Thursday, January 26, 2012

"Fair Share," and "Class Warfare": Please, make it stop!

 just might off myself if I don't stop hearing about all this "fair share," bullshit, and this goes for both sides.  One group of people says that rich people aren't paying their fair share, and the other side says that it's all somehow class warfare.  Well guess what, I think you're both wrong.

First off, let's tackle why it's stupid to say that rich people need to pay their "fair share."  The so called "1 percent," foots about 30% of the tax burden.  That's a pretty good chunk for a small group of people.  So yes, in terms of proportionality, rich people are paying their fair share.  Now, some people might think that 30% is not enough, but that's an entirely different argument.  If we strictly look at proportion, they pay more than their fair share.

Now, for those of you who claim that they already pay their fair share, and that taxing them further will stifle growth, I think you're fairly off base with that assertion, too.  Why are rich people rich, and why do they continue to be rich?  Because they're smart with their money, and they've invested in the American economy over the years.  A perpetually slow economy means that they stand to be not so rich in the future.

So I think we can all agree that investment is the key.  We want them to put their money into the economy so it can turn some sort of growth that benefits everyone.  Knowing that helping the economy helps them, why do you think that they would suddenly invest less and stifle growth just because 5% more of their income goes to taxes?

Look at Warren Buffet, for example.  He's insanely rich and writes $49,000 checks to the treasury on a whim.  Do you honestly think that a savvy businessman like him is really going to say "holy shit, I pay 5% more of my income to taxes!  I have to seriously tighten my belt, or my entire lifestyle is going to crumble around me!"?  Do you honestly think that 5% is going to be more than a minor annoyance to someone as rich as him?

Logically, no.  But I get the sense that a lot of rich assholes have convinced a lot of people that that's how they think.  The mega-wealthy likely don't give two shits about losing 5% more of their income.  They will still invest, probably even invest the same amount that they were investing before.  I mean, how much of their income goes to investments anyway?  I think it'd be interesting to see.

And they might actually invest less just so that they can get what they want.  Investing less because they pay more taxes has more with them being greedy assholes than it does with wanting to take less risk.  Don't believe me?  Well then you've got a *lot* more faith in human nature than I do.

So here's an idea: lets stop using bullshit catch phrases like "fair share," and "class warfare."  The real issue is that middle class Americans pay a higher percentage of their income in taxes, and they're the people who need that money the most.  What's that?  Do I hear the whispers of "flat tax," on the wind?

If I'm required to pay 25% of my annual income to taxes, then some guy who makes millions more than me should be required to pay the same proportion.  It's only fair, isn't it?  Sure, he needs to invest his money, but I need to eat and raise two children.  So as your logic goes, because I don't have enough money to invest, I should get to keep less for myself?  Doesn't that seem just a little bit on the stupid side?

Anyway, we all know that the 1% can very, very easily continue to invest at their current rate even if they cough up 5% more of their income to taxes.  Stop kidding yourselves on that one.  Now, how that money is spent is a completely different story . . .

15 comments:

Jersey McJones said...

Jack,

You do understand what the word "fair" means, right?

Read this: http://www2.ucsc.edu/whorulesamerica/power/wealth.html

We have very little progressivity in our tax code, we have among the world's worst wealth disparity, and when compared to income and wealth, the wealthy pay much less in taxes than do the rest of us.

You have to at least get your facts straight.

JMJ

manapp99 said...

How about this...instead of making the rich pay more in taxes which will just be sent to DC and promptly wasted, lets make them spend more. You know...we look at your income and say you have to go out and buy x dollars more stuff. So bazillionaires like Sir Warren of Buffet has to go and buy more T.V.s and boats and houses and such. This will directly inject money into the economy and create jobs jobs jobs. Oh yeah...no fair spending it all at Walmart, it has to be stamped with those three proud words....made, or at least partially assembled, in America. O.K. seven proud words. Then we allow small business that will be selling said stuff to said bazillionaires to charge based on your income. You go to buy a washer and the washer seller looks at your financials and gets to charge you $5 or $5,000,000 accordingly. Progressive consumerism baby. No one price fits all here.

