Friday, September 14, 2007

Taxes

Someone once said that the essence of a communist philosophy is that people should contribute to the society according to their ability, and derive from society according to their need. To capitalist, that is the wildest form of heresy; rather, one should derive in proportion to his ability.

Several presidential candidates in the Democratic party have been criticized for proposing tax increases in order to increase existing welfare programs and to add new ones. They claim that they only want to tax the wealthy, but many of the folks they call wealthy don't have much more to contribute. Candidates in the Republican party claim tax cuts for the wealthy increase revenue and improve the economy, but many of the extremely wealthy are performing artists, athletes, and politicians who neither develop nor produce new products nor do they hire large numbers of employees.

Part of the conflict is that while the term "wealth" is relatively easy to define, the term "need" is a little more ambiguous. For example, as a person's wealth increases, so does his "need." Most of us can get along just fine owning one house; many feel the need for a second "summer home;" and the very wealthy "need" to maintain several homes. The need for cars, TV sets, and many other items also grows as a person's wealth increases. I can get along fine with 2 or 3 business suits in my closet, but a wealthy man "needs" two dozen suits. A two thousand square foot house is adequate for most folks to live in, but when you are wealthy, you "need" a 20,000 square foot house on 10 acres of land. The wealthy few "need" all of these things that the other 99% of us consider to be pure excess. They cling to their excesses, and will not cut back on them to help the poor.

For even the poorest people, "need" has increased significantly. People who can barely afford food for the table have satellite dishes on their rooftops, tied to multiple TV sets. They are behind on their mortgage and utility bills, but their children have cell phones and wear designer shoes to school. And the politicians tell us that EVERYONE needs access to a computer.

Most of the people who draft our tax laws are wealthy. They are members of that elite 1 or 2 percent of our population whose annual income exceeds $500,000.00. While they claim to increase taxes for the "wealthy," they actually want to raise the taxes of folks whose annual income is in the $50,000.00 to $499,000.00 range. Their rationale is that the "over $500,000.00 club" are already paying more than their "fair share."

But in reality, 99% of us would really feel the pinch if our income tax increased by, say, $2,000.00 next year. But do you think for a minute that an executive, an athlete, or an actor who earns $3 million dollars next year would have to endure hardship to deal with an increase of even one hundred times that much?

Some people will argue that many of the wealthy are indeed generous--they build schools for the underprivileged, they donate computers to the public schools, etc., etc. That is true, but their is a big difference between what they do and what they want us to do. You see, they determine not only how much they will give, but when and to whom they will give it. They know that their money will be better spent if they donate directly to the cause than it would if they gave it to the government to spend. And, if they want to buy a new private jet this year, they will skip the donation.

The rich don't want you to have those choices. You will be forced under penalty of law to donate an amount they determine to the government every year. The people who set the policies and the people who write our tax laws are mostly members of that wealthiest 1%. They don't want to forego their third house or their fifth automobile, so they will increase the taxes of the people in the upper middle income range. This also serves as a barrier to keep others from joining their ranks and competing for the luxuries.

It's not an organized conspiracy; they wealthy just think that way. The extremely wealthy are the "royalty" in an otherwise democratic society. They exempt themselves from the very requirements they place on the commoners. They agree with each other, and they write the laws. You see, it's a really good deal for over half of the voters who get the handouts but not the tax increases. That's why the rich guys keep getting re-elected. They "buy" their votes with entitlements that are funded by our tax money, not their own. The result is forced charity. Think about that before you select the next candidate to get your vote.

2 comments:

Anonymous said...

I found your post well-written. I'm also an unofficial member of the Bull Moose Party, but I was curious about the following comments:

"Several presidential candidates in the Democratic party have been criticized for proposing tax increases in order to increase existing welfare programs and to add new ones."
---
This is partially true, especially for those who want universal health care. However, many of them want more revenue simply to BALANCE THE BUDGET after 8 years of GOP supply-side stupidity.


"While they claim to increase taxes for the "wealthy," they actually want to raise the taxes of folks whose annual income is in the $50,000.00 to $499,000.00 range. Their rationale is that the "over $500,000.00 club" are already paying more than their "fair share."
--- WHo is saying this from the field of Democrat candidates? Most are talking about tax cuts for middle class earners or expanding the EITC (a virtual cut for low-earners) or AMT reform (which would stop many middle class earners from getting caught paying the AMT). Almost ALL of them are talking about increasing taxes on the top marginal rate. Now this might catch a few people in the high 300K range, but it is hardly the way you are making it seem here.

Who knows what will happen. Teddy himself wanted to implement the Estate Tax in 1906, but was shot down by elitist Congress.

Teddy didn't have welfare in mind, but simple accounting, and was aiming his sights not at the family farmer, but the tycoons: “The man of great wealth owes a peculiar obligation to the State, because he derives special advantages from the mere existence of government.” The wealthy individual needs to pay for the “protection” that the State provides for his or her property ¾ a military force that defends private property from foreign threat and a legal system/police force that protects private property from domestic theft."

Poochie Williamson said...

Thank you, Dean, for your insightful comment. My personal position on the responsibilty of the wealthy is exactly that expressed in the TR sentiment that you quote. Unfortunately the members of today's "over $500,000.00 club" do not share TR's opinion, and they are writing the laws.

While some Democratic candidates claim they want to increase taxes merely to balance the budget, their proposals for new and expanded entitlements belie that claim. Universal health care is one of those proposals. Another is the proposed "5,000.00 baby bond." There are several more. Actions speak louder than words.

As to the definition of "wealthy," I see some ambiguity. TR recognized that it's not simply a matter of annual income, but also of net worth. The source of income (earned, through wages; or unearned through speculative investments) is also a consideration. Some candidates want to want to tax corporations more, which will only depress economic growth. It is wealthy individuals who are ducking their fair share.

There is, in fact, another way to balance the budget: REDUCE SPENDING, or at least hold it constant. Neither Democrat nor Republican seems to want to do that.