Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.
A conversation
Published on February 21, 2007 By Draginol In Politics
This past week I had a very interesting debate with JoeUser's resident socialist, Col Gene. He is always trying to find new and creative ways to advocate higher taxes on anyone who makes more money than he does. His argument always boils down to the deficit and that rich people can afford it.  The former argument is nonsensical because politicans will simply spend all they get and more. The latter is a classic socialist argument.  Below is some of the conversation.

Socialist claim: What I have said is that the distribution of wealth is skewed too fare toward one side.

Wealth isn't distributed. In a capitalistic society, wealth is earned. Person A provides Person B with a product or service in exchange for money.

Socialist claim: very wealthy for example pays far smaller % of their income to Social Security taxes then the low and middle income workers

Of course. That's because social security is CAPPED. There's only so much you pay in and that's how much gets paid back. 

Socialist claim: If your annual income is 1 Million dollars you are paying about.6% of your income in Social Security Taxes where a person making $25,000 is paying 6.2%. How is that fair?

What does fairness have to do with it. If I make $1 million and put $60k into a bank aboutn I am putting in .6%. On the other hand, if I make $20k and put in $1000 into the bank then I am putting in 5%.  So what is your point?

Social Security is, in theory, supposed to be a retirement plan by the government.  If I were emperor, I would do away with it entirely and then no one would have to put anything into it.

Socialist claim: The wealthy can pay slightly higher income taxes (like those in effect in the 1990's) with NO adverse impact on their life style. If we have a slight shift in the wealth to the middle and low income working families it would not only help many meet their most basic needs but they would spend almost 100% of that income that was shifted and help the economy.

There are so many things wrong with this statement I'm not sure where to begin.

First, what we pay in has nothing to do with whether we can afford it or not. The government, like the electric company, exists to provide its individual citizens with a service.  Stealing one man's earned income to give to another is wrong.

Secondly, you clearly have no idea of what the "rich" do with money. You are correct in that their lifestyles wouldn't change if you taxed them more. That isn't the point. The people with the highest incomes INVEST their money. That's HOW you get rich in the first place. You keep investing your money to make more money.  That investment is what creates jobs, opportunity, and new goodies for us to use. 

Taxing the rich more won't hurt the rich personally, but it will, in the long-run, hurt everyone else through fewer jobs, a slower increasing in standard of living.

Moreover, the # of Americans who don't have access to "basic needs" is trivial. I've mentioned this before but the poorest 25% of Americans live pretty well on average. Most have DVD players, TVs, Internet access, cars, and a slight majority of them even own their own home. They even get free medical care via Medicaid.  But even that's irrelevant. It is not the responsibility of the government to give away other people's earned money to other people.

You basically see the government as something that RULES us. This is completely contrary to what the founding fathers intended.  They saw the government as a glorified neighborhood association. For the first hundred years or so, the govenrment only taxed for services rendered.
 

Socialist claim: If you have a seven figure annual income (that would place you in the top 1%) then you paying another 5% in federal Income taxes would not impact you life style. What will impact all of us is the fact we are operating this government at a substantial deficit and have piled up a National Debt of almost $9 Trillion dollars which we must pay interest on EVERY Year. We will be paying $500 Billion PER YEAR in interest. That interest comes from the taxes you and I pay and is money that is not available for other obligations like Social Security and Medicare benefits.

You are correct, it wouldn't affect my lifestyle. I'd just have to lay off a worker or two because that's where my excess income goes to -- investing in my business.

I have also pointed out, repeatedly, that it is well known that the budget would be easily balanced if we simply FROZE spending increases for a couple years. No cuts needed. Just quit increasing spending until the tax receipts catch up.  The tax recepts of the federal government have nearly doubled since Bush came in. Imagine the surplus we would have if they hadn't increased spending at an even faster rate.

Socialist claim: I worked about 40 Years and paid my taxes so my parents and grandparents could receive their Social Security and Medicare.

So you admit social security is a pyramid scheme. 

I also work but see it as a moral obligation to help my family myself and not rely on the government.  Free citizens do not need the government to do the right thing. They do the right thing because they are free people.  I'm sorry you need the government to intercede for to take care of your parents and grandparents.

