There was a call-in to one of the Marks that fill in for Limbaugh, responding to the Mark’s favorable comments on the “Fair Tax” today. The Mark repeated Steve Forbes’ call for a flat 17% income tax.
The caller tried to make the point that, although 17% would represent a large tax cut to the rich, which isn’t a bad thing, it would represent an undue hardship for those with the lowest incomes. The Mark’s reply was that at least this makes everyone a taxpayer, and therefore we’d all have a stake in things. True, but the major point was missed, in my opinion, by the host.
The correct reply to the caller’s concern is; “Perfect! Now you’ve started down the road to understanding, Little Grasshopper! If 17% percent is too much for the poor, it is too much for everyone else. If 17% will restrict the poor, it will restrict everyone else.
Let’s refer to the poor as our canaries in the income tax coal mine. If 17% makes the canary sick, we’re all being slowly poisoned, and whether we notice it right away or not, we’re all inhibited or restricted because of it.
Reduce taxes and investment and employment increase. Raise taxes and investment and employment decrease. Even if all you care about is revenue to the fed gov, and the issue of personal liberty is meaningless to you; do you want 17% of 14 trillion, or say, 8.5% of 28 trillion? That’s the sort of question we’re asking here. I say if there’s going to be an income tax it should be constitutionally limited to 5%. Any more than that not only cuts into charity in a big way, it encourages a black market, and stifles liberty and economic growth. If the fed gov can’t make it on a 5% flat tax, they’re either doing too much or wasting too much, and they need to be replaced with someone who can do the job right.
There’s another mechanism working here, that is at the same time obvious and proven, largely unreported, and almost never discussed. That is; America once was, and can be again, a haven for creativity, productivity, wealth creation, and a haven for wealth in general. Make it a safe bet that your property rights will be protected, and capital will flock to America, while at the same time wealth creation will be, once again, popping and scintillating across the fruited plains.
Let the enemies of Mankind go off and bang their heads against a concrete wall someplace. It doesn’t matter, so long as they’re ignored and powerless here.
“I say if there’s going to be an income tax it should be constitutionally limited to 5%. Any more than that not only cuts into charity in a big way, it encourages a black market, and stifles liberty and economic growth.”
Glad you mentioned the charity thing. According to my accountant I now pay 50% of my income in taxes. Although I am a Christian I rarely give any money to the church. It seems that the .gov has taken over many of the biblical purposes the church raised money for. The church largely exists to perpetuate itself and is no longer responsible for taking care of the widows and orphans. If the .gov would return to its natural purpose and the church its, then I would be happy to return to charitable giving.
I still give to missions though. Lord knows the U.S. is not out to promote Christianity to the world. If anything it actively works for the other team.
Charity is a big issue, and you will recall that the Obama administration was making noises some time ago about further restricting charitable organizations. The Left is truly an enemy of Mankind.
One of the biggest objections to the fair tax is that it is fair. The left LIKES to punish achievers, they see that as a benefit of the current tax system.
I say “Eliminate the income tax altogether.” Let the Federal Government subsist on tarrifs and excise taxes as it was meant to, and pass the hat to the states — as it was meant to — to raise money for other projects.
As for the tax BITE? If God can be satisfied with 10%, where the hell does the state get off demanding half? Taking it at gunpoint at that?
M
It’s unusual that I don’t agree with you, but that post isn’t persuasive.
Poor folks don’t have lobbyists writing loopholes into the law. They don’t hide their profits in charitable foundations that “pay” them tax-free salaries.
Saying that millionaires actually pay 50% or 80 or 90% of their incomes as taxes is simply wrong. They pay in the form of donations to politicians, but the high-tax bracket is a shell game to trick the rubes into thinking politicians are pro-middle class.
I think you’re making my case, dustydog, by pointing out the stupidity of the current system. In fact, the multi-thousand page tax code is used for all kinds of “nudging” of the society. It’s as much for that reason as any other. Hence, a flat tax would be more just, by eliminating all that nonsense. Mainly though, we need to slash the fed gov, and start respecting other people’s rights and property for what they are– other people’s.
So there are two components to the post. One; making an income tax (if we’re going to have one – that’s debatable) fair by making it flat. Two; stop and drastically reverse the course of confiscation, waste, and redistribution by force that our government has come to regard as its primary function.
