A reply to an argument against government aid to the poor

[SixNein]

In a nutshell-

A person who is dependent on government handouts for their income will tend to want to maximize the amount of payout and minimize the amount of regulation associated with that income. As such, they will vote for representatives who promise the most payouts for them.

A person whose income comes from employment (either the private sector or possibly public), will tend to want to maximize their income by minimizing the taxes they pay. They will tend to vote for representatives who promise the least handouts and the most free-market incentive.

These two ideologies are fundamentally at odds; but, currently about 45% of the US population doesn't pay federal income taxes. Who's winning? What happens when the number of people not paying federal income tax reaches 51%? As it is with so many people not paying taxes any attempt at making "them" pay taxes will be considered very unpopular...

You are cherry picking data to support your argument by excluding other federal taxes like the payroll tax. And in so doing, you are attempting to create the appearance that only 55% of Americans are supporting these federal programs. Income taxes accounted for 45% of government revenue while payroll taxes accounted for 36% of government revenue in 2008.

[PLAIN]http://www.taxpolicycenter.org/briefing-book/background/numbers/images/Numbers_Figure-1_What-are-fed-govts-sources-of-revenue_3.gif

 

[WhoWee]

You are cherry picking data to support your argument by excluding other federal taxes like the payroll tax. And in so doing, you are attempting to create the appearance that only 55% of Americans are supporting these federal programs. Income taxes accounted for 45% of government revenue while payroll taxes accounted for 36% of government revenue in 2008.

[PLAIN]http://www.taxpolicycenter.org/briefing-book/background/numbers/images/Numbers_Figure-1_What-are-fed-govts-sources-of-revenue_3.gif[/QUOTE]

Ironic that the President would cut the payroll tax (about 12%) during an economic downturn - given the reliance on the revenues. I still can't figure out what the $10/week is supposed to do - other than allow him to say he cut taxes for 95% of all taxpayers?

 

[mege]

You are cherry picking data to support your argument by excluding other federal taxes like the payroll tax. And in so doing, you are attempting to create the appearance that only 55% of Americans are supporting these federal programs. Income taxes accounted for 45% of government revenue while payroll taxes accounted for 36% of government revenue in 2008.

[PLAIN]http://www.taxpolicycenter.org/briefing-book/background/numbers/images/Numbers_Figure-1_What-are-fed-govts-sources-of-revenue_3.gif[/QUOTE]

Even still.. if 50% are 45% of the total government revenue and those people still additionally contribute to another 35%... isn't that still a little off?

Just because a claim is exagerated (or slightly skewed) doesn't make it catergorically false. Besides, he actually said 'income taxes' not total revenue.

 

[SixNein]

Even still.. if 50% are 45% of the total government revenue and those people still additionally contribute to another 35%... isn't that still a little off?

Just because a claim is exagerated (or slightly skewed) doesn't make it catergorically false. Besides, he actually said 'income taxes' not total revenue.

I think it depends on how you wish to measure the burden of taxation. If the lower classes are paying a higher percentage of their income to federal taxes, is it still a little off?

The argument presented is deceptive, and it is in response to what Warren Buffet said here:
http://www.nytimes.com/2006/11/26/business/yourmoney/26every.html

 

[Proton Soup]

You have a point - people in Government DO depend upon the poor - don't they? I guess without crime - the police wouldn't be needed, without uneducated folks - teachers wouldn't be needed, and without business - employees wouldn't be needed?

that's a really good point. the wars on drugs and terror are huge rackets if you ask me. lot's of unquestioned funding for overtime pay, fancy gadgets and the industry that builds them, etc.

 

[mege]

I think it depends on how you wish to measure the burden of taxation. If the lower classes are paying a higher percentage of their income to federal taxes, is it still a little off?

The argument presented is deceptive, and it is in response to what Warren Buffet said here:
http://www.nytimes.com/2006/11/26/business/yourmoney/26every.html

What's the net payment/reciept from an individual?

In Warren Buffet's case - he's not seeing as high of a percentage in monetary benefit back. If the system works right, he'll have his Social Security alotment paid out roughly equal to what he put in (which is relatively little to his salary).

