Last week I had a post about the next Presidency if Barack Obama is victorious along with a Democratic Super-Majority. Anything can happen in politics so of course this may not be the path.
The Wall Street Journal has written an article that clearly articulates what could possibly happen in the next year when New Deal 2.0 or The New New Deal or The New Great Society Deal comes to be.
When people talk of change and vote for change I really hope they know exactly what they they are voting for. My guess is that most Americans who will vote for Obama in November have little idea what is really coming down the pike. This is the overall issue that McCain should be hammering away at.
A LIBERAL SUPERMAJORITY
Get ready for 'change' we haven't seen since 1965, or 1933. (And I would also include the Progressive free-for-all of 1913 under Wilson)
POST-SCRIPT add 10/18/08: Finally McCain shows some gumption--McCain suggests Obama tax policies are socialist (FINALLY!)
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24 comments:
Don't be so scared Mark.... you know, the only thing to fear, is fear itself.
Also -
Socialism, Capitalism: What's In A Name?
http://www.americanchronicle.com/articles/78323
An okay article on the definition and meaning of "socialism" in the American Political context.
"This (the bank buy in)– the largest propping up of free markets in history – is, in conservative circles, OK, so long as you do not mention socialism. Socialism is the one word that is an anathema to the American political vocabulary.
Even before the recent splurge of government intervention in the capital markets, you could do socialistic things so long as you did not use that word. We would probably have some kind of national health insurance by now, if it were not for the skill with which the opponents have invoked the specter of socialism. To even mouth the word in conservative circles sends the faithful running to the bomb shelters.
Of course, it would help if we had a decent definition of socialism. To some, it means Soviet-era communism. To others, it means the blend of capitalism and social services found in the Scandinavian countries."........
Me again. The reason for the post is that I think it is useful to think about the history of the idea and its many manifestations. This is important when starting a discussion not because I think others don't what they are talking about, but to make sure we are talking about the same idea and resulting policies. (Karl's idea of what is socialist may be different than Lenny's, and Homer's and Mr. Burns, etc.)
Once we understand what each other thinks, it is easier to talk about what exactly is improper about socialism, as well why the word is able to be used a bludgeon or tool to instill fear. It freaks people out, but yet most Americans have a different ideas of what exactly socialism is.
To some universal health care is the line past which we may not cross.
Anyway, #1, I agree with Powell, who said “Taxes are necessary for the common good. There’s nothing wrong with examining what our tax structure is, or who should be paying more, who should be paying less, and for us to say that that makes you a socialist is an unfortunate characterization that isn’t accurate.” And #2, I agree with the concept of tax brackets, which is a longer discussion I had with Dad recently. That is another post I guess. Coming from those two positions, I view Obama as solidly mainstream w/ regard to his tax policies.
So, how exactly is Obama socialist, in your view? Serious question. I'm not baiting.
edit: I wanted to put just before the line about health care, that Medicare is "too" socialist to some. but to others....
I think that makes more sense that way.
The idea that conservatives were ok with the bank buyout is ridiculous. Conservatives were not since they understand how free markets work. The markets needed to "clean themselves" and the buyout has saddled us and our children with trillions more in debt and inflation. The buyout did not solve the problem but will make it worse.
We now live in a country where failure is no longer allowed. The beauty of true capitalism and a free market economy is the existence of both success and failure. Without failure we have, as Hayek stated, a "Road to Serfdom." (A very good book and should be read by all believers of Keynes to understand how he was so wrong).
I pray to God that we never have national health insurance so that I can decide how to spend my own health dollars.
Paying taxes is necessary, it is how governments function. However, "spreading the wealth" is socialism. If I earn $1 million per year, do I receive any more "government service" than the person earning $25,000 per year? What do I do with that $1 million I earned (unless I am Obama or Biden) I probably gave a good chunk to charity. I also spent most of it employing many or I invested it, providing the capital needed by so many so they too can have an opportunity to earn their $1 million.
How did I earn my $1 million? Did I work for it? Why is it when someone wins the lottery people say "good for them, they deserve it?" What did they do?
I have no problem with anyone making as much as they can. Athletes, actors, whoever. If they have a niche or if they have worked their entire life to be rewarded that way, great for them.
How is Obama socialist on taxes? He believes that if I earn "too much" that the government should come and take more away from me to give to someone else earning less. What income level should that be and how much? $250,00? Why not $150,00? The median income in the US is about $55,000 per year, why not have eveyone that earns over $55,000 take the excess and give it to everyone earning under $55,000? That is equally as arbitrary.
How do you think that those below $55,000 would react? Do you think that they would want to make more than $55,000? No, why would they? Now this is taking the case to the extreme to make a point that when you penalize success by taxing it more, the desire and drive to become more successful decreases. In my example it virtually disappears, in Obama's it certainly declines.
So, back to the Socialism question on taxes. It is Socialism when the government takes tax dollars from one group and directly gives it to another group. It does nothing to expand the economy or grow national wealth, it simply makes the statement that the government believes that person A will spend it "better" than person B. In this case, Obama is taking from all taxpayers (don't kid yourself on the $250,000 plus idea, every tax payer gets hurt because it means a lower percenatge of money going towards the essential government services out of the giant common government pot called the "general fund") and directly transferring the money to non-taxpayers. Tell me, how can you provide a tax cut to 95% of filers when more than 40% of filers
pay no income taxes? They pay payroll taxes, so is he going to decrease those and raid Social Security and Medicare?
An Obama presidency with Pelosi, Reid, Frank and Schumer will be worse than Carter. A tax increase will send us into a depression and it will be the middle of the next decade before we recover.
First, I will say that conservatives may not have liked the bank buyout, but republicans don't seem to be raising hell.
Ok
1. A progressive tax system is good policy
2. Progressive taxation in no way meets the definition of socialism. Progressive taxation is not socialism.
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1. A progressive tax system is good policy
A Progressive tax system may not be just, in your view, to those in the highest tax bracket. I submit, however, that is the best way for government to remove itself from being an oppressive force. An oppressive force removes market players.
Progressive taxation, by adjusting the burden of taxes, actually allows for more people to participate as consumers. Moreover, which has been part of this country's economic policy for nearly 100 years.
A. Response to the argument that Progressive taxation inhibits motivation.
You assert that there will be no reason for people to aspire to make more than 55k, or the cutoff amount, since then tax consequences are felt. You think that a progressive tax bracket penalizes successful people unfairly, and destroys the motives for success that drive our capitalism. I submit that you are wrong. Would you ever accept a 47k/year job instead of a 67k/yr job? Why do you think people, who are driven by a desire to succeed, would suddenly stop trying? They hit $55,001 dollars, and say "Darn it. Guess I'll stop." No, they get up and try to make more, and buy the giant TVs with HD and a picture so clear that the channel 7 special with Bill Bonds and the Turners will give you nightmares for at least a week. (Seriously, I never knew skin and flesh and leaky eyes could be so scary.) Plus, our system of progressive taxation is designed so that one will never be "taxed out" of their gains. If you make 535 dollars over bracket, the first (lower) bracket applies to the first amount, the second bracketed percentage only applies to the remaining 535$.
B. Response to the Penalizing people unfairly thread of argument
Yeah. It sucks to pay 10% more than someone else. There are valid reasons for it, and they are not wishy washy "punish the successful" reasons some of my conservative friends derisively laugh about. It is this very system that allows for greater # of market participants, and therefore it allows those successful at business to have a greater consumer base to sell too. When buying ads, would you pay ten percent of your business income to grow your audience by 30%? If your answer is yes, then the idea of a progressive tax should be considered by you. It grows the consumer base. ( See below Apple Example.)
