Questioning Obama's Critics: Why the Dislike?

[OmCheeto]

Scenario 1 is the only fair one. It may not be desirable to the guy with $1000 bucks left over, but it is the only fair one.

The guy with $1000 bucks left over just won't have as nice a car or house or whatever as the other guys.

CS

Hmmm... That gives me an idea. Maybe it would be ok to have a flat tax, say 30%, if there is a $35,000 deductible to cover minimum living expenses. Now that would be fair.

Everyone would get the deduction, and everyone would pay the same flat tax.

OmCheeto for Treasury Secretary!

 

[mgb_phys]

Hmmm... That gives me an idea. Maybe it would be ok to have a flat tax, say 30%, if there is a $35,000 deductible to cover minimum living expenses. Now that would be fair.

It has been proposed, it works in small relatively prosperous countries.
Take the amount paid out in social security/unemployment benefit in a year. Make that the tax free allowance and have a flat rate of tax on top of that. Or equivalently pay everybody, working or not, the standard unemployment benefit (a bit like Alaska's oil handout) and then tax everything at a flat rate.

The main objection is that if you are rich it becomes advantageous to pay accountants to hide income overseas or any other loophole. Unless the tax enforcement is very good the total amount received is much less.

Holland has (or had) a system like this. Foreign workers could elect to just pay a flat 20% tax on everything for the first 10years, since they would be unlikely to claim the same benefits as people retiring there. It made it very attractive for overseas companies to setup their European HQ in the Netherlands.

 

[LightbulbSun]

Living decently and fairness are not the same thing. Your argument is based off of a quality of life preference. Sure everyone (or most everyone) wants the nice cushy quality of life as someone who is rich. But is it really fair that only the rich pay for it while everyone else gets it for free?

CS

Are you serious? It isn't a matter of cushy quality of life preference for the 36K dude. It's about barely struggling to maintain a standard of living. Let's look at the numbers.

A 36 K person (they really make 40K, but this is after you've taxed them by 10%), in a 40 hour work week will only make $760 at this rate (~$19/hr). There are nurses that make way more than that in a week. Compare this to the 90K dude, and there really is no comparison. How can you call this equal tax nonsense fair?

 

[Ben Niehoff]

Scenario 1:

Person A makes $40,000.
10% tax rate = $4,000.

Person B makes $100,000.
10% tax rate = $10,000.

Person A is "poorer" than person B. Person B is paying 250% of the actual dollar amount Person A is paying with the same flat tax rate (i.e. 250% of $4,000 = $10,000 when both pay a flat 10% tax rate).

With a 10% tax rate, the amount they pay per cent is the same. In other words both pay the same proportion of tax based on a different income.

Person A: $4,000/$40,000 = 10%
Person B: $10,000/$100,000 = 10%


Scenario 2:

Person A makes $40,000.
10% tax rate = $4,000.

Person B makes $100,000.
30% tax rate = $30,000.

Person A is "poorer" than person B. Person B is paying 750% of the actual dollar amount that Person A is paying with a lower tax rate (i.e. 750% of $4,000 = $30,000 when person B pays a higher tax rate than person A).

With a 10% tax rate for person A and a 30% tax rate for person B, the amount they pay per cent is not same. In other words person A pays less per cent than person B pays per cent.

One can see plainly by comparing the two scenarios that person B will pay 3 times more tax than person A if person B's tax rate is 3 times more.

Question:

Which scenario seems fair to both people?

CS

Red herring. Tax brackets don't work that way. Here's how the scheme actually works:

Suppose there are two tax brackets: $40k and below, which are taxed at 10%, and then 30% for the next bracket up to $100k. Then:

Person A: Makes $40,000
10% tax rate = $4,000.

Person B: Makes $100,000
10% tax rate on first $40k = $4,000
30% tax rate on next $60k = $18,000
Total tax = $22,000

It's actually quite fair. Both people are taxed exactly the same rate on the first $40k they earn (and Person A, if he were given a raise, would enter into the exact same higher tax scheme that Person B pays).

Why do we tax the lower income brackets a lower overall rate, you may ask. It's not just for charity. It is good for America as a whole (including Person B!) if Person A is taxed less; because if Person A has enough money to make ends meet without having to worry, then Person A will feel more comfortable about buying things beyond the most basic necessities. Person B probably produces a few of those things (like computers, microwaves, wristwatches, whatever), and so Person B will have a bigger, more diverse market to sell to. And if Person A has enough means to raise a stable family, then this is good for America too, for similar reasons.

Yet another way to look at it is this:

Suppose everyone were taxed the same percentage rate. How would we choose the rate? Well, we would have to consider how it would affect both Person A and Person B. We want Person A to have enough money to live on, after taxes; after all, why should he take a grueling, low-wage job if he can't even make enough at it to live?

