And, to reinforce the point, you have all the states that refund sales and property taxes. Cite,, etc.. By and large, the poor do not pay much by way of taxes.
This assumes the very questionable notion that everyone feels the same marginal benefit of absolute dollar values. If you accept that the benefit of the next dollar in/out is not the same for everyone, you’ve just done all the hard work in justifying a progressive tax scheme based on “feeling a little pain.” Congrats.
Sorry, that’s just what went through my head…
Okay, flat taxes are just dumb–here’s how I explain it to my grandson. You have several people, it’s Sunday, and they have a certain amount of cash on hand to make it to Friday, when they all get paid. One guy has $10, one has $100, one has $1000 and one has $10,000. You take ten percent from each of them. Who, in their right mind, can actually say with a straight face that the guy who now has nine bucks to make it by on for a week is equally bad off as the guy who now has nine grand? It’s ludicrous. No matter what, assuming we’re talking just spending for food and rent, normal weekly expenditure stuff, the nine grand guy is going to have money he doesn’t know what to do with come Friday and the guy with nine bucks is going to be pretty damned hungry. What’s “fair” about that scenario? If you take another ten percent off the ten grand guy, leaving him eight grand for the week, you can totally excuse five hundred ten buck guys from paying their buck and give them two extra bucks each so they maybe don’t mug somebody at the ATM on Wednesday when it starts getting crazy–and the eight grand guy is STILL sitting pretty, and the economy as a whole doesn’t lose out, in fact it gains. It’s a guarantee that the ten buck guys are going to spend every penny of their ten bucks but no guarantee that the ten grand guys will, which takes a whole bunch of money out of the system that nobody gets to use or profit by for that week. Not good.
Another thing that governments do is help regulate the economy. Consumer spending accounts for about 70% of the GDP. People at the lower end of the economic scale are much more efficient consumers–they plow back pretty much 100% of their money into the economy every day. High end earners don’t–they stash it and stick it in the stock market, which doesn’t do nearly as much to keep the ground level economy going as people who buy food and gas and pay rent and maybe go to Target for a few simple luxury goods. Letting the lower end off of their taxes and in some cases refunding them tax money puts more discretionary spending money into the hands of those who are guaranteed to keep the basic economy going–can we argue that it’s a greater benefit that $200,000 dumped into the local shops is of greater social benefit than the same money going to buy a single Lamborghini?
Essentially, by taking the tax burden off the lower end of the spectrum the government is paying people to support the economy, which benefits everybody–even the rich people. Rich people don’t get rich if nobody can afford to buy what they make, so if they won’t pay their employees better (which is what they should do, but haven’t for the past eight years) then somebody else has to step in and make what has to happen (economic stimulus) happen. The economy has to grow and be active, otherwise we’re all fucked. If the rich suckers and the corporations won’t do it on their own, they have to be pushed into it one way or another. If we offer them a tax break for making new jobs and paying people better, that’s another way to use the power of taxation to encourage the market to do what it ought to do if its self interest were smart and long range instead of stupid and shortsighted.
Exactly.
A flat tax, where the amount of tax paid is strictly proportional to your income, would be fine if your other expenditures were also proportional to your income. If the price you paid for goods and services at the gas pump, the grocery store, the utility company, and elsewhere depended on how much money you made, then there would be nothing unfair or burdensome about demanding that you also pay a non-negative tax rate proportional to your income.
In fact, there are societies you can live in that do have that kind of “progressive pricing”, as you might call it. When I lived in India and went shopping in the bazaars, the fact that I was clearly a Western foreigner automatically bumped up the prices of the merchandise offered to me by 50% or more. (If I wore Western tourist-type clothes instead of Indian dress, the surcharge might be over 100%.)
Native-born Indians experience the same phenomenon, to a lesser extent: rich people get charged more for many goods and services, because they can afford it. And when you think about it, why is that necessarily unfair? Is it really more fair to use our system of “flat pricing” where the cost of a good is arbitrarily fixed, so that it’s cheap for some customers and unaffordable for others?
