Monday, November 15, 2010
Elite liberals don't get us
These elite liberals are completely mystified about why ordinary Americans don't want to tax the rich aggressively. These supposedly creative people even lack the imagination to come up with a good answer. So as the son of a retired maintenance man, let me help them out. The problem is that they assume that we rubes are naturally good at hating, so how in the world could we not want to stick it to the people who clearly deserve our hostility? They make the mistake of believing that we think like them.
The reality is that ordinary American assume that they are just as good as rich people; they are just people like ourselves. They are not cardboard monsters like liberals want us to believe. They are just folks. And just like we don't want blacks or Hispanics or Jews or regular white guys to get hosed, we don't want anyone to get hosed. If I don't get angry that some rich guy pays the same for a lawnmower at Sears as I do, why am I going to get worked up if he doesn't pay taxes at a higher rate? He's paying much more into the system than I am as it is. If the government is giving him sweet deals that I don't get, then that should be stopped. But why squeeze more out of him?
I see soaking the rich as a little like gang robbery. We take his money because we've got the numbers to get away with it. And then liberals make us feel righteous about our crime. "Social justice" sounds so noble, doesn't it? We don't want to bleed the guy because we're not criminals. If he stole the money, then he needs to rot in prison. But we don't believe capitalism is organized theft. If he didn't break any laws to get it, then I'm the thief if I join the mob to strip him of his cash.
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The problem is conflation of the function (net in-place liquidation value of assets) with the derivative (income, capital gains, value added, sales, etc.).
ReplyDeleteThe result of this conflation is a brain-dead discourse in political economy.
OF COURSE people who have vast property rights should pay more for the existence of the entity that upholds those property rights -- just as they should pay more for property insurance.
OF COURSE people who make millions or billions of dollars a year should have zero tax burden as a result of those changes in their net in-place liquidation value of assets..
I share your sentiment. There also another thing to consider on this equation. Wealthier people, at least the self made type, should be a better allocator of capital. By leaving some of the money in their hands, it increase the prosperity of the nation.
ReplyDeleteJohn
"at least the self made type"
ReplyDeleteAll the more reason to emphasize the distinction between income and net in-place liquidation value of assets in political economy -- something you failed to do, John.
Would it be okay with liberals to have a zero tax rate if we had no public needs?
ReplyDeleteI am guessing no, because they want a cut of the action and like the parasites they are, would not be able to get a piece of the action.
Great post.
ReplyDeleteHard work and brains may be ONE of the factors in becoming rich, but anyone who believes they are the ONLY factors, is being seriously naive.
ReplyDeleteTaxed at what high rate? The high rate of Reagan's time? You're either falling for a false narrative or you're helping propagate it on purpose.
ReplyDeleteOrdinary, middle class Americans don't hate rich people, because a lot of them one day hope to become well-off too.
ReplyDeleteA colorful anecdote illustrates this point. A Brit told an American visitor "here we see a guy in limousine and we want to drag him out of it and beat him up. You Americans say 'someday I'll be that guy in the limo'."
This is the Inductivist, right? Where is the polling data on taxing the rich?
ReplyDeleteIt sounds like Jim Bowery is arguing for the opposite of a consumption tax.
"You Americans say 'someday I'll be that guy in the limo'."
ReplyDeleteAnd any average, unconnected Joe who thinks that way is either: a) completely ignoring statistics or b) is being a delusional fool.
Anonyomous - I agree that it's not likely most people will ever become rich, but that's not the point. I don't think it's necessarily delusional for people to imagine they can become wealthy if they "build a better mousetrap."
ReplyDeleteAnyway, a grudging acceptance of one's peasant status and a why-even-bother attitude is the hallmark of dysfunctional 3rd world countries like Mexico. Maybe that's where we're headed, but why give in to that kind of defeatist thinking?
Plus, they (the people in the video) are just flat-out wrong about (or misrepresenting) some of the facts. The statement that the estate tax affects almost no one is false. Leaving aside this year (because it is repealed until January 1, 2011), it certainly does affect many people. Last year, the lifetime exemption (the amount below which you pay no estate tax) was $3.5 million. Thus, anyone who died with a gross estate of $3.5 million or less, paid no taxes on it. Even at that level - the highest the exemption had ever been - I believe about 3% of people paid estate taxes.
