “socialist” label to Obama’s policies are apparently unaware that nothing he’s proposing is really new. His tax plan would just change some of the existing proportions a little bit, but it’s still basically the same recipe that we currently run our progressive taxation system on, including the widely-dreaded “wealth redistribution” part.

steronz is absolutely right that this is essentially politics as usual. The people who try to draw some bright-line distinction between Obama’s tax policy as “socialist” and McCain’s as “not socialist” are absolutely wrong on the facts.

#5

Those who say Obama is a sociailist or his tax plan is socialsit are most definitely lacking in intellectual rigor as you say. But that doesn’t mean they don’t have a point, it just means they are expressing it inartfully.

The better way to state the argument is as follows: x is bad. Obamab would increase x more than McCain would. Therefore McCain is the better candidate than Obama.

In this case, x is redistributing wealth from those with to those without. Obama supporters use this same argument where x is some other issue.

#6

I like how you misspelled “untruthfully”. They may have a point, IYHO, but there is nothing “inartful” about their characterization. It’s simply dishonest.

#7

That’s a fair argument, if you in fact believe that “x” (in this case, income redistribution through the tax system) is bad.

Of course, by that logic, you’d also have to argue that both McCain and Obama are better than Ronald Reagan. Reagan’s tax reforms increased the downward redistribution of the federal income tax system more than Obama’s plan would do.

(Yes, Reagan’s net tax cuts shifted federal funding more towards deficit spending overall, and you could argue that his drastic reduction in the top marginal rate, along with his payroll tax and gasoline tax increases, made the tax system as a whole less progressive. But his expansion of the Earned Income Tax Credit and tax exemptions significantly boosted the role of the federal income tax in “redistributing wealth from those with to those without”.)

#8

That’s a very good assessment that also highlights the importance of “labeling”. The fact of the matter is that socialist solutions will always be needed to fix the errors of capitalism. I regularly interact with many of the top investment management firms and sometimes with their heads. I just went to a conference earlier today and spoke to one of the heads at PIMCO, and this was his point. It’s funny how everyone touts the benefits of “laissez-faire” policies on the economy until you need socialism to fix it. The real point is that capitalism and socialism aren’t mutually exclusive.

#9

FWIW, Colbert had the actual Socialist Presidential Candidate, Brian Moore, on his show on 10/29/08. Moore denies that Obama is a Socialist. That’s good enough for me!

Link

#10

Ok. I have no problem with that. Also, note that Mao and Stalin both had policies that were more socialist than anyone else yet mentioned in this thread. Given that in the present election one could vote for Obama or McCain, I donakt see how any of this is relevant.

#11

It helps keep the issue in perspective. Given how many people have been going around trying to argue that Obama is “socialist” and McCain is not, or that Obama’s tax policies are more “socialist” than McCain’s, it’s worth pointing out that Obama’s policies are also in some respects less “socialist” than Reagan’s.

But I’m intrigued by the spectrum of comparative socialism you’ve laid out for us there!
Less Socialist -------------> More Socialist

McCain — Obama — Reagan — Mao — Stalin
Or maybe you’d switch the order on Stalin and Mao? Hard to know exactly what the relevant criteria would be.

#12

Well, the general form of the argument there is as follows: x that goes beyond a certain amount is z (where z is a word used for its emotional impact). Others can disagree on the amount of x that is z (and you apparently do here where x is wealth redistribution and z is socialism).

FWIW, I agree with you. I think it is enough to say that increasing wealth redistribution is bad without saying that it is a socialist policy or Obama is a socialist (but note that wealth redistribution is a tenet of socialism and not capitalism, so it is more consistent with socialsim than it is with capitalism).

#13

Every admin redistributes wealth. Bush unabashedly distributed as much as possible to the wealthy. Obama may level it out some. If Obama’s is socialist them Bush’s was Fascistic. Name calling goes both ways but really does not throw light on whats happening.

#14

Was Teddy Roosevelt a Socialist?

#15

A couple of points Shayna.

