Option #3. Blow it all on hookers and beer. If the government is going to get all the money and your children are not going to get any of it then, at a certain point, it makes more sense for the person to spend the money on things instead of investing and growing the money.
Option #4. Take the money and run somewhere where they do not tax the hell out of people. I know people who have moved to Nevada specifically for that reason (Nevada has no personal income tax). It wasn’t the only reason many of them moved here but it sure as hell was a major factor for many of them. I also know a couple people who moved to other countries because of tax issues.
Have a look at who supports NASA. I can tell you - Senators who have large NASA facilities in their states. Do you know why NASA launched the Apollo missions from Florida, and mission control was in Texas? It wasn’t because that was the most economically efficient or technically superior way to do it - it was the result of political horsetrading among powerful Senators.
NASA’s current plan for their next generation launcher was heavily influenced by the need to keep employees working in powerful congressional districts.
Barack Obama claims to support a move towards ethanol. And yet, he supports a tariff on Brazilian cane sugar, which is the most energy efficient source of ethanol. And he supports huge subsidies to inefficient corn ethanol. Any guesses why? Hint: Go look up which state Archer Daniels Midland calls its home.
Do you know what an earmark is? An earmark is funding inserted into a bill which was not requested by the agency involved. Earmarks are payouts to special interests at home by senators. They often have nothing whatsoever to do with the bill.
Here is a fascinating visualization which shows how much federal money in ‘earmarks’ each state received, per capita. The bigger circles indicate states that received the more money per capita than states represented by smaller circles.
One thing you’ll notice is that the smaller states have bigger circles - more earmarks per capita. This is due to the fact that they have equal representation in the Senate, despite having a much smaller population. Therefore, they have more power to direct funds per capita than other states. This has nothing to do with economic efficiency, and everything to do with the nature of bargaining in government.
But there are some outliers in that graph. Take West Virginia - there are 13 states with smaller populations. And yet, West Virginia ranks third in how much federal earmark money it gets. How can this be? Answer: West Virginia Senator Robert Byrd is Chairman of the Senate Appropriations Committee. And the money he manages to direct to his state is huge - 3 billion dollars so far. 40 different projects in West Virginia bear his name. $229 million this year alone.
Think about the implications for economic efficiency - money flows out of government not to where it can do the most good, but to the areas that have the most political influence. This is a common characteristic of government. A town represented by a powerful politician will have a shiny new hospital, and one that lacks representation will have a dump. Technology is funded not based on likelihood of return, but rather on the state the technology is located in, or the size of the donation the company made to the campaign of a Senator from that state.
This doesn’t have to be an illegal bribe or a quid-pro-quo; it can simply be that Senators whose stated positions will help a certain company will find their campaigns supported by that company. But the effect is the same - the company winds up getting government money or beneficial regulations because it invested in a politician who made it happen. Not because the company was the most deserving of the money or would put it to the most efficient use.
Sometimes it can be really dirty: A $130,000 earmark requested by Rep. Ralph Regula, R-Ohio, will fund a library and museum honoring first ladies. The library was founded by Regula’s wife and the director is the congressman’s daughter. This guy basically took taxpayer money and directed it to his family’s interests. And he got away with it.
In 2006, $29 billion dollars was earmarked - money inserted into bills that no goverment agency requested. What do you think the odds are that that money was spent wisely?
You’ve twisted the argument. The moral justification for allowing the rich to keep their money is that it is their property. They worked for it. A practical benefit of allowing them to keep it is that they have demonstrated the ability to generate wealth with their assets. Of course not all of them do. All Paris Hilton generates is bile in my stomach. But as a group, they do. This is not an argument for a ‘deserving’ test, but a rebuttal against the notion that government is a better steward of the nation’s capital.
You think so? There’s an old saying among the wealthy - “Shirtsleeves to shirtsleeves in three generations”. you can leave your kid immense wealth, and if he doesn’t manage it wisely, his children will be back to square one. And this is largely true, outside of the handful of hyper-wealthy families like the Rockefellers.
In fact, it’s far easier to screw up and wind up completely broke than it is to take a nest egg and turn it into something even bigger for your own children. It takes hard work and savvy to manage money. Those who can’t do it, lose it.
If you do then you do. It’s your money and spend it as you wish while you have it. Heck, the kids were probably going to blow it all anyway. Might as well let Dad have the fun - he earned it.
We’ve been talking federal taxes not state or local taxes. Admittedly what you say has some truth to it. As you said, some people already leave the country to avoid paying a tax they don’t like. If so, then I say good riddance. If your money means more to you then your citizenship, then have a good time living in Paraguay or wherever you run away to.
One thing I would do is close off the residency scam that many of these tax “exiles” exploit. If you renounce your American citizenship for tax purposes, then as far as I’m concerned you can live in your new homeland full time. No permanant visas just so you can continue living in America while refusing to pay taxes to America.