On the other hand, his secretary pays several % of her yearly salary in Social Security, and ends up getting nearly all of it back in the end. She's also benefiting from her Medicare payments that she's made.

So, by percentage, who has the higher net payment to the government over their lifetime? Mr Buffet or his secretary? He doesn't see any (very little) of his money back over time whereas his worker does. This is one of the problems with including that '35%' into the total figure - that is manditory investment money as opposed to general taxation. Sure, it's withheld in the same manner as taxes, but the expectation is that an individual sees a direct return on that 'tax'.

Hyperbolically - isn't the fairest tax system one where everyone pays a fixed dollar ammount? Why isn't there a $5000/yr per person tax? Isn't that ultimately the fairest? (I'm using this example to frame percentage based taxes as already slanted in the favor of the less wealthy).

 

[jambaugh]

Ok, there is ultimately the threat of diminished freedom, in one form or another (fines, jail time, etc.) if one breaks the law.

Not the threat of diminished freedom, the threat of physical violence upon ones person. It is by this coercion that the freedom is diminished either upon breaking a law and thereby as far as the state is concerned relinquishing one freedom, or even when acting lawfully when the threat remains if the law is broken and thus the laws diminish freedom. Of course a strong man in an anarchy has the freedom to take by force from the weak, it is, we hope, in a free society, those sorts of freedoms the law is curtailing.

If one breaks the law, then one has done violence against the system that one has agreed to abide by, and the system responds in kind. I wouldn't call this coercion.

Ah, no. If one breaks the law one breaks the law. Failing to report for jury duty is not an act of violence. As I mentioned about "coercion" let's be clear on what each of us means by "violence". By violence I mean harm to an individual. Only an individual can possesses will and values which distinguish one event as helpful from another being harmful. Let's keep the definitions basic. If we wish to expand them then use qualifiers ... "meta-coercion" "pseudo-violence" or something.
[edit]Oh, and I'm as likely to strain definitions so call me on it if you spot it. I'll try to watch myself.[/edit]

Why not look at it as an agreement between us and our elected government that we can opt out of via certain means? Are we being forced/coerced to be US citizens, or to live in the US, or any particular city or state within the US?
We're expected to behave in accordance with the laws of whatever political entity we happen to be in. The agreement is: yes, you can live and work here (wherever), and in exchange you agree to behave lawfully. What is it that's forcing/coercing one to live/work/vacation/etc. in one place or another? Personal circumstance?

The US government isn't forcing us to live here. Like your parched traveller who agrees to pay exorbitantly, we agree to behave lawfully. We're free to abide by the status quo, change it lawfully, or move on.

The same applies to a businessman being extorted by a racketeer. You can pay the protection money, or move out of the mobs territory. That doesn't justify the protection racket.

Now if I could literally opt out my private property (real estate), make it a sovereign territory like Heinlein's Coventry, not subject to tax or invasion (but the state could impose tariffs on import/export and manage its borders) then maybe.

[edit] An afterthought: The "opt out" social contract argument you make could be made valid by relegating social spending to the state and local level [But NOT via Federal mandate!]. I don't buy it at the Federal level. One must sacrifice too much to leave, and one must find a foreign sovereignty willing to allow you to immigrate. I can't see stretching that to a "free choice".

Side note: When I was a kid I was so excited the day after the '76 Presidential election. I told everyone at school we were going to move to Australia. My Dad said that "if that $&%&$# Jimmy Carter got elected we were going to move to Australia!" and I believed him. (And I do now believe if that had been a realistic option he really would have taken it.)
[end Edit]

 

[jambaugh]

Toll roads are unheard of in most of the coutry, we don't have them here. It would be utter chaos to have a bunch of self proclaimed road builders wanting to put up alternate roads. That would make no sense, there is so much involved in traffic planning, the environment, land use, drainage issues (a large part of SE Houston, TX flooded once due to new roads where they made a mistake in anticipating propper rain drainage. I'm talking about people getting rescued from their 2nd floor windows by boats).

There are a few toll roads in my part of the country, Georgia SR400 in the Atlanta area, and some Florida turnpikes. But these were not private sector roads.