Either one will markedly and instantly improve things, and both together will result in a renaissance the like of which no one alive today has seen, and few could imagine.
Actually, my idea of a flat tax, many years ago, was not a flat percentage for everyone, but a flat fee. Say, a five hundred dollars per year from every man, woman and child in America, regardless of any status, or from every person above age 18, locked in by constitutional amendment. Something of a membership fee if you will. After all, I don’t fill out a G*d damned financial statement every time I go to the supermarket, to find out how much I should pay, do I? Nor do I submit an income statement to determine how much I should pay to enter Disneyland, etc. That would be both unfair and retarded, regardless of which smarter-than-thou college professor or professional politician/bumbling ignoramus thinks I can “afford to pay”.
One could make an argument for the rich paying less in actual tax dollars. After all, they’re more invested in the country already. In a free society, you don’t get rich without serving your fellow Man. Who after all, has done more for his country– a bum under the bridge, or say, Bill Gates? Who’s productivity level should be encouraged and who’s should be discouraged (if our Dear Leaders are going to meddle at all, that is, as opposed to leaving people the fucking hell alone to make their own choices in life without some know-it-all creeps getting in their faces)?
I don’t know that the canary aspect goes without some further explanation. Most people are going to look and say “Hey, my family needs, oh, $30,000 to pay the rent, put food on the table, and have enough to go on a vacation to an in-state beach in August. 17% of my $32,000 income makes that impossible. 17% of that dude’s $250,000 income isn’t all that much, and he can still do all the things I can do, and more.” Especially when the first person is someone working several jobs for 80 hours per week and the second is, say, a Kennedy. Even if you have a welfare queen and someone who works his socks off for the business empire he grew from scratch, I think most people have a rough dollar amount in their mind that is “enough,” and where anything beyond that is more than anyone needs.
To make sense of the low-tax argument, we need to use economic arguments (and having very little background in economics, I don’t know the formal names for them). Explaining the need for a critical mass of money if there is to be job creation is a good first step, especially when coupled with an analysis of the danger of trusting that kind of money to the government (who will spend it on loose women and alcohol and will waste the rest). People rightly have a fear that business will smother “the little guy” if he gets in their way. They do need someone to keep an eye on things and make sure the rights of the individual are protected, even when this means lessened profits. It’s nearly impossible for the individual, and still hard for even a group, to do this. You do need a government to whom citizens have delegated the power to enforce the laws and protect their rights. It’s just that the government has become ossified where it needs to be nimble and corrupt where it needs to have people truly willing to serve the public.
I have to address this “rich people have lobbyists writing loopholes into the law” bit, ’cause I hear it a lot from all sides.
That’s not free market. That’s not capitalism. That’s corruption. That’s Congress violating the Oath of Office and they are the ones to blame. That’s not supposed to happen. Don’t blame capitalism, or “the rich”. There will always be a few who try to cheat, but when some dickhead in Congress goes along with them, they should be removed permanently from public service, forced to give up their retirement funds, repay their salary and benefits to the treasury, placed in stocks in the town square for a week, then tarred and feathered, then hanged, then ground up for fertilizer, fermented for a week, then mixed with shit and spread on the fields in Africa where they need it. Call it foreign aid to poor farmers.
And I’ve paid well over 50% by the way, as a self-employed bidnethman, so I know what happens. Combine the 15% Socialist Security (yeah; if you’re self employed) and 35% income tax and you’re already there, then add state income tax, and a million other petty and not-so-petty atrocities. That doesn’t count what you pay to your accountant just to be in compliance, either.
Actually, it does matter whether the enemies of freedom grow strong elsewhere, we’ve tried the isolationist stick before and my dad and others paid a huge price for it. I’d prefer that we not try that methodology again. Other than that, the rest of your post makes eminent sense.
I love how tax arguments always devolve into poor vs middle vs upper class wars. Our real problem is our .gov restricting our personal liberties and violating civil rights. The .gov keeps us busy fighting over rich vs poor when in the end we all get screwed by them.
The “anything beyond that is more than anyone needs” argument is absurd. How is it anyone’s business but mine how much money I need? People need to butt out of my life and take care of their own.
How is it anyone’s business but mine how much money I need?
