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The debate about whether or not raising taxes on the rich would increase government revenue, is...
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Sunday, August 26, 2012, 5:56 AM ETThe debate about whether or not raising taxes on the rich would increase government revenue, is "beside the point," writes John Carney on CNBC. The real reason to hike taxes is to fight inflation, but if and when it exists, the measure possibly wouldn't cure that problem either. "The proposals to raise taxes on the wealthy just don’t add up," Carney writes.
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Let me ask something. You have this small community. This community needs to dig a well for the common good. How are you going to divide the task of digging the well fairly? Do you:
1) Make each citizen to dig the same length;
2) Make each citizen to dig for the same time (thus the length each will dig will depend on each citizen's prowess digging);
3) Make those that dig faster dig more time than the others.
Sometimes when we think of solutions for our society, we're thinking in a plane in which we cannot really understand the ethical characteristics of what we defend. Only by bringing problems to a more human, personal, scale, can we better understand the ethical dilemmas at hand.
"from each according to his ability, to each according to his need", btw, is what we have today and is choice number 3 above. Those who have the ability are made to work more for the others.
Is taxation really inverted in the favor of the wealthy even if they pay a lower % in taxes? That's also debatable. Even a lower % can mean a much higher contribution, if applied on a much larger amount.
If everyone paid the same amount, there would be no taxes at all and we would be living in a place like central New Guinea. If you don't accept the flat % tax, the alternative is indexation and then the decision is how much indexation.
People can debate the 'fairness' of every tax that exists depending on their special interests - own a home, have a mortgage, use your car for work, earn dividends, capital gains, oil depletion allowance, install energy efficent appliances, lease a 'truck' (i.e., SUV) for your 'small business' (i.e., doctor, lawyer, dentist, accountant, entrepreneur, . . . and no, the wife doesn't use it to take the kids to soccer). So, of course, what we have is an unintelligible tax code that neither accountants nor the IRS can figure out correctly.
Actually, Cain was onto something with his 9-9-9 idea, although the numbers need some work. There are 3 things that can be taxed - what you earn, what you own, and what you buy. A fair taxation system should consider a balance of the three - at the federal, state and local levels.
You are confusing income with wealth. To really tax the rich, you have to have some type of ad valorem (net worth) tax. An example is your real estate tax where you pay based on the value of your property. If you want a big house, you pay more to support the community services. Right now, we have a back door (and poorly targeted) net worth tax with our planned inflation targets. But if you think you'll get support for a net worth tax from our millionaire senators, dream on.
And taxes are also value, which is convertible in work by others. So yes, if someone pays 2 doctors and another person pays 1/10 of a doctor in taxes, the first one has given 20x more back to that society ("for free") than the second person, no matter what the tax rate is - and that's in excess of the (paid) value the person already gives to society for performing his duties.
Your argument also assumes a fair and free market. The value that laborers provide to companies is obviously skewed since to companies, workers getting $20-30 an hour are overpaid since they can hire labor in China for $1 a day. But Chinese labor is chep because the government suppresses union and doesn't have a minimum wage - its not a free market. Likewise, doctors are only paid what they are paid because of government subsidies - if people paid cash pocket they wouldn't have 500 bills cough pills.
A Van Gogh painting has value because someone else is willing to give millions for it. It's worth the work of many doctors, simply because you can trade it for the work of many doctors.
Zuckerberg produces value for society simply because a few hundred million person each see a bit of value in what he created. All put together, that value is immense and made him rich.
Your own opinion that he's not a billion times more valuable than someone else is simply your subjective opinion on value - the objective fact is that he can command the work of thousands of others, because hundreds of millions of others voluntarily made him able to.
We are now the most polytheistic society in the history of the world and have real life gods of all manner actually living among us who we can observe and be entertained by and emulate. We can dress them up in all manner of costumes and put them on display like potted plants in great pomp and ceremony. Some entertain us in more lively exhibitions like playing billiards in the nude with their admirers. The central message from all of our modern gods, from politicians to movie stars is that "greed is good".