No, the argument is whether or not we should go beyond taxing people to pay for the essential services of government, or whether we should tax them in order to promote ‘equality’. Barack Obama has said that he favors a capital gains tax increase even if it doesn’t increase revenue, because it would make the country more ‘fair’. The left talk just as much about ‘the gap between the rich and poor’ as they do about the need to fund essential services. To many, there’s just something inherently wrong with some people having 50 times more wealth than others, and they believe it’s a proper role of government to take some of the money from those people and redistribute it to the poor, in order to lower the gap between them.
That’s the big difference.
The question is, how much revenue do you need? For some, no amount of revenue is enough so long as there are benefits that can still be handed out to the poor and there are still wealthy people to extract the money from. Take Obama’s financial plan - he’s not looking to raise revenue - he’s looking to cut taxes on the poor, and pay for it with increased taxes on the rich. It’s a pure wealth transfer from one group to another, based on his ideas of ‘fairness’ - not some existential need the country has which is going unfunded.
I think it’s very likely that a strong motivator for wealth creation is to leave a better life for your children. Speaking for myself, I already trade off extra wealth for more time with my family. However, I also work hard and save so that my daughter can live a better life after I’m gone. When I’m 60, I’ll continue working, even thought it’s unlikely that I’ll personally spend the money I earn by that time, because I will be building a family nest-egg for future generations. If you tell me I can’t do that, and that the state is going to take everything I have when I die, here’s what I’m going to do:
Retire at 55.
Take out a reverse mortgage on my home so that it devalues to zero by the time I die.
Along the way, I’ll refuse any promotions that require me to work my ass off, because neither I nor my family will get much benefit from it.
Government revenue went up over 500 billion dollars per year since 2001. The deficit did not come about because Bush gave money to the rich. The deficiit happened because of the war on terror, the invasion of Iraq, huge increases in federal spending on education and entitlements, a new prescription drug benefit, another other spending. Health and Human Services spends 300 billion dollars a year more today than it did in 2001. The Department of Education spends almost 30 billion per year more now than it did in 2001.
The deficit is the result of the explosion of government spending, not a reduction in revenue from tax cuts.
And as a result, you will have more time to spend with your family, and your children will be less likely to become juvenile deliquents. I guess that makes the Democrats the party of family values!
Well now that I see you’re talking about earmarks and pork barrel politics rather than actual fraud I’d answer your original point differently.
Sure there is government waste of various kinds and some of it ends up going to a senator’s home state or to a particular party’s privileged consituency. The same is true of all kinds of favors (like the favorable legislative reforms that the credit card industry got from the Republicans).
But to argue that that a given sum of money would be better spent if it were untaxed and thus left in the hands of already rich people as opposed to taxed and used by the government you’d have to know 1) what is the rich person doing with the money and 2) what is the government is doing with it.
You’d like to assume that all rich people use their money in a socially beneficial way while all money used for government spending is waste. But that’s a patently absurd assumption given all the things that are funded by the government without which society as we know it would cease to be. I could provide an endless list of social goods–any smart junior high school kid could–which are funded by taxes; while few of them would be entirely free of some demonstrable element of waste, perhaps even some element of pork barrel spending, that’s not to say that the situation would be better if the spending simply weren’t there. (And there are always ways to reform the system to reduce waste and increase accountability–which I’d strongly support.)
BTW, NASA’s budget is a tiny fraction of the federal budget–not a big problem in my view (unlike the endless military budget).
I agree with you about subsidies for corn-based ethanol which are morally and environmentally unsound. OTOH, both sides of the aisle are guilty of that particular sin: the problem isn’t with taxation; the problem is with the lack of accountability to individual citizens few of whom, even in midwestern states, directly benefit from subsidies to big agriculture.
As I’m sure you’re well aware, if your employer pays you in bonds it’s still income. But if you want to keep all your money in munis, then the governments will thank you. If it is a loophole for tax evaders, why do you think the governments going to be ripped off explicitly issue the bonds? Loopholes are unintentional holes in the laws. This is an intentional thing.
As I responded to Shodan the moral argument I understand if not agree with. You brought up how the rich do so much for us. Those who do will make far more than we can tax away, which is fine with me.
For the moral argument, why is it any less moral to take more than a fair share from the middle class? Given that we need money to run the government, why not take money to cause more or less equal pain? Giving that we’re spending it, it is only responsible we tax ourselves to pay for it. Right now we’re selling the US to the Chinese, as Ted Koppel mentioned tonight on TDS, and that’s what is immoral in my book. It’s like a person running up credit card bills and then being pissed that his or her spouse has to leave to go to work.
Wars cost money - having wars without the taxes to pay for them is stupid.
Prescott made it, GHW Bush is a smart guy, so we’ll see how the twins do. It might come true yet.
