America...the newest third world country.

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Bob D'A

Trad climber

Taos, NM

Topic Author's Reply - May 12, 2014 - 03:45pm PT

HT wrote: one more
flat tax is regressive because it takes a higher proportion of income compared to cost of living for lower incomes.
Said a little more plainly: If A makes a lot less income than B, A requires a much larger share (as much as 100%) of his income just to stay alive

I try to explain that to him...to no avail.

What blows me away is the total lack of compassion for the poor in this country. The republicans have made them the evil ones taking it all. I just don't get it.

labrat

Trad climber

Auburn, CA

May 12, 2014 - 04:00pm PT

Taxes? This is what being a third world country is about?

How is talking about taxes going to solve the problem of China continuing to take over territories, dominating regions via political and military pressures, and controlling resources around the world?

When China takes over Taiwan will we do anything about it militarily? Should we? Can we afford the costs?

China will probably take more control of disputed islands from Japan and the Philippines first to see what the West and Europe do.

Maybe they will use what Putin is doing in Ukraine by fostering internal strife in Taiwan first before the takeover. I believe it will happen.

On Second thought, a flat tax and elimination of many of the loopholes might get us some help paying for future wars.....

madbolter1

Big Wall climber

Denver, CO

May 12, 2014 - 04:15pm PT

Really...who lifestyle is gonna take the biggest hit?

Fifteen percentage of $20,000 or 15 percent of $500,000.

Regressive to the poor.

First, you need to stop saying "regressive," as it is NOT by definition correct. You are simply using that term because it has a negative connotation, but by definition a flat tax is not disproportional.

What you are really wanting to claim is that it does disproportional DAMAGE, which is not the same as a "disproportional rate," which is the definition of "regressive."

But, the minute you are not able to help yourself to the negative connotations of the TERM, you must then actually do the hard work of sustaining your CLAIM that the same RATE does disproportional DAMAGE. And you will find that CLAIM to be not so easy to sustain.

Most on this thread will immediately grant your CLAIM, because they just "feel" the intuitive appeal of it. But claims and feelings are not a proper basis upon which to formulate public policy. We're after JUSTICE first and foremost in such policies.

You have not even started to provide metrics or principles to support your utterly arbitrary percentages. That would be a bare minimum needed to sustain a "progressive" tax.

But let's turn back to the other side of the coin: your need to demonstrate the "disproportionate damage" caused by a flat tax.

Let's say that the tax rate was a flat 10% (for ease of calculation; nobody proposing a flat tax has proposed one even that high).

You make $20,000 per year, and I make $500,000 per year, let's say.

You pay $2,000 and I pay $50,000 in tax each year.

The question is: what does this MEAN to our "lifestyles," as you put it?

You are appealing to the intuition that says, in effect, YOU can't "get ahead" or even stay afloat if you have that much taken from you each year, while I certainly can. Thus, by your lights, I still "have it easier" than you do. Thus, the flat tax does "disproportionate damage" to you compared to me.

The problem is that you are appealing to a "left wall" fallacy. Your idea is that you are much closer to the "left wall" of NO income and hence NO ability to survive than I am. Your idea is that I have a LOT more "wiggle room" than you do. Your idea is that it takes a LOT more for me to be in "dire straights" than you. So, your idea is that PROXIMITY to the "left wall" entitles you to take less "damage."

What this fallacy does not contemplate is that the intuition here really cuts both ways.

If you are AT the "left wall," then you contribute nothing. If you earn exactly one dollar, you contribute a dime, which amounts to nothing, because that dime does not effectively pull you AWAY from the "left wall" enough to make your situation survivable. Same if you make ten dollars. Same if you make 1000 dollars.

So, within a CERTAIN proximity to the "left wall," the flat tax is really doing no "additional damage" because you are already as "damaged" as possible, and the RATE at which you are taxed constitutes such a minuscule AMOUNT of money that the AMOUNT is irrelevant in your survivability or ability to distance yourself from the "left wall."

Your intuition only starts "feeling" valid when you are "just far enough" from the "left wall" that you are "on the line" between "making it" and "not making it." This is why you chose the figure that you did, rather than the figure of $100 per year or $1000 per year. You intuitively know that when you are "against the wall," so to speak, the AMOUNT the tax RATE signifies is irrelevant.