Living in the valley where the well heeled play I would be able to charge waaaaaaaay more to fix their ailing appliances. Whoohoo. Of course then the tires I just put on the mini-van would have cost me $7000 instead of $700 and the guy that sold them to me would have to go buy more stuff with his excess profits. But that would get that money rolling down hill really fast. Fuck taxing...start spending. Because no matter how much you send to Uncle Sam he will never send you a new L.E.D. television. With the spending plan you get to help your fellow man AND get to watch amazing depth and crystal clear clarity.

manapp99 said...

Speaking of fair and shares and paying a low rate...how about a rate of 0 as in what 36 Obama aides are paying.

http://news.investors.com/Article/599002/201201260818/obama-white-house-staff-back-taxes.htm

From the article:

"A new report just out from the Internal Revenue Service reveals that 36 of President Obama's executive office staff owe the country $833,970 in back taxes. These people working for Mr. Fair Share apparently haven't paid any share, let alone their fair share."

Shades of little Timmy Geithner Batman.

Seems it should be easy for President Obama to "walk the walk" by publically calling out these deadbeats and making them pay up.
Then he can move on to other federal employees that are not paying their fair share. Again from the article linked.

"The report finds that thousands of federal employees owe the country more than $3.4 billion in back taxes. That's up 3% in the past year.

That scale of delinquency could annoy voters, hard-pressed by their own costs, fears and stubbornly high unemployment despite Joe Biden's many promises.

The tax offenders include employees of the U.S. Senate who help write the laws imposed on everyone else. They owe $2.1 million. Workers in the House of Representatives owe $8.5 million, Department of Education employees owe $4.3 million and over at Homeland Security, 4,697 workers owe about $37 million. Active duty military members owe more than $100 million.

The Treasury Department, where Obama nominee Tim Geithner had to pay up $42,000 in his own back taxes before being confirmed as secretary, has 1,181 other employees with delinquent taxes totaling $9.3 million.

As usual, the Postal Service, with more than 600,000 workers, has the most offenders (25,640), who also owe the most -- almost $270 million. Veterans Affairs has 11,659 workers owing the IRS $151 million while the Energy Department that was so quick to dish out more than $500 million to the Solyndra folks has 322 employees owing $5 million.

The country's chief law enforcement agency, the Department of Justice, has 2,069 employees who are nearly $17 million behind in taxes. Like Operation Fast and Furious, Attorney General Eric Holder has apparently missed them too"


It is a little disingenious to have to have the head of the federal government talk about fairness when he cannot even make it happen in his own direct sphere of influence. Face it...all this fairness talk is nothing more than political rhetoric aimed at trying to convince the little guy that the big guy is just one of us. Therefore we should give him four more years of lavish vacations and hanging with his favorite movie stars. Why is there a huckster born every minute? To handle the surplus of fools.

Anonymous said...

Jackie, as you know I have seen this issue from most sides, barring the billionaire's side, I am not quite that well off.

I was somewhat fortunate when I ran my most profitable business that the $250,000+ bracket didn't exist as it currently does.

I can tell you this much about it though, as a small business owner for over a decade now, I have seen the percentage of what I pay in taxes stay pretty much the same, while my income has fluctuated pretty wildly. I am not hiding my assets nor am I trying to purposefully find the loops however, so I cannot comment on the people who have shelters or corporate tax monkeys that cook the books.

Admittedly, I was pretty upset when I did have good years that I saw about 80k go to Uncle Samuel just to be pissed away somehow.

I also know that if the Federal Government was bound by the rules of a legitimate business they would have been bankrupted sometime in the 70s.

The only way this issue can be resolved in my opinion is to do exactly what Ford did, tighten the belt, work smarter, do as much as you do now with less. There is so much overspending on worthless shit that does nothing but waste resources that I have to seriously question the sanity of some of these lawye... I mean congressmen.

Joe Markowitz said...