One of the justifications for the current US interstate highway system was as a necessary infrastructure for national defense. Hence its full name: the http://en.wikipedia.org/wiki/Interstate_Highway_System" . Similar to the GPS system and DOD sponsored academic research, it is a government system justified for defense but utilized by the private sector.

 

[WhoWee]

What's the net payment/reciept from an individual?

In Warren Buffet's case - he's not seeing as high of a percentage in monetary benefit back. If the system works right, he'll have his Social Security alotment paid out roughly equal to what he put in (which is relatively little to his salary).

On the other hand, his secretary pays several % of her yearly salary in Social Security, and ends up getting nearly all of it back in the end. She's also benefiting from her Medicare payments that she's made.

So, by percentage, who has the higher net payment to the government over their lifetime? Mr Buffet or his secretary? He doesn't see any (very little) of his money back over time whereas his worker does. This is one of the problems with including that '35%' into the total figure - that is manditory investment money as opposed to general taxation. Sure, it's withheld in the same manner as taxes, but the expectation is that an individual sees a direct return on that 'tax'.

Hyperbolically - isn't the fairest tax system one where everyone pays a fixed dollar ammount? Why isn't there a $5000/yr per person tax? Isn't that ultimately the fairest? (I'm using this example to frame percentage based taxes as already slanted in the favor of the less wealthy).

Let's not forget the $Billions Berkshire Hathaway pays in taxes - that is if you (they) want to count EVERY type of tax paid. SEE PAGE 103 - $2,325,000 in 2010 alone.
http://www.berkshirehathaway.com/2010ar/201010-K.pdf

 

[SixNein]

What's the net payment/reciept from an individual?

In Warren Buffet's case - he's not seeing as high of a percentage in monetary benefit back. If the system works right, he'll have his Social Security alotment paid out roughly equal to what he put in (which is relatively little to his salary).

On the other hand, his secretary pays several % of her yearly salary in Social Security, and ends up getting nearly all of it back in the end. She's also benefiting from her Medicare payments that she's made.

So, by percentage, who has the higher net payment to the government over their lifetime? Mr Buffet or his secretary? He doesn't see any (very little) of his money back over time whereas his worker does. This is one of the problems with including that '35%' into the total figure - that is manditory investment money as opposed to general taxation. Sure, it's withheld in the same manner as taxes, but the expectation is that an individual sees a direct return on that 'tax'.

Hyperbolically - isn't the fairest tax system one where everyone pays a fixed dollar ammount? Why isn't there a $5000/yr per person tax? Isn't that ultimately the fairest? (I'm using this example to frame percentage based taxes as already slanted in the favor of the less wealthy).

Oh but he does see his money come back to him in the form of profits generated by money spent on those programs. This money doesn't just disappear but circulates back through the economy.

Fair only if you don't measure the burden of taxation as a percentage of income.

 

[daveb]

You have a point - people in Government DO depend upon the poor - don't they? I guess without crime - the police wouldn't be needed, without uneducated folks - teachers wouldn't be needed, and without business - employees wouldn't be needed?

No, I'm not laughing at your argument, but it made me look at this in terms of logic, and it actually works.

Your argument seems to be that if the government didn't promote the welfare mentality, there would be no poor. Let's take a look at what you've said. So, since there is crime, then, yes, police are needed.

There will always be crime, and therefore police will always be needed. It would be nice if that wasn't the case, that there is no more crime, though. So, since there is crime, police are needed.

There will always be uneducated folks, and therefore teachers will always be needed. It would be nice if that wasn't the case, that there are no more uneducated folks, though. So, since there are uneducated folk, teachers are needed.


There will always be business, and therefore employees will always be needed. It would be nice if that wasn't the case, that there are no businesses, though? Hmmm...that one doesn't seem to fit.

There will always be poor, and therefore the Government aid will always be needed. It would be nice if that wasn't the case, that there no poor, though.

So, all of these arguments oare of the form, A implies B, A is true, therefore B. An equaivalent argument is not B implies not A. Not B, therefore, not A.

By these arguments, an elimination of police, teachers, and government will eliminate crime, uneducated, and the poor.

Logic can be goofy sometimes. We now return you to your normal thread.