C. A progressive tax is just, and economically sound.
Hypo:
Suppose the world is in a prolonged period of famine. Someone creates a fortified apple. It now takes only one apple a day to keep yourself fully nourished. There are many men, but we are particularly concerned with Man A, Man B, and Man C. A makes enough to afford exactly one apple a day. B buys 3 / day, and C has assets which enable him to buy 10 apples/ day if he felt so inclined. All is well. Many people get rich because the fortified apple is very difficult to produce. Mostly only people in country 1 have the technology, and they sell the apples worldwide. Unfortunately, the famine gets worse. Apple production has supported a world population which is now more stressed. There simply aren't enough apples to go around. Country 2 begins to attack 1, because of some nasty diplomatic fights over 1's protection of native 1 companies' proprietary apple technology. 2 is trying to reach 1's strategic apples reserves. It is a world gone mad. 1, obviously must raise money for its common defense... so how to tax the people?
Taxing Man A would quite literally kill him, or at the least render him dependent on the kindness of strangers. No sane free person wants to be a part of a country that would tax a man to death. So we give Man A a pass. Anyway, it wouldn't be efficient to remove part of the workforce by taxing them out of their apples and life.
So, the tax burden falls to the remaining men, B and C. If the tax burden of defense is so great that it requires the equivalent of 3 apples from every remaining capable man, then B would be the one put to death by the tax system. So it is limited to an amount = to 2 apples for B, and unfortunately 4 to C. In this system, it can only be said that a progressive tax system is the only sane manner of operating.
Of course, that isn't our system Just one more example though -
What if we change Man A to having an amount = to 1.3 apples; B = 4 apples, and C =10. It still requires a 6 apple equivalent to defend 1. Do we then apportion the amounts as .3% for A, and 2.85 for B and C? That leaves A with 0 disposable income, B 1.15 apples worth, and C with 7.15. Does it seem more fair, because A gave something, however meager, to provide for the common defense? In the other example, he was a bit of a freeloader. However, A can not go and buy shoes from B's store. And what if I told you that if B only had to pay 2, he would be financially able to open a second location?
This is why progressive taxation makes sense. Because it allows more people to buy into our society, if not with capital investments than at least they are consumers. It isn't about hitting the people who can afford it because they are so rich and thus, necessarily "evil." That is a straw evil man.
Now what if I mentioned that the money wasn't actually going for defense against 2, but instead was going to some dumb program that wasn't necessary? Then everyone would get angry. And that is what we actually do with a bunch of our money. But the argument over where to spend our resources is not the same as the argument over how to tax. We can rail against government expenditures, but then we are really talking about the overall tax burden, not the system of progressive taxation.
So that is my apples example. I had to change the discussion to analogy, simply because that is how my brain works. The particular use of fortified apples is my invention, and I'm just now trying it out so it may have flaws. It is based on my own understanding and reading on the topic of progressive taxation.
D. Another reason commonly offered for why Progressive taxation is just:
Another common argument is the idea that government protection of property rights (both intellectual and real, as well as contract rights, etc.) and wealth generally benefits the wealthy, and those who benefit most should pay the most. Much like when Andy buys the bigger TV, he pays more than John Doe, who bought the tiny tv. That isn't actually the argument that convinces me, but it is a popular one so I felt compelled to mention it.
The concept of an "ownership society" is one conservatives like. Why not consider taxes our investment, instead of our burden. Tax investment. We invest in our country, in the interstate freeways, in the common defense, in the education of a superior workforce through the use of student loans, and those with the greatest ability to invest do reap great returns, for this is a great country.
2. Progressive taxation IS NOT SOCIALISM
Bringing it back to reality, I must say that socialism has an actual definition. It is "the collective or governmental ownership and administration of the means of production and distribution of goods" Progressive Taxation does not meat that definition, and therefore is not socialism. Progressive taxation is a system we have used for nearly one hundred years, and it is one that most economists support. Its intellectual underpinnings come from, among others, Adam Smith. He of the invisible hand, you might say. Wealth of Nations, anyone?
So, again, I say Barack Obama's tax plan is within the mainstream of American history and thought.
Finally "It is Socialism when the government takes tax dollars from one group and directly gives it to another group. It does nothing to expand the economy or grow national wealth " First, that isn't socialism according to Merriam-Webster. Second, This is a mis-statement of what progressive taxation is. It doesn't steal from the rich to give to the poor. Since when is a middle class tax cut "giving" directly to the middle class? Isn't it actually just "taking" less? It does take more from the rich than from the middle, and less from the poor, and nothing from the impoverished.
It doesn't become "directly giving" to another group until you include entitlements and government programs in the picture. "direct giving" (which I understand as a reference to what, social programs?) is actually not socialism according to the definition which requires government ownership of the means of production. #1 that is why we must first define socialism for the purposes of this discussion and #2 take that issue as separate from the progressive taxation. They are related, but not necessarily joined. One can have progressive taxation and no Medicare, or one can have both.
Of course, by now I have tipped my Democratic hand. I'll just be upfront and honest and say I think Medicare and caid are good investments in the American populace, and should stay. And I think many of Obama's plans will make us more competitive as a nation. But, that is another discussion, and one on which reasonable people who come from different starting points can disagree.
I am perfectly content to continue arguing why Obama's tax plan is not socialism.
Finally, RE: your "health dollars" Jeff, I take your comment to reveal you have not read Barack's actual health plan, no?
Ok, it turns out I have yet more to say.
The origins of my comment came from the link "McCain suggests Obama tax policies are socialist" to which Mark added (FINALLY!)
This is the most simple I can make my rebuttal:
John McCain also has a progressive tax plan. His highest tax rate is 35% ( as I understand it, he would retain the current rates under Bush.) Obama's is 39%. Do you mean to tell me that somewhere in that four percent gap is the line where Obama crosses into socialism?
so, again... Obama + Tax Policies = NOT socialist
did you ever write something really long, really fast, and then read it later and wonder how you could spell so badly? Meat instead of meet, for example.
Only a jackarse would mention it about someone else's post, so I figured I'd call myself out.
I'll edit better in the future.
You need to reread my statements as you have made quite a few factual errors.
1.You state "You assert that there will be no reason for people to aspire to make more than 55k, or the cutoff amount, since then tax consequences are felt." However, that is not what I said. I said that the "desire and drive to become more successful decreases." When I am allowed to keep less of the next dollar I earn than the previous dollar I earned, then my motiviation to earn that next dollar decreases. Easy example, my neighbor and I need our lawns mowed and we will each give you $20 to do it and they are the same size. The tax rate on mowing the first $20 you earn is 20%,so you get to keep $16. The second $20 is taxed at %40 percent, so you only get to $12. Has your desire to mow the second lawn declined?
2. I should point out here that I am a CPA and I am fully aware of how the tax code functions. The problem with your example is that you assume that your first statement was correct. The fact that one does enter the next tax bracket means that the next dollar earned is worth less than the previous. Additionaly, the incremental increase is greater than simply stepping from one bracket to the next as our system so wants to punish the high wage earners. As income increases, the tax rate increases as well as the phase-out of itemized deductions (currently the phase-out stops at 80%, i.e., if I was deducting mortgage interest, charity and property taxes of $40,000, the phase-out reduces that deduction to $32,000, thus increasing my taxable income. Under Obama, he has proposed the removal of that floor), the phase-out of personal exemptions, the phase-out of child credits, and the use of the Alternative Minimum Tax. All of this results in my next dollar being worth less than the previous.
3. In the above discussion, I just assume that as my income increases my taxes increase, thus requiring that I pay more. At the lower income levels, as described in this WSJ article, as the income increases, the loss of the "government distribution" results in a greater rate of decline or implied tax rate. Therefore, what is the motivation for many to work harder to increase their income when it will increase their taxes AND result in the loss of free government money?
http://online.wsj.com/article/SB122385651698727257.html
4. Your item B makes no sense. What you are saying is that by me giving 10% of my income to the government, I can increase my sales by 30%. That is the example you use, so I will let you skate on the specific numbers. However, there is still no logic there. Under your theory (and it is a theory since there is no basis in fact to support it) shouldn't I just give my 10% directly to my consumer so that he can come back and buy my product? Why go through the government, it is inefficient and the consumer gets, at best, 55 cents on the dollar when the government touches it.
