The GOP and the income tax.

420incometaxborder A new feature of the ever evolving memes and themes of the McCain presidential campaign is the accusation that Obama is in favor of a "redistribution of wealth" in the United States through what amounts to confiscatory taxation.  Both McCain and his familiar, Rick Davis, have been saying that (paraphrase) "Americans do not want to see income redistributed through taxation" and that to redistribute income in that way is (paraphrase) "not the American Way."

They must be talking about some other "America," an "America" that exists in a parallel universe, hidden away behind the walls of the "Racket club," or the "River Oaks Country Club." 

This "America," the one that most of us live in has had a graduated, progressive income tax as a feature of life and death for as long as any among us can remember.

Now, it is true that the denizens of that other, more exclusive "America" often manage to use the intricacies of the tax code in their favor so as to not pay very much income tax.  Warren Buffet’s famous remark that his cook (or some such person) actually pays more tax than he does come easily to mind.  Nevertheless, a progressive income tax is what we have.

Does this mean that McCain opposes the progressive income tax?  Does he favor a flat tax or a "national consumption tax on steroids" as I do?

Are the Republicans serious when they mock poor Biden (ole foot in the mouf) for implying that paying taxes is patriotic?  Surely they do not mean that?  The US income tax is largely collected on the honor system—–  Hmmm.

Actually, we all know that the tax drivel is just irresponsible propaganda.  This too will pass.  pl

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42 Responses to The GOP and the income tax.

  1. J says:

    don’t forget all of those of our fellow citizens who say that the personal income tax issue is un-Constitutional as the 16th amendment was never ratified by ‘all’ of the states. and that personal taxes are collected on the basis of irs regulations, not congress enacted laws.

  2. Nicholas Weaver says:

    However, (and the reason for Buffet’s comment about his secretary, and its that his secretary pays a higher PERCENTAGE) is that the tax code has grown significantly more regressive in the past 8 years.
    EG: Someone making <100K/year pays (when you consider employer + employee contributons or self employed) 14% into social secruity and 2% to medicare, on top of income taxes. So Buffet's secretary's net tax bill to the federal government is probably on the order of 25%-30% when you include the employer side contributions to social security, and is still 18%-25% when you exclude that.
    Yet a hedge fund manager who manages to turn his compensation into long-term capital gains, pays a TOTAL federal tax rate of 15%!
    And this is exactly why Buffet's percentage tax rate is lower than his secretary's. His secretary has ordinary income, and ends up having a net tax rate of probably 20-25%. Any money Buffet actually cashes out is from selliing stock, which is long term capital gains at 15%.

  3. lina says:

    If I were Obama’s message maven, I would counter every tax argument with “I will put the tax structure back to what it was during the Clinton administration.” Then I would segue into the econ. statistics of those years (jobs, etc.), then I would invite everyone to compare and contrast THAT economy to THIS economy.
    And can I just say, if Joe the Plumber in Ohio is anything like the plumbers that come to my house and “soak” me for their services, I’m happy for him to pay higher taxes.

  4. linda says:

    it was buffett’s secretary paying a higher tax rate than he does. the link is worth a look:
    Well, let’s start with the ultra-rich. Bajillionaire Warren Buffett has argued that he isn’t being asked to pay his share. He went around his office, asking people what share of their income they pay in income taxes. Buffett’s 17.7 percent tax rate compared a bit too favorably with the 30 percent tax rate paid by his secretary.
    So it appears that the tax system favors the super-rich over working stiffs.
    And Buffett went a step further, putting his money where his mouth is. Last November he issued a challenge to his fellow billionaires:
    I’ll bet a million dollars against any member of the Forbes 400 who challenges me that the average (federal tax rate including income and payroll taxes) for the Forbes 400 will be less than the average of their receptionists.
    So far, no-one has taken him up on this bet.