 

[WhoWee]

Oh but he does see his money come back to him in the form of profits generated by money spent on those programs. This money doesn't just disappear but circulates back through the economy.

Fair only if you don't measure the burden of taxation as a percentage of income.

Let's also not forget that secretary had her SS contribution lowered by about 12% by President Obama - but Berkshire Hathaway (Buffet) paid the full amount of matching taxes - in addition to the $2.35Billion in income taxes last year.

 

[daveb]

One of the justifications for the current US interstate highway system was as a necessary infrastructure for national defense. Hence its full name: the http://en.wikipedia.org/wiki/Interstate_Highway_System" . Similar to the GPS system and DOD sponsored academic research, it is a government system justified for defense but utilized by the private sector.

One could also argue that since this is the means by which interstate commerce takes place, that it is authorized by the Constitution.

 

[Mech_Engineer]

You are cherry picking data to support your argument by excluding other federal taxes like the payroll tax. And in so doing, you are attempting to create the appearance that only 55% of Americans are supporting these federal programs. Income taxes accounted for 45% of government revenue while payroll taxes accounted for 36% of government revenue in 2008.

The point is deomcrats want to raise income taxes to make the rich "pay their fair share." In reality, the rich pay far more than their fair share already, but political rhetoric is rarely based on facts these days...

fair - adjective, free from bias, dishonesty, or injustice.

It seems to me the only truly "fair" tax (in that "fair" is "free from bias") would be a flat tax where people are charged a flat percentage rate without regard to income, ethnicity, family circumstances, etc. Obama says that a balanced approach to the budget should be used, where tax increases are used to increase the federal income; problem is:

1. As you point out, income taxes are only 1/3 or so of the federal budget, and even confiscating ALL the money from the "super rich" would not balance it.
2. There is no plan to balance the budget at all. They have signed on something like under $50 bil in cuts, and raised the debt ceiling by over $2T .

 

[WhoWee]

No, I'm not laughing at your argument, but it made me look at this in terms of logic, and it actually works.

Your argument seems to be that if the government didn't promote the welfare mentality, there would be no poor. Let's take a look at what you've said. So, since there is crime, then, yes, police are needed.

There will always be crime, and therefore police will always be needed. It would be nice if that wasn't the case, that there is no more crime, though. So, since there is crime, police are needed.

There will always be uneducated folks, and therefore teachers will always be needed. It would be nice if that wasn't the case, that there are no more uneducated folks, though. So, since there are uneducated folk, teachers are needed.


There will always be business, and therefore employees will always be needed. It would be nice if that wasn't the case, that there are no businesses, though? Hmmm...that one doesn't seem to fit.

There will always be poor, and therefore the Government aid will always be needed. It would be nice if that wasn't the case, that there no poor, though.

So, all of these arguments oare of the form, A implies B, A is true, therefore B. An equaivalent argument is not B implies not A. Not B, therefore, not A.

By these arguments, an elimination of police, teachers, and government will eliminate crime, uneducated, and the poor.

Logic can be goofy sometimes. We now return you to your normal thread.

I see your point. However, should we assume the economy will continue to decline - and thus more Government will be required in the future to care for the poor - or do we expect the economy to improve and Government doesn't need to grow as large (or fast)?

 

[WhoWee]

The point is deomcrats want to raise income taxes to make the rich "pay their fair share." In reality, the rich pay far more than their fair share already, but political rhetoric is rarely based on facts these days...

fair - adjective, free from bias, dishonesty, or injustice.

It seems to me the only truly "fair" tax (in that "fair" is "free from bias") would be a flat tax where people are charged a flat percentage rate without regard to income, ethnicity, family circumstances, etc. Obama says that a balanced approach to the budget should be used, where tax increases are used to increase the federal income; problem is:

1. As you point out, income taxes are only 1/3 or so of the federal budget, and even confiscating ALL the money from the "super rich" would not balance it.
2. There is no plan to balance the budget at all. They have signed on something like under $50 bil in cuts, and raised the debt ceiling by over $2T .

The fair question might be who paid more in taxes Buffet and his company (at least $2.325Billion last year plus payroll matching taxes) or all of his (thousands of) employees combined?