5. A few shorter bullet points as it is getting late, the Nikkei is falling and I have to work to earn 45 cents on the dollar in the morning.
-Your apple analogy is flawed as it assumes that A will always have one, B will always have 3 and C will always have 10. The economy does not work that way and this is a problem with liberal policy and the Congressional Budget Office. There is not a big pie and we have to figure out how to divide it, there is an ever expanding pie. Your analogy is confusing and may work for taxation under a batter system but the economy is more dynamic than that.
-Andy is already paying more for the TV as the sales tax is greater. So now, since Andy is super wealthy, he has to pay more, twice. But Andy, on behalf of the people that made the TV, shipped it to the store, in the box that was made by another company, from the cardboard that was made with the lumber from the lumberjack so the stock-hand could help you and the Circuit City employee lift it into your trunk, I would ike to thank you for spending your after-tax dollars to keep them employed. It sure is a good thing you had that extra after-tax money to buy the TV, otherwise all of those people would have been out of work and waiting for Obama's redistribution check.
-Read the health plan and it scares the hell out of me. It will lead to crowding out of competition by the government.
-Progressive taxation does not exist in 14 US states, seems they do very well without it. 8 have a flat tax will 6 have no income tax.
Finally, answer me this, how do you give a tax cut to someone that is not paying any income tax? Seriously, answer me that. 44% of the people that file tax returns pay no income tax. That means that 56% do pay an income tax. How do you give them a tax cut unless the government is just cutting them a check for existing?
1. Lawn mowing. Look, maybe this is a personal difference. If I know I can mow a second lawn and get 12 dollars, or stop mowing and get no more dollars, I'm going to keep mowing. I think many people would keep mowing.
2.I assume my first statement was correct because I speak for myself, and as applied to me, it is correct. Because one more dollar earned gets me less, doesn't remove the value to me that it would still have.
Look, I don't have time for this tonight. I promise to get back to it tomorrow or Friday. In the meantime, I'm going to recommend Prof. Beale's blog. (perhaps as a jumping off point for further discussions?) She's a tax law professor at Wayne State that you are going to have fundamental disagreements with. My fast point to you is that conservatives don't own the store regarding economic ideas.
and re "4. Your item B makes no sense. What you are saying is that by me giving 10% of my income to the government, I can increase my sales by 30%. That is the example you use, so I will let you skate on the specific numbers." That is not what I said. I said if you could theoretically use 10% of you income to advertise your business and by so doing grow your business, would you do it? I picked 30% for shits and giggles.
The idea is that sometimes you spend money to make money. If you think of your taxes as an investment in the country, then you are investing in future opportunity.
Also, I know you hate Keynes, but what about marginal propensity to consume? If you accept that, then taxing lower income people less does in effect grow the consumer base. Maybe you don't accept that. Please go into further depth as to why, bc I'm not reading the serfdom book for at least 3 months.
ok - in quick points responding.
- "Your apple analogy is flawed as it assumes.." OF course it is. I said that from the beginning. I was trying to show a few different things without sounding like a total nerd. Of course it was flawed. The point of a hypo is to take a snapshot play with the scenario. I mentioned I was just starting to play with this particular analogy. I can try to keep refining it, but consider yourself as teacher - what analogies would you suggest? Come on, you could try to convert someone here!
RE: Pies
There will be greater pie if we have an equitable tax system. We disagree on what that is. Fine. You don't have to get ants in your pants!
"-Andy is already paying more for the TV as the sales tax is greater."
(yes, and no. Isn't it? Yes, in dollars, but no in percent. Plus, I swear, Andy's TV is too big. I am actually referring to a real TV here. My fiance bought it. His name is Andy. I don't like it. Can't fall asleep to it. Makes too much light. you know?)
"It sure is a good thing you had that extra after-tax money to buy the TV, otherwise all of those people would have been out of work and waiting for Obama's redistribution check. " - Really? Seriously, do you think Obama would tax the crap out of everyone so much so that Andy can't buy his TV? With that whopping 4% more than McCain would tax fictional super rich Andy?
-"Read the health plan and it scares the hell out of me. It will lead to crowding out of competition by the government." Glad you read it, and that it wasn't a flip comment. It may surprise you, but I agree that the health plan isn't perfect.
- "Progressive taxation does not exist in 14 US states, seems they do very well without it. 8 have a flat tax will 6 have no income tax."
- was referring to Fed, not states.
As far as doing well without it, that is fine and dandy. My point all along has not been that government needs all the money it collects. I think I said that gov. is pretty wasteful.
As far as Alaska, they don't count. (Wonder what will happen with Stevens though?)
I know I'm out of order here, but I decided to go back and see if there was anything I missed, and I did miss your point 3.
3. In the above discussion, I just assume that as my income increases my taxes increase, thus requiring that I pay more. At the lower income levels, as described in this WSJ article, as the income increases, the loss of the "government distribution" results in a greater rate of decline or implied tax rate. Therefore, what is the motivation for many to work harder to increase their income when it will increase their taxes AND result in the loss of free government money?" -
This is a solid SOLID point. Always has been. The common EX is If a single mother can stay home and get a state check, or work min wage and have to pay for child care which leaves her with less money at the end of the month, what is the smarter short term, month to month thing to do?
Look, this is a no brainer. And the solutions that have been tried include welfare reform and job training. The problem here isn't with progressive tax per se, but with the state assistance. If people at this level just weren't paying taxes, that isn't as big of a deal to you as actually making money, right?
The only thing I can say to this is I don't want to live in a country where parental rights are terminated for the reason of economic inferiority. So, if you are a parent who is too incapable to provide, than in that situation I'm ok with this upside down motivation. Yes, that does create an incentive to have more kids you can't afford. I hope people don't actually have kids for that reason, but I have heard it argued, So I need to address it. We do live in a dynamic country, where a kid can go from being the child of a single mom to Harvard and the Senate. The reason I'm a softie and am ok with this upside down incentive is because I think if we make sure kids of idiots get a shot, then we we still have a meritocratic society and the possibility of fewer future idiots. One way kids get a shot even in the face of life is by getting good school meals, good healthcare. Yes, if we removed the upside down incentive, a large number of single moms would go out and achieve. Some wouldn't. Wouldn't we be damning the kids of the parents who wouldn't?
Anyway, ignore all the tripe and feelings. The straight answer is we should do everything in our power to correct the odd curve this graph would have.. I just believe we have to do it with an eye towards protecting those that cannot yet protect themselves, minors.
"Finally, answer me this, how do you give a tax cut to someone that is not paying any income tax? Seriously, answer me that. 44% of the people that file tax returns pay no income tax. That means that 56% do pay an income tax. How do you give them a tax cut unless the government is just cutting them a check for existing?"
look, "checks for just existing" are not a part of the Obama plan. It really is late, and I didn't intend to type this long. This is
where I'll pick up tomorrow or friday.
You guys are making my head hurt (and or my wallet).
And why, Kristen, is a kid getting shot in the face? :)
"One way kids get a shot even in the face..." of life hee hee
lol. I don't know what it was about that, but I laughed really hard.
I also am operating on about 4 and a half hours sleep, because I was up so late trying to explain why "glass half full" thinkers don't get stuck comparing 16 to twelve, and instead compare 12 to zero.
So, I make little sense today, too bad for the guy whose brief I re-edited. Let's hope I review that again....
At least I have enough sense about me to know when something is funny. So thanks for the haha and I shouldn't complain, because you are the new dad with the real excuse for sleepless nights!