The issue that socialists have is that they want the government to take over the economy.  For the past 60 years, the normal level of government intrusion in the economy has been around 18%. By 1998, the government had managed to get to over 21% of the economy. Something needed to be done -- tax cuts. 

Take a look at this graph from the CBO:

Graph

Historically, the federal government was only confiscating around 18% of the generated wealth of the country. Bush helped get it back to something approaching normal. As you can see, however, social security is slowly going to intrude more and more as you get out into the future. Socialists think that's a good thing. They prefer the government rule us.

The basic problem with most socialists is that they have no understanding of economics. They  think if we just raise taxes everything will be fine. But that's not how it works. If you raise taxes, you are simply shifting wealth from the private sector into the public sector.  And who has a better track record of producing wealth? People like me or some clueless politician in Washington? 

Moreover, even if you raised taxes the 40% needed on the wealth to balance the budget next year, it would only be a temporary solution. In other countries, the government represents up to 30% of the GDP and guess what? They have debts too. Governments will always spend what they get because they have an incentive to do so. 

That is why the tax recepts and spending receipts aren't a good measure of what our tax rate should be.  The real question is, what % of our economy do we want the government confiscating.  Once you make that decision, then it's just a matter of the government living within its needs and making sure enough taxes are being collected to meet that number.

Look closely at this graph.  The government's tax income today is the same as it was when Bush came in.  Yet we have these scary deficits you mention.   So what is the cause then? Spending. We increased spending across the board:

You see the problem? Since Bush came in, spending just went berserk. And it's not because of the Iraq war alone. The government went on a spending spree.

So to sum up:

  1. Rich people are rich because they invest their money.
  2. If you tax the rich more, it won't affect their lifestyle but it will mean they have less to invest (look at how quickly the economy jumped back largely thanks to the tax cuts).
  3. If the rich invest less, people lose jobs.
  4. It is immoral IMO to advocate that the government should confiscate money from one person to hand to another who provided no service to the original person.
  5. Tax rates and spending levels are the wrong metric. It's what % of the economy you want the government to be involved in.
  6. We have a deficit today because we increased spending.
  7. Tax cuts are why the economy grew so fast after the recession.

The reason why the United States has been at the forefront of economic progress is because we have laws that encourage people to work very hard.  The moment you start penalizing people from working hard, the worse off all of us are.  I work on average 55 to 70 hours per week depending on how busy I am.  I do that all year round. I take maybe 2 weeks off per year (which is really just making up all the weekends I work).  As it stands today,  I am working about 20 to 30 hours per week for the government. That is, I'm working what amounts to nearly a second full-time job just to pay for the government.

And I support paying taxes because my country does so mcuh for me.  What I don't support is the government confiscating my income to give to others who hasn't earned it.  I think it's a toxic, evil thing for a government to do. It robs the earner of freedom and it saps the will out of the receiver. It's certainly not compassionate.

Free men and women control their own destiny. When we give power to the men with guns, we cease being free.

 


Comments (Page 1)
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on Feb 21, 2007
The lifestyle claim eats at me worse than any of them. I see it so often promoted by Dems making in excess of 100k a year. Well, I and my family live on 50k a year.

So... why stop at the 500k+ folks? Why do we have this imaginary line? To me, if you are living on 150k a year you can afford to pay, heck, 1/3 to 1/2 of that and still live as well as me, probably better. Oddly, though, the "lifestyle" thing gets really, really subjective at that point in the conversation.

We don't mind boats owned by 100Kers, but we get mad about the 500Kers' boats. 40k SUV is tolerable, but the 100k one is "excessive". Who says? Me, I say the whiners in the middle would be fine with a used car.

So, careful what you wish for, socialists. If you want to talk about "need", be sure to check into how much of what you really have that you "need". Those in glass houses, however middle class they may be, shouldn't throw stones.
on Feb 21, 2007
I believe that all rich people should give 1% of their holdings to me. That would be fair in my mind.

Back to reality, You are correct. People earn their money and it should be no bodies business what people do with thier money. Most rich people started off poor and managed their money properly. They make sacrifices in order to become rich. being rich is the pay off for the sacirfices they made. Insane liberals feel that the fact that people worked hard and earned their money is no reason why they should keep it. Funny how those same people hide their money while they are demanding the other rich people pay more in taxes.
on Feb 21, 2007
I think the most simple way to fix this is to have an out-in-the-open way for people to give as much as they want to the government outside of their other taxes. Then, when we see people like Edwards spouting condemnation, and we check and he didn't even give as much as a middle class American, the condemnation would show its true meaning.