Hoovers reports 260,000 employees in 2010.
http://www.hoovers.com/company/Berkshire_Hathaway_Inc/rftfji-1.html

 

[daveb]

fair - adjective, free from bias, dishonesty, or injustice.

It seems to me the only truly "fair" tax (in that "fair" is "free from bias") would be a flat tax where people are charged a flat percentage rate without regard to income, ethnicity, family circumstances, etc.

I'm convinced this is the crux of the debate between the two sides. One side (the "tax everyone the same" crowd) uses the "free from bias" definition. The other side (the "soak the rich" crowd) uses the "free from injustice" side, claiming that it is unjust the poor to pay more than they are capable and the rish to pay less than they are capable. Of course, even the term justice has multiple definitions to multiple people (and a dictionary meaning is different from a personal meaning anyway).

 

[WhoWee]

Does anyone think the average Berkshire Hathaway employee paid more than $8,900 in net federal, state and local income taxes?

 

[jambaugh]

One could also argue that since this is the means by which interstate commerce takes place, that it is authorized by the Constitution.

Good point, but I think a stretch. The commerce clause would justify the Federal Govt, regulating privately built roads as well as traffic (e.g. inspection stations). The power to e.g. regulate a bank can't be used to justify getting into the banking business, nor the power to regulate trade to justify government getting into the shipping business.

 

[daveb]

However, should we assume the economy will continue to decline - and thus more Government will be required in the future to care for the poor - or do we expect the economy to improve and Government doesn't need to grow as large (or fast)?

I would love it if the economy improved, everyone had jobs, etc. My belief is that things will get worse (overall), though. The economy (GDP, etc.) might improve, but IMO the poor will get poorer, the rich will get richer, etc.

A problem as I see it is that global competition is not only for markets, but also for workers. If it's overall cheaper (fiscally, socially, as well as politically) for Company X to go overseas to manufacture some goods, it would be idiotic for the Company X to stay here in the US out of some sense of patriotism (they can certainly do it, but in reality are doing a disservice to shareholders). So jobs go overseas. The rich, who are the ones investing, see a return on their investments. The poor, who no longer have their jobs, get poorer (and others who weren't poor no longer have jobs).

 

[Mech_Engineer]

The other side (the "soak the rich" crowd) uses the "free from injustice" side, claiming that it is unjust the poor to pay more than they are capable and the rish to pay less than they are capable.

"Free from injustice" would mean there is no injustice for or against either party, not just on the part of the "less wealthy."

 

[ThomasT]

Not the threat of diminished freedom, the threat of physical violence upon ones person. It is by this coercion that the freedom is diminished either upon breaking a law and thereby as far as the state is concerned relinquishing one freedom, or even when acting lawfully when the threat remains if the law is broken and thus the laws diminish freedom.

Ok, point taken. The terms of the agreement between government and the people are ultimately backed up by the government's ability to engage in lawful violence.

Laws constrain behavior and so diminish freedom. The threat (the contractual contingency) is that if one breaks the law, then one's freedom will be limited even further. And the threat of government sanctioned violence/coercion is the ultimate means of enforcing compliance.

And of course, the government is, in most cases, holding all the cards -- which can be frustrating when one considers a law to be a bad law, because the lawful process of getting laws changed is quite laborious and outside the scope of most people's abilities.

Nevertheless, we've all agreed (at least tacitly) by continuing to remain here, to conform to the system and behave lawfully, and we can know up front the consequences of breaking a law.

Anyway, yes, I agree with you that society is governed, ultimately, via the threat of sanctioned physical violence. How else could it be run?

...If one breaks the law one breaks the law. Failing to report for jury duty is not an act of violence. As I mentioned about "coercion" let's be clear on what each of us means by "violence". By violence I mean harm to an individual. Only an individual can possesses will and values which distinguish one event as helpful from another being harmful. Let's keep the definitions basic. If we wish to expand them then use qualifiers ... "meta-coercion" "pseudo-violence" or something.
[edit]Oh, and I'm as likely to strain definitions so call me on it if you spot it. I'll try to watch myself.[/edit]

Point taken. Yes, I was straining the definition of 'violence'.

