Oh yeah…One other point I wanted to make is that libertarians are very selective in which “rules of the game” they want to start changing. I.e., they want to get rid of “redistributive” schemes like welfare. But, they don’t then start questioning other schemes like corporate law and intellectual property (patent) law, etc. These laws weren’t exactly willed by God and they have huge redistributive impact.
As a concrete example, let’s say we were all put in a big room to found our society and someone said, “Here I am going to propose this corporate law structure and it is going to improve the average standard of living by 14% over the Leading Brand but it is also going to produce a much broader distribution of living standard so that 10% will be way, way better off and 90% will be worse off, many of them considerably worse off.” Now, I would argue that there is no fundamental principle governing whether we should adopt this proposal or not. John Rawls, for example, would say, “No fucking way…I want to maximize the standard of the least well off person.” [I personally happen to think Rawls is too extreme in this direction, by the way.] Others would have different views. Still others might propose that we adopt this corporate law structure but with an amendment to redistribute the income so that we get both a higher average standard of living (which may or may not be as good as the 14% rise mentioned above) and a more equal one.
Of course, the real world is more complicated because we don’t even know for sure the impacts of various policies…We just have to guess. And, if you see, for example, who Dick Cheney and Spencer Abraham invited to the table in order to discuss energy policy, one might even hazard a prediction about whether these “guesses” will be more aligned with the views of the wealthy and connected or the poor!!
And so it goes. There is simply no way to selectively open up the Pandora’s Box on income distribution and selectively throw away those things a libertarian would deem to be “redistributive in a bad way” (which often seems to be downward, probably not surprisingly if you were to look at the funding sources for libertarian think-tanks) without also considering those that a libertarian would like (which, I believe, would tend to redistribute upward).
I suppose there are Libertarians who would agree with what you say, but I certainly think that there is a legitimate role for the federal government in many areas. I just believe that at least 50% of what the fedgov is currently doing is far beyond the scope of the constitution. Many of the other things belong at the state level and I certainly believe in paying those taxes as well.
I have to say, you got me there. I reviewed the data and you are correct. I must retract my position that progressivity has increased over the last 20 years. Good work jshore!
I can’t go along with you here. Starting and nurturing a successful business has got to be one of the toughest jobs there is. That person takes enormous personal and financial risk and usually must put in 80-100 hrs/wk with little or no reward initially. Yes, the rewards can be great eventually, but it is both deserved and necessary to provide incentive to make the sacrifices. The customer doesn’t create the jobs, the system (i.e. the company or business) creates the job by providing a product or service that is needed or desired and is superior to alternatives. That is not easy to do. Frequently, customers are created. Even though I own a lawn mower, I hire someone to mow my lawn because they can do it so quickly and efficiently it is cheaper for me to pay than do it myself. That applies to most services and many products. The product or service has to be substantially superior to what I can do for myself.
Looks like a tongue-in-cheek remark to me, but it’s false in any event unless he committed fraud in some way in his transactions with his customers.
Don’t be so melodramatic. I think you fail to understand the underpinnings of capitalism and free enterprise. Without government intervention, a capitalist can only make money by pleasing someone enough to entice them to part with their hard-earned money. Capitalism is literally millions of people all over the world working as hard as they can to please me! If they don’t, they don’t get my money. If they do, they may be richer, but I’m happier than I would be otherwise. That’s a good thing.
Fair enough, but my problem with your position is that it isn’t for you to understand why someone would want to keep the money they earned. Wealth is relative and what may appear wealthy to you might not be so to someone else depending on circumstances. To a truly poor person, any money you make over $30,000, would seem excessive and perhaps should be taxed away. It’s funny how the level of income that seems excessive to someone is always a number much greater than what that someone earns (not necessarily aiming this at you, jshore, after all you did admit that you personally didn’t deserve a tax cut).
Well, if it’s just freakin’ money, what’s the harm in letting someone keep theirs. I think the burden of justification lies with the person doing the taking, not the person who just wants to be left alone.
This is not a fair analogy. It is functionally equivalent to the “holding a gun to your head” argument that I deny exists in a free market (e.g. meet my demands or lose your life). It is interesting that the best related analogy I can think of is perpetrated by the federal government: “yes you can have the cigarettes you are addicted to but you must pay taxes through the nose to get them”. (please, no discussion of corporate involvment in purposely addicting unwitting smokers - regardless of the merits, it’s not pertinent to this discussion)
I think you made great points about the lack of increasing progressivity of the federal income tax (and I stand down on that issue), but you didn’t address the point about what happens when a minority pays all of the income taxes. What prevents runaway taxation on that minority? Is it that those people must pay even more money to bribe the politicians not to increase their taxes further?