If these people really believed in their socialistic garbage, they wouldn't be buying 10,000 square foot homes. They wouldn't be demanding the government do something about Katrina. When I see people worth millions demanding the government pay for things they could probably bankroll themselves, it makes me sick. Knowing that they use every loophole possible to prevent their own taxation only makes it worse.
on Feb 22, 2007
Wealth isn't distributed. In a capitalistic society, wealth is earned. Person A provides Person B with a product or service in exchange for money.


"Distribution" here means statistical distribution, not that people line up at the White House and someone distributes money to them. Like, you can make a chart for the height distribution of single American men. If I say "The distribution of height is approximately normal," it doesn't mean you can come back and say "Height isn't distributed. People get height by eating well and avoiding environmental toxins while they're young."

I think the word redistribution, via socialist taking from some and giving to others, is what you're really worried about. But I can change the distribution of height without "redistributing" it by cutting off tall people's heads and stretching the short people. I can just add iodine to the salt supply and watch the tail of the height distribution shrink as fewer people grow up stunted.
on Feb 22, 2007
I might had missed it in your article, Drag, but back in the 30s, when Social Sec. was introduced, it was called "Social Security Insurance", and was not supposed to extend much past the Depression Era. On average, people only lived to 62 or 63 then, and SS was supposed to kick at age 64, I believe---after you were supposed to have died. It was originally conceived to help them out if they lived to 65 or higher. As the life expectancy rose, noone ever changed the parameters to adjust it. Of course, like all true Socialist machinations, it got out of control and became something it wasn't intended to be, mainly because it was too good to be true.

Over the passed 60 years or so, people like the Col have come to see it as a right rather than a priviledge, as the Socialist mentality will do with such things.
on Feb 22, 2007
I don't understand how to read the first graph. Could somebody please explain what that is supposed to represent?
Thanks.
on Feb 22, 2007

BLOOD IS BEING SPILLED IN YOUR NAME!!!


The U.nited S.tates Of A.merica
IS AT WAR!
the homefront MUST NOT FORGET that
not for one

gorgeous/hORRIBLE

second!!!!!!!!!


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on Feb 22, 2007
Okay, I take back my defense of GT. That was nothing but an off topic plug. Third strike.
on Feb 22, 2007
Baker: You mistook mental illness for literary genius. Don't feel bad, though. Other people do it too.
on Feb 22, 2007
John Scott Ridgway, branded for tv and radio as: PAIN.



yeah, i'd call that a hijack, lol.



and someone who has delusions of being the 2nd coming of hunter s thompson....as if...



as far as this article goes, there's so much oversimplification and unfair labeling going on, that i'm not sure even where to start. the attempts to label col. gene as a socialist are so amateurish that they really aren't really worth addressing. i can see why he hasn't dignified it with a response. also interesting on that note is how brad felt he had to take a conversation in the replies and instead of answering gene there, he chose to just take selected quotes and plaster his own views on the top of the front page...not exactly playing fair.



also funny is the attempt to label anyone who won't just submit to the wealthy and buy their "arguement" hook line and sinker as a socialist. as if there are only 100% capatalists in this world, and if you are not, you are a socialist, which we all know is a derrogatory term in our society...not some "honest representation" of an opponents position. fact is that most of us, including gene, embrace certian capatalistic principles, and reject others.



for example, in this country, ya'll are supposedly not for any "redistribution of wealth" (although a slight modification in tax rates is hardly that) yet in Iraq, virtually everyone agrees that "sharing the oil revenues" is necessary for Iraq.



would those in favor of Iraq's income redistribution be labeled as socialists or pragmatists?



on the subject, i refer to this article by princeton economist paul krugman...here's an exerpt...



It is true, however, that America was once a place of substantial intergenerational mobility: Sons often did much better than their fathers. A classic 1978 survey found that among adult men whose fathers were in the bottom 25 percent of the population as ranked by social and economic status, 23 percent had made it into the top 25 percent. In other words, during the first thirty years or so after World War II, the American dream of upward mobility was a real experience for many people.