ReplyDeleteBut next year (assuming Congress doesn't do anything), the exemption will drop back to $1 million. That will catch a HUGE number of relatively middle class people. Think about it: a guy who has a house worth $500,000, a retirement account worth $200,000, and a life insurance policy worth $100,000, is already 80% of the way there. For a 65 year old guy who has been working all his life, that's not an extreme example. If he happens to own his own business, he'll almost definitely be paying estate taxes; or rather, his kids will, and since businesses aren't liquid assets, they'll probably have to sell it just to pay the tax bill.
Also, proponents of the estate tax will admit that it isn't even about federal government revenue (it raises less than 5% of revenue each year while the income tax raises 80-90% of revenue each year, split roughly evenly between the tax on individuals and the tax on corporations). The estate tax is, and always has been, about breaking up large concentrations of wealth. Of course, after decades of inflation, $1 million just isn't that much anymore.
I watched the clip Ron put up.
ReplyDeleteIf Bill Mahr and his guest wanted to have a tax discussion, then they should have some tax charts that elucidate exactly what the various American income groups pay into the system, and not allow Nora Ephron to simply say, "the rich should pay more", when most of the studio audience wont know what the rates are.
The current top tax rate is 35% and it kicks in at a 373K yearly income. The 33% bracket kicks in at 171K. http://en.wikipedia.org/wiki/Income_tax_in_the_United_States
However, to be completely fair and honest, many of the ultra rich get paid in stock options and various other corporate-pay-scheme-machinations and their income technically can come under definitions like capital gains. Bush cut that rate to 15%. This rate is due to increase to 20% in 2011, and probably is the real reason you see GOP-talk-radio mouthpieces kvetching so much about taxes this year.
I keep this simple thought in mind when it comes to taxes,
"The top 10% of the taxpayers paid 71% of all Federal income Taxes, while the bottom 50% of the taxpayers paid less than 3%. The top 1% of the taxpayers paid 40% of all Federal Income taxes. Additionally, of the 136 million returns processed, at least 43 million owed no tax, and many of those received an earned income credit"
You can find that verbiage here in context:
http://www.loyolamaroon.com/exposing-another-liberal-falsehood-the-bush-tax-cuts-favored-the-rich-1.2394754?pagereq=2
It is worth admitting however, that the top 1% own something like (Im going from memory) 38% of all privately-held-wealth in this nation at this point.
Talk show hosts shouldn't discuss these issues unless they are willing to use charts and numbers to plainly lay out the economic landscape so the audience can be fairly informed before they make their apologetics. Nora Ephron's casual tone seemingly implied the rich were merely paying a pittance more than the rest of the country, and that really isn't the case.
In my life, Ive found that both liberals and conservatives will lie to advance their arguments (or at least withold information), but liberals will do this more often than conservatives.
Plus, how does taxing the rich help those who aren't rich?
ReplyDeleteThese elite liberals are completely mystified about why ordinary Americans don't want to tax the rich aggressively.
ReplyDeleteWhat makes this whole argument so mind-bending is that those "elite liberals" are the rich, for the most part.
A confiscatory tax on America's billionaires would hammer the Democratic party.
as Steve Forbes would say, "No taxation without respiration."
ReplyDeleteTaxing the high income and/or the wealthy (not necessarily the same) would go after Democrats somewhat more than Republicans. The Democrats, after all, are the party of the high income earners or the wealthy.
TGGP writes: "It sounds like Jim Bowery is arguing for the opposite of a consumption tax."
ReplyDeleteI'm saying STOP TAXING ECONOMIC ACTIVITY.
That man is so physically repulsive to me I can't even bear to look at him much less listen to him.
ReplyDeleteI suppose he won't begin to reject liberalism until they remove all snack foods from grocery store shelves or impose a cheese tax that makes even a small pizza delivered to his door so expensive that Pizza Hut, Round Table, and Dominos close their doors.