Can we agree that government 'coercion' isn't necessarily a bad thing, insofar as it is a necessary thing.

The US government isn't forcing us to live here. Like your parched traveller who agrees to pay exorbitantly, we agree to behave lawfully. We're free to abide by the status quo, change it lawfully, or move on.

The same applies to a businessman being extorted by a racketeer. You can pay the protection money, or move out of the mobs territory. That doesn't justify the protection racket.

The racketeer's extortion/coercion is an unlawful practice wrt a higher authority and thereby unjustifiable in that context. There's no nonviolent mechanism associated with changing the situation created by the mobster.

The government's coercion is justified by the need to control and protect a vast population. There's no higher authority, and there are nonviolent mechanisms for effecting changes in the status quo.

Now if I could literally opt out my private property (real estate), make it a sovereign territory like Heinlein's Coventry, not subject to tax or invasion (but the state could impose tariffs on import/export and manage its borders) then maybe.

A large portion of the US population tried that, collectively, back in the 1860's.

An afterthought: The "opt out" social contract argument you make could be made valid by relegating social spending to the state and local level [But NOT via Federal mandate!]. I don't buy it at the Federal level. One must sacrifice too much to leave, and one must find a foreign sovereignty willing to allow you to immigrate. I can't see stretching that to a "free choice".

The 'freedom' of one's choices is usually proportional to one's wealth.

And I agree that since changing the status quo or moving on isn't a reasonable alternative for most people, then this is akin to the situation of the indigent worker whose circumstances force him (if he wants to feed himself and his family) to sell his labor at exploitative rates because the employer is holding all the cards.

 

[ThomasT]

It seems to me the only truly "fair" tax (in that "fair" is "free from bias") would be a flat tax where people are charged a flat percentage rate without regard to income, ethnicity, family circumstances, etc.

A flat tax and a simplified tax code with no 'loopholes' would be wonderful. Would that include taxing individuals whose incomes are below subsistence level?

But my guess is that the very rich, including corporations with big bottom lines, would be against it, preferring instead the current progressive tax structure and an immensely complicated tax code with lots of 'loophole' possibilities.

 

[ThomasT]

A problem as I see it is that global competition is not only for markets, but also for workers. If it's overall cheaper (fiscally, socially, as well as politically) for Company X to go overseas to manufacture some goods, it would be idiotic for the Company X to stay here in the US out of some sense of patriotism (they can certainly do it, but in reality are doing a disservice to shareholders). So jobs go overseas.

Yes, this does seem to be a problem for the US general economy.

Is the US government promoting this?

 

[BobG]

You are assuming poor people actually need to work. If you are a single mom, you don't have to work until you're all out of kids to raise.

While the federal government provides grants to state welfare programs, provided the state programs follow some general guidelines, each state runs its own welfare program.

Because of that, your comment is tough to evaluate.

What's the average duration that a single mom spends on welfare in your state and how does that compare to the national average?

Keep in mind that welfare has changed significantly since 1996. In spite of that, the reports that justified the 1996 change still seem to creep up to the top in search engines. Those aren't particularly useful today.

I don't think you can support the comment you made, but, like I said, that's hard to say for sure since there's 50 states and each has their own welfare program and each has a varying rate of success in reducing welfare rolls.

Slightly rephrasing this would be accurate, however. One of the changes that accompanied welfare reform was an increase in Earned Income Credit and that does contribute to the negative income taxes paid by low earners. They do have to work to receive Earned Income Credit, however. But, single moms are more likely to receive EITC for the entire time their kids are living at home. (Another change included improved child support enforcement, increasing the number of absent parents that support their children.)

 

[Mech_Engineer]

A flat tax and a simplified tax code with no 'loopholes' would be wonderful. Would that include taxing individuals whose incomes are below subsistence level?

In my opinion, it should include everyone.

My reasoning for this is how do you decide what the "subsistence level" is? People might argue the subsistence level in the bay area is $50k/year, where as someplace like central Idaho it might be $15k/year. So then you have politics attached to trying to quantify standards of living and costs of living and adjustments based on state and county... it would be a mess.