I agree it takes smarts to make money - but the smarts can be hired. I actually suck at investing, but I’m smart enough to pay someone who’ll tell me that Google at $165 is a good deal, and then believe him against my concern that it was too much. I don’t think it takes a lot of brains to not spend more than you have, just the common sense Ed McMahon doesn’t have.
And if you hire the smarts, the same interest is served. You are taking your wealth and using it to hire the services of smart people to help you find the most productive places to put your money. Not only did the money wind up in a productive place, but a smart money guy managed to earn some money, which promotes the occupation of smart money guy. So the rich have paid for the creation of a whole class of people who do nothing but study the market and try to find the most productive places for money to go. Sounds like a good thing to me. A perfect example of how economies evolve and adapt.
If that money was taken from him, the smart money guy would be out of a job, and instead of going to productive purposes the money might get spent on cheetos and smokes.
Sure Sam, but no one is suggesting a 100% inheritance tax. Even if they bring the estate tax back you could (with no estate planing to speak of) leave your kids: 1 Million dollars*, the family home, and all the Life Insurance you want. Please don’t try and tell me that your kids need more than that? And if you hire a decent trust & estate lawyer it could be double that, easy.
Now, if a bit of that money went to the government and paid another class of people called engineers and construction workers to improve our roads and bridges, would that money be put to better use? On the one hand I appreciate the importance of liquid markets, on the other we can get too clever by half, as we’ve seen recently.
But I get better service from having a good chunk of money invested, and those with 10x what I have get better service still. My point was that those starting with money can keep and grow their money without being very smart.
I wonder what type of trust laws they have in Canada. Trusts are something everyone with two quarters to rub together set up in California, but they were nearly unknown in New Jersey.
Read your own question. You’re asking about why it’s immoral to take more than a fair share from one group over another.
overall, I really can’t fathom what is so hard about this. It is NOT the government’s money. They haver NO money. They get it by taxing us. Those taxes—the taking of other people’s money—should be kept to a minimum. Whatever we need to run the country. NOT to redistribute wealth. (Except for help for the truly destitute.) That burden should be levied equally across the board.
People have a moral right to the fruits of their labor. That’s why income taxes should be kept as low as practical. that is why I don’t think that estate taxes deserve the same moral high-ground. Not that it cedes moral high ground completely, just that it falls short in comparison to earned income. There is a practical matter though: how would you levy a heavy estate tax effectively when the person would just mange their affairs in a way that diminishes their estate to zero.
You’re talking about a different issue. Debating how much taxes the government should collcet is one issue. Debating who they should collect them from is a seperate issue that we’re discussing here.
Assume for the purposes of this thread, that the government is going to collect X amount of dollars. Imagine X to be as high or low as you want.
Now the question is, would you be willing to have your share of X increased in order to have Bill Gates’ share of it decreased? Is Gates going to do such a better job of managing his money than you would of yours that he should keep his instead of you keeping yours?
The argument seems to be: do the ultra-rich benefit us, by acting as capital-accumulation agents? I would say: MAYBE!
For example, Henry Ford accumulated a vast fortune-most of which he plowed back into the Ford Motor Co.-that was good for us, because it provided jobs and made FORD more efficient.
But somebody like Ted Kennedy?:their trust fund probably invests in chinese assembly operations:which ships cheap products to the USA.
Or, Paul Allen: made a mint in MICROSOFT-but lost $75,000,000 in a disaster called “MERCADA.COM”-a failed on-line buying service.
The old robber barons (the J.P. Morgans, the Mellons, etc.) generally fulfilled a desreable role in accumulating and investing capital. I’m not so sure aboutthe current crop of millionaires.
No, we’re disputing the definition of fair share. Do you think it is fair to tax the guy making minimum wage at the same rate as the guy making $1 M a year? If not, then it just becomes a matter of negotiation.
Yes, it is our money, but it is also our benefit. The government doesn’t drive on the roads. The government is not something that has to be protected from terrorists. The government doesn’t need protection from Chinese additives. People pay, and people benefit.
Given the inequality in the ability to pay, there is going to be some redistribution of benefits. The working poor guy is not going to be able to afford to pay an equal share for police and fire protection, not to mention for Bush’s war. That’s the way it is anyplace outside of your libertarian fantasy world. If you want to ensure an equal payment by all, all you need to do is to ensure equal incomes to all. Not so attractive now, is it?
Sure, we should decide what we need the government to do, levy taxes to pay for that, and that’s it. Today it would be nice to run a surplus to help pay off the debt. But starry-eyed right wing idealists have a fantasy that politics will vanish and that Congress won’t pass stuff for their constituents, and cut taxes as if this fantasy was going to come true. It’s really no different from going into debt based on the expectation of a 30% raise. The spending seems to be constant, the difference between Democrats and Republicans is that Dems are tax and spend, while Republicans are mortgage our country to the Chinese and spend. Which do you think is better?