  5. jon says:

    Last sentence first.
    We all want what taxes buy, we just don’t want to pay them. And all of us seem to like to get paid. Quandary there.
    It’s always ‘Class Warfare’ when it might mean that the Republicans or affluent people in general might pay more. It’s never class warfare when they’re objecting to raising the minimum wage.
    There is a graduated income tax. The rates have generally been coming down for the more affluent, looking back to the thirties. And many of the affluent have arranged their investments and accounting to take advantage of the tax code to pay par less than what their gross income might suggest would be fair.
    Corporations have been even more aggressive in reducing tax rates, bulking up deductions and write downs, and making tax avoidance a core part of their profit growth.
    Also remember that many state income taxes are not graduated, and that sales taxes, gas taxes, etc. are felt far more keenly by lower income people.
    There are some things that only government can or will do. There are other things that government can do better and more efficiently than the private sector. Government should concentrate on those, and encourage the private sector to do what it is good at – for the benefit of the public.
    The financial meltdown is further proof that the activity of the government – such as Social Security – has advantages. Imagine if everyone’s full retirement was bet on the performance of the stock market – as Bush and McCain have strenuously tried to enact?

  6. jonst says:

    Your raise a fascinating and important point Col, in your post. And to amplify on it. Recall, if you will, the McCain flap on Social Security. Where he said, angrily, that:
    “Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that’s a disgrace. It’s an absolute disgrace, and it’s got to be fixed.”
    Well, HELLO. That has been the system since inception. So your post, and this recollection of mine, lead me to ask: What nation to they live in? What historical reality do they embrace? Do they make this up out of whole cloth? Are the fooling themselves? Or are they trying to fool the historically challenge populace? or both? IOW…are they delusional? Deceptive? Nonsensical? All of the above? Or, perhaps more ominously, we’ve gotten to the point where facts, historical realities don’t matter anymore. And people who think they do are ‘old fashion’. Well, I’m here to state the obivous, they DO matter. See the crisis on Wall St/Main Street. Another bunch of shysters who thought reality a gratuitous and easily ignored variable.

  7. WP says:

    PL wrote, “Does he favor a flat tax or a “national consumption tax on steroids” as I do?
    …The US income tax is largely collected on the honor system-”
    I come from the heartland of the “Fair Tax” movement that promotes a national consumption tax. The thing about the comsumption tax is that it is essentially a national sales tax. As such, due to the size of the take, at about a third of the price, it seems to me that it would create a huge incentive to have a black market to avoid the tax. Consider the effect of the liquor and cigarette taxes that are so high that they have always resulted in a large bootlegged market.
    How can a consumption tax scheme avoid a black market of collossal size?

  8. SAC Brat says:

    “Americans do not want to see income redistributed through taxation” and that to redistribute income in that way is (paraphrase) “not the American Way.”
    Too rich considering how politicians seem to have no qualms when funneling tax money to croneys. Sports stadiums anyone? One way like a street sign there John!

  9. As a designated 1-A in 1967 under SELECTIVE SERVICE rules upon law school graduation, ended up working for the Treasury Dept. and IRS. Leaving later in 1967 for 2 years, 10 months 4 days and 7 hours of active duty (but who was counting) returned to IRS finding that I had been promoted to a GS-11 from a GS-9 and most of my colleagues were now GS-13 and 14s. Nonetheless glad for the job and returning in one piece and not seeing combat. Detailed in 1971 to the PHASE I and II Wage, Price, and Rent Freezes and Stabilization. Leg incidentally by Donald Rumsfeld as Director of the Cost of Living Council and Richard Cheney as Exective Director of CLC. Most of the large scale audit program for corporations was diverted to the freeze and stabilization effort. Intentional favor to the corporate state, maybe. Anyhow, corporate taxes never recovered. McCain in debates keeps talking about the 35% rate for corporate taxes. Does he not know that the effective rate is much lower (the effective rate being taxes actually paid)? Does OBAMA not know and seems to always give McCain a pass on this statement. Whatever, the fact is many US corporations pay NO taxes. Perhaps, they (the candidates) just don’t understand, either of them.