As it happens, I like the fact that our legal system (mostly) imposes “flat pricing”, so I don’t have to haggle over the cost of individual items at every purchase. But I recognize that such a system makes the basic necessities of life expensive for many low-income people, and that’s a hardship for them. A little wealth redistribution through the tax code is part of the price we pay for our convenient system of flat pricing in commercial markets.
It depends on what you’re trying to optimize. Do you want the incentive to earn more to be balanced, or do you want purchasing power to be balanced, or…? It’s not ludicrous, it’s just a different standard.
Do you want:
The amount of tax paid to be proportional to the amount earned?
The rate of change of taxation to be proportional to the amount earned?
The change in tax rate proportional to the change in earnings? The square root of the earnings? The natural logarithm of earnings? …?
Do you want to talk about:
The tax rate?
The effective tax rate?
Do you want:
Deductions?
Deductions that can turn into payments?
The negative income tax scheme I mentioned has an exponential effective tax rate (“bounded growth” curve) where the effective rate varies from negative infinity to 25%, crossing zero at $40,000 income. If you look at the tax, it is proportional (flat rate) with earned income. If you look at the effective rate (1-net income/earned income) it is not flat with earned income. Actually a person has to earn over $1,990,000.00 before the effective tax rate is 25% (rounded to two digits). Saying that the marginal benefit of one dollar is different for different people is obvious. Saying that a proportional tax doesn’t take this into account is possibly misleading.
While that payment and tax rate may themselves not be indicative of what would happen in practice, I hope you will be surprised by the analysis of a “flat tax.”
Why is that the metric? No matter how much you take from the rich guys (shy of whittling him down to the poor guy), the rich guy is going to have an easier time. You think this is some revelation? In related news, Yao Ming has an easier time of dunking a basketball than I do. Life isn’t fair. Get over it.
Not if he planned for it. And even if he his, he’ll work harder to make sure he’s not hungry in future weeks. Fortunes have been amassed by this primal motivation. Just look at the many people who went through the depression and then did quite well.
Everyone can spend what the earned. It’s their money.
:rolleyes:
Well, why not take 90% of his money? He’s still better off and it just increases the “greater good”, right?
Except down the road he decides to build a home, employing many people and buying many things from many other companies who employ many other people.
So what? the wealthier guy can spend a 10-100 times as much. And one of the reasons he is willing to spend more on higher price goods is that he has a cushion, which he can spend at anytime on cars, refrigerators, suits, shoes, boats, etc. People have to get paid to make those things. And he pays sales tax on every one of them.
Tell that to a company whose stock isn’t being bought. And to the people planning for retirement who already have money in the company. and high-end earners often start new businesses with the money they [stash]. You know, those things that give people jobs and create wealth.
Why? The dealership employs lot’s of people. And the tax on a Lamborghini is quite a lot, not to mention service. And the fortune it costs to insure it.
No, the government isn’t paying anything, the rich people are paying the poor people. Well, indirectly, because the money is not a voluntary payment. First it is confiscated from them and then doled out. It’s forced charity, that passes through the government’s hands.
The rich didn’t get rich by being dumb. If you’re product is beyond the reach of enough people, you either improve the value (either increase quality/quantity or lower price) or you come up with new products people can afford. And if you won’t do it, another rich guy will. Or GET rich doing it.
Bullshit. (And now the rich are “suckers”?:rolleyes:) No they don’t. If I’m in the car business and people can no longer afford Lamborghinis, I need to offer lower priced cars if I want to stay in business. And if I downscale to BMWs and stop, and people still don’t buy, the guy down the street offering VWs and Saturns will do quite well.
Wow. Let’s just hope your grandson stays in school and gets another view other than yours.
A bizarre notion, economically speaking, but go on…
If you’re going to invent definitions, you should probably take into account other factors. Perhaps these markets have so much distortion (government created or otherwise) that people are expected to bargain. Perhaps another more apt way to look at it would be discrimination. Does discrimination sound fair to you? It’s mostly illegal in the United States.
