The following is a reprint of a response I had in an earlier post. It is not an attenpt to be a revisionist historian to Adam Smith's "Wealth of Nations" which I have read. Rather, it is to discuss the benefits and merits of a concept. Debate it rather than just offer up names. Here it is:
The idea that government should choose who the winners will be and who the losers will be is anathema to the whole principle of free choice, isn't it? Progressive taxes? Repudiation of the Bush-Cheyney policies? Come on.
The ultimate job of government is to get out of the way so that individual initiative can have a chance to realize goals if pursued by the individual. It is, or was, based on a society that believed in independence and work. The only "fairness" that we worried about was to try as much as possible to have a level playing field for all in this country.
I do believe that there must be stricter regulation and oversight for situations that we have seen in this financial crises. When power and wealth are abused, especially in a way that takes all of us with them, there must be safeguards in our system of freedoms. People make bad choices, and illegal choices. They must be held accountable.
Having said that, what is progressive about any tax? Government produces no money, but takes it from those that do, then make them pay progressively more than those who don't???? What is progressive about that? How does that provide greater incentive for people to create wealth in this country? How does a 35% corporate tax keep business in this country when every other industrialized country offers less of a strain on earnings? Senator Obama is right in the sense that wealth is built "from the ground up." When you start at ground level, don't you want to achieve higher status financially. What a goal to look forward to when you know that your efforts will lead to a "progressive tax." How is that progressive for success?
Lessen the tax confiscation, tighten the spending, and find an equitable way to provide tax cuts for 100% of citizens in this country; not just 95%. If you nwant to create a nanny state of dependency where we whine for fairness defined as what I can get, I believe we go opposite the very tenets on which we were founded.
Tuesday, October 28, 2008
Redistribution of wealth--Progressive or Regressive
Subscribe to:
Post Comments (Atom)
6 comments:
Until a candidate or political tribe truly embraces, pushes for, and implements a simple flat tax, this kind of argument will go on forever.
A flat tax.......no deductions, no special tax breaks, no loopholes, no credits, and most importantly no need to support the bloated IRS (which is housed in the largest federal building in Washington, by the way).
As an experiment I had 3 separate people (accountants) calculate my taxes a couple of years ago. Guess what? I got 3 separate answers.
But hey, when candidates like Steve Forbes propose such a change, their own tribe labels them a kook and quickly brushes them aside.
"I believe we go opposite the very tenets on which we were founded."
Of course, the primary framer of our Constitution, James Madison, understood that in a free democracy the poor will eventually vote away the property rights of the wealthy. That's why only white male land owners could vote initially. Madison "protect the minority of the opulent from the majority." He referred to the wealthy as the "responsible" class.
We've obviously progressed from Madison's stance. Progress is good.
There is something very discomforting to me in Gary's post:
an inability to discern that the system is irretrievably broken as it exists.
When large corporations with the backing of our government go into other nations and steal their material wealth, appropriate their land for their own profits, enslave their workers, and then end up not having to pay taxes outside of a small import fee, the system is broken.
When the US government uses secret police and military action to alter the governments of other nations--sometimes through assassination, sometimes through foment of insurrection----to facilitate the those corporate takeovers, the system is broken.
When the rich have gotten disproportionately richer in a short span of time while the poor have gotten poorer at the same time, the system is broken.
When treasury money is used to rescue financial institutions and individuals who acted irresponsibly-----while keeping in mind that arguments are constantly used that there is no money for health care for those who don't have the wherewithal, or educational assistance to educate our next generation---the system is broken.
When the national debt goes beyond anything numerically imaginable to the average person, into the trillions of dollars, and our children's and grandchildren's futures are indentured to cover it, the system is broken.
When the US spends more for defense than all other countries in the world and maintains troops around the world without the consent of those nationalities, the system is broken.
When everything that our government does is either done to increase someone's political powere or to make someone richer and 'we the people' have no say about it, the system is broken.
When two large political organizations control the mindset of the electorate, the system is broken.
When the media becomes the cheerleader instead of the interrogator of government actions, the system is broken.
And so on.
----------------------------------
Gary's initial premise is itself completely illogical:
"The ultimate job of government is to get out of the way so that individual initiative can have a chance to realize goals if pursued by the individual."
Nothing could be further from the truth-----the ultimate job of government is to govern. Most times governance involves decisions that negate individual choice. Governance is the creation of boundaries--(rules,laws), that define the limits to individual action.
You may want to drive your car over your neighbor's lawn, but the law says you can't. You may want to have a small nuclear explosive, but the law says you can't. You may want to do a lot of things that the law says you can't.
Government is the governed agreeing to be governed. The individual under government is inherently a member of a larger group of individuals.
Government's job is to make and enforce laws that are the most fair to the greatest number of people. THAT is the ultimate job of government. To be as fair and supportive to its citizenry through the laws it passes that are the representation of the common will of the citizenry. When this is no longer the case, the system is broken.
As it is.
An overhaul is overdue.
RC, well said.
It seems the argument over 're-distribution of the wealth' doesn't get the same reaction as the principal applied in the reverse which is 're-distribution of the debt'.
Privatize the profits and socialize the debt seems to be the economic philosophy of the current outfit running the country. Swell.
On top of that characterize those who oppose us as 'tax and spend' socialist liberals while we simply 'borrow and spend' and appear to be fiscally responsible. Joe the Plummer is too stupid to figure it out. By the time the public catches on and the bill becomes due, we'll be long gone and we'll let some poor bastard get elected and have to deal with it. Mission accomplished............which reminds me, has anybody heard from Dick Cheney lately or is he on one of those witness protection programs Gary talks about?
If the party that is now worried about "spreading the wealth" really cared about it more than just as current political slogan to pander to the voting public, they would have been pushing for a flat tax all along.
Some things to ponder that I have run across pertaining to taxation thought down through the history of the US.
Adam Smith from Wealth of Nations
“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”
In a letter to James Madison in 1785 Thomas Jefferson suggested that taxes could be used to reduce “the enormous inequality” between rich and poor. He wrote that one way of “silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.”
Madison later spoke in favor of using laws to “reduce extreme wealth towards a state of mediocrity (meaning the middle) and raise extreme indigence towards a state of comfort.”
During the early days of the republic, the government relied mostly on tariffs to collect revenue, under the theory that since the rich bought most of the imports, they would pay most of the taxes.
“The rich alone use imported articles, and on these alone the whole taxes of the general government are levied,” Jefferson wrote in 1811. “The poor man, who uses nothing but what is made in his own farm or family, will pay nothing. (With) our revenues applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings.”
During the Great Depression, Franklin Roosevelt's administration boosted the highest tax rate from 63 percent to 79 percent in order to fund his New Deal programs. He pushed it to 94 percent during World War II. Roosevelt was matched by Dwight Eisenhower in the 1950s, who, with the aid of a Republican Congress, maintained an income tax rate of more than 90 percent for top earners. It took Lyndon Johnson to lower the upper tax rate to 77 percent. It remained near that level until the second year of Ronald Reagan's presidency.
Post a Comment