Natural law passes no moral law on class warfare, revolution or any other means employed by any group to ensure their survival. Is it any wonder that the history of the world is such sad reading and that it continues to repeat as soon as the lessons of the past are forgotten.
It's natural that a person, laboring, has it incredibly hard to become wealthy - after all the production that he can generate for others is usually very limited. Only by transcending what a person can produce, through the use of capital means, aggregating a slight margin over the production of others, can you accumulate enough income (not wealth - that will depend on how much of that income you consume).
Doctor pay also exists because of artificial barriers to entry, licences, etc. Obviously all those decisions about value are conditoned by the rules of the society you live in, how they affect supply and demand, etc. Also, it's comparatively much easier to get large monetary value for the same services out of a group of people that, themselves, have already achieved a great amount of wealth. Anyway, its complex.
This imbalance does have ethical and moral issues, and applies to just about every "entitlement" or "socialized service."
But we're thinking about allocating people's efforts to a given task without compensation, just to complete the task for that community.
2 is the same as a flat tax (same % for everybody).
But I find it hard that you really would defend 3, and see it as fair. Remember, these people are supposed to have their lives and be independent from each other, they get together only for this task by taking time away from their lives. How can you really force some to work proportionally much more than others in the same task and see it as fair?
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This other idyllic (failed) community is former CCCP
Your example does not support your point and actually it contradicts your point
Many wealthy don't pay FICA because they don't earn wages.
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FICA is contribution to one's retirement
Half pays employer and half pays employee
People like Romney are paying full price
The equivalent here in Portugal comes to 34.75% (11% exployee, 23.75% employer).
For 2008, the employee's share of the Social Security portion of the tax is 6.2%
up to a limit of $106,800
employer pays 6.2%
so it 50 50
Speaking of bible
Terry has customized for her
Totally irrelevant. The US is waaaay, waaaay past taxes.
http://bit.ly/PkGh75
The US is well on the way towards banana republic status.
If you have no "earned income", yet are still making millions per yer on investments ( "unearned income" ), this needs to be taxed at a higher rate. Perhaps rewarding those who have this unearned income from investments originating from US based businesses or the like could be taxed at a lower rate, ( similar to municipal bond tax break )
And now you know why we got in this mess in the first place.
Flat tax on all means of income be it wages, interest, dividends or capital gains above a baseline amount...just where to set that baseline is a question.
We can't have the top 1% holding the majority of the wealth, while the middle class scraps by. No matter how hard they work they can't move up.
In 1960, the CEO to worker compensation ratio was 20 to 1, now it is up to 231 to 1. This occurred while productivity growth from workers was very strong....the productivity gains went to the CEO.
The corporate governance system might need reworking, though, as it's not likely that shareholders really want to pay as much as they've been paying. The decision is just not flowing through them.
[1] Yes... I know calories are a pre SI unit of energy and kiloWatts are the SI unit of work.
Have no fear that the vicious cycle will continue unbroken. Natural Law always acts to restore balance to any system which spirals out of control with the certainty of gravity or any of the physical laws.
As to whether it will occur in your lifetime depends on where you live as the reset is occurring now in many areas of the world. You probably will not enjoy it much when it reaches your neighbourhood as Natural Law does not discriminate between good and evil, rich or poor, young or old.
When population increases cross the threshold of declining resources (primarily energy, food and water) then the extinction event begins at that location. There have been 5 major extinction events in the past and we are well into number 6. Every biological organism alive today is a relic of these past extinctions which eliminated 99% of past organisms.
The strongest and wealthiest believe they may be able to improve their odds by buying private islands, building defensible mansions on mountain tops, etc. and they are probably right as Natural Law bears them no grudge due to their wealth.
We are currently in what is believed to be a population "overshoot" brought about by the discovery of oceans of fossil fuels 200 years ago. When the cost of recovering the energy exceeds the value it returns then the population must decline and it usually produces an extinction event "overshoot" on the way down due to panic, resource wars, famine and disease.
As the old "tent-maker" wrote in his famous poem:
The moving finger writes,
and having writ, moves on
Nor all our piety or wit
Can lure it back
To cancel even half a line of it.
Have a nice day sir.