  10. Patrick Lang says:

    Hey Folks
    I am not complaining that the Republicans do not pay enough tax.
    I am pointing to their apparent opposition to the idea of the progressive income tax. pl

  11. Cieran says:

    Great question and comments…
    Does he favor a flat tax or a “national consumption tax on steroids” as I do?
    As Nicholas Weaver mentions above, American wage earners already pay a 14% flat tax, and for most taxpayers, it’s the largest share of their income taxes (and it is a tax on their earned incomes, though for some reason it’s seldom considered an income tax…).
    That flat tax is for social security, and it has no deductions, no exemptions, and it’s highly regressive, as the marginal rate drops to zero as income rises above approx $100K/yr. So the working poor actually pay an infinitely higher marginal rate than do the rich.
    I’m always intrigued by the fact that those who advocate a flat tax conveniently seem to forget that we already have one, and we’ve even managed to make that one regressive, too… and that is the kind of irony that George Orwell would have enjoyed.

  12. Dave of Maryland says:

    If Joe the Plumber had $250,000 in net earnings, he would be incorporated, by definition. Quarter million in net earnings, Joe mostly sells his labor & a few parts, would make his gross somewhere around half a million.
    Let’s have fun with that. Suppose Joe charges $100 an hour for his labor, which I think is typical, and let’s suppose that of the $500,000 he grosses annually, that $400,000 is from labor.
    At $100 an hour, that’s 4000 hours. At 40 hours a week, that’s 100 weeks. Since that’s too much for one year, and as some fraction of the 40 hours is spent driving from site to site, that means Plumber Joe has at least two employees.
    Now factor in Plumber Joe’s well-known interest in ghost hunting & his tendency to zap off to all parts of the country looking for spooky houses. TAPS, anyone? (Personally can’t stand that program.) Did McCain know that before he dragged poor Joe away from his spooks?
    Thirty years ago there was the legendary Dick Wray, the Master Plumber, of Kansas City, but I digress.
    Fifteen years ago all the plumbers I knew all expected to die from AIDS. Sewer workers are in constant contact with fresh sewage, and the tight spaces plumbers work in, along with torches, make for an oxygen-starved environment. Add in minor skin cuts from jagged pieces of pipe & you have a real health nightmare. That they are, today, all alive & well & able to find the ghosts in your closet is yet another reason why I do not believe that AIDS is in any way communicable, but I have rambled too long.

  13. Jeff says:

    In re: Jon’s comment
    Jon, a portion of your comment is false. President Bush and Senator McCain do not advocate that an individual should hold his/her entire social security in equities. President Bush and Senator McCain advocate “private accounts”. I think a “private account” social security system would be better than the current system.
    First, private accounts allow for portfolio diversification. Why should such a large portion of social security be held in the form of government debt? Why shouldn’t taxpayers be able to hold, in addition to government debt, CDs, mutual funds, ETFs, gold, annuities, money market accounts, etc.?
    Second, private accounts do not provide defined benefits like the current social security system does. The fact that many people draw out of social security much more than they have contributed makes the entire system unsustainable. With private accounts, there is a limited amount that each individual has at his disposal.
    Third, private accounts avoid the problem of one generation financing the consumption of another generation. Each individual is responsible for himself.
    Obviously, there would need to be some type of sharing mechanism to ensure that those unable to create any enconomic value throughout their lives will be taken care of. In general, I think that a system where title to the account has vested in the taxpayer is far superior to a system that allows the government to appropriate funds as it sees fit.

  14. Paul Mooney says:

    The federal income tax is one of the few progressive taxes in the United States. As you mentioned, the wealthy can get out of much of it via loopholes.
    Most taxes in the US are regressive in terms of % of income paid – for example the state excise tax in Hawaii or the federal social security tax.
    When you combine it all, the US tax system is generally regressive.
    This is why conservative discussion around taxes focuses on the federal income tax. I will believe their sincerity on something like a flat tax when they suggest the social security tax be paid up to the full salary rather than capped.

  15. Lysander says:

    I certainly hated it when 700 billion was “redistributed” from people who earn a living doing an honest day’s work and given to the banksters who put it all on black. Not to mention Fannie and Freddie, not to mention AIG, not to mention the most recent government guarantee of interbank loans. We take the risk, they take the profits. Is anyone talking about that redistribution?