I never shopped (at least for/by myself) in India, but I’m no stranger to haggling. I’ve had to haggle all over Asia (except Japan (though I hear you can haggle in the flea market areas, but it’s a different sort of haggling), oh and India). I can use China as my best example. The Chinese will haggle everything. I haggled my first hotel room last year, after I already pre-booked it. I haggled at a professional acupuncturist’s office (it was connected to a physician’s clinic). Unfortunately, I haggled too long that I had to leave after we agreed to a price. As I walked away, he dropped the price again.
How do you know someone is rich? Do we really want to start introducing more subjectivity into society? Doesn’t that lead to more discrimination?
Other than discrimination and consumer protection laws (which are really just against fraudulent transactions or fraud of some type, meaning the seller never intended to go through with the transaction as offered), how does the law impose “flat pricing?” Again, if you’re going to make up definitions, wouldn’t the fact that the US’s free market and efficient way of doing business are what is really keeping pricing stable? (Yeah, you can throw in supply-side economies of production and some evolution of this country’s culture to be more accurate). While I don’t disagree with the notion of wealth redistribution (though I might have a thing or two to say about how it is done or how much), to think that this is what causes stable (well, really, free floating) prices is a bit, if not mostly, ignorant.
I find this absolutely bizarre. I grew up on tales of Robin Hood & see the Hood legend as heroic. Of course, I also grew up with a Biblical education & accept alms for the poor & standard tithes (much of which go to the poor) as normal, normative, & “God-given” in the Judeo-Christian tradition. Do most Americans really see Robin Hood as a deplorable figure?
(bolding mine)
This is more or less the argument I have heard on the right, though with the bolded points used to justify flat taxes, or bizarrely, a total exemption for capital gains.
But if life **isn’t **fair, why should we care? If we embrace, welcome, love, worship unfairness, why should we be bothered overmuch at the extortion of taxes, or the redistribution of wealth?
I think ultimately, whatever they say, those who object to taxes &/or redistribution believe, rightly or wrongly, that they are being treated “unfairly,” & object out of a sense of entitlement.
And that’s ultimately what all the whinging is about. Persons who think they are entitled.
“In our mixed oligarchy-meritocracy those awarded advantages by birth believe those advantages to be earned and believe themselves exempt from obligation” - Dorothy Gambrell.
Because I earned that money by the sweat of my brow. I’m quite generous with charitable donations, but I’ll give as much of my money away as I see fit.
Huh? Unless you mean that people might feel entitled to keep what they’ve earned.
:rolleyes: I can tell you that I’ve worked extremely hard to get to where I am. And I am not one that you would consider “rich”. But you’re entitlement argument belongs in a toilet bowl.
I can’t finish this thread. Let me just say that mswas is being way nicer to some of you than I would be.
Robespierre was right.
Cite for sweat?
Cite for your generosity?
Again, define “earned.” There’s a world of difference between, “somebody paid me for this,” &, “I was paid a fair wage proportionate to my labor.” Which usage are you using?
Oh, so you don’t feel entitled to keep what you’ve earned? I’m glad for that. Eat, drink, & be merry, bourgeois pig.
Wow. I’ve never heard something so asinine in my life.
You’re trying to say that I’m not “entitled” to the money I earn through my job?
Unbelievable.
It’s fools like you who make me vote Republican.
Define “fair wage proportionate to my labor”. I’ll just tell you that I started as an unskilled laborer. The two things I had to offer my employer was a willingness to work very hard and a desire to do a good job. I got my first non-laborer job 25 years ago, in Manhattan, making less then $15,000. The rest is none of your business.
Based on your response to me, I guess that I’m not surprised to see you run along. You best do so before you level more insults in this forum and earn yourself a warning.
Yes, by the grace of his lordship.
Wealth will naturally tend to concentrate for the simple reason some people are more clever or skilled or ambitious or just plain lucky. I don’t think it’s necessarily a bad thing. People work harder when they have something to aspire to.
What you don’t want is to create a class society. A society where the only way to get wealthy is to go to very expensive private schools, graduate from certain top colleges and work for very exclusive companies that basically serve as repositories for wealth.
Plus the ten trillion or so they spent on top of that.
I found this quote on Wikipedia from Adam Smith:
“The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.”
Basically his argument is that since the wealthier you are, the more disposable income you have that goes to buying crap. The majority of the poorer persons income goes to buying essentials like food and clothing.