Well, that is all the posting for me tonight, I'm going to watch my Thursday night shows on the too large TV that saved someone's job in Ohio while it destroyed a rainforest somewhere south of us. Or something.
I will get back to this discussion tomorrow.
Percentiles Ranked by AGI AGI Threshold on Percentiles Percentage of Federal Personal Income Tax Paid
Top 1% $388,806 39.89
Top 5% $153,542 60.14
Top 10% $108,904 70.79
Top 25% $64,702 86.27
Top 50% $31,987 97.01
Bottom 50% <$31,987 2.99
Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service
Socialism is when an expert tells me they don’t agree with what I want to do with my property and so they take it from me and do whatever it is they think I should have been doing with it.
The pursuit of property “happiness” means I can dispose of my property in rational and irrational ways, and then I must accept the success or failure of my choices.
No one has to pay back the $700 billion. When the treasury securities mature the government will sell more securities to pay the old ones off. Debt roll over. All the government has to do is pay the interest.
Interest payments as a percent of the budget have decreased even as the total debt has increased. How does this happen? We grow the economy as measured in GDP. This increases the revenue.
This doesn’t mean I support or reject the bailout.
What government policy can do is either help the economy grow at an annual rate of 2% or 3%. It is a huge difference over time. It means the difference of being able to pay our obligations or not. That includes socialism like social welfare and defense spending to defend our country.
Higher tax rates will not help the economy grow. Whether its 1% higher or 10% higher rates.
Also there is on such thing as a common good. This is a pc term to justify putting the state above the individual. It allows the expert to tell me she knows better what is better for me, thus denying my right to property. That is socialism.
Also:
“Progressive taxation is a system we have used for nearly one hundred years, and it is one that most economists support.”
Doing something just because we have traditionally done it is not a logical argument for continuing to do it. In fact it could be one of the worst reasons to do something.
We had slavery in this country for 100s of years, so by your logic we should keep that policy.
Also consensus by economist on any tax plan is hardly ever unanimous. It is also not a scientifically defensible argument, because it causes me to accept something that there has been no proof with documentation to support. Consensus by any number of experts is also not a logical argument to do something.
The Socialist utopian dilemma:
A reasonable person who believes that the government should use physical force to take from those with the ability to produce through hard work and then give to those that have a need has to answer the question of how much.
The socialist would hope for a moderate and intelligent expert to act in a sensible way that does not unfairly (a subjective presumption) take from those that produce and give to those who have not earned.
This is impossible to expect. For even if today we could all agree on who should wield such power there is no guarantee that the next person in power would be of the same moderate disposition or have the same level of intelligence to administer such a wealth redistributive policy.
Another dilemma would be agreement on what is moderate and what is fair. Both of which are subjective qualities. Two people who might agree on expropriating the wealth of some for the benefit of others might not agree to the extent to which it should be carried out. Is it ‘fair’ to take 15% of ones property or is 50% okay?
The last thing to add here is the supposition that one in need has the “right” (an objective term) to the property of others. By what principle can the socialist stand on to show they have the “right” to decide someone should pay and how much should be taken and who should benefit? How does a socialist act with out a moral standard? How does a socialist decide who has the power to set that standard? Why is the whim of one person or group of people substitute for a moral principle based on mans rights?
It would be a sliding standard based on the caprice of the one with the power. That is the opposite of acting on principle.
Man, do people not like the actual definition of socialism or what?
And now we are talking about the 700 billion dollars?
The point was Obama's tax plan. The tax plan. Obama's. The mainstream one which abides by principles we have used for nearly a century. Or, have we been socialists for a century?
Anyway. Back on the horse.
RE: Jeff's link to the WSJ article. And his comment, to refresh our memory was:
“Finally, answer me this, how do you give a tax cut to someone that is not paying any income tax? Seriously, answer me that. 44% of the people that file tax returns pay no income tax. That means that 56% do pay an income tax. How do you give them a tax cut unless the government is just cutting them a check for existing?"
I have to stop investing my time in typing out long answers. First, it isn't a good use of my time. Second there are people out there who have already written better rebuttals than I could achieve. So I will begin apeing them.
The necessary portion from a partisan website, aptly named “Economists for Obama”
http://econ4obama.blogspot.com/
“the WSJ plays the usual conservative game of mixing up overall taxes and income taxes. … : "X% of people don't pay taxes." It's not true. Yes, many tax filers don't owe any income tax. But anyone with a salaried job pays other taxes, particularly payroll taxes.
The WSJ says "Taken together, however, these tax credit payments would exceed payroll levies for most low-income workers." This is almost certainly false, by any reasonable definition of "low-income worker." This Tax Policy Center table shows that under Obama's proposals, average effective tax rates would go negative, meaning that they would actually receive get money back from the government, only for those making less than $10K a year. (ME: So in other words, not near or around 50% The TABLE they source is here : http://www.taxpolicycenter.org/numbers/displayatab.cfm?Docid=1967&DocTypeID=1
)
Finally, the editorial makes the discredited claim that Obama's tax plan would hike marginal rates for low-income workers, and they include the figure from AEI's Alex Brill and Alan Viard screed as an illustration. Jonah explained the dishonesty in their piece in this post last August. Since then, an objective analysis of the effects of the candidates' proposals on marginal rates has been published by TPC. Their analysis shows that with Obama's proposals in 2009, the effective marginal tax rate would increase for only 15% of households, and an even smaller percentage of those making under $30K. (See Table 1.) In fact, under Obama's proposals, 61% of all households would face a lower effective marginal tax rate, precisely the opposite of what the hacks at the WSJ would have you believe.
(ME: Eh. While pertinent to our discussion from yesterday, I’m not as invested in this paragraph as I was in the first. The Marginal rate is a problem, does create some crazy dis-incentive. But I’m pretty trusting of the objective analysis cited, which is here: http://www.taxpolicycenter.org/publications/url.cfm?ID=411759)”
RE: Uncle’s post.
“Percentiles Ranked by AGI AGI Threshold on Percentiles Percentage of Federal Personal Income Tax Paid
Top 1% $388,806 39.89
Top 5% $153,542 60.14
Top 10% $108,904 70.79
Top 25% $64,702 86.27
Top 50% $31,987 97.01
Bottom 50% <$31,987 2.99
Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service”
However, When the federal taxation rate is compared with the wealth rate, the net wealth (not just income but also assets) distribution of the United States does almost coincide with the share of income tax - the top 1% pay 36.9% of federal tax (wealth 32.7%), the top 5% pay 57.1% (wealth 57.2%), top 10% pay 68% (wealth 69.8%), and the bottom 50% pay 3.3% (wealth 2.8%) (old 2001 figures from the a paper on the fed site, but still recent enough to demonstrate the point of inherent fairness)
--- and ----
“Also there is on such thing as a common good. This is a pc term to justify putting the state above the individual. It allows the expert to tell me she knows better what is better for me, thus denying my right to property. That is socialism.”
First, isn’t this what McCain did? Is this not what he advocates? Does Mark not have a lawn sign that says “country first”? Is it only “country first” when we talk about foreign policy? Or is all of it, both “country first” and flinging charges of socialism, just rhetoric?
Second - Socialism has a definition. It has a definition, dammit, it does. It isn’t about “experts”, or progressive taxation. It isn’t whatever you dislike about a system.
If we can’t agree on definitions, on basic terms to use, then what is the point of continuing?
Not much. I will finish responding to points 2 and 3 before I end.
RE: Uncle’s post 2
“Doing something just because we have traditionally done it is not a logical argument for continuing to do it.”
Here is the simple argument I make : Since we have done it for 95 years, either we have been “socialist” by your definition for 95 years, or we have not been socialists and we are not about to become socialists under Barack Obama’s plan. We are not about to become socialists under McCain’s plan either.