  16. Will says:

    i have an electrical and plumbers license so i don’t have to get soaked when my houses need repairs. A person can always work on his own house where he lives w/o a license b/ when you have more than one house, it gets hard to pretend you live in all of them.
    That gentleman Joe, (his first name is Sam) does not have a plumbing license, so it has now been revealed. he can buy the company, b/ there has to be a licensee somewhere in that company.
    Getting a plumbing license is no big deal. I got mine about 30 years ago by going to a one day class and then taking the test. Pex pipe has taken all the fun out of it. Put the ring on, then crimp the connection.
    Now electrical is a different field altogether. they change the rules all the time!
    Back to the subject, if you had a flat tax or a VAT, the we would have to find other ways to tweak the system other than w/ credits- eg. solar credits, etc.
    But the tax system is crazy, it’s just the middle class that pays.
    It’s expensive being poor- or middle class!

  17. Will says:

    the Oxford Debate
    “Barack Obama: High corporate tax rate is offset by numerous loopholes
    McCAIN: Right now the US business pays the second highest business taxes in the world, 35%. Ireland pays 11%. If you’re a businessperson and you can locate anyplace in the world, then obviously if you go to the country where it’s 11% tax versus 35%, you’re going to be able to create jobs, increase your business, make more investment, etc. I want to cut that business tax. I want to cut it so that businesses will remain in the US and create jobs.
    OBAMA: Here’s what I can tell the American people: 95% of you will get a tax cut. If you make less than $250,000–less than a quarter-million dollars a year–then you will not see one dime’s worth of tax increase. McCain mentioned that business taxes on paper are high in this country, but there are so many loopholes that have been written into the tax code, oftentimes with support of McCain, that we actually see our businesses pay effectively one of the lowest tax rates in the world.”
    Source: 2008 first presidential debate, Obama vs. McCain Sep 26, 2008

  18. euclidcreek says:

    “I guess Joe wants to help fix an old broken down John.” – Mr. Stress of Cleveland

  19. alnval says:

    Col. Lang:
    Unfortunately, the Republican tax drivel that you rightfully refer to as irresponsible propaganda is not going to go away until we have another sphincter-loosening, eye-opening economic event that illustrates their stupidity and forces them to cooperate in a sensible revision of the tax code. Worse yet they still act as if they don’t remember that the government they patriotically point to as the source of all tax evil is also the source of all the services they don’t want to give up.
    We’re getting close to that tectonic shift. A glance at a daily newspaper will tell you that we’re just a skoch away from financial disaster at the state and local levels. For example, California (with the seventh largest economy in the world) has already appealed for help from the Federal Reserve because of their inability to cover a 7 billion dollar shortfall in their revenue stream. That request is not going to be unique to California nor will be the downstream negative impact of the economy on the country’s state and local municipal bonds.
    Somehow, like Pavlov’s dogs, we all still jump nervously when the Republicans say magic words like “wealth redistribution.” Isn’t it about time that we tell then that if they’re going to help the rest of us fix this country that they’ve got to understand that slogans won’t cut it anymore?

  20. Paul says:

    McCain and his coterie should have vetted “Joe the plumber” before they used him as a prop. This guy is typical: an uninformed loudmouth who knows everything and nothing. Like Palin, he will become a laughling stock once the bloggers sniff out his CV.
    McCain should throttle the staff who found this goober.

  21. Matthew says:

    Col: They are just angry that we aren’t angry about Obama. First, ridicule; then label “foreign”; then claim he wants all your money. The Right is watching all their spitballs bounce off.

  22. Will! Thanks for the Obama retort to McCain on corporate tax rates in the Oxford, Mississippi debate. I just missed that response. Gives me even more confidence that Obama was better prepped than McCain for debates and able to think on his feet in a non-programmed way.