  1. This election is between McCain and Obama so it really doesn’t matter that much what other presidents’ views and policies were.

  2. Roosevelt was arguably discussing only who should pay the burden of funding the government, whereas Obama’s plan increases cash handouts to those with lower incomes. The part about “every dollar should be earned” indicates that Roosevelt may not have been in favor of Obama’s tax plan (or refundable tax credits in general).

  3. Roosevelt spoke in terms of higher tax rates on large fortunes, which may indicate that he favored progressivity only (or mostly) at a point on the income scale way higher than 250k per year.

#16

No, Rand, as people have been teaching me in other threads, cash paybacks to people who pay no taxes are really tax cuts.

I couldn’t understand it either, but it finally came to me. In fact, after understanding this I called my employer and thanked him for reducing my bi-weekly payments to him. He didn’t know what I was saying, but then I explained that he had given me a cost of living increase in July.

So, according to Obama, if you get a raise at work then it is very much consistent with the English language to say that your payments to your employer have been reduced.

#17

Wealth clearly has been redistributed during the Bush administration. It just has not been spread around to poor or middle class people. It seems to me that folks only scream “socialism!” when poor people are benefiting and not when rich people and corporations are benefiting. Considering that the Obama tax plan will cost less than the McCain plan to the tune of about $1.3 trillion, and will benefit me personally, the word “socialism” in this instance sounds like an empty epithet used to try to scare middle class people into voting against their own best economic interests.

Are people worried on a philosophical level about this perceived creep toward socialism? It is a specious worry at this point, all things considered. Really, honestly, if you don’t make more than $250,000 year and won’t in the next 4-8 years, why is this such an overriding concern for so many people? Do you have a moral objection to poor people getting tax refunds? Why? Especially when it will help the working poor and still overall cost less than McCain’s tax cut plan. I don’t understand all the freaking out about this.

#18

Because money is extremely fluid. We might not make $250k/yr, but you can bet that we are only one level removed. I’ll guess that 95+ % of us work for a corporation or a business owner who makes more than $250k/yr.

So if we decide to raise that person’s taxes, then next year when we want raises, more time off, a company vehicle, a company expense account, etc., then our boss now has less money with which to provide those things.

This whole class warfare argument assumes that the “rich” have this giant lighthouse full of money (a la Scrooge McDuck) that he swims in every day. So if you raise his taxes, then no big deal, he just has to pull out a shiny gold dollar and pay it. It doesn’t work that way.

#19

I’m not even close to one level removed, so good for you I guess, but for me that’s not a compelling argument.

First of all, have you gotten all those things that you wanted for the last 8 years? Have you found yourself enriched under the Bush tax plan? I have not. Tax cuts for the rich have not helped me. I’ve seen my fortunes dwindle in the last 8 years but the wealth concentrate more and more in the hands of the top 10%, so again, your argument, that cutting taxes for the rich will help me, is not compelling. I’m willing to see if lower taxes for the poor and middle class will stimulate the economy.

Really? How does it work? The trickle-down theory is a crock, which has been illustrated time and time again. I’m not buying it.

#20

So, the Bush tax cuts were the only economic event in the past 8 years? Nothing else could have contributed to the poor economy? Not the 9/11 attacks, not the dot-com bust, not the Enron and Worldcom scandals, not two wars, not a once in a century hurricane, not a mortgage crisis which threatens the entire banking industry along with the rest of the economy.

None of these matter. Everything is to be blamed on tax cuts for the “rich”, which in itself is misleading because the Bush tax cuts were across the board cuts for everyone. And since the rich already pay more, it is obvious that they would get more of the benefit.

It McDonalds cuts the price of their Big Mac, and I go there twice a week and you go there twice a year, obviously I get the larger benefit even though the act itself was indiscriminate.

I am no fan of Bush, but his tax cuts did NOT cause these problems. Tax cuts ALWAYS help the economy. They may increase the deficit without proper government discipline, but any type of tax cut will always help the economy.