Also, even though we may have some agreement on the need for progressive taxation, shouldn’t everyone be a participant in supporting our government? Even the poorest could afford something, and even if they couldn’t afford some small amount of money, couldn’t they donate some time or labor to our society?
Well, I am glad to hear you say you see many areas for the federal government. And, I understand that there are things that work better at the state level. We’ve had the argument about devolving more things down to the state level here in Great Debates before. The main thing that concerns me about it is that I think it is often a “divide and conquer” strategy on the part of corporations who would like to put states in competition with each other on things like who has the lowest environmental standards and who has the lowest corporate income taxes and most tax breaks and other benefits for them. It’s all a matter of balance-of-power and I see this as a way to put more power in the hands of those who already have too much.
I’m glad that I’ve won you over on that point. I must admit that when you set out those figures, I was really confused for several minutes because they were so much in contradiction to what I knew to be true from past forays into this area yet I didn’t immediately see the problem.
Well, I will admit that I am playing a bit devil’s advocate here. I respect the fact that entrepeneurs work hard and I don’t have trouble with them reaping large rewards because of it. But, I guess I still don’t think the progressive tax structure we have comes anywhere close to denying them the rewards. [I also must say that I am somewhat puzzled by the rewards of say CEOs of major established corporations who get huge compensation **and** golden parachutes, because I just don’t see where the risk of failure comes in. Hell, I’d be happy to get the consolation prize in that game!]
Sorry, I just don’t buy that. I know it is the ideal and there may be a few markets that come close to this ideal…and many others that come close enough that they can be made reasonably close with only modest government regulation (e.g., “lemon” laws). But, there are a lot of tempting ways for the capitalist to “cheat” in this system. E.g., sometimes they can try to please you or sometimes they can just try to make you think you need something that they want to sell you. I look around at the rampant materialism in our culture and all the advertising that is by no means just giving me the info I need to decide if I want the product. There’s also problems of information, of getting people “hooked” and interdependent on inferior products (“the Microsoft effect”). And, there’s the externalities: the destruction of the environment, …
And, perhaps most fundamentally from my own personal experience, if you are not part of the majority in your materialistic wants and needs but would prefer to live more sustainably, ride your bike to get places, …, you are pretty screwed by the decisions that the majority has made; somehow it seems to me that tyrrany of the majority is much harsher in the free market realm than in the political realm, even if I am not exactly sure why this comes to be the case.
Yes, and that’s why I have argued against ever having a totally confiscatory tax rate (e.g., 100% of income taken above a certain amount)…there was once a thread on this in Great Debates. I admit that without any basic fundamental principles to go on like “no redistribution is fair”, it becomes a lot harder to say where the lines should be drawn. But, as I have tried to argue, I think such basic fundamental principles are ephemeral anyways and we are left in the ugly reality of a complex world.
That was more of a throw-away line of my own philosophy. Not any real deep point here, except that I just have trouble understanding people getting so into money and material possessions when they have well well beyond what seems necessary for basic comforts. But, yes, I know that people have different views of what they need for basic comfort.
Well, I was thinking in terms of the low-end labor market for example. And, sure, it’s exagerrated for the sake of the example. But, I still think the basic point is there…that when people are making bargains from very unequal positions (one with lots of economic power and the other fighting to make enough to afford the basic necessities to live on), then there is an element of duress or coercion that comes into play.
That’s actually an interesting question. I understand your point in principle of needing some basic constitutional right of property to prevent egregious examples like this. And, while I am no expert on constitution law in the area of property rights, I would guess that we probably have that.
However, I also think that it seems to be a danger in a democratic society that does not seem to really occur in practice. Why? Well, I think you hint at one reason. If you look at the history of civilization, I really don’t think you see examples of an economically powerful elite not also having more than their share of political power. So, I think the danger really is much more in the other direction: How do you keep the government a tool of the people, keeping in check the power that derives from large amounts of wealth, rather than it just becoming a tool of that economic power? This is the difficult question that I don’t claim to have a full answer to.
