Question:Follow

YEAH WELL IF YOU SAID THAT TO MY FACE I WOULD PUNCH YOU AND KNOCK YOU BACK TEN FEET BUT LOLOL YOU HAVE NO LIFE UNLIKE MY LIFE WHERE I BANG HOT CHICKS AND AM REALLY RICH AND FLY

Dirty liberal.

Easy. Because they have more. Are you really suggesting that someone who makes 100k annually should pay the same as one who makes less than 10k annually? You really think massive corporations should pay the same as the small business? That one should inherit millions and not pay a cent?

It really isn't a hard concept. Lets do some math.

Let us assume, in this hypothetical situation, that there is a flat income tax rate of 10%.

Now, we have two people. One, we'll call him Joe makes, lets say $13,409/year, and the other, who we'll call Bill, $103,455/year.

Now Bill, when he pays his 10% income tax, pays out $10,345.50, leaving him with $93,109.50 to live on for the year. This is more than enough, Bill lives quite comfortably, regardless of having paid what is admittedly, a fairly high amount to the government. Bill complains anyway though, because he really needs that brand new Hummer, a boat, and an annual vacation to the tropics.

Joe on the other hand, when paying his income tax, pays out $1340.90, leaving him struggling even more to get by, with $12,068.10. But Joe doesn't complain, he just soldiers on and hopes for and tries to make things better.

Lets do some more math.

Bill, with his $93,109.50, owns a house and pays monthly mortgage payments of $1,295 monthly, or $15,540 each year. Leaving him with, for all other necessities and luxuries, $77,569.50 for the rest of the year. Bill pays $5,500(which is above the averages I was able to find) annually for utilities, leaving him with $72,069.50 for anything else for the rest of the year. Bill still lives comfortably.

Joe, with his $12,068.10 pays monthly rent of $684, or $8,208 annually, leaving him with $3,860.10. Then he pays $3,300(again, slightly above average, but I'm basing these on the costs of the specific home/apartment) annually for utilities, leaving him with $560.10 for the rest of the year.

These costs do not include food, transportation, etc.

So, tell me, is it still fair for the person with less to pay the same amount as the one with more?

My sources:

http://answers.google.com/answers/threadview?id=486753

http://www.whitefenceindex.com/

http://en.wikipedia.org/wiki/Average_Joe#Homeownership

Those with more should pay more because it doesn't ruin them financially to do so. Those with less should pay less because they can't afford to pay more.

The only way to preserve democracy is to not let people vote for a progressive tax system!

We already have a progressive income tax Joph. Once again, we have a liberal misstating the issue to make conservative opposition to raising taxes even more on just the top (ie: making it even more steeply progressive) somehow appear to be opposition to any progressive taxation at all. We are talking about the whole "let the Bush tax cuts expire for just the rich", right?

No, he understood it. All the other words were just explaining what made it a joke.

I hear answers like this a lot from left leaning individuals, and I cringe every time I do because it's playing directly into conservative talking points. You're arguing from the standpoint of fairness, but to a conservative it isn't that they don't' value fairness. But to them fairness achieved through an economically unsustainable method is idiocy, and they're right about that. Helping out poorer people at the cost of creating greater numbers of poor is stupid. You're taking one step forward to take two steps back.

Fairness doesn't matter. McDonalds is more than happy to sell you any of their dollar menu items at a loss if it means they can generate increased foot traffic and sell you more 5 cent cokes for a buck fifty. Price doesn't at all reflect the cost of the item, but by sacrificing fairness they can generate a net gain.

I'd be all for conservative fiscal policies if they actually work the way they are intended to. But they don't.

Liberal fiscal policies isn't about fairness, it's about result. The strongest growths and stability are created through income equality. The rate of bank failures are stunningly almost directly related to the degree of income inequality.

What's fair doesn't matter, only what works does.

...you didn't just embarrass yourself crying about it and now need to try and save a little face?

Yeah, I know.