"I'm saying STOP TAXING ECONOMIC ACTIVITY." - Jim Bowery
ReplyDeleteI'm pretty interested in property-tax-only systems. Are you a full-on Georgist (assess tax on its land value only) or do you go for a self-assessed / standing sale offer model?
I personally find the Fair Tax much easier to "sell" (describe) to people than any increased reliance on property tax. People just fear sales taxes less than property taxes; doesn't make either one better. Just my observation.
The problem with "property" taxes is they are applied to the homestead value. This is inexcusable since a person has a homestead in the absence of government just as any animal possesses territory from which it derives calories to sustain it. So NATURALLY people resent "property taxes". They aren't legitimate without some sort of compensation.
ReplyDeleteThe only situation in which it is legitimate to tax homestead property value is when there is a citizen's dividend whose net present value is equal to the median price of a home plus the median capitalization of a job. In this situation the economic rent stream received by the citizen is compensation for his investment of his homestead in the body politic.
Self-assessment is inferior to in-place liquidation value assessment as determined by the highest bid placed in escrow for the property right. It is then up to the owner of the property right to either accept the bid and transfer title, or pay the interest on the escrowed bid. When the government places the high bid it receives the stream. Bank accounts are, of course, assets whose liquid value is by definition their balance. If there is no citizen's dividend then savings accounts collect the interest up to the homestead limit -- replacing FDIC.
Christ, what a fool you are. -gcochran
ReplyDeleteHey, wait a minute, are you going to explain that?
Or is this one of those insider comments that all the popular kids already understand.
Cause if so, yeah, I guess I ain't one of popular kids.
:(
Let me summarize in-place liquidation value assessment to see if I have it right.
ReplyDeleteA couple of bidders bid on my property, but their bids only count if they place actual money in escrow. So the fellow who bids 80,000 gets cashed out when somebody bids 90,000. I can take this money and hand over the title or pay interest on 90,000. (I don't know who determines the interest rate; does it work out to something like a lowish money market rate? I know it's hard to say with the invisible hand and all that.) I have my job earnings, private pension, poker winnings, and citizen's dividend to help cover the interest.
This means that if the high bidder is not the government I pay no tax, but I pay the same amount in "high bidder disbursement" whether it's the government, a would-be homeowner, or a developer who made the bid. For purposes of usual government activity like fixing roads and paying the night watchman, as well as coming up with the citizen dividend, we need to hope that the government has plenty of cash to put in escrow. This raises the questions, (A) does any level of government have the right to bid and (B) are we on a gold standard? (I assume yes to both.)
I am confused by the last two sentences of your last post. Is it that, if I have a savings account, banks are using my savings to try to make high bids (and of course they get to keep bidding until they win because nobody holds a second-or-lower bid in escrow); so my savings appreciates by other landowners paying interest?
This whole thing is so original I'm going to have to ruminate on it for a while. I'm still sort of in the "mind is blown!" stages right now.
Okay, now that I've killed the thread ...
ReplyDeleteanybody know Mista Bowery's email address?
I can't find any other threads he's on and it would be inhumane for me to show up there anyway, least until I get some anaesthetic and all that.
The problem with this is that the rich have to pay for the poor in some form or another, regardless of whether or not the government employs wealth distribution schemes. In a society that has failed to moderate inequalities of wealth, the rich have to live in gated communities and drive armored cars or helicopters to work in order to avoid being kidnapped, such as is the case in Mexico and Brazil. If I were rich, I'd rather pay more in taxes and feel free to walk ANYWHERE within the country that I live, as I would be able to in a place like Finland, than to feel confined to my fortress for fear of being robbed or kidnapped. If you're not paying for the poor in taxes, then you're paying in the form of all the private security measures that you have to purchase in order to keep the poor from killing you, not to mention the fact that most of your own country is hostile territory.
ReplyDeleteI don't think that's necessarily true. The rich have to protect themselves from crime in high crime areas. Paying for boatloads of welfare doesn't make rich Angelinos safe; not having welfare didn't endanger rich Victorians. Ethnic diversity is an important factor.
ReplyDelete