Another point is that I think that, to the extent that lots of wealth is a reward for productivity and the extent to which people want to keep such incentives in their society because they feel it would benefit everyone (and because they might imagine they will some day be wealthy, no matter how realistic or unrealistic this imagining might be), these factors will work against such “runaway taxation” of the wealthy. [And, this gets back to the previous point because I think that the wealthy generally have the tools at their disposal to convince the majority of these things to a greater extent than they are actually true. Hearst didn’t advocate a “soak the rich” strategy, nor will the execs of Time-Warner, MSNBC, Disney, etc. who own the major media at the moment.]
Well, with some types of taxes they already are. In terms of the federal income tax, I don’t see this as necessarily a principle. I’d have to think about this more to be honest. Of course, this sort of thing, in terms of the labor part, was a big aspect behind the programs during the Great Depression. Here in upstate New York, the trails in the parks seem to have been built during that period and I think that was a great thing. I do think that giving people a sense of self-reliance and being a productive contributing member of the society is a good thing.
One underlying issue is that capital gain income tends to fluctuate with the business cycle and with changes in the tax code.
1980 was a recession year, which depressed capital gains. Tax reform occurred in 1986, which led to increases in the capital gains tax rate. Those anticipating such increases had an incentive to realize capital gains on their investments, before the tax hike took place.
Hey, I’m not anti-government, just anti-wasting-my-money. I say if liberals want to take almost $2 trillion from people who earned it, then let’s have some accountability. That suggestion is usually met with derision.
Competition is precisely why I like Federalism. There are incentives that work against the environmental and other catastrophes you fear as well. People will vote, not only at the ballot box, but with their feet.
I agree, but I don’t see any mechanism that prevents further, and excessive, progressivity (except for the really nebulous “well, the rich are so powerfull”, but they only have one vote apiece, same as you and me). And as you’ve pointed out to me, you don’t even need further progressivity to continue down the path of a minority carrying the entire load with no recourse or relief.
I also agree, but in this case, as I’ve mentioned before, it’s not my money and I have no legitimate say in how or whether it gets wasted.
Capitalism didn’t create that situation. “A fool and his money are soon parted” is a fact of nature. I’m all for laws that protect people from fraud, but I’m more reluctant to support laws that protect prople from their own stupidity.
I think we’re going over old ground, but other than the tragedy of the commons that we’ve previously discussed, and have agreement, wealth tends to bring about environmental improvement. Only a wealthy society has the resources to spare to devote to environmental issues. Poor societies are too busy just surviving. Private property rights also provide great incentive to keep things clean.
Well, I would submit that tyranny of the majority is far worse under pure democracies and socialism. Our republican form of government is one reason you see it more in the marketplace than politics. But as far as the marketplace, I would suggest that there is great incentive to fill every possible niche when free enterprise is most unfettered. Your problems with tyranny are all the more reason to be in favor of more local control. The power and dictates of the federal government make your problem worse.
Indeed.
Well, that’s very basic to human emotion. You can’t eliminate it with politics without causing more harm than good. Contrary to leftist philosophy, we cannot create a perfect world and while I also strive for perfection in my life (even with the full knowledge that it is unachievable), we must take small, carefull steps to prevent unintended consequences.
It’s called the “vote”.
However, you (I think?) said before that the rich derive more benefit from the government, for one reason, due to private property protection because they have more to lose. If they have more to lose, then it seems to me they should have more say. Society is a sort of partnership among all the people. Any partner that contributes more and is impacted more gets more say in most other partnerships that I’m aware of.
Yes, I think you are correct about the first part, but I frequently see major media campaigns, and many other rich people advocating to “soak the rich”. Guilt, I think. Even rich people are not immune to the liberal propaganda that they are undeserving beneficiaries of other people’s labor. Also, the only rich folk that are given prominent voice in the media are the ones who support this line of (erroneous) reasoning. You certainly don’t see them advocating tax cuts.
Yes! The increasing reliance on the (welfare) state is extremely destructive to the people involved. It also encourages other forms of irresponsibility such as child abandonment by fathers.
Sorry for the long gap in responding to you, flex727…a busy week.
What makes you say that this is met with derision? I think accountability actually has a wide range of support throughout the political spectrum. Unfortunately, however, the current conservative President has been doing much to undermine it…working to restrict the Freedom of Information Act, the release of Presidential records, the release of information on who the Administration met with in formulating energy policy, etc. I say that if you support more government accountability, you ought to write a strongly-worded letter to the current occupant in the White House.