Yup. That's more or less the way conservatives look at it. When you take from "the rich", you're really just taxing your own potential employment. But the guy earning $15k today doesn't see this. He sees a short term benefit for himself and is willing to take it. The sad thing is he's increased his odds of spending the rest of his life in low income work cursing those big businesses and rich executives for not making his life better when all along he's doing it to himself.



You'd have to provide some evidence for this. I think it's quite easy to show evidence that wealth held in the hands of big business and their investors does do exactly what conservatives say it will. It creates jobs, it grows the whole economic pie, and it brings better and more affordable life-status improving products to consumers. In an age where even starving college students can afford a cell phone and a computer, it's hard to argue that this doesn't work.



I agree. I suspect we disagree about the result though.



I'm not sure why you think this. Feel free to support this claim if you can. I believe that the only way one makes this argument is if he uses the rather circular assumption that income equality equals strong growth and stability and measures the former to conclude the latter. Kinda like how health care systems are ranked by how socialized they are, and then the rankings are used to "prove" that socialized medicine results in the best health care. Completely circular.

There's just no logical reason to expect that taking capital from the most productive parts of an economy to provide short term benefits for the least productive parts can possibly result in increased economic growth or stability. It would be like an engineer insisting that by removing portions of the foundation of a building and piling them on the roof, you can make the building stronger and more stable. It should be quite apparent that this isn't going to work. Ever.




I'm not sure how you make that correlation at all. The rate of bank failures would seem to be most related to the degree to which banks are able to profit off "risky" investments. Obviously, this is going to mean that freer markets are going to see more bank failures than those which are more closely regulated. However, those freer markets will also experience more growth. The only way this can't be true is if one assumes that the government regulators are better able to predict which things will result in economic gain than the bankers themselves. If that were true, why not just hire those guys to run your banks?

The better question is whether the long term effects of the occasional failures outweighs the benefits a more active investment infrastructure creates. No one is perfect at predicting what will fail, but they're equally imperfect at predicting what will succeed. I just think it's wrong to believe that we can somehow regulate out the failures without also regulating out the successes. So it's important to look at both factors when making a decision.



Yeah. Ends justify the means and all that. The problem is that what the Left does economically tends to not work most of the time. Just look at what's going on right now.

Of course. But the problem is that right now, if we speak purely of income taxes, Joe pays 0% (and depending on conditions may receive things in the form of tax credits which results in negative income tax) and Bill pays 35%. A range of people in between pay different levels, but all are higher than you suggest and are more steeply progressive than you suggest.

As you say, this is a mistake. Yet, despite this, there are many on the left who argue that the rich aren't "paying their fair share" and want to raise taxes on the highest bracket (and on no-one else). When conservatives say that we should correct that mistake, they are demonized and attacked for wanting to make the poor pay for tax cuts for the rich (or some similar rhetoric).

It's pretty darn ridiculous just how completely far out of touch with reality those arguments are, yet we hear them nearly every day being made by liberal pundits and politicians. And they're not joking.




That's a decent sentiment. The problem is that for the left there always seems to be an "extreme circumstance" which magically increases in size and scope until a whole hell of a lot of people qualify for it. Income tax should only be zero if you make zero income (ie: you are supported solely by someone else). I don't have a problem with deductions reducing the income level you're taxed on, as long as they are reasonable and can't easily reduce income to zero (again, barring actual true extreme situations). I do have a lot of problems with tax credits though. That's where we end out causing people to pay zero taxes in many cases. They also can act as incentives for things we shouldn't be encouraging in the first place.


Best of intentions though.

Except you are conflating benefits "from society" and benefits "from the government". The benefits from society (and that's not really how I'd phrase it, but whatever) are the result of the people within that society being free to choose their own actions and to choose to reward the actions of others. Government interacts with that part of society in that it can act to create the environment in which society holds those freedoms.