“We had slavery in this country for 100s of years, so by your logic we should keep that policy.” Whoa. Way to go there buddy, now I’m taking you seriously. NOW you’ve changed my mind!! So I can either agree with you, or agree with slavery? False choice. First, I explained why I appealed to history above. I wassn’t saying necessarily that because something has been done a particular way in the past, it ought to be done that way in the future, which is a fallacy. The fact is, this plan has been used for several decades. No, that doesn’t necessarily make it right, but it does mean we are not on the precipice of great change through Obama’s plan. It does mean that campaign rhetoric which brands Obama as a socialist is not genuine, since those that speak the rhetoric also agree with the principles of progressive taxation.
If anything puts us on the precipice of great change, it is the semi nationalization of banks. Which the president, the republican administration, the democrats and the republicans in congress all are on board with. No, that doesn’t make them right. It makes them all socialists. In other words, it isn’t Barack Obama’s tax plan that should make all of us fear the great red march.
“Also consensus by economist on any tax plan is hardly ever unanimous” Nor did I say it was unanimous. I didn’t ask for you to accept anything based on unanimity from economists. I ask you to consider that your thoughts regarding the taxation system we used do not go unchallenged.
RE: Uncles post 3
“A reasonable person who believes that the government should use physical force to take from those with the ability to produce through hard work and then give to those that have a need has to answer the question of how much.” Not Obama’s plan. No physical force involved, no sir.
Your entire post seems to be arguing why socialism is an evil. That is not our debate. I am not attempting to prove socialism is a good. I agree, and did agree from the beginning, that it is not. I am trying to show, by arguing what socialism is and what taxation is, that taxation is not socialism.
It is old hat libertarianism to argue that taxes are socialism, not even fresh libertarianism there. If taxes are socialism, if progressive taxation is socialism, then John McCain is a socialist, and Reagan was a socialist.
Jeff, Uncle Rico, thanks for having some fun. I guess I consider it more fun to talk with an effort towards reaching an understanding with each other, than to type with an effort towards only the win. That is why my first post was to start a discussion.
I was given great advice by Andy of the big tv yesterday. He said “Don’t go to conservative blogs and try to mess around with people.” He also said “You really need your own blog.” (twice.) So, I will take his first piece of advice, but not his second.
I wish you both a good weekend.
As my parting wish, I leave you with links that you should not read if you desire to stop posting:
http://mauledagain.blogspot.com/#7835968887796148071 ( TAXES, BAILOUTS, AND SOCIALISM)
This is a really awesome read, he writes simply and well, unlike yours truly. I suspect it may be that he ccdorrektly edits his psots.
And a good one from Economists for Obama - 1913: When Socialism Was Ratified
http://econ4obama.blogspot.com/2008/10/1913-when-socialism-was-ratified.html
And another: More Socialists: McCain, Ford, Reagan, Bush I and II, Milton Friedman
http://econ4obama.blogspot.com/2008/10/more-socialists-mccain-ford-reagan-bush.html
http://ataxingmatter.blogs.com/
Prof. Beale’s Blog (the latest post is “Progressive Taxation--Socialism? or Just Standard USA Tax Policy?”)
A quick addition to the melee. I do have to agree with Kristen that socialism was unleashed in 1913 under the Progressives, both Republican and Democrat. In some ways it is a futile argument (about if their is socialism or not or that Reagan was a socialist [He was a leader who led a nation that was a mixed econony and since he wasn't a king and we have checks and balances he couldn't remove the cancer. He would have if he had the power, but thankfully he didn't have that type of power, no one person should]). The Wilson adminstration and its policies were repudated in the 1920 election and again in 24 and 28. The Great Depression gave socialism new life. Please be patient while I lament the slender bleeding of Liberty.
We are a mixed ecomony. Yes, for better or worse. In a democracy the mob rules. We though should always be striving towards a free market and liberating individuals. Educating them and discreding tyrannts (and no Kristen I don't put you in this category!) We can argue on the fringes or in the clouds on tax policies and whatnot but it comes down to the reality in which we live. Reality is when we have been to some level socialistic since the Jacksonian period (or even before). There has always been a blend of the public and the private. The system predates even the definition (socialism that is).
However, the welfare state can only be slowed down. We are on the road to serfdom, fortunately it is a pretty long road. Then people will revert to the peasants and the merchants and the aristocrats again and the process will start over. Some people will always seek freedom and others will always want to be taken care of by a lord or lady. [more on this theory later]
PS: Kristen, hopefully you really did have fun in the intellectual discussion (seriously) but you are talking to classical liberals and admittedly are a different breed and sometimes a little too idealistic. We just want to be free in the old Scot-Irish definition: beholden to no man who we choose not to associate with. We (I) know this is not how it currently works, or will ever work in our lifetimes, but we strive towards it. The label Republican or even conservative is not the label I particularily like. I can't speak for Jeff or Uncle Rico, but I can for myself. Classical Liberal is probably the best I've come across. But there is no party that truly represents that idea so instead of wandering the wilderness you need to hitch you wagon to one of the two stars and work from within. The founders collectively knew how to construct a government, but they knew that it would be amended and watered down. We are still amidst the Golden Age no matter who is elected in Nov.
Yeah I did have fun. Your post is exactly where I wanted to go. It made me happy. So happy, that I am posting again. That and it automatically emailed me. I have to figure out how to shut that off?
I was wondering, hoping almost, that someone would point out exactly what you pointed out. That there is a middle ground between my construct that either we are not socialist, or that we are socialist and have been for 95 years.
The middle ground does depend on the definition of socialism. If the definition of socialism is mere wealth redistribution, ignoring the requirement of government ownership of the means of production, then we have been socialists. If we define socialism as both wealth redistribution and government or state ownership of industry or the means of production, then we are not socialists. The middle ground is that we could define socialism the way it has always been defined, with both prongs, but admit that we have been "a little bit" socialist for a long time, having fulfilled that first prong.
PLEASE see the mauledagain blog for a really insightful discussion on this.
It just really bugs me that no one uses terms correctly. (That is why I wanted to define the term so badly, it is easily abused.) Total Socialism does require more that wealth redistribution. We are not there, Obama would not take us there, and I do think it is politically irresponsible to say he would while simultaneously having a progressive tax plan on your own campaign website. (McCain) You are right about the golden age, methinks.
Anyway,... those pet peeves of mine are why I posted the first article, which states that the bank prop-up is socialism, but that conservatives in power aren't allowed to say it for some reason. The article also states that we don't have an agreed upon definition of socialism, the concept is watered down. That is a problem. We do need to be precise in our language.
I agree you are a classical liberal, but try explaining that one to Uncle Ron!
I also gotta say that idealogical purity is fun to argue with. You'll notice there are times I didn't contest what Jeff said, and times where I agreed with him. ( I think I even admitted when he had solid points...) The same is always true of you and I. The real line between us isn't that I'm the liberal bogeyman that people want to believe those who oppose them are. (Same with liberals who think conservatives must hate the poor or think the poor are merely lazy. Often what we think are the other persons underlying beliefs are just our opinions of those beliefs reflected. See Limbaugh, Rush and his daily descriptions of what "liberals" think. He is actually saying what he thinks they think. I digress.) The line between us, and I'm not sure how to say this so don't get offended, but the line probably has to do with how invested in ideological underpinnings we are. I'm less invested in any one idea, and much prefer to look at messy reality as something to work with, not reform or reverse. (This is also why Con law professors seem to hate O'Connor decisions. She is all over the board with her reasoning from case to case, as opposed to a Scalia decision or a, to a lesser extent, ginsburg decision. Those latter two have a definite world view. I recognize that those of us who are less likely to just pick a side and stay there are infuriating to those who have.
I totally had fun. I do have a computer headache, and I will have to spend most of Saturday doing the work I was supposed to do today. But I think it was worth it. I'll read "serfdon" post wedding, but your description of reverting to peasants and aristocrats already makes me think it might be more doomsday-ey than I'd agree with.