For the sake of argument, let's say the minimum yearly salary needed to maintain basic needs was $36,000. And if Person A is only able to make $40,000, then we would be shooting ourselves in the foot if we tax any higher than 10%, because if Person A can't make enough money to meet basic needs, then he cannot participate in the economy, and the economy as a whole falls apart.

OK, so based on that data, we decide to tax everyone 10%. But then we have a problem with our budget: we don't have enough to fund all of our programs! And I don't mean things like welfare programs; this isn't about redistribution at all. I mean basic programs like building and maintaining roads, bridges, education, etc. We can't fund it that way; we would be forced into deficit spending just to maintain infrastructure.

So we have to tax somebody. But we already established that we can't tax Person A any further, because it would cripple him as a player in the economy. So we must instead increase the tax rate on those people who make more than Person A.

The key idea here is that you want to make sure as many people as possible are able to participate in the economy, because that is the source of growth. To tax Person A any more would be to cut off our nose to spite our face; to tax Person B any less would mean we can't afford necessary programs.

And we can't just tell Person A to get a better job or to start his own business; while such things are occasionally successful, we have to remember that the vast majority of people really are doing the best that they can, and the fact is that most of them are going to be "poor". These low-paying jobs are just as important to our economy as the higher-paying jobs, and as citizens we had better make sure that it is possible, numerically, for someone to work such a job and still get by.

So yes, as a nation, we should partially subsidize the poor. We couldn't function otherwise.

 

[Proton Soup]

Scenario 1 is the only fair one. It may not be desirable to the guy with $1000 bucks left over, but it is the only fair one.

The guy with $1000 bucks left over just won't have as nice a car or house or whatever as the other guys.

CS

actually, it makes no difference.

consider for a moment another scenario, where we only tax income above $250,000 (or some other relatively high number). what would happen? first of all, you'd take most individuals off the tax rolls. it would cost less to administer the system. of those left, most are businesses with several employees, and even have people on payroll whose job it is to keep books and negotiate the tax system.

now, would it be fair? yes, and here's why. those employees of theirs will not end up with raises. their pay will be adjusted to what they were making in net before you changed the tax system. the company's expenses will be the same. after all, the company was providing all the tax revenue before, they just weren't paying it directly to the government, the employees were.

think of it as Trickle Up economics if you like.

 

[Evo]

Don't forget that people that make over, what, $102,000 annually, don't pay the 6.2% Social Security tax? Just a few years ago, people didn't get taxed after only earning $68,000. That already puts them ahead 6.2%. Then don't forget that people in upper income brackets usually find some way to shelter part of their income, so less of their income is taxed.

 

[stewartcs]

Are you serious? It isn't a matter of cushy quality of life preference for the 36K dude. It's about barely struggling to maintain a standard of living. Let's look at the numbers.

A 36 K person (they really make 40K, but this is after you've taxed them by 10%), in a 40 hour work week will only make $760 at this rate (~$19/hr). There are nurses that make way more than that in a week. Compare this to the 90K dude, and there really is no comparison. How can you call this equal tax nonsense fair?

People are more than capable of surviving off of 36K per year. Your statements don't address the issue of fairness but rather the same quality of life statement you made previously.

CS

 

[stewartcs]

Don't forget that people that make over, what, $102,000 annually, don't pay the 6.2% Social Security tax? Just a few years ago, people didn't get taxed after only earning $68,000. That already puts them ahead 6.2%. Then don't forget that people in upper income brackets usually find some way to shelter part of their income, so less of their income is taxed.

Refer to post #297.

CS

 

[stewartcs]

Red herring. Tax brackets don't work that way. Here's how the scheme actually works:

Suppose there are two tax brackets: $40k and below, which are taxed at 10%, and then 30% for the next bracket up to $100k. Then:

Person A: Makes $40,000
10% tax rate = $4,000.

Person B: Makes $100,000
10% tax rate on first $40k = $4,000
30% tax rate on next $60k = $18,000
Total tax = $22,000

It's actually quite fair. Both people are taxed exactly the same rate on the first $40k they earn (and Person A, if he were given a raise, would enter into the exact same higher tax scheme that Person B pays).

The example was meant to be simple and easy to follow. The result is the same because person A isn't in that tax bracket. Hence person B is paying a higher effective rate on his total income.

So we have to tax somebody. But we already established that we can't tax Person A any further, because it would cripple him as a player in the economy. So we must instead increase the tax rate on those people who make more than Person A.

The key idea here is that you want to make sure as many people as possible are able to participate in the economy, because that is the source of growth. To tax Person A any more would be to cut off our nose to spite our face; to tax Person B any less would mean we can't afford necessary programs.