Jack, I think the real issue is that the wealthiest 1% are taking a much, much larger proportion of the wealth than they did in previous decades. The last time we had wealth disparities similar to what we have now was the 1920's, whereas in the 1940's through the 1970's we lived in a much more egalitarian society. So the reason that the top 1% are paying 30% of the tax burden is that the top 1% has a much larger share of the national income than they used to.

We can argue about why this has happened, but it would be too simplistic to say that these wealthy people are earning so much now because they are just so much more valuable and productive than the top earners used to be back when we were kids. There are other factors at work here. One is cultural. In the 1950's it just wasn't culturally acceptable to pay the CEO 300 times what the guy on the assembly line was making. Our cultural norms have shifted to change what is the new normal. Another thing that has changed is the tax code itself. In the 1950's the top marginal rate on earned income was 90%. That's right, 90%. With those kinds of rates, most companies would have just considered it wasteful to pay the top execs huge bonuses. Most of that money would just go to Uncle Sam. But now everybody acts like we are going to choke the economy to death or start class warfare if we suggest raising the top marginal rate from the ridiculously low 35% at which it currently stands. And somehow we have also accepted the argument that capital gains should be taxed at an even lower rate.

So what needs to happen is that we need to get rates back to some semblance of what has been historically normal. And we need to change cultural norms so that we no longer accept multi-million dollar bonuses as normal.

Jersey McJones said...

And Jack, if may I join in with Joe, there are a variety of theories as to why our culture has changed in favor of the obscenely rich, but so many that one must accept this as reality. It is similar to the attitude of the Confederate soldiers of the Civil War, fighting against their own best interest, entranced and sated by culture-war rhetoric.

It's no different from the "Trickle Down" rhetoric of the Reagan years, with the notion that "anyone can get rich (me, me, me...), what if I get rich? I wouldn't want to pay taxes!" It's retarded logic, but a lot of people think that way. They are not looking at the big picture.

When you do look at the big picture, as over history, as Joe pointed out, the economy for most people fares the best when the country leans a just little to the left, with just a little more progressive and fair taxation. When we tax gains less than earnings, we are saying "you are only worth anything if you are already worth something." Think of how that tells each new generation, "You're screwed, we have everything."

Look at today. The Baby Boomers control a vastly disproportionate share of the wealth, they are living longer and healthier and working later into life, and they (and the "Greatest Generation") have gamed the system with laizzez faire government. And sure enough, they have all the wealth.

In generations past, people in their 30's and 40's and 50's were the controllers of the wealth. Now, it is people in their 50's and 60's and even 70's and 80's. The whole natural generational divestment has been upped 20 years at least. An entire generation. All the wealth of an entire generation pre-absorbed by another in only few decades.

We, America, We the American People have a very serious problem. We are declining. We are cannibalizing ourselves, with our healthcare, education, trade, and drug policies. And we are spending ourselves into oblivion on wars, contracting, "privatizing," and borrowing.

Tax policy alone will not solve all our problems. Our problem is cultural. We are not looking seriously at our serious problems.

JMJ

Jack Camwell said...

I think perhaps I wasn't clear.

I am in favor of increasing their taxes. Granted, I think the increase should only happen to individuals making well over $1 million a year, but I did state that they should have their taxes raised and stop whining about it.

Now, as my friend mentioned, he was pissed knowing that his money was being pissed away. He, and every tax payer, has a right to be concerned about where their money is going.

What this article was meant to more or less advocate was to stop using all this tired-ass verbage.

Yes, the 1% holds well over 90% of the wealth in America, but we're not talking about income disparity and wealth distribution. We're talking about the tax burden.

Just stop with the phrases, because they're useless. That's the point. As long as we're still saying "fair share," and "class warfare," the discussion will go nowhere.

This article is more about how to frame the discussion rather than who has the right idea. I think neither side has the right idea. It seems the "fair share" people just want to keep the current level of spending (maybe they don't, but that's the impression I get), and the "class warfare" people want to make drastic cuts without first taking a look at what we can do to make government more efficient (I know that's not how they all feel).

When these catch phrases start flying out, it signals a breakdown in communication. Neither side has any fresh ideas, and they've run out of ways to discuss the issue.