Again, if life is unfair, it seems to me that we should pick the unfair path that maximizes the benefit to the most people. In other words, “fairness” should be whatever tax plan maximizes revenues and minimizes disincentives. Both extremes of a flat tax or taxes 90% of the Forbes 500’s wealth are both unworkable. But there is certainly a reasonable point somewhere in between.
I agree entirely. In fact, that’s my point.
We don’t set individual prices as a proportion of individual income, even though you could make a case that that would be a more “fair” approach, because it’s not efficient. Prices are set uniformly in accordance with economic laws of supply and demand because that’s what will provide the most revenue with the least overhead. (Some exceptions exist, e.g. in automobile sales, but these are comparatively rare.)
Likewise, even if a flat-rate tax code is considered more “fair”, we can still choose a system that’s more efficient. Progressive taxation is a better system because it provides the most revenue with the least economic hardship.
And I think you can argue, as I said above, that a flat-tax system isn’t even more fair than a progressive-tax one in our market economy, because prices aren’t proportional to income. Demanding that poor people pay taxes strictly as a percentage of income, when they don’t get to pay for goods and services as a percentage of income, is burdensome and unfair.
Anti-discrimination, anti-fraud, and consumer protection laws are exactly how, in addition to legal regulation of trademarks, licensing, and so forth. (I didn’t say that legal regulation was the only impetus behind the one-price system—in fact, it wasn’t even the primary impetus—but it certainly did solidify and regularize the use of one-price business practices.)
You’ve got my conclusion precisely backwards. I’m not saying that income redistribution through the tax code is the cause of the one-price system in commercial markets. Rather, I’m saying that the one-price system in commercial markets is one of the reasons that we should have some income redistribution through the tax code.
[quote=“foolsguinea, post:109, topic:469773”]
…nevermind
Still no cites. Yet somehow, whenever one of us on the left argue anything, it’s all, “Cite, please?”
The core of your argument appears to be that you earned everything you make. Yet you offer no cite at all for that. I’m just glad the government will demand a cite, & give you jail time if you refuse to comply.
OK, those were overkill. I have a bad habit of going to the leftist extreme when I’m confronted with hidebound knee-jerk pro-capitalists (you’re not really a capitalist unless you derive the greater portion of your living from investment). I just throw up my hands & seem to confirm their assumption that I’m a crazy Leninist.
Besides the internet, I’ve done this to people in person twice that I recall. Once was just an ill-advised way to kiss off some income-tax protestor by declaring myself a Marxist with what may have actually been a fascist salute. The other time was to an acquaintance of mine earlier this year, in a discussion which started(!) with him saying he endorsed Mike Huckabee. I started saying I was a Libertarian Socialist (which isn’t actually true) & saying we should bomb Switzerland. I exaggerate, angrily, easily.
That said, maybe I really am turning into a Leninist, or a Jacobin. I am becoming more & more convinced that no real reform, no benign socialism, is possible without the threat that the Revolution Could Happen Here. And without that threat, America will happily grow into a Third World caste-based society, & all you Pubbies will be happy as clams.
I’ve lived in Haiti. I see how this movie ends. I’d rather have socialism.
Well, superficially it sounds like an absurd thing to demand a cite for, right? I mean, I understand that your deeper point is that we don’t really “earn” anything all by ourselves, because we depend on society as a whole to maintain property rights, enforce contracts, provide security and opportunities, etc. Still, saying “I earned everything I own” is a common and widely understood simplification of that deeper fact, and naturally people expect it to be understood and accepted.
Kinda; not to mention prohibited in this forum. (Not that everyone on the other side has been a model of politeness, either.)
Not to lay a guilt trip on you or anything, but that tends to make the job a little more difficult for those of us who are trying to put forth the leftward side of this issue with cool-headed and responsive debate. Well, usually cool-headed. Fairly cool-headed.
So, by “apologize”, sort of, you mean “explain”. Gotcha. You may want to look the word up.
Look, I do appreciate you at least recognizing you went a little over the line (I’ve done as much, and worse), but why the hell do some people find it so hard to apologize, genuinely?
[shrug]