Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.

Former Secretary of Labor under Bill Clinton, Robert Reich, has written his view on how taxes should be done. It really puts in very stark terms how American liberals really view the concept of property.

To liberals, you have no property. It all belongs to the government. Therefore, it's just a matter of deciding how much of what you earn they should let you keep.

So how much do Democrats think "the rich" should be taxed?

What's fair? I'd say a 50 percent marginal tax rate on the very rich (earning over $500,000 a year). Plus an annual wealth tax of one half of one percent on net worth of people holding more than $5 million in total assets.

WOW. Not only would some people be expected to hand over half of what they earn to the federal government, but we would essentially pay a rental tax to live in the United States of 1.5% a year! And the "very rich" are now $500,000 a year. Remember that term "very rich" for later.

He then invents his own strawman argument:

You say the rich will leave the country rather than face a marginal tax of 50 percent? Let them, and take away their citizenship.

No, they won't leave the country, they'll just eliminate expenses (i.e. jobs). Taxes are simply another cost to "the rich". If taxes go up, something else has to get cut and the most obvious thing to do would be to cut jobs. That's what I would do. Not because I'd want to. Not because I demand having a fancy car or something, but because to keep my business intact, I'd have to make up for those new expenses in order to keep investing in growth of my business.

And most of the top 1% (as Reich partially admits) are "CEOs". Note how he uses the term "CEO" generically. There's only a handful of mega corporations, so the vast majority of those CEOs are simply small business owners. I'm a CEO – I founded my own company. But by referring to people like me as simply CEOs he gives the unwary the impression that he's really talking about "those big corporation fat cats".

To defend his argument he writes:

Taxing the super-rich is not about class envy, as conservatives charge. It's about the nation having enough money to pay for national defense and homeland security, good schools and a crumbling infrastructure, the upcoming costs of boomers' Social Security (the current surplus has masked the true extent of the current budget deficit, but it won't for much longer), and, hopefully, affordable national health insurance. Not to mention the trillion dollars or so it will take to fix the Alternative Minimum Tax, which is now starting to hit the middle class.

Please. Of course it's class envy. Why else would you insert so many strawman arguments. For instance, we have enough money right now to pay for national defense, homeland security, good schools and infrastructure. In fact, we have so much money that we are now debating whether to provide health insurance to middle class children. Here's a link to Encarta's general table on where federal outlays go. Ask Reich to explain in detail was "Health" and "Income Security" are. Ask him to go into detail where "Other" goes to. So spare us the nonsense that we don't have enough money for the basics.

Liberals use class envy in order to enable the government to gain more power. The more money it has, the more dominating of society it can become.

Reich explains that these things have to be paid for:

If the rich and super-rich don't pay their fair share of this tab, the middle class will get socked with the bill.

Now also note this: In the course of a single essay he has already expanded the reach – now it's "super rich" and the undefined "rich". Remember, he defined "super rich" as any house hold that makes over $500,000 a year. So who are "the rich"? Who knows. But if history is an indicator, "the rich" usually end up being nearly everyone who holds a job.

Mr. Reich is concerned that "the rich and super rich won't pay their fair share of the tab". Except that "the rich" and "super rich" are already paying for nearly the entire tab right now.

Last year, 43 million Americans paid zero in income taxes. You want to talk about "fair share" of the tab. How about every adult American having to pay some token amount of taxes into the system? When 43 million Americans are paying squat, one can only imagine the needed mental gymnastics to reach the conclusion that the super rich aren't paying their fair share. The rich bastards, how dare they work, create jobs, and new opportunities.

Right now, the top 1% (the people who make $500,000 or more) are already paying for 40% of the income taxes.

Let's sum that up: 1.3 million Americans are paying for 40% of the tab right now. 43 million Americans don't pay a cent. Who's paying their fair share, Mr. Reich?

But Reich has an answer to this. He says it's a specious argument:

First, most Americans pay more in payroll taxes than in income taxes; in addition, state sales taxes have grown faster than almost any other form of taxation. Both payroll taxes and sales taxes take a much bigger portion of the paychecks of lower-income Americans than of higher-income. Viewed as a whole, the current tax system is quite regressive.