I would instead like to see a flat tax rate of something like 10-15% across the board. No deductions, no exemptions. Just think how simple the tax code would be! Savings in tax law and enforcement would be huge!

But my guess is that the very rich, including corporations with big bottom lines, would be against it, preferring instead the current progressive tax structure and an immensely complicated tax code with lots of 'loophole' possibilities.

Everyone is against having their taxes raised, it isn't specific to the "greedy rich." The main problem is if the taxes are only on income, how you decide what is considered income can get a little fuzzy. Paired with uncertainties like earnings on savings, tax-exempt retirement accounts etc. further complicate the situation.

 

[WhoWee]

I would love it if the economy improved, everyone had jobs, etc. My belief is that things will get worse (overall), though. The economy (GDP, etc.) might improve, but IMO the poor will get poorer, the rich will get richer, etc.

A problem as I see it is that global competition is not only for markets, but also for workers. If it's overall cheaper (fiscally, socially, as well as politically) for Company X to go overseas to manufacture some goods, it would be idiotic for the Company X to stay here in the US out of some sense of patriotism (they can certainly do it, but in reality are doing a disservice to shareholders). So jobs go overseas. The rich, who are the ones investing, see a return on their investments. The poor, who no longer have their jobs, get poorer (and others who weren't poor no longer have jobs).

A decision must be made to invest in manufacturing facilities or equipment in thoses countries or allow a company to manufacture proprietary products. The first scenario puts capital at risk and the second puts trade secrets at risk.

As for who invests overseas - does your 401K fund manager know you don't want any of your funds put to work offshore?

As for the definition of "poor" - is a worker in China making $3,000 per year poorer than the US worker collecting unemployment and an EITC or making work pay redistribution or a welfare recipient receiving housing, food, utility and medical subsidies?

 

[mege]

A flat tax and a simplified tax code with no 'loopholes' would be wonderful. Would that include taxing individuals whose incomes are below subsistence level?

But my guess is that the very rich, including corporations with big bottom lines, would be against it, preferring instead the current progressive tax structure and an immensely complicated tax code with lots of 'loophole' possibilities.

While I am a big fan of a simpler 'everyone pays evenly' tax code with almost zero exemptions - one thing I am afraid of where it comes to corporations: tax them more and they'll move to other countries. The US already has higher than normal business taxes (nearly all of Europe has lower corporate taxes, but their cost of doing business otherwise is a bit higher which equalized it currently)

 

[BobG]

While I am a big fan of a simpler 'everyone pays evenly' tax code with almost zero exemptions - one thing I am afraid of where it comes to corporations: tax them more and they'll move to other countries. The US already has higher than normal business taxes (nearly all of Europe has lower corporate taxes, but their cost of doing business otherwise is a bit higher which equalized it currently)

If the US raises corporate taxes, then the rest of the world will follow accordingly. Historically, other countries set their corporate taxes just a little lower than the US regardless of whether that means cutting their own taxes or raising their own taxes.

(At least for now. You'll know the balance has changed for good when "the world" starts adjusting their corporate tax rates to some other country.)

 

[jambaugh]

We seem to be making some progress, at least in setting up the framework of the essential arguments.

...
And of course, the government is, in most cases, holding all the cards -- which can be frustrating when one considers a law to be a bad law, because the lawful process of getting laws changed is quite laborious and outside the scope of most people's abilities.

Not quite all the cards. Here in the US there are provisions for private citizens to lawfully use the same violent means, especially in situations where government agents are unavailable. e.g. citizens arrest and self defense.

Nevertheless, we've all agreed (at least tacitly) by continuing to remain here, to conform to the system and behave lawfully, and we can know up front the consequences of breaking a law.

I'll have to consider this. I don't think agreement is the same as pragmatic observance given the coercive incentive to abide by the law. And there are of course those who are perpetually violating the law yet remaining here or who remain here yet publicly assert their independence from the law.

But I think this issue is not relevant. And my argument for that brings to mind some points relevant to the main subject. It seems we are trying to hash out what we can agree is the way government ought to be. Clearly we are each applying our own personal sense of ethics with some expectation of commonality on many points. We may ethical stances which are not fully formed and the exercise, even if it comes down to recognizing an irreconcilable difference in moral values, if fruitful for the sake of making that difference explicit. Thus in the social contract model we are negotiating for the best government, and in the "necessary evil"([edit]pragmatic) model we are seeking the minimum "evil".