So, you must find that "sweet spot" where the AMOUNT of any flat-tax RATE will appear "relevant" to you "making it."

But the problem is that THAT is a moving target. There are people in this country that do just FINE on $15,000 of INCOME per year. In fact, there was an article on Yahoo news just yesterday about a family of four living on $15,000 of income per year. He was just out of the military, so their healthcare was through the VA. They had saved during his military years to purchase a modest house and late-model used car outright. They buy groceries in bulk, and they plan their errands to minimize gas expenditures. Etc.

The point is that it is INCOME that is subject to the tax, not ASSESTS, not SAVINGS. (I have stated, btw, that I am opposed to INCOME tax in any form; but we're talking about how to make an income tax as "fair" as possible).

So, here is a family that is FAR from the "left wall," even though they are examplars of a very low INCOME. Another family making $15k of INCOME might be much closer to the "left wall."

Your intuition is that beyond a "certain" income, you are "far enough" from the "left wall" that neither the rate nor the amount is "damaging."

But that intuition is based entirely on the question-begging assumption that everybody has a "right" to be guaranteed a "certain distance" from the "left wall."

I'll grant that the abuses cast in the form of "too big to fail" are MADDENING when, by contrast, it seems that there is no corresponding sentiment that anybody could be "too little to fail." That disparity in justice is horrific! But what went wrong with it is NOT that there is no corresponding guarantee for the "little guy." What went wrong is that the banks and corporations were not allowed to fail! They SHOULD have!

Failure is a real possibility in this society! And this country was not founded to provide guarantees against failure. It was founded to wildly reward success! And your "lowest common denominator" approach of ever "leveling the playing field" flies directly in the face of what this nation was founded to accomplish.

So, yet again, we come up against the most fundamental difference between the liberal mindset and the libertarian mindset (which was that of our founders). Notice I don't cast this as "liberal vs. conservative," as the so-called "conservatives" are JUST as confused as are liberals, just from the opposite side of the fiscal coin.

That difference IS primarily this: Liberals intuitively believe that society is one, communitarian "pool of resources" that the government is supposed to "manage" to the "benefit of all." The notion of PRIVATE PROPERTY is not one of RIGHT but of privilege, of "stewardship," where the government exists in large part to ensure that "distribution is equitable," which means that people are engaging in "good stewardship" of "their" (scare quotes) resources. Thus, if the government "takes" resources from any entity, the ONLY relevant question is whether the eventual distribution of those resources served "the public welfare." So, liberals debate ONLY what is a "good" distribution, as the TAKING is a given.

By contrast, libertarians believe in a ROBUST notion of PRIVATE PROPERTY, where government exists primarily to protect and ensure this RIGHT. Our founders, and modern philosophical libertarians, believed that taxation could ONLY be justified when the TAKEN resources were used solely to support the explicitly-stated functions of government. And those functions were carefully designed to be ONLY those that individuals could not, in principle, do for themselves and that provided for the very existence of a nation that would be robust and powerful enough to PROVIDE for the protection of property rights. Thus, when government takes resources from any entity, the ONLY relevant question is whether the eventual distribution of those resources serves the explicitly-stated function of the government qua ultimate protector of property rights. So, libertarians debate ONLY what is a usage consistent with explicitly-stated functions of government, as the TAKING is NOT a given.

There you have it: THE divide. You are either a communitarian or a libertarian. You either believe in a "pool" of resources that really is ultimately owned and must be managed by government, or you believe in individual property RIGHTS that must ever be protected by government from those that would encroach upon them.

Most people waver between these perspectives. They would say that they believe in individual property rights. But the sorts of policies they actually want to see government engaged in reveal that they ALSO believe that there is a "pool" of resources that must be "managed" by government. But these perspectives are NOT commensurable! And the incommensurability of them is why liberals cannot provide principles or metrics regarding what is a "fair distribution."

That is why you cannot, in principle, provide a "safe distance" from the "left wall" that would be "the line" at which the flat tax rate should or should not apply. That "line" is a moving target on a case by case basis, and the whole drawing of such a "line" already implies a "guarantee" on the part of government to ensure that "nobody really fails!"