On the good times they get all the benefits, they make millions. When the company goes kaput, they are rewarded with a termination package that consists of millions of dollars.
The CEO doesn't risk their capital. Shareholders get screwed.
The shareholders pay but don't decide how much.
The BS of fair share is just that, BS!
The Free market decides what pay CEOs should get, not a corrupt government which incites class warfare to gain votes.
cut the fraud, double billing, mafia type schemes, graft etc and save an absolute fortune
forensic accounting is needed, especially with citizen oversight FBI is a joke
In time the most successful species will come to dominate the canopy of the forest and capture 99% of the energy and be able to put down deep roots to mine the minerals of the earth so necessary to maintain their immense size. The other species who are left in the shade must make do with the remaining 1% of the sun energy.
The most successful species that it usually found dominating a climax forest is actually a parasite species who begins life as a seed in bird droppings who habitually roost in the top of the tallest trees.
The little parasite seed begins life as a vine and after first putting down a tap root near the tallest and most successful trees it begins to grow as a vine and rapidly wraps itself around the tree in the manner of a snake. In time it completely encapsulates the body of its victim and becomes the new owner of the space with access to the roof of the canopy and incorporates the victims body and root systems into its own. It is known as a Strangler Tree or Strangler Fig.
Look at he top of almost any eco-system and you are likely to find a parasite species who are strangling the life out of those around them. It seems to be a very successful strategy.
1) No limit on social security tax (social security solved)
2) Give corporations a deduction for dividends. (No more double taxation and get money to the shareholders that could start small businesses with it.
And this has the great advantage of making everyone aware of the costs the State entails. You no longer have people that are so obviously "net beneficiaries".
And "involuntary servitude" aplies as easily to someone giving 4 hours per day of work, as it applies to someone giving the earnings of 4 hours per day in taxes, it just doesn't SEEM the same. But it is. Paying taxes is never fun.
All I'm saying is that I doubt you find many volunteers for this, and if you try to force people you will end up with a socialist state, managing people via the government.
In turn they pay the government for services.
To be fair you charge the same percentage like we do with SS and Medicare, and you hit the consumers with an additional tax.
For all purposes, a part of your time you're working for the gov, only you do so by working at your regular job and handing over your pay to the gov.
You also pay the bank, grocer, and utility supplier for their services.
I know what you are trying to say but you can not work for government in lieu of paying taxes, or if you can not afford to pay them, or if you don't have a job. That concept leads to the same place....government control via no choice.
It doesn't make a whole lot of sense to fault someone who financed 10 doctors because we think he should have financed 15, when we ourselves have financed 0.5.
Those receiving the services of those doctors have more to thank the guy that didn't pay his share but paid more in absolute terms, than the guy who paid his share but contributed less..
You can fault him for evading the law with offshore accounts and creative accounting. In a free society we all need to play by the same rules.
You can fault him for accumulating his wealth by damaging people's lives. "Restructuring" companies, laying off workers, hurting pretty much all stakeholders except himself and a few around him. That kind of activity is not unabiguoulsly positive for society, although one would need to argue many details case by case.
The premise of progressive taxation is that the wealthy will (almost by definition) take advantage of the less wealthy, but if they contribute back some of what they took, society can hopefully sustain itself. I argue vaguely that the wealthy class shouldn't extract a larger share than what the economy grew by in a given period, to at least maintain equilibrium. This does not seem to have been the case in the past few decades in the US and many parts of the world, which precipitated a possibly insupportable decline in the incomes of the majority of the population.
Nature has few phenomena that can continue forever out of equilibrium. Wealth equilibria have reset themselves many times over history, but the resets usually weren't pleasant. Feudalism is the perrenial configuration of human societies, but the idea is that its extreme swings can be moderated with intelligent planning (ie: progressive taxation). If we give up this goal, we resign ourselves to the violent, painful swings of nature. Some of us prefer to think we are better than that, as a race.
It makes no sense to fault someone for saving 10 lives when he could conceivably have saved 15, when everybody else is saving 0.1 or 0.5 lives.
Everyone has skin in the game and the people that consume more pay more. done.
Paulo - the point is everyone digs.