Anyway, yes, I agree with you that society is governed, ultimately, via the threat of sanctioned physical violence. How else could it be run?

Some may argue other ways but I do not see such systems as Government, rather the lack thereof and at the same time do not believe such systems are realistic or stable.
And so yes we can...

[...] agree that government 'coercion' isn't necessarily a bad thing, insofar as it is a necessary thing.

It is a tool which may be used for good or ill.

So starting with the essential coercion for the enforcement of law, we look now at the justification of particular laws and classification of laws in terms of roles of government.

I think we should consider both government in general and what (I hope) we can agree upon as the idea form, free government, let's say liberal government understanding "liberal" in the http://en.wikipedia.org/wiki/Classical_liberalism" but allowing by my concession some "welfare liberalism" if reason and our values lead us there.

I seek to argue on two points.
1.) I assert that over the long term an aggregate, more harm is done by governmental social welfare than good. And I define "harm" here in the same value system used to justify the social welfare.

2.) I assert that even if point 1.) were definitively not true, the coercive nature of governmental social welfare makes it unjust. We should reap what we in the private sector, sow even if it is starving mobs looting our property out of desperation.
(this one may come down to a matter of my own distinct value system but let's explore it and see.)

I'll do some thinking on how to present my arguments as clearly and succinctly as possible.

The 'freedom' of one's choices is usually proportional to one's wealth.

Yea, and that brings up two differing definitions of 'freedom'. We can agree I hope on the base definition of "freedom = freedom from coercion", rather than a more general "freedom = freedom from obstacles".

And I agree that since changing the status quo or moving on isn't a reasonable alternative for most people, then this is akin to the situation of the indigent worker whose circumstances force him (if he wants to feed himself and his family) to sell his labor at exploitative rates because the employer is holding all the cards.

The indigent worker example is complex and I would like to bring it up later, but I agree... given sufficient qualifiers especially the employer actively hindering competing employers or collective bargaining, using deception or coercion, establishing a monopoly on necessary services to workers, etc.

 

[jambaugh]

Another note on my dislike of the social contract model. In terms of our support/opposition of government there is a gradation of actions we may take, not just a simple take it or leave it:
active support (such as enlisting in military or civil service, reporting of crimes,...)
passive support (voicing arguments in support of policies and laws, patriotic demonstrations...)
passive resistance (protesting)
active resistance (civil disobedience) and,
active rejection (emigration or ...)
"♬ ♪ You say you want a revolu-u-tion, we-ell you know♪♬ we all want to change the world!♪"

 

[WhoWee]

Another note on my dislike of the social contract model. "♬ ♪ You say you want a revolu-u-tion, we-ell you know♪♬ we all want to change the world!♪"

In business, most contracts have a specific termination date and/or renewal options - the social contract is open-ended until it runs out of money (the Golden Goose is consumed).

 

[daveyrocket]

In my opinion, it should include everyone.

My reasoning for this is how do you decide what the "subsistence level" is? People might argue the subsistence level in the bay area is $50k/year, where as someplace like central Idaho it might be $15k/year. So then you have politics attached to trying to quantify standards of living and costs of living and adjustments based on state and county... it would be a mess.

I would instead like to see a flat tax rate of something like 10-15% across the board. No deductions, no exemptions. Just think how simple the tax code would be! Savings in tax law and enforcement would be huge!

That would almost completely destroy small businesses and self-employment as an option for people.

 

[Evo]

That would almost completely destroy small businesses and self-employment as an option for people.

I think a flat tax at that rate is fair. I can't get that low.

 

[WhoWee]

A flat tax on income is fair.

However, a business has direct (cash) expenses such as Cost of Goods Sold, Labor, Occupancy, Marketing, and G&A that must be considered. The cash payments on debt service (or leased equipment) must also be accounted for - rather than depreciation.

The recipients of those funds may also have expenses - eventually though every dollar of profit would be taxed by the person who realized the final profit.