So, you are quite content to violate private property RIGHTS to ensure this guarantee! But NOWHERE in our Constitution is such a function elucidated, nor ANY such guarantee provided! It is simply NOT the role of the federal government to ensure that EVERYBODY is guaranteed a certain "distance" from the "left wall." That is a strictly liberal mindset that gained momentum since the Depression. It is a recent development in this history of this nation, and it is not a Constitutionally-based perspective.

Class envy is NO excuse to penalize the "wealthy," and it is NO basis upon which to NOT make the "poor" contribute at the same rate.

Or, you can just come clean with the fact that you don't believe in property RIGHTS, at which point you admit that you read the Constitution VERY differently from what was written and ratified.

If you believe in property RIGHTS, then the burden of proof is on YOU to DEFINE exactly what legitimate function of the federal government is being furthered by a given tax, and the burden of proof is on YOU to justify each and every extraction of fund from the public at ANY "class." And the welfare state appears nowhere in the Constitution.

madbolter1

Big Wall climber

Denver, CO

May 12, 2014 - 04:19pm PT

Mad...go here. http://www.lp.org/

Have fun.

Your point?

I am not a political libertarian. I am a philosophical libertarian, and those often come far apart.

madbolter1

Big Wall climber

Denver, CO

May 12, 2014 - 04:20pm PT

flat tax is regressive because it takes a higher proportion of income compared to cost of living for lower incomes.
Said a little more plainly: If A makes a lot less income than B, A requires a much larger share (as much as 100%) of his income just to stay alive

See my response above. You are REdefining "regressive" to tie it into the "left wall" fallacy.

madbolter1

Big Wall climber

Denver, CO

May 12, 2014 - 04:21pm PT

Ask Madbolter.....he seems to have the inside line on why poor people suck.

Straw man.

Poor people don't "suck." It sucks to be poor. You don't SOLVE that problem by STEALING from the "wealthy."

Reilly

Mountain climber

The Other Monrovia- CA

May 12, 2014 - 04:25pm PT

If A makes a lot less income than B, A requires a much larger share (as much as 100%) of his income just to stay alive

When I drive through 'lesser' neighborhoods, as measured by home value,
why do I consistently see so much bling in the driveways? That doesn't
jive with 'staying alive'. I call that poor decision-making.

Bob D'A

Trad climber

Taos, NM

Topic Author's Reply - May 12, 2014 - 04:26pm PT

Mad wrote: And the welfare state appears nowhere in the Constitution.

Who said it did??

What does exist is this...16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system.

And what has existed since the start of the nation is taxes...like it or not.

Could you also give me an example of a Libertarian run country?

Reilly, that really does disservice to the many poor people who work extremely hard for so little.

I grew up in a lower middle class area of Philly...never once till I was sixteen did I see a "new" car on my street.

Gary

Social climber

Desolation Basin, Calif.

May 12, 2014 - 04:43pm PT

You don't SOLVE that problem by STEALING from the "wealthy."

You DO solve the problem by stopping the rich from stealing from the producers, though.

madbolter1

Big Wall climber

Denver, CO

May 12, 2014 - 04:45pm PT

Who said it did??

If it doesn't then it is not legal nor legitimate. It is not a legitimate function of the federal government that in principle CAN be the recipient (for redistribution) of tax dollars.

What does exist is this...16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system.

Two replies:

1) Many people on this thread have decried various "legal" enactments, such as, most recently, the SCOTUS "take" on the first amendment. Just because something happens to "fly" as "law" does not make it right or a function of legitimate government.

2) Even I have no opposition to the principle of taxation. But, see above, I am vehemently opposed to taxation that supports illegitimate government or "functions" of government that are not among its explicitly-stated powers.

And what has existed since the start of the nation is taxes...like it or not.

See above. NO problem!

Taxes go from "contributions" to "theft" when they are extracted to fund arbitrary (which the welfare state IS) and illegitimate "roles" of government (which the welfare state IS).

The "poor" benefit from the legitimate functions of government just as do the "wealthy," and they do so in per-capita proportion rather than in "income proportion." Again a flat tax corresponds with this fact.

The fact that at present the "wealthy" benefit in disproportionate fashion from the ILLEGITIMATE functions of government MUST be addressed and reformed! I'm ALL FOR that!!!

But you do not accomplish those sorts of reforms by just raising their tax rates. In fact, doing so actually proves to have no "punitive" effect!