Mike Henry said...

you can tell the person's credibility by the people who surround them, for example, look at the follower's of this blogger.
Just by seeing the list of the people who follow him you can tell that this blogger is a sociopath.

Ron Russell said...

Fuck You and the horse you rode in on!

Jack Camwell said...

Mike,
Flattery will get you nowhere. I'm glad that there are sill people left in the world who still believe in reasoned discourse.

Ron,
Whose horse are you fucking? Mine or Mike's for calling me a sociopath?

Either way, thank you both for making my day =)

Silverfiddle said...

So yes, in terms of proportionality, rich people are paying their fair share. Now, some people might think that 30% is not enough, but that's an entirely different argument. If we strictly look at proportion, they pay more than their fair share.
[...]
Now, for those of you who claim that they already pay their fair share, and that taxing them further will stifle growth, I think you're fairly off base with that assertion, too.


??? What the...???

You're arguing with yourself! First you say of the rich "they pay more than their fair share, and then in the next paragraph you argue against "those of you who claim that they already pay their fair share"


Maybe you should have struck the "for those of you who claim that they already pay their fair share" and just left the rest?

And the effective tax rate of the median income taxpayer, (due to exemption, deductions, etc) is $7.4 %, not 15% or 25%

Romney, a typical rich man who, like Warren Buffett, makes most of his money off of investments, had an effective rate of 13.9% in 2010. Rich men Obama and Gingrich paid 26.8% and 32.2% respectively. So rich people, at best are paying twice the rate as the median income taxpayer, while others pay four times that.

It is also useful to distinguish between earned income and capital gains. They are taxed at different rates. So the Warren Buffett's secretary argument is one of apples and oranges. And btw, she's not a school secretary earning $30,000 per year, she makes over $300K/year reportedly, which puts some of her income in the 15% category and some in the 25%. So yeah, Warren pays a lower effective tax rate, but he gets his money from captial gains, not salary.


http://www.nytimes.com/interactive/2012/01/24/us/politics/the-candidates-tax-returns.html

Silverfiddle said...

Also, it is a dubious argument that rich people with just sit there and take a higher tax rate. They are rich precisely because they do not do that. That know how to hide and protect their money.

Rich people will spend a nickel to save a dime. So if a corporation's tax bill would normally be $10 billion, it will spend $4 billion on lobbying, attorneys and accountants to cut the tax bill down to $5 billion, coming out $1 billion ahead.

Of course we need taxes to pay for government, but this is the calculus. Money in spent on unproductively to avoid taxation.

In my very simplistic example, cut the taxes to $5 billion and simplify the code (like a flat tax) and a company will fire the tax avoidance staff and simply pay the tax bill.

Silverfiddle said...

And Jersey: "Wealth distribution" betrays an anti-liberty, socialist mindset.

Who distributes it? Based upon what criteria? You are talking about other people's money that you have no right to.

Our tax code is the most progressive among developed nations:

http://www.taxfoundation.org/blog/show/23856.html

And this is a sly little piece of progressive propaganda:

and when compared to income and wealth, the wealthy pay much less in taxes than do the rest of us.

I admire how you snuck in "and wealth" because we do not tax existing wealth in this country! We tax income!

Go here to see the bare facts (Top 5% pays over 50% of all taxes), and they are nowhere near what Jersey would have you believe:

http://ntu.org/tax-basics/who-pays-income-taxes.html

So be sure to carefully parse progressive propaganda. They can' stick to the simple numbers, but must invent categories and sly formulations to make their points.

So you're full of crap, Jersey.

The rich pay the overwhelming preponderance of taxes in this country, and almost 50% of Americans pay no federal income tax whatsoever. Some even get Earned Income Tax Credit, where the government pays them! Thank President Gerald Ford (a republican) for enacting it, and President Ronald Reagan (a republican) for expanding it.

Anonymous said...

Kurt,

You ought to be running the country.

I mean it.

~ FT

Alex said...

While doing this be careful while climbing over thresholds and doors. This tutorial will guide you from basic knowledge to intermediate playing. Forever I Do - Bradley Joseph Barcarolle