You keep fighting your fight, and I'll keep saying progressive taxation both works and is justified. 40 years from now, we can compare how far the country has moved either way.
One last quick fact check.
Kristen said, "Does Mark not have a lawn sign that says “country first”? Is it only “country first” when we talk about foreign policy?"
I actually have no such sign. One is a simple McCain/Palin. And the other states: Reform, Prosperity, Peace.
Which can translate as Reform the tax code and nanny state=Prosperity=Peace, ah yeah. :)
Sorry, I must have mentally transferred what I see on the podium when McCain speaks to your sign.
And you can believe your sign to mean anything you want, Mark.
Re: Kristen
I like hearing your side on these issues and your ideas. Reading your posts is enjoyable.
I’d like to work with you in coming to a common definition of socialism.
Part of it is government ownership of some industries. Part of it is also redistributions of the wealth of a country.
There are not many examples of the first part of socialism in the US today. The only one I can point to would be public education. It’s true we have some privet education, but the vast majority of students are in public schools run by the government.
Now I would also add to this part of the socialist definition government intervention in the economy. This includes subsidies to sugar producers and the protective tariffs they enjoy that cost the consumer billions of dollars a year. It includes government regulations on all kinds of economic activity such as safety standards for cars and minimum wage laws. Is this socialism to you or not? I’m asking so we can have an agreed definition.
The second part is the transfer of wealth. This is done through taxes that fund social welfare and the other activities government spends taxes on.
Re: Government use of physical force.
Earlier when I said that government takes our income through physical force it means if we choose not to pay our taxes or to comply with government regulations, then we are subject to judicial action by the government. The outcome for not obeying the law would be either confiscation of my property or even imprisonment. If I try to hold onto my property the executive branch will physically take it or me away. If I put up a fight then my life is likely to be taken as well. We don’t see it this way, but that’s what is implicit in the government’s execution of the law.
Re: Republicans or conservatives who practice socialism.
It is still socialism if it is carried out by Regan, Bush, McCain or anyone who goes by one of those two names. Their names don’t make their actions any less socialism than if they chose to call themselves democrats or liberals.
Something Mark and I have talked about is the fact that we are on a continuum we call a mixed economy. We move towards more socialism or more capitalism all the time and in different parts of the economy we may be more of one than the other. Once government starts to regulate or starts a new entitlement it is unlikely it will ever go away or give up that power.
Mark also talks about working from within or from the outside of the party in power. If our two choices are Republicans or Democrats, then we choose to work from within the one closest to our principles. This doesn’t mean that Republicans don’t jump on the handout bandwagon for the purpose of getting into and keeping power, they do it all the time. When they do act in a socialist manner we disagree with those actions and we call them what they are.
Re: McCain or Obama on taxes?
Are both candidates planning on keeping our progressive tax system in place? Yes. So I support the less socialist of the two policies based on which is less of an attempt to redistribute wealth. Believing that to transfer wealth is part of the socialist definition.
That doesn’t mean it is a good policy, only that it is the one Americans are used to and it would be hard for either man to change it to a flat tax, or national sales tax if they wanted to. It would be shot down by liberals and conservatives who have worked to put in place favors for their constituents at the expense of others.
What happens under socialism and progressive tax policy is that society forms groups in order to benefit and protect their members at the expense of other segments of the population.
So all politicians identify portions of the electorate they can piece together to get elected. Then handout benefits to the ones that gave them power. This has been true since the election between Adams and Jefferson, and it’s just as true for dictators all over the world.
Re: socialism and the bailout.
The government intervention into the markets is also an example of socialism. It seems to be more of the first part of my definition. The government now owns large portions of the banks than it ever did before. Just because Bush’s administration proposed it and McCain voted for it doesn’t mean it shouldn’t be called socialism. It is.
Kristen please help correct the parts of my suggested definition of socialism that you find to be in error. I want to know what your opinion is.
Thanks, Uncle Rico
Uncle Rico - agreed, but I'm going to try to keep posts short. I think this will help me to express myself without overwhelming the table with ideas.
Your definition "Part of it is government ownership of some industries. Part of it is also redistributions of the wealth of a country" is too similar to mine for me to bicker with. I think the difference is in the connecting word between the two ideas. I would be an "and" thinker, and I suspect you and Mark both are "or" thinkers. I think socialism requires 1 and 2, whereas I have seen you and Mark label 1 or 2 each alone socialism.
I think this is because of the sliding scale concept Mark mentioned a few posts back, where a society will slowly side into socialism unless like- minded people fight against it. If this is the way you view the world, then prong one or prong 2 shows Socialism. To me, this worldview sees people as essentially wanting to walk the road, with only the enlightened resisting. The march towards socialism continues because people get used to being "taken care of." I'd prefer to see people as generally reasonable and self reliant.
I conceive of socialism as requiring both 1 and 2. This means, necessarily, that I don't think our economy is socialist. I also acknowledge we have a mixed economy, but I don't see it as something to rail against and fear. A mixed economy is not necessarily a moving economy. I do not view the world as a continuum, where government, the state, the economy, other or all of the above must necessarily be trying to get to either laissez-faire capitalism or socialism. Instead, a mixed economy is a form into itself. A moderate system, which solves the problems of extremes. Just as a 5k runner doesn't HAVE to run the 10k next time, we can stay right here in the middle. We have been here through the most prosperous days of our country, and I hate to confuse correlation with causation, but I think is might be causative and that is definitely something to investigate.
And there are extremes in laissez faire capitalism. It doesn't create a perfectly free society. This is because the invisible hand is not an omnipotent hand. Accept, for now that individuals are part of the firms and market players that steer the invisible hand. The concept of each individual making decisions that are for the best and basing a whole system off of that only works so far as the individual has complete knowledge. If the individual does not, how can we rely on his decision, or thousands of individual decisions, as being correct? In order to correct this flaw, regulation is necessary. Allow me please, a short example. If we can buy two seemingly identical products at the same price point, how do we make a decision? aesthetics, maybe. What if we knew that one product contained a harmful substance, and the other did not? Then our decision is made. Without regulation of disclosures, our knowledge would be lacking. Regulation is necessary then, but who should guard the hen house? Should it be the manufacturers themselves?
A second short example - two identical products. One is produced by a company that treats its workers well, and another that uses child labor or forces employees to work 90 hour workweeks for little pay. If the consumer knew which product was which, we could make an economic choice that reflected our other beliefs about the dignity of work. This wouldn't force from the top down a requirement that people be paid a certain amount, or work a certain number of weeks. This would only give people the knowledge and information. If most people chose to purchase the first product, then there would be economic pressure to lessen hours, take a lower profit for a while, anything you can do to improve public perception of your product. This isn't socialism, this isn't trickle down anything, this is "Fan Out" improvements that USE THE MARKET SYSTEM that can only be achieved if people have information. Information isn't willingly provided if everyone in an industry is committing the same act that they don't want consumers to know about. Once external pressure is exerted by requiring disclosure then one producer can switch, and thus has an advantage over others. These are not the greatest examples, but they are simple example of when external forces can be useful. Producers still make money, there is still competition, but now there are even more employees with adequate income to buy the products. Everyone goes onward and upward. These examples are designed to prove that some regulation can be useful.
There is a book about globalization that I don't yet feel competent to read, but I hope to one day. Its thesis is essentially that there are externalities to markets that render the invisible hand non-existent, and that regulations can correct this. Having not read it yet, I can tell from what I know now and understand I probably would agree with it.