  23. TomB says:

    Col. Lang wrote:
    “Hey Folks…
    I am pointing to [the Republicans] apparent opposition to the idea of the progressive income tax.”
    Yes that was the point, and while I’m not really invested in the issue at all just for fun and as regards those here who seem to like a progressive income tax I’ll be their huckleberry.
    I.e. what exactly *is* the morality behind same if there is any besides the Willie Suttenesque idea that of course you gotta soak the rich because that’s where the money is?
    Indeed in fact in one very important way isn’t such a tax spectacularly *regressive*? That is, the harder one works, the more industrious one is, the smarter one is and/or etc., the worse they get treated. That can seem pretty “regressive” in a big sense it seems to me.
    Of course I know of the old saw about “those who have benefitted from our system most ought to pay the most” and etc. But wait a minute; isn’t the essence of our system and at least the ideal we are supposed to strive towards and want to always enthrone is the idea of freedom? One is free to work one’s ass off and become rich, or to sit and contemplate one’s navel and not be rich, right? So by soaking the former at a higher rate than the latter isn’t this nothing more than punishing those who have exercised their freedom in certain ways?
    In essence, it seems to me there’s at least a bit of an ugly idea behind the most strenuous “progressive taxation” schemes to the effect that no, at base you aren’t put on this earth to care for what you want, but instead you’re just a slave to the mob. And while the mob today merely demands you pay a greater share of your money towards their enthusiasms than they do, tomorrow it may be something even more, or different.
    That is, it seems to me the argument kind of proves too much. Once you assert that ultimately people are not on a fundamental level put on this earth as free agents but instead are somehow beholden to everyone else, where’s the logical stopping point to that idea?
    And indeed isn’t the history that exists of that idea pretty ugly? That is, the more radically a country or system has adopted that basic idea the sooner and more viciously the worm has turned on those who were supposed to benefit by it? Look at Soviet communism or indeed most communist countries: They started out to “soak the rich” big time under this theory, but right after they got done doing so then this quasi-slave idea turned on those who these systems said were “slackers” or “parasites” or etc.; in other words, poor ordinary schlubs that the system felt were not fulfilling their slave duties sufficiently.
    As to your “consumption tax” though Colonel I would observe that those do tend in practice to be extremely regressive as that term is ordinarily used. I.e., the poorer one is the greater the percent of one’s income by necessity has to go towards consuming. So at any rate while I think a flat tax system has its merits, a sales or consumption tax seems pretty problematic to me at least.

  24. Jim V says:

    Jeff said ” The fact that many people draw out of social security much more than they have contributed makes the entire system unsustainable.”
    I am not an accountant, but the one time I saw someone put numbers to this argument (it was Leslie Stahl, the Dean of the Powder Puff School of Journalism, on “Sixty Minutes”, years ago), those numbers seemed obviously bogus to me. For one thing, she did not include the employer contributions in her total (as though my employer were paying this out of the goodness of his tiny heart, not as part of my salary plus benefits). Secondly, she ignored the time value of money. When I started paying SS, a dime would get you a 12-oz soda out of a vending machine. The goverment took those dimes and got an equivalent value for them (roads, bridges, sodas for servicemen, etc.). They will pay me back in “funny money”.

  25. ked says:

    Col, you’re a long-time intel hand… what’re the chances “Joe” was an info op?

  26. Cujo359 says:

    Actually, we all know that the tax drivel is just irresponsible propaganda. This too will pass.
    True, but it’s sad that they think they can get away with saying stuff like this. These pundits have been claiming for years that what most Americans believe is, in fact, not what most Americans believe. They have called people who wanted to end the Iraq war, provide health care for everyone (or at least make it accessible), and make the rich pay more taxes the freaks. Yet all those positions are, in fact, the mainstream ones.

  27. srv says:

    British Army’s new leader provides cover for the next Hail Mary pass:
    “We need 30,000 more soldiers to beat Taliban”
    Osama prepping his “Mission Accomplished” banner now.

  28. Kelly says:

    McCain using Joe the Plumber as part of his debate would have been a good idea if the campaign had done some fact checking first. I believe the American people are tired of lies. (by both parties) What McCain’s campaign hasn’t discovered is most Americans do read. For example, the latest on Joe the Plumber and the fact that only 2% of small business owners fall into the personal income tax bracket of earning more than $250,000 and apparently Joe the Plumber is not one of them.
    It has also been reported that some 30% of Americans do not pay any income tax, because they do not earn enough, some 6% who owe but do not file income tax returns and according to the link above Joe the Plumber falls into the category who owes but hasn’t paid.
    Personally I can’t vote for a candidate who undermines the intelligence of the American public.