But it's absolutely incorrect to equate that to benefiting from the entirety of what government does, doubly so when we're talking about the massive amounts of money spent on social entitlements. The wealthy do benefit from the government providing a military to protect their property from foreign attack, and from police forces and laws protecting their property. They don't own their success to government entitlement programs though. So it's wrong to conflate those the way you do.



Gonna make the same correction again. She doesn't pay anywhere near the same "amount". You mean paying the same "rate". The whole Buffet thing is BS though because you're comparing capital gains taxes to income taxes. There's a very very good reason why (long term) capital gains taxes must be lower than income taxes. And believe it or not, that reason involves helping non-rich people become more wealthy over time, not the other way around. If capital gains couldn't provide earnings at less than income taxes, then the rich would never invest their money in things in which the middle class (or even working class) could invest in as well. I'll explain this if you want.



Except that what you call the "equality of sameness" is also "equality under the law". You have to treat people unequally to create the "equality of outcome" as you put it. That's because not everyone is going to get the same result. Not everyone is equally skilled, or equally lucky, or whatever you think affects their outcomes. The problem is that you are throwing out the baby with the bathwater here. If you give people with no money benefits, then why should they work to earn money at all? Some will certainly make the choice to work the system to get the free money. And if working harder just results in more of your money being taken away, wont this also affect the number of people who succeed?


You're losing sight of the fact that the size of the whole economic pie is the collective total of the fruits of our labors. When we pursue a course of equalizing outcomes, we also end out reducing incentives across the board for people to maximize their output, and thus reduce the relative size of the whole pie down the road. The more equally we try to divide it, the smaller it gets over time. It should be easy to visualize what would happen if you perfectly equalized everything. If everyone lived in the same home, with the same cloths, same recreation, same food, same everything, regardless of what they did for a living, or even whether they worked at all, what do you think would happen to total productivity? It would sink like a stone. We'd produce a fraction of what we do now. And that equal housing and food and whatnot would become an equal state of poverty for all.


If we can envision the absolute disaster that perfect equality of outcome would produce, we should reasonably be able to conclude that degrees in that direction create similar negative macro-economic effects in proportion to the amount of equalizing we're doing. The more we take from the productive to provide for the non-productive (regardless of reason), the more we will tend to diminish the whole pie. It's pretty basic logic, right? That's why it's a bad idea.




Despite the reference to "proportion to their revenues", Smith was *not* talking about income taxes. He vehemently opposed the idea of taxiing income and especially labor. He was speaking about land-rents (or property taxes). His argument being that if you properly structure your taxes, then a rich man living in a big expensive house will pay more taxes for the house he lives in, the land it sits on, and the luxury items contained within than the poor simply because he owns a bigger house, on a bigger plot of land, and fills his house with expensive stuff while a poor person will not. He proposed accomplishing this via land taxes and luxury taxes which would automatically tax the rich more than the poor, but not by taxing the fruits of their labors, but rather taxing those things one owns which are not necessary to live.


Of course, he did not envision anything approaching the government run social programs we have today.

Edited, Aug 8th 2011 6:43pm by gbaji

There is another point I'm curious about. How many of the people ******** "It's my money, I earned it, I shouldn't have to pay taxes" actually earned it. Did they start out poor and worked their way up, or did they start out with a huge bankroll and made their money by investing what was given to them?

Related, for the ones who mention that they did everything for themselves, working their way up from the bottom (no rich daddy, no family contacts), do they offer the same chance to their workers. For the guy who started in the mailroom and made CEO, do you give the same opportunity to the young kid out of college? Or is your company one that fires the hard workers, because you can hire another fresh face out of school for half the wage?

It's not a question of making the rich pay more taxes than anyone else. It's a question of letting the poorer pay less taxes than other people.

Every other tax bracket below the top tax bracket is a DISCOUNT on the top tax bracket. The discount is so we don't take with one hand, then have to give back so much with the other because we took too much. And if the vast bulk of the "middle class" get a discount off the top bracket too, that's a reflection that the middle class isn't quite free and clear in terms of monetary comfort.