Next, I would wholeheartedly disagree with putting public education under the definition of socialism. Just because the vast majority are in public schools doesn't mean that it is socialism. First, because education doesn't strike me as industry. Second, because there is competition and not government monopoly there. Just because the majority choose to educate children in public schools doesn't mean there is socialism run amok. There is no rule that all students must be educated in public schools. There is no quota system that the Gov. set up to manage how many students could go to private schools. Jefferson would say that an educated populace is beneficial for the maintenance of a free country. Last, I would like to note that it is perhaps the level of federal rule-making on the issue that reminds people of government intervention and tingles socialism bells. I remembered a case where federal laws banning gun possession near schools were struck down because it couldn't be justified as a valid use of Congress' commerce clause. I have thought of it often since one section seemed to scream to me "No Child Left Behind." I looked it up. It is U.S. v. Lopez, and the section I was trying to remember follows:
"For instance, if Congress can, pursuant to its Commerce Clause power, regulate activities that adversely affect the learning environment, then, a fortiori, it also can regulate the educational process directly. Congress could determine that a school's curriculum has a "significant" effect on the extent of classroom learning. As a result, Congress could mandate a federal curriculum for local elementary and secondary schools because what is taught in local schools has a significant "effect on classroom learning," cf. post, at __, and that, in turn, has a substantial effect on interstate commerce."
To me it seems that what the Court warned of is slowly happening. And perhaps that level of federal intervention is more of a problem than the fact that our tax dollars are used to support public schools.
So to sum up this part of my answer, I require a "BOTH AND" situation before I would declare socialism. I wouldn't declare moderate regulations alone socialism. (including car regulations, minimum wage) I would declare it a mixed economy, which when run effectively is desirable. When run ineffectively, it does do damage. However, Regulations alone are not socialism, and there is a countervailing weight in our system to over-regulation. That is the private industries themselves, As long as industries are private, they can lobby the government and appeal to the public. We have a democracy that can decide the level of regulation it wants. In some ways it is an adversarial system like our courts, with each faction pushing in different ways. If I ignore Mark's slights about liberals in his most recent post, I can take from it the idea that the "selfishness" of people whom I view as generally self reliant and reasonable will act as a barrier to pure socialism. This means that within our adversarial system we have a stable mixed economy. As I stated before, I do not see people as easily led or view them as weak and wanting to be taken care of. I think that people can choose, without falling into pure socialism. And if they get too far, there is always you, or mark, or jeff, to remind them. :)
Re: Government use of physical force.
The executive branch would probably not take your property away, that function would be effected in the judicial branch with the instigation of either executive agencies or the "fourth branch" administrative agencies. I still don't see where you are going with this argument? If you withhold your property in protest of taxation, the government will bring its force against you. This is true regardless of the tax system used to levy taxes. So it is possible I am missing something here, but I still don't see how a government's prosecution of tax protesters is part of the definition of socialism. It strikes me as the definition of government.
RE: good policy, what Americans are used to, and flat tax or national sales tax.
Please explain why you think a flat tax would be just?
RE: "What happens under socialism and progressive tax policy is that society forms groups in order to benefit and protect their members at the expense of other segments of the population. " I disregard the implicit assumption that society forming groups and politicians pandering to groups only occurs under progressive tax policies or socialism. This is what happens in all systems, if not on the basis of income than on some other identifying factor. We group. I could go further, but I'm keen to stop soon because I had wanted to write in short bursts. I failed at that.
RE: socialism and the bailout.
"The government intervention into the markets is also an example of socialism." This is also danger territory to me. Because now we have had 1, and here we are getting 2. 1+2 =bad. bad. bad. We have essentially privatized success but socialized failure.
I have a question for you. If you subscribe to the ideas of Milton Friedman, who supported the negative income tax, how do you so easily equate progressive taxation to socialism?
As per Obama's particular economic ideology, I remember a long piece that might interest you on November 5th, should he win. It was called "obamanomics" and it was in the New York Times, or Times Magazine.
Finally, David Brooks had a piece in the NYT today, portions of which I would like to quote. He stated that:
Ceding the Center
By DAVID BROOKS
There are two major political parties in America, but there are at least three major political tendencies. The first is orthodox liberalism, a belief in using government to maximize equality. The second is free-market conservatism, the belief in limiting government to maximize freedom.
But there is a third tendency, which floats between. It is for using limited but energetic government to enhance social mobility. This tendency began with Alexander Hamilton, who created a vibrant national economy so more people could rise and succeed. It matured with Abraham Lincoln and the Civil War Republicans, who created the Land Grant College Act and the Homestead Act to give people the tools to pursue their ambitions. It continued with Theodore Roosevelt, who busted the trusts to give more Americans a square deal.
Members of this tradition have one foot in the conservatism of Edmund Burke. They understand how little we know or can know and how much we should rely on tradition, prudence and habit. They have an awareness of sin, of the importance of traditional virtues and stable institutions. They understand that we are not free-floating individuals but are embedded in thick social organisms.
But members of this tradition also have a foot in the landscape of America, and share its optimism and its Lincolnian faith in personal transformation. Hamilton didn’t seek wealth for its own sake, but as a way to enhance the country’s greatness and serve the unique cause America represents in the world.
Members of this tradition are Americanized Burkeans, or to put it another way, progressive conservatives.
This tendency thrived in American life for a century and a half, but it went into hibernation during the 20th century because it sat crossways to that era’s great debate — the one between socialism and its enemies. But many of us hoped this Hamilton-to-Bull Moose tradition would be reborn in John McCain’s campaign.
...
His campaign seemed the perfect vehicle to explain how this old approach applied to a new century with new problems — a century with widening inequality, declining human capital, a fraying social contract, rising entitlement debt, corporate authoritarian regimes abroad and soft corporatist collusion at home.
....
The Hamiltonian-Bull Moose tendency is the great, moderate strain in American politics. In some sense this whole campaign was a contest to see which party could reach out from its base and occupy that centrist ground."
Now, I don't love Hamilton. But I think Brooks has an incredible timely point as it pertains to our discussion. I mentioned that I see myself as perhaps less wedded to an ideology than are my debating partners. Perhaps I am part of the great American moderate tradition. Could it be that the incredible distrust of a mixed economy is in part a reaction to the excesses and dangers of socialism, which was one half of the great struggle of the 20th century? Instead of settling safely in the middle, people want to swing wildly back to pure capitalism because the rightly fear socialism.
Thanks for reading, and I apologize for length.
Also to note: A seeming nod from Adam Smith on the notion of taxing the rich more than the poor. I paste because I cited him before as being in support of some progressive taxation.
Adam Smith, Wealth of Nations, Book 5
Of the Revenue of the Sovereign or Commonwealth.
...
The proportion of the expense of house-rent to the whole expense of living is different in the different degrees of fortune. It is perhaps highest in the highest degree, and it diminishes gradually through the inferior degrees, so as in general to be lowest in the lowest degree. The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
--------------------------------------
not that I think Smith was the be-all and end-all genius or anything.
The other remaining question is - Are there circumstances in which progressive taxation is not wealth redistribution?
Oh yeah, I forgot to mention that our current system of progressive taxation, while it occurred in 1913, shouldn't really be seen as the first great step down the road. In my view, it was an American decision setting up the perimeters of our mixed economy. We had had government intervention and regulation prior to 1913.
Also, I'd like to know how you'd describe the national park system? If you think public education is socialist, then what of public land?
KB, Thanks for the posts. I laughed when you realized your post wasn’t going to be as brief as you intended. I know it’s hard.
Re: Part one and/or part two.
The defense of ‘or’ over ‘and’ is the path with which the socialist uses to transform a free society into a socialist society. While communist wanted radical revolution to overthrow and start at once a whole new system, the socialist believed in democratic means to implement their socialist policies. This means of change may take years and decades to achieve the full socialist agenda. So baby steps like welfare and progressive taxes tend to move slowly overtime. See how social security, welfare, Medicare, medicate, unemployment insurance, and other government entitlements have expanded from when they first became law. And now politicians offer us more socialism like universal health care.