  29. Cold War Zoomie says:

    Neither political party wants to revise this tax code mess. We need to write a new, much simpler, progressive code from scratch, then set a date to make the old code obsolete and the new code active.
    But we won’t do that any time soon.
    My hope is that the 1980s college Republicans now running the GOP will get flushed out of the system after taking a beating this November, forcing a “come to Jesus meeting” for the GOP leadership. Maybe then they will be willing to tackle this issue with a modicum of sincerity from their position as a minority party.
    They are good at fighting as the minority.

  30. Cieran says:

    I.e. what exactly *is* the morality behind same if there is any besides the Willie Suttenesque idea that of course you gotta soak the rich because that’s where the money is?
    It’s not morality, but utility. The marginal utility of income decreases as income increases, hence progressivity is a natural means for funding government services.
    Lots of economic work has been done since the income tax was created, towards the general critique of utility theory, but the theory actually holds up quite well in the real world, or at least it holds up better than the belief that we actually have a progressive income tax code!

  31. Will says:

    back to basics. the foundation of the progressive tax scheme is akin to Maslov’s hierarchy of needs. First you have to eat, then shelter, then luxury, etc.
    The base amount needed for basic needs is taxed less, then as income progresses, it is taxed progressively.
    The luxury income is taxed luxuriously.
    But the scheme has fallen apart. The very poor is subsidized. The rich have so many loopholes, they pay little. It is the middle class that pays.
    Again, it’s expensive to be poor- or middle class.

  32. TomB says:

    Cieran wrote:
    “It’s not morality, but utility. The marginal utility of income decreases as income increases, hence progressivity is a natural means for funding government services.”
    Well, by saying that it’s not morality you of course support my point that a so-called “progressive” taxation scheme isn’t moral at all and rests instead on nothing more than the raw calculus that because there are fewer of the rich it’s easier to squeeze them than those who aren’t. And how’s that different from a strong-arm bandit saying it’s easier to steal from the aged than it is from the healthy?
    But you then do kind of posit a clever moral/ethical argument with your statement about how the marginal utility of income decreases as income increases.
    Yet it seems to me there’s two problems with this.
    Firstly, utility is in the eye of the beholder, and so once again there’s the idea that one is not put here on earth to do what oneself feels is utilitarian, but instead to do what the mob feels is utilitarian.
    But, secondly, I don’t even think you can defend the kind of blanket progressivity that’s the norm and that we have been talking about with this argument. After all the progressivity of the income tax doesn’t even really pretend to discriminate on the basis of specific utility, does it? E.g., it doesn’t matter if a rich person is using his income to live frugally and banking the great bulk of it while they think about inventing some wonderfully helpful new software or to ponder cold fusion, or whether he is using his money to buy yachts with, right? His income is all taxed the same at a higher rate than everyone else’s, regardless. And a poor person who puts their income into ever bigger wide-screen T.V.’s and tickets to monster truck rallies isn’t taxed higher than another poor person who is using their money to pay the heating bills whilst studing poetry or literature or cold fusion either, right?
    So it seems to me this can’t *really* be the argument in favor of the kind of blanket progressivity that we’ve been talking about. And thus again doesn’t it simply come down to the mugger’s argument that it’s easier to stick up the infirm than it is the physically fit?
    As to the argument that Will (and others?) are seeming to make that our current system is not progressive at all but is instead horribly regressive, I just read somewhere (the “American” magazine?) that something like 15-20% of all income tax revenues are paid by the top 1% of wage earners, with the top 10% of wage earners paying something like 67% or more of all income taxes collected. And at the same time those earning less than the average annual income pay something like only 3% of all income taxes. (And this makes sense given all the political exemptions and deductions that the middle-class have written in for themselves. They like kids, they got big exemptions for same, and deductions for child care, and for school expenses, and on and on. They like houses, they get to deduct their interest expenses, and so forth and so on.)
    So income-tax wise at least my sense is that the middle-class in this country are doing pretty good getting the tax bill paid by the higher-ups.
    Now I know that this is only talking about income taxes, and that FICA/SS taxes are a big deal. But as regards those it’s still the truth is it not that the average SS recipient gets a helluva lot more *out* of the system than they put into it? So to whatever degree things are “regressive” there, it doesn’t seem a matter of people unfairly *losing* a benefit. Instead it’s merely a matter of them getting a tad less of the *excess* benefit they are *already* getting, no?