No they don't need to raise the tax on those who make more. Instead the government needs to reduce frivolous spending, not continue to tax people higher to support programs that don't meet their own countries needs first. Cut out the foreign aid until the domestic needs are met first.

And we can't just tell Person A to get a better job or to start his own business; while such things are occasionally successful, we have to remember that the vast majority of people really are doing the best that they can, and the fact is that most of them are going to be "poor". These low-paying jobs are just as important to our economy as the higher-paying jobs, and as citizens we had better make sure that it is possible, numerically, for someone to work such a job and still get by.

So yes, as a nation, we should partially subsidize the poor. We couldn't function otherwise.

These people aren't really poor though, they're average (a median family income in the US is around $40K/yr IIRC). The really "poor" do have programs to assist them. I've never said we shouldn't have government assistance to those who really need it. My point has been that everyone should contribute equally to the system.

CS

 

[LightbulbSun]

People are more than capable of surviving off of 36K per year. Your statements don't address the issue of fairness but rather the same quality of life statement you made previously.

CS

Quality of life and fairness go hand in hand.

 

[Ivan Seeking]

I was trying to remember all of the labels or associations applied to Obama by the right. So far I have:

Foreign Terrorist
Domestic terrorist
Black radical Christian/Muslim extremist
Elitist
Hollywood celebrity
Arab
Muslim
Liberal extremist
Socialist
Marxist
Re-distributor
End of the world omen
A complicit promoter of pedophilia
…and worst of all, a community organizer!

I almost never hear, professor of Constitutional Law; first black President of the Harvard Law Review; a person who chose public service over a cushy life in law. A person who rose to the top from the lowest of circumstances - one of the greatest American success stories of all time. Or, in the words of Colin Powell, "a transformational figure" whose election will "electrify the world".

And we have
Drape Measurer

and another one that I forgot:
Foreign born.

 

[Ben Niehoff]

No they don't need to raise the tax on those who make more. Instead the government needs to reduce frivolous spending, not continue to tax people higher to support programs that don't meet their own countries needs first. Cut out the foreign aid until the domestic needs are met first.

Exactly, now you see my point. It's not a question of who should be taxed what rate, because the tax rates are dictated by necessity, given a certain amount of spending. The question is, rather, how much spending is needed for the maximum benefit/cost to our nation's people. And as you well know, there is much disagreement over exactly how much should be spent, and where.

If you can come up with a budget that addresses even just the country's most basic needs (infrastructure, education, research, public health and defense) while taxing everyone only a modest rate of 10% or less, then you should call up the Pope, because I think that constitutes working miracles.

If by "frivolous spending" you mean the various "earmarks" McCain and pals have been making such a big fuss over, you should realize that earmarks make up only a tiny percentage of the overall budget, despite that fact that in real figures they are in the tens of billions. I would agree with you that porkbarrel spending needs to be curtailed, but the reality is that it is a drop in the bucket when compared to the budget as a whole. Any serious budget reduction is going to have to take a serious look at a broad array of programs.

From what I've seen, most of this talk of "frivolous spending" boils down to "I don't directly benefit from X or Y program, so I don't want to pay for it!" But the reality is that we are all in this together, and X or Y program certainly benefits plenty of people. The question is to decide what is truly needed, and what is the most efficient way to go about providing it.

 

[CaptainQuasar]

One argument that resonates well for me why the wealthy can afford to chip in more money is that whenever a war comes around the poor end up chipping in many more lives, proportionately, than the wealthy. That's just one way that the wealthy end up benefiting proportionally more than everyone else from the government's activities.

⚛​

 

[stewartcs]

If by "frivolous spending" you mean the various "earmarks" McCain and pals have been making such a big fuss over, you should realize that earmarks make up only a tiny percentage of the overall budget, despite that fact that in real figures they are in the tens of billions. I would agree with you that porkbarrel spending needs to be curtailed, but the reality is that it is a drop in the bucket when compared to the budget as a whole. Any serious budget reduction is going to have to take a serious look at a broad array of programs.

Frivolous spending encompasses many areas including but not limited to earmarks, so it is not a tiny percentage once foreign aid is included. However, it's not just "McCain and pals" like you seem to think, it's ALL of Congress including "Obama and pals". Seeing how Obama and McCain are part of the Congress, they are BOTH responsible for the mess the US is in. Neither can be relieved from responsibility. But that is beside the point.

From what I've seen, most of this talk of "frivolous spending" boils down to "I don't directly benefit from X or Y program, so I don't want to pay for it!" But the reality is that we are all in this together, and X or Y program certainly benefits plenty of people. The question is to decide what is truly needed, and what is the most efficient way to go about providing it.