When conservatives get into power the best they can do is slow down the growth of these. It is unlikely they will ever end one of these programs. Reform is the biggest victory conservatives will ever achieve. And all that does is legitimize the programs existence.
The 5k runner is a good example. I coach runners in all races from 100m to 5k. No one starts as a 5k runner or a 110m High Hurdler. It is a process over time, just like the road to socialism. One day some 5k runners may want to enter into a 10k or a triathlon or a marathon. But they all had to start with one mile at a time to get their bodies into the shape needed to compete at 5K or 100m. Just like socialism is a process of building up policies in order to transform society.
A mixed economy is a mixture of freedom and controls—with no principles, rules, or theories to define either. Since the introduction of controls necessitates and leads to further controls, it is an unstable…A mixed economy has no principles to define its policies, its goals, its laws—no principles to limit the power of its government…A mixed economy is rule by pressure groups…war of special interests and lobbies, all fighting to seize a momentary control of the legislative machinery, to extort some special privilege at one another’s expense by an act of government—i.e., by force.
Ayn Rand, Capitalism: The unknown Ideal pp. 185.
Obama: this reminds me of Obama’s interview on public radio from 2001. He said the constitution was fundamentally flawed when it failed to tell the government what it had to do. The reference was to income redistribution. He also felt the courts didn’t do enough during the civil rights era to tell government it had to provide people with monetary support from the taxes of others, if they didn’t have enough.
Re: we have had great economic growth under mixed economy.
We passed European economies back in the mid-1800s in terms of their combined GNP. This was due to our freer markets. Europe has also been more of a mixed economy, with variation from state to state, for much longer than the US and to a greater extent. Yet they have not progressed faster than we have. Only European countries that have higher per-capita GDP are much smaller in population size and they have a greater degree of homogeneousness than the US so they don’t offer an accurate comparison. This also points to the continuum of mixed economies by looking at the differences between the various European states and the US. Mixed economies can move right or left.
Re: Invisible hand and the role of government in the economy.
The consumer and producer decide what is produced. Do people have perfect information all the time, no. It’s not possible or desirable. It would cost too much and take too much time. The role of people is to act in their own rational self-interest. They assess risk and make a choice. They are free to fail (until the bailout) or succeed. Their failures should not be the burden of anyone, nor should the failures of others become their burden. If people take action on limited information, then they assumed the risk and should accept the consequences.
Governments are created to enforce contract (written, verbal, and assumed) and punish fraud. If a company is selling a product to the public that turns out to be a) harmful and b) knowingly sold anyway, then the courts should punish the company’s assets to compensate the buyers and punish the company’s directors with jail. Even if the crime arises out of negligence and the company and its directors are still in business, then the consumers can choose not to patronized them any longer and thus reward the competition. This regulation cost very little up front. And the courts time would be much less costly than the bureaucracy created to regulate the good and bad businesses. There are many more good companies than bad ones. All the cost of regulation of the good business is wasteful spending of tax dollars. Ending this regulation would leave billions more for the socialist or supporter of mixed economies to spend on welfare and public schools, or for the capitalist to keep and spend on themselves. It doesn’t even start calculating the savings to businesses weighed down by reporting to the government that they haven’t been braking the law, and the billions paid to their lawyers to fight off speculative investigations by government litigation, nor the billions spent figuring out the lowest amount they can pay in taxes and still stay out of jail, nor the billions spent on lobbying government for special exceptions and handouts for their industry and more regulations and restrictions on other industries and their competitors.
Re: company forcing 90 work weeks and child labor.
No company in America can force someone to work. No US Company would survive long if they owned slaves overseas. Public wouldn’t buy from them anymore. Let citizens that want to look into labor practices of US companies do so on their own dime. Don’t fund it with my taxes if I don’t think it worth spending voluntarily.
Re: Public schools are or are not socialism.
It is a business, the business of education, run by the government. It could just as well be run by private businesses, like it is in private and charter schools. It is cost deferred to tax payers, students don’t pay anything. It is socialized, government run. It is redistributive, students benefit and never pay.
Re: moderation, mixed economy.
To say a mixed economy is its own idea, neither capitalist or socialist is to deny the fact that it is a blend of both. And to say that it is a form of moderation between the two is subjective. I might think any minimum wage is socialist, Mark might think $5 is just right, and you might believe anything less than $10 is an unfair wage (assuming that a wage that is voluntarily accepted by a worker can ever be unfair is false.) All three opinions are subjective under a mixed economy, because it is based on nothing. There is now principle to follow, so which amount is correct?
Re: so called capitalists, those in industry.
Just because business does something doesn’t make it a capitalist activity. Many businessmen harm capitalism by advocating for government to give help with loans, tax breaks, and subsidies, barriers to entry into their market, tariffs and more. The businessman acts against capitalists principles and strengthens the socialist’s argument that government should tax capital more for the benefit of the less well off. This is another example of collectivism forcing people to form factions (interests groups) to try to persuade government to do things in their favor at the expense of other Americans. So the people who argue for higher minimum wage are asking government to take from business. The businesses that want high tariffs on steel, corn, or sugar are hurting American consumers that are forced to pay a higher price for all goods made with these commodities.
Re: Imperfect information.
People have imperfect information in politics too. They don’t know socialism when they see it. They can’t even agree on what it is. I give our postings as proof. You and I are better educated and more well read than 90% of the voters out their. If we can’t agree on a definition, how can we expect them to know any better?
Re: Which branch will take my property and or my life and liberty?
The legislative branch would make that law that I pay tax on my income, then the courts would interpret the law and decide I did not follow it so my property should be taken, and when I arm myself to protect my property it will be the court that decides I violated the law that gave the government the authority to take my property, so the executive branch would be sent out in the form of the police or FBI or who ever was called to use physical force to enforce the courts interpretation of the laws congress passed.
Re: Groups try to influence congress to act in their favor against the rest of us.
Once again there are lobbyists in D.C. numbering over 30,000 and there are only 535 members in the house and senate. They all work for their groups benefit at the expense of the rest of the populous.
Re: David Brooks and moderate views.
I like Brooks, but he has a moderate agenda that looks to reconcile right and left. He is a mixed economist or sociologist just a little on the right of center. So he is biased when he sees Obama be sees his moderate policies and hopes that’s who he will be. He ignores the more socialist sides of his past and speeches and the fact that he is not a legislative fighter, that he is an accommodating politician. It is more likely that he will be pushed around by Pelosi and congress, rather than setting a moderate middle of the road agenda he runs on in the closing days before Tuesday.
Re: Friedman and negative taxes.
Friedman advocated negative taxes as a way to do away with welfare. When the bill came up in congress he argued against it passing, because it kept welfare in place.
Re: more but not time or space now.
I’ll get back to flat tax, national sales tax, good progressive taxes, national parks, and “people are reasonable and self reliant”.
I am sorry I never got back to this, I suppose life made me move on.
I was probably going to make some analogies about how when you have a bucket of red and a bucket of blue and you mix them each in bits, you don't call the new bucket red, you
call it purple. It was going to be a point about how sometimes a mixture is in itself a discrete thing, and then I would've gone on to talk about the guiding ideas of a mixed economy, which would have boiled down to basically "pragmatism."
Then I was thinking about welfare, and I wanted to talk about poor laws. We had poor laws before we had a constitution, they were even part of English common law.
Essentially, we have been having the fight over for whom to provide and how much to provide for over 400 years. It isn't ending soon.
You have your own well thought out ideas, I have mine. The fight will continue. Every point I make, you will rebut, and likewise. So we end, happily.
One last note - Republican, from Res publica, one meaning being the public thing or property held in common.... Perhaps for the common good? You may be in the wrong party after all :)
Again, my apologies for letting this die without a response. I just wanted to come back to it and end it on a conciliatory note.
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