  33. Eric Dönges says:

    as long as the upper income groups of society enjoy more privileges than the common man, I expect them to pay for it. Of course, back in the real world (at least here in Germany, but judging from the remarks above, this also applies to the U.S.), the top earners actually pay less taxes (relatively) than the middle income groups because they have access to all sorts of lovely tax loopholes, so I would be willing to settle for a non-progressive tax without any deductions so that everyone actually pays their share. I’m not holding my breath.
    And now to something completely different – since Mr. McCain has now officially played the “Democrats want to raise your taxes” card, any bets on when he’s going to play the “Democrats will take away your guns” card ?

  34. Cieran says:

    Well, by saying that it’s not morality you of course support my point that a so-called “progressive” taxation scheme isn’t moral at all and rests instead on nothing more than the raw calculus that because there are fewer of the rich it’s easier to squeeze them than those who aren’t.
    Absolutely not true… in fact, you insult our collective intelligence with that ill-considered outburst. What you assert here is a painfully obvious example of the false dichotomy fallacy, which has no place in informed discourse (including here at SST).
    Please try again. I’m confident you can do a lot better than that.

  35. TomB says:

    Eric D wrote:
    “as long as the upper income groups of society enjoy more privileges than the common man, I expect them to pay for it.”
    Like I said Eric I don’t have any too big a gripe about it (excepting when I’ve had to write those honking big checks to our tax people), but I do think that there’s a potential cosmos of significance between that concept you invoke—”privilege”—and the idea of “rights,” isn’t there?
    “And now to something completely different – since Mr. McCain has now officially played the “Democrats want to raise your taxes” card, any bets on when he’s going to play the “Democrats will take away your guns” card ?”
    Oh the NRA is playing that for all it’s worth Eric. At least judging from the stuff I’ve gotten from them. But it’s getting no traction whatsoever it seems.
    Indeed I don’t know that anything anti-Obama could in this environment; I think George Bush has so completely blackened the name of conservatism right now that anything and everything historically connected with it sounds at best farcical right now. (As it should coming from John McCain’s lips.)
    What I think is interesting is what the candidates ain’t seizing on. E.g., notice how teensy-tiny and tentative their charges have been against each other as regards who caused this financial mess despite it’s titanic importance. And the reason of course is that both parties are up to their ears in guilt. To a tad degree more there’s been a bit more talk about the Iraq mess, but not all that much, and of course for the same reason. Notice how so many of the issues that have gotten the blogosphere up in arms, such as, oh, the Patriot Act, or etc. simply don’t even seem to exist in the campaigns.
    Just reinforces my belief in my proposed Iron Law Of Modern American Politics: It’s not when the parties are screaming at each other that we should get excited and worried, it’s when the scoundrels *aren’t* that we should know there’s corruption afoot.
    Auf Wiedersehen,

  36. TomB says:

    Cieran wrote:
    “you insult our collective intelligence with that ill-considered outburst….”
    Whoa Cieran! Being in no position to insult anyone’s intelligence I obviously blundered writing in some horrible way. Not meant that way at all; honest honest honest. Wasn’t intended as an outburst in the least. Just took your words that “it’s not morality” to a hypothetical conclusion, not trying to imply that’s your point of rest at all or indeed anyone else’s here.
    Absolutely not a spicule of insult intended and upon re-reading it feel abashed since same can so easily be read that way. Damned clumsy of me, my friend; my apologies.

  37. Cieran says:

    No insult taken. The phrase “insult one’s intelligence” is not literal, at least in my book.
    Here’s your problem:
    Just took your words that “it’s not morality” to a hypothetical conclusion
    Actually, you took those words to a self-serving conclusion that was not at all a logical one. You might try looking up the term “false dichotomy” (also known as “false dilemma”) and ponder its meaning. It’s a stupid rhetorical trick, common to neocons (among others), and it’s inappropriate in informed discourse because it is foolish, i.e., it works only on the weak-minded, those who have no idea what the concept of “negation” actually means.
    So when you use it here, you imply a certain weak-mindedness on the part of your readers, which is wildly inappropriate in this company.
    In fact, your entire last post was riddled with sloppy thinking and loose rhetoric. I was completely sincere when I said that you ought to be able to do a lot better than that.