It can be. If you have a situation where one person feels that he doesn’t have enough, that you have more than enough, and that he “deserves” that more than you do (such as by working just as hard, or harder, than you but having started off with more disadvantages) then it’s not obvious that you should have more than he does. As much as individualists like talking about the benefits of merit, it’s simply the way of the world that there’s not a perfect correlation between success and merit, and sometimes that correlation is very week indeed.
I argue that our social contract does allow for certain amounts of asset redistribution. The purpose behind the social contract is to provide a society that is better for its citizens than would be had otherwise. By removing so many of the barriers that would otherwise exist, it allows everyone to be better-off. However, there are costs as well, since TANSTAAFL. We delegate much of our right of defense to the military and the police. We delegate much our right to governance to our local, state, and national governments. One of the things we get in return is a certain degree of protection. Just as the government can seize property through eminent domain (we can argue the limits, but let’s say they want to build an ABM site on your land), they can also levy taxes and spend for the general welfare. That general welfare might include life-saving medicines, food stamps, and even make-work jobs. As with eminent domain, the question is what things aren’t reasonably within the “general welfare.”
Most of us, I suspect, would be willing to either pay whatever rate in taxes is genuinely needed to pay the government enough to fulfill its constitutional duties, or to leave. IIRC, Lincoln fought the Civil War on a 3% income tax for most people. It’s just that there’s been so much waste that we’re unwilling to support anything we don’t absolutely need to, even if it’s something we might be willing to do were we to be paying a 5% rate and running a budget surplus.
So, as before, it comes down to your business not necessarily being your own in times of crisis. This is a time of economic crisis. It doesn’t mean that we need to go all socialist, but it does mean that it behooves us to be able to explain the benefits of capitalism to society and not to simply have our argument be “none of your business.”
I’ve long held that since God only wants 10%, who the heck is the government to demand even that much (let alone more)?
Also, Wolfwood, what “social contract”, exactly, is it to which you refer? I never signed one.
Don’t play dumb, Publius. I presume you’ve lived in the United States, reaped the benefits of infrastructure, a common system of money, and of national defense. I presume you’ve voted. I presume that you believe the Constitution exists to protect your rights and, if you were to be haled into court, you’d assert defenses based on the body of case law developed around the Constitution.
You seem to think that you have to “sign” a contract to be bound by it. Certainly not! Go look up “quasi-contract” and get back to me. You’ve reaped the benefits and you’re properly bound to hold up your end of the bargain. You may not like the bargain, and may want to negotiate a better one (and it’s important that we all try, as the current one is pretty been administered very wastefully), but you’re bound by it nonetheless.
Now, if you’ve been spending your adult life trying to emigrate, not using the roads or money, and not voting then I certainly take it all back.
Wolfwood,
“You’ve reaped the benefits”
On balance I’m getting screwed. Go figure.
Which is to say, I never agreed to anything. I was born here, and I’m here by default. If there were anywhere to go, I probably would, but the sad thing is, I can’t think of anywhere better. We could be, and some of us know how to, “do it right” here in the USA, but they aren’t in power and likely won’t be.
From alan: “One of the objections to the fair tax is that it’s fair.”
The so-called “Fair” tax, as it is currently proposed, is NOT fair. Its attempt to remain “revenue neutral”, in and of itself, immediately renders it UNFAIR. We are taxed far to much, and whether we are taxed that way through income tax, or sales tax, or any other tax imaginable, we would STILL be unfairly taxed.
As I have considered taxes, I have concluded that all taxes are unfair, unless they are given up voluntarily.
From Wolfwood: “I presume you’ve lived in the United States, reaped the benefits of infrastructure, a common system of money, and of national defense. I presume you’ve voted. I presume that you believe the Constitution exists to protect your rights and, if you were to be haled into court, you’d assert defenses based on the body of case law developed around the Constitution.”
As I learn more, I am more and more convinced that this “infrastructure” could be provided by private means, and that if we had a system that would allow for the private development of these things, or at least allow others to compete without the severe disadvantage of facing regulation and taxation (forcibly take a fee from) their one competitor, we could be better off…but since we’re discussing freedom, there is no guarantee.
We have been lead to believe that Only the State(TM) can do certain things, and if the State doesn’t do them, we would have complete chaos…which is partially true, except that chaos isn’t always as bad as the State tries to make out, and Order is often far worse.