Could you also give me an example of a Libertarian run country?

PRECIOUS few of them in human history, which is largely what made the founding of the USA so unique.

There has never been a PURELY "libertarian run" country, because, emphasis on "run," you immediately introduce the human element, which means imperfections and mistakes.

I prefer to reference PRINCIPLES, because if those are kept on their proper pedestal, they can be referred back to again and again to help measure "drift" and provide reform targets. But when you pitch out the PRINCIPLES and/or make them equal to prevailing practice, the very ability to enact principled reforms is entire lost.

The USA was indeed founded on the principles of philosophical libertarianism, and it is to those PRINCIPLES that I keep referring. We'll never, ever get it "all right." But let's at least keep striving toward the PRINCIPLES rather than to pitch them off the cliff and capitulate to lowest-common-denominator thinking.

HighTraverse

Trad climber

Bay Area

May 12, 2014 - 04:47pm PT

I call that poor decision-making.

Everybody has a choice for spending their discretionary income.
It's only poor decision making if the kids aren't being fed and clothed.

It was after all a relatively recent notion that every American should own their home. It's good for the banking, construction and real estate industries, therefore it must be good for America. Make it easy for those who can't afford it to get loans, tell them it's patriotic and their loan is backed by the government. When it all crashes foreclose the mortgages so that patriotic investors can buy the properties on the cheap. Insulate the banks from the losses with Fannie Mae and Freddie Mac.
There's a fool born every minute and a large number of them become Republican lawmakers.

madbolter1

Big Wall climber

Denver, CO

May 12, 2014 - 04:49pm PT

You DO solve the problem by stopping the rich from stealing from the producers, though.

ABSOLUTELY!

But please explain how raising their taxes accomplishes this.

I am ALL FOR sweeping reforms, starting in the halls of Congress! NONE of those goofballs is serving the TRUE public interest! NONE of them is serving the legitimate principles of the federal government.

From the party system to the lobbying and campaign system, the entire thing is intentionally slanted toward money=power.

But taxation issues amount to us bickering about things that really have very little effect on actual POWER, while keeping us divided regarding the REAL reforms that would throw the bastards out on their ears and get people in there that actually did represent US!

Reilly

Mountain climber

The Other Monrovia- CA

May 12, 2014 - 04:50pm PT

Bob, I'm just stating what I so frequently see: a POS house with a flashy
ride in the driveway. When my brothers and I were raised by our single mom
there was a Rambler in the garage but we lived in the best house she could afford.

Bob D'A

Trad climber

Taos, NM

Topic Author's Reply - May 12, 2014 - 04:54pm PT

Reilly wrote: Bob, I'm just stating what I so frequently see: a POS house with a flashy
ride in the driveway.

Sounds like a lot Texans who come to Taos and talk about the adobe houses and trailers. A lot of the people I work with live in those houses, work two to three jobs and raise their family in them.

There are situations like you state. I just don't need to debate it. :-)

Bob D'A

Trad climber

Taos, NM

Topic Author's Reply - May 12, 2014 - 04:57pm PT

Mad wrote: The USA was indeed founded on the principles of philosophical libertarianism.

Founded using slaves and stolen land. Is that philosophical libertarianism?

"Directly or indirectly, the economies of all 13 British colonies in North America depended on slavery. By the 1620s, the labor-intensive cultivation of tobacco for European markets was established in Virginia, with white indentured servants performing most of the heavy labor. Before 1660 only a fraction of Virginia planters held slaves. By 1675 slavery was well established, and by 1700 slaves had almost entirely replaced indentured servants. With plentiful land and slave labor available to grow a lucrative crop, southern planters prospered, and family-based tobacco plantations became the economic and social norm."

http://www.monticello.org/slavery-at-monticello/african-slavery-british-north-america

HighDesertDJ

Trad climber

May 12, 2014 - 05:05pm PT

John stated

Care to cite some support for that novel proposition, HT? There is very strong evidence that raising the minimum wage decreases minimum wage employment.

By small amounts that are easily outdone by the relative economic gains. Let's not overstate in our rebuttal to an absolute, shall we?

madbolter1

Big Wall climber

Denver, CO

May 12, 2014 - 05:10pm PT

I take these to be some really prescient and legitimate points and questions!