  38. Dana Jone says:

    “I come from the heartland of the “Fair Tax” movement that promotes a national consumption tax. The thing about the comsumption tax is that it is essentially a national sales tax. As such, due to the size of the take, at about a third of the price, it seems to me that it would create a huge incentive to have a black market to avoid the tax. Consider the effect of the liquor and cigarette taxes that are so high that they have always resulted in a large bootlegged market.” wp
    WP: At current government spending levels we would have to have a 300% Consumption tax at MINIMUM. From what I have read there is no way that we could run the U.S. Gov’t on a sales tax. All talk of “Flat Taxes” or “Consumption” taxes are just smoke & mirrors of the wealthy to reduce their taxes even more. The ones that would be hardest hit would be those at the bottom & in the middle.
    Of course the only way to reduce government spending to the point that we might be able to afford it is to reduce so-called defense spending, one of the most wasteful areas of all. Of course nobody here wants to hear that. But with the new paradigim of huge deficits and bailouts of Fall St, that may be the only place left to cut. The Republicans have left no other choices but to sacrifice the Sacred Cow of the Pentagon.

  39. TomB says:

    You write:
    “Actually, you took those words to a self-serving conclusion that was not at all a logical one….”
    Oh, look. The original post of mine you responded to questioned the existence of a moral underpinning of the progressive income tax. The very first words of your *own* response to same was “It’s not morality, it’s utility.”
    So if what I took from that was “self-serving” it was only possible due to the categorical service your own words rendered my questioning argument.
    (And indeed I didn’t even really play “gotcha” with those words of yours given I acknowledged that your later statements about the supposed lesser utility of ever more income did indeed posit a moral argument.)
    So in any event I’ll just apologize again for any implication that you or anyone else thinks that progressivism has no moral basis. On the other hand however I note that I still haven’t seen much of a defense of same here, which is why think I agree with Eric D’s fine observation that what we call “rights” are, in the final analysis, really just “privileges.”

  40. Cieran says:

    So in any event I’ll just apologize again for any implication that you or anyone else thinks that progressivism has no moral basis
    I suspect you are confused by the distinct concepts of “progressivity in the tax code can be based on utility theory, not on morality” and “progressivity in the tax code is immoral”. You might ask yourself whether you believe that “amoral” and “immoral” are synonyms, as that would shed some light on the distinction. Just a thought…
    It’s also worth noting that while utility theory is considered to have deep roots in ethics (e.g., John Stuart Mill), one doesn’t need an ethical or a moral framework to deduce its relevant conclusions here, e.g., the Law of the Minimum does a fine job of predicting the decrease in the marginal utility of income as income increases, and that law is amoral (in the sense of moral neutrality, since it is a scientific law that exists independently of our moral views).
    Will also pointed out a similar justification via Abraham’s Maslow’s principles of humanistic psychology. Thus one doesn’t require a moral lens to view this economic principle.

  41. TomB says:

    Cieran your position is still a little unclear to me. On the one hand you seem to imply that the “utility” argument for a progressive tax code might “have deep roots in ethics.” On the other you seem to rely on the idea that progressivism in taxation has nothing to do with ethics as it is “amoral.”
    In any event as to the former I’d just refer again to my previous post about the “utility” argument which is that even agreeing that a system based on same does indeed possess some ethical/moral justification, it seems to me the “blanket” progressive system we have and that we’ve been talking about doesn’t seem to be based on same. Again, the system we have doesn’t discriminate on the basis of the utility income is put to, it’s based purely and simply on who is getting more income, period.
    And as to your latter statements seeming to say that the progressively higher taxation of the rich is “amoral,” all I’d say is that in general when gov’t discriminates against one class of people without any good moral or ethical reason at all, people consider that “immoral/unethical/bad” or etc. So it strikes me that trying to call such discrimination “amoral” is an uphill fight.
    Again then I think Eric D. was very astute in seeing that what’s really at work here is that for all our Western talk of people’s “rights,” getting rich/earning great income isn’t really a right at all and is instead a “privilege.” And that’s fine by me but I’m old and younger folks especially might consider that unlike with rights and their inalienable nature, “privileges” can just as easily be taken away as they can be granted.

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