Unbelievable. Payroll taxes are where Social Security and Medicare come out. And in theory, these are taken out and set aside for that person. This means that Reich explicitly believes that you are supposed to be taking care of other people's retirement and healthcare. So much for the illusion that Social Security and Medicare were part of your "personal lockbox".

Secondly, sales taxes are hardly regressive. They're amongst the fairest taxes there is. The more you consume, the more you are taxed.

Reich also fails to make the case as to why it needs to be Federal Government that needs all this money. Schools, infrastructure, police, fire, and nearly all the other government services that normal people make use of are provided by their state and local communities.

The fact that Reich would prefer to see the money transferred to the Federal Government instead of letting states and local communities decide what they need done and taxing as needed belies the underlying liberal goal – power concentrated in a powerful central government.


Comments
on Oct 31, 2007
Taxes = Money
Money = Power

An increase in taxes is an increase in federal government power and a decrease in individual power.
on Oct 31, 2007

I started reading the comments, and then stopped.  It sounded like a bunch of laughing monkeys again.

Just remember, if elected, this is who Hillary (perhaps not he himself, but his ilk) are going to put into power.  A bunch of envious sloths who understand nothing, except what Mourningwould said - and that is really what it is all about. Power.  How they got it and you dont.

The only good thing about a clinton presidency will be to laugh at all the suckers who voted for her.

on Nov 01, 2007
Firstly one small pedantic point, its 0.5% not 1.5% (one half of, not one half and one percentage point).

I've read this article and another in which you make the same point, that by increasing income taxes jobs will be lost as people try to recoup their losses, I'm curious about this.

I always thought that income tax was paid by the person not the company. If so how does increasing the tax on the CEO increase the cost on the company to the extent that jobs will have to be lost? Or do you mean 'domestic' jobs eg cleaners? Or have I got it all wrong?

Also sales taxes are regressive in the sense that if two people buy the same thing (s) then the amount of tax they pay as a percentage of their earnings will be inversely proportional to their earnings.
on Nov 01, 2007
Basmas: Obviously you've never had to make payroll.  All of it comes out of the company's budget.  The employees pay, insurance, social security, medicaid..etc.  Yes, with Social Security, half is paid by the employer and half is paid by the employee, but before either of them go to the government, it has to be in the company's bank account.  That is why a company would have to cut jobs.  It would greatly increase the amount of money it takes to keep a person employed.
on Nov 01, 2007

Also sales taxes are regressive in the sense that if two people buy the same thing (s) then the amount of tax they pay as a percentage of their earnings will be inversely proportional to their earnings.

Sales taxes are regressive, as is the FICA and Medicaid taxes.  But both are darlings of the left who talk about feeling for the poor - and do nothing to help them other than generate hot air.

But for this discussion, since we are talking federal taxes, Sales Tax is not really an issue (there is no national sales tax).  But have you ever heard the democrats talking about reducing the FICA tax for the poor?  Ever?

on Nov 01, 2007
I am usually not one to simplify things, but in this case I believe the formula is simply getting votes from the poor in exchange for giving them money from the rich; with "poor" being everyone who is part of a comfortable majority and "rich" being those who produce enough to finance the majority.

In Germany there is even a political party who want to divide the country into two zones: one for those who want to work, and one for those who don't. (I thought the Russians had already tried that.) However, it turns out that party wants the zone that works to pay for the zone that does not.

on Nov 01, 2007

I always thought that income tax was paid by the person not the company. If so how does increasing the tax on the CEO increase the cost on the company to the extent that jobs will have to be lost? Or do you mean 'domestic' jobs eg cleaners? Or have I got it all wrong?

Only companies that are filed as C-corporations have their own taxes.  For all other companies, the earnings of the company go directly to the owner, which in the case of smaller companies, is typically the CEO.

Hence, the higher the taxes, the less money a company has to invest in capital equipment, new technologies, and new employees.  The most logical reaction is to look through the workforce and eliminate the marginal jobs that exist in every company.