I believe in private property rights, but I also believe that in order for society to be cohesive, it must ensure the vast majority of it's members are "far enough from the left wall", as you put it. Otherwise, why participate in society in a meaningful and positive way, as it wouldn't be in any way in your own interest.

It depends on what you mean by "cohesive." You seem to be saying something like "invested in the success of the country."

But, pre-Depression, immigrants to this country were dirt-poor and often struggled to "make it." Most would say that they were pretty darn close to that "left wall."

What was "cohesive" among them was they believed in the principles of this nation, principles that would ALLOW them to get ahead, as they would not be KEPT in poverty! They believed in equal OPPORTUNITY without any guarantees of success.

Your idea of investment in an ideal is exactly right, and that investment is eliminated in any group of people that come to disbelieve in the promise of equal OPPORTUNITY.

What mostly galls most people on this thread is that they believe that the "wealthy" have succeeded in so distorting the "rules" that now a HUGE proportion of people are indeed in the condition that they do NOT have equal OPPORTUNITY!

And I agree that the rules of the game have become vastly distorted! Because government did NOT perform its prescribed and legitimate functions, you got a Great Depression, followed by a knee-jerk reaction to that in the form of our grand experiment in liberalism, which is NOT a prescribed nor legitimate function of government.

Because government did not perform its prescribed and legitimate functions regarding the rights of PERSONS and then civil rights, you got the degradation of an entire race of people. Then the knee-jerk liberal reaction was the likes of affirmative action, which is not a legitimate right of government.

I could go on and on. IF government will do its ACTUAL job (now, more pressingly, campaign finance reform and anti-trust functions), the playing field WILL "level," and OPPORTUNITIES will again become much more equal.

But as long as government REACTS to SYMPTOMS, we will just have vast pendulum swings that will certainly not level the playing field. We must approach reform in principled fashion in order for the reforms to be sticky!

Also, if this country is founded on private property rights as you put it, wouldn't that have grown out of a "distance from the left wall" argument, since the reason we worry about government encroachment and the taking of private property is this would allow the government to put us all "on the left wall"?

Yes, of course. The founders wanted assurances that the GOVERNMENT would not become the entity that put us all against the "left wall!" But that possibility is protected against BY the government being HELD to its proper and legitimate functions.

Like all fallacies, there are non-fallacious approaches to the same modes of thinking. All deductive arguments, for example, "beg the question" in that their premises necessarily contain the conclusion. But question-begging arguments are fallacious in that they HIDE the smuggling of the conclusion into the premises and/or they are flagrantly non-informative.

Just so, the "left wall" fallacy is not fallacious because it references the "left wall." It is fallacious because it treats some arbitrary distance from the "left wall" as the "magic distance" that denotes a qualitative shift from one "class" to another. There IS no such "magic distance."

JEleazarian

Trad climber

Fresno CA

May 12, 2014 - 05:11pm PT

Capital expenditures that have been happening overseas....if at all, as you purport. Besides, the largest factor in the growth of worker productivity (output per hour worked) is in wages remaining flat as hours worked have increased. Unpaid overtime, lack of raises, wage reductions, have all contributed mightily to "productivity". I have a sneaky suspicion that the reintroduction of slavery would see a huge jump in productivity.

You correctly define "productivity" as output per worker, but the rest of the quote above deals with unit labor costs, not productivity. Also, your statement that wages remained flat as hours worked increased seems to have a sinister connotation to you. How so? If I'm paid $25.00 per hour, and my hours increase from 30 hours/week to 40 hours/week, my wages have remained "flat," but not my compensation. My compensation increases by $250.00 per week.

I often see the comparison of "profits" to "wages," where "profits" are total corporate profits, and "wages" are the average rate of hourly pay. Those giving this presentation expect their audiences to be outraged by the massive increase in "profits" compared with "wages."

Of course, "profits" are a total, and "wages" an average. Suppose I make five cents on every dollar I invest, and I pay my workers $25.00 per hour. Suppose I double my investment and double my output, and therefore double the amount of labor I buy. My profits double, but the wage I pay remains the same. Of course, my return on investment also remained the same, and the compensation I paid my workers doubled, but the "wages vs. profits" comparison the charlatans use wouldn't tell you that.

John