Now for the shocker: The Business Week piece cites a new survey of today's adult men, which finds that this number has dropped to only 10 percent. That is, over the past generation upward mobility has fallen drastically.
Very few children of the lower class are making their way to even moderate affluence. This goes along with other studies indicating that rags-to-riches stories have become vanishingly rare, and that the correlation between fathers' and sons' incomes has risen in recent decades. In modern America, it seems, you're quite likely to stay in the social and economic class into which you were born.

Business Week attributes this to the "Wal-Martization"
of the economy, the proliferation of dead-end, low-wage jobs and the disappearance of jobs that provide entry to the middle class. That's surely part of the explanation.

But public policy plays a role--and will, if present trends continue, play an even bigger role in the future.

Put it this way: Suppose that you actually liked a caste society, and you were seeking ways to use your control of the government to further entrench the advantages of the haves against the have-nots. What would you do?

One thing you would definitely do is get rid of the estate tax, so that large fortunes can be passed on to the next generation. More broadly, you would seek to reduce tax rates both on corporate profits and on unearned income such as dividends and capital gains, so that those with large accumulated or inherited wealth could more easily accumulate even more. You'd also try to create tax shelters mainly useful for the rich. And more broadly still, you'd try to reduce tax rates on people with high incomes, shifting the burden to the payroll tax and other revenue sources that bear most heavily on people with lower incomes.

Meanwhile, on the spending side, you'd cut back on healthcare for the poor, on the quality of public education and on state aid for higher education. This would make it more difficult for people with low incomes to climb out of their difficulties and acquire the education essential to upward mobility in the modern economy.

And just to close off as many routes to upward mobility as possible, you'd do everything possible to break the power of unions, and you'd privatize government functions so that well-paid civil servants could be replaced with poorly paid private employees.

It all sounds sort of familiar, doesn't it?

Where is this taking us? Thomas Piketty, whose work with Saez has transformed our understanding of income distribution, warns that current policies will eventually create "a class of rentiers in the U.S., whereby a small group of wealthy but untalented children controls vast segments of the US economy and penniless, talented children simply can't compete." If he's right-- and I fear that he is--we will end up suffering not only from injustice, but from a vast waste of human potential.



feel free to throw backhanded insults at those who don't just eat up the sales pitch from the rich and powerful. it doesn't make them socialists, regardless of how they are slandered by others.

by the way, for those who wish to see the full article, go here...http://www.zmag.org/content/showarticle.cfm?ItemID=4728
on Feb 22, 2007
Dan Greene: That first chart is tracking the percent of GDP the federal government took in in taxes. If you just plotted taxes versus GDP growth it would be harder to read because both numbers are moving up all the time.

Even though total federal revenues stay the same, you can see they're getting it from different sources than they used to on this chart. More social security, less corporate income tax. (just ignore the top shaded region, that's state and local taxes. Those have grown more than anything.)
on Feb 22, 2007
I think both Draginol and Sean make excellent points. Rather than repeat them i'll just make an observation that at the moment labour's share of income is at a low compared to corporate profits. If the trend continues I wouldn't be surprised if labour attempted to redress this through political means (eg raising minimum wages, higher taxes for the wealthy etc). While I'm a capitalist, it won't pay in the long run to be too greedy.
on Feb 22, 2007
"I think both Draginol and Sean make excellent points. Rather than repeat them i'll just make an observation that at the moment labour's share of income is at a low compared to corporate profits."


As compared to cost of living it isn't low, though. The relative strength of the rest of the economy, people's purchasing power, the percentage of people who own their home, car sales, etc., all show that people, not just CEOs, but average people are doing fine.

Labor's "share" isn't determined by any idea of fairness or equality, it's determined by what they're willing to work for. The clout behind their demands is the reality of their lives and lifestyles. No matter how high the CEOs' wages are, people can't make the point that the workers are suffering because of it.
on Feb 22, 2007
though here was also Mattew, the field general in Korea
---GT

Heh....yeah...the guy who managed to lose the war MacArthur won. Whatever.....back to the topic at hand.....

on Feb 22, 2007

GT is now a visitor.  Not a good idea to spam the owner's blog.

 

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