Well, we simply disagree on this because I see this as having been very ineffective. One reason is that this “vote with their feet” power is very dispersed and depends on information. Corporations concentrate power very effectively and thus the “competition” ends up being no contest without the power of people through government to act cooperatively (assuming that the government isn’t captured by those that they are supposed to reign in…which is why it is a constant fight to keep government effective).
I lost you on that last sentence. As for the rest, I don’t see any mechanism that prevents us from all being eaten by alien space monsters from the planet Zyrcon either, but I am not spending a lot of energy worrying about it. I tend to worry about events that actually have some reasonable possibility of occurring.
Well, you may call it “laws that protect people from their own stupidity” but the problem I see with libertarian arguments is that they neglect any forces that actually have a huge influence over people as long as they still in some very technically-defined way allowed the people to make a “free choice”. I have a different, I believe more expansive, view of free choice. Also, and of course, this does get back to the externalities/trajedy of the commons issue, we do need laws to protect those of us who make one choice from the stupidity of other peoples’ choices…something that I don’t see any real life conceptions of a libertarian society dealing with.
We already are an extremely wealthy society with strong private property rights and we seem to still have lots of problems on these issues … many moreso than other Western Democracies with less extreme private property rights and less skewed wealth distributions.
And I would suggest that the market is very imperfect and has a combination of good and destructive incentives. It is the role of government to try to correct the destructive incentives. And, I am not against local control on issues where this local control is not simply an excuse to give more power to those who are economically powerful and already enjoy too much power. There are some areas where the federal government may be causing more harm than good but there are also many more places where the economically powerful are doing so. (And, in many places where the federal government is causing more harm than good it is because it is basically pushing the agenda of the economically powerful … Witness the current Administration.)
Well, I think that sometimes the unintended consequences of “letting the free market have free reign” are far worse than the unintended consequences of taking steps to prevent this.
Well, besides being a rather undemocratic concept in my opinion, this again ignores the reality of the situation. Those with more wealth to be protected naturally enjoy greater protection from, say, police protecting theft, than those who don’t . This is independent of the influence of those people on the government. But the basic point is that any society is unstable toward an extreme imbalance of power and I see a role of government in protecting us from that eventuality. You don’t seem to believe this is necessary, being more concerned that the most powerful members will somehow be victimized by the masses (despite the fact that there are lots of laws protecting the property and such of the powerful…as of course there should be to prevent people from simply stealing from each other).
You must be limiting yourself to even more (marginalized) leftist media than I do if you get that impression.
Well, I think we have exhausted most of the factual part of this discussion and what we are left with is two very different viewpoints of the world (or nation) as it actually exists. It always amazes me how two different people looking at the exact same thing can see the thing so totally differently, but hey, I guess that is what makes political life interesting.
I think a good portion of the 1% are made up people that made there cash in a game that was in the family “ inherited “stacked rigged “ Political “ or flat out white collar grab. If I learned one thing in my 40 years in construction & heavy equipment operations is that your personal position at a job site exists because someone is making money by you doing it, If it can be done for less “ legally or in some case illegally “ you will be sent packing. The second think that I learned about this 1% group is that after shaking hands with said group…Count your fingers! Better yet check for your hand.
I’m not even sure what some of those things mean, practically speaking, but as far as inheritance, one study shows that only 21% of millionaires or larger, inherited their wealth. 79% started with nothing.
Not the best study to answer the question. millionaires generally represent the top 10% of the wealth bracket. To get to the top 1% you need about $11 million.
2018 Pew Reserach Center would indicate not (the middle class is shrinking, and the lower and upper growing, but the upper growing more than the lower), but it all depends on how you count it - what aspects you include and don’t, etc.
Edit: I didn’t realize how old the post was before I replied - sorry.
***I agree that if you make wealth you should be able to do as you please as with any of your other worldly possessions ! I’d prefer that the said wealth was taxed at the correct rate unlike capital gain stock market money or via Shell money form offshore llc entities ! Also we need 88000 IRS agent just look at Trumps way of doing Taxes, I don’t doubt that many others in his pay grade neighborhood do some form of a similar style of arithmetic to some extent!
The biggest wealth generator for the US population over the past century has been home ownership. So do you propose that as the value of your home appreciates, that you be taxed on that appreciation?
That system of taxation, just like Elizabeth Warren’s proposal on wealth taxation would be so cumbersome to administrate and enforce. There are better more effecient ways for the government to collect taxes. But she knows that, it just sounds good at political rallies.