What it boils down to is whether or not Americans directly benefit from the spending of their tax dollars on these programs, not whether person A or person B benefits from the program. They both need to benefit from the program.

CS

 

[stewartcs]

One argument that resonates well for me why the wealthy can afford to chip in more money is that whenever a war comes around the poor end up chipping in many more lives, proportionately, than the wealthy. That's just one way that the wealthy end up benefiting proportionally more than everyone else from the government's activities.

⚛​

So now 10 people's lives are worth more than 1?

This is a bad example since it is beyond the government's control (other than whether we go to war or not) of how the people fall into economic classes. What they can control is how they tax those in the US.

CS

 

[stewartcs]

Quality of life and fairness go hand in hand.

No they don't.

CS

 

[LightbulbSun]

No they don't.

CS

Explain.

 

[stewartcs]

Explain.

Explain why you think fairness and quality of life are equal.

CS

 

[Office_Shredder]

So now 10 people's lives are worth more than 1?

This is a bad example since it is beyond the government's control (other than whether we go to war or not) of how the people fall into economic classes. What they can control is how they tax those in the US.

CS

Yes, 10 people's lives on average are worth more than one.

The best argument here is that national security and domestic law enforcement both are used to protect the stability and wealth of a nation, and hence since wealthy people have more to lose, they should pay more for the protection

 

[stewartcs]

Yes, 10 people's lives on average are worth more than one.

The best argument here is that national security and domestic law enforcement both are used to protect the stability and wealth of a nation, and hence since wealthy people have more to lose, they should pay more for the protection

So if we have 10 rapists and the Pope it's ok to kill the Pope? I don't think so.

Everyone in the nation uses the same law enforcement and they protect all of the people in the US regardless of how much money they make. If anything, based on your logic, since there are more poor people in the US they should pay more for the protection.

CS

 

[Proton Soup]

Everyone in the nation uses the same law enforcement and they protect all of the people in the US regardless of how much money they make. If anything, based on your logic, since there are more poor people in the US they should pay more for the protection.

CS

that's the theory, but it's not the practice

 

[LightbulbSun]

Explain why you think fairness and quality of life are equal.

CS

They should go hand in hand, but in our current situation they are not. The rich should pay higher taxes than the poor, it's just that simple. That's fairness in my book. Don't worry, you'll still have plenty of disposable income to buy that fancy car.

 

[LightbulbSun]

So if we have 10 rapists and the Pope it's ok to kill the Pope? I don't think so.

What if we have 10 babies and 1 rapist, is it ok to kill the rapist?

 

[Office_Shredder]

Yes, 10 people's lives on average are worth more than one.

I put the bold part in there for a reason.

Proton Soup already covered the law enforcement bit. And the point I was making isn't about daily law enforcement... why don't poor people just buy guns and rob the rich people? Because they'd be arrested/killed. Notice poor people can't start up a revolution to rob the poor people, because the poor people have no money to steal

 

[stewartcs]

They should go hand in hand, but in our current situation they are not. The rich should pay higher taxes than the poor, it's just that simple. That's fairness in my book. Don't worry, you'll still have plenty of disposable income to buy that fancy car.

I don't see the equality of fairness and quality of life. They describe two different things.

And it is only "just that simple" in your opinion (which you are certainly entitled to). Which isn't an effective argument.

CS

 

[stewartcs]

What if we have 10 babies and 1 rapist, is it ok to kill the rapist?

That's my point. You can't put a price on life. These question are a matter of subjectivity based on moral beliefs.

CS

 

[LightbulbSun]

I don't see the equality of fairness and quality of life. They describe two different things.

And it is only "just that simple" in your opinion (which you are certainly entitled to). Which isn't an effective argument.

CS

Equality of fairness would be giving the poor guy a break.

 

[LightbulbSun]

That's my point. You can't put a price on life. These question are a matter of subjectivity based on moral beliefs.

CS

Yes you can. Saving the majority of people on average is better than only saving a few.

 

[stewartcs]

Equality of fairness would be giving the poor guy a break.

The term "fairness" and the phrase "quality of life" do not mean the same thing.

CS

 

[stewartcs]

Yes you can. Saving the majority of people on average is better than only saving a few.

In your opinion which is based on your moral beliefs. Like I said, it is subjective. Now that being said, I certainly believe it is better to kill 10 rapist than the Pope! But what you or I believe on the value of life isn't central to the point of fairness.

CS

 

[Proton Soup]

The term "fairness" and the phrase "quality of life" do not mean the same thing.

CS

this all depends on how you define things. if you took "all men are created equal" to one extreme, then fair could mean all receive the same educational, financial, nutritional, and social (am i leaving something out?) opportunities. and then see where each goes with it.

OTOH, if you strongly believe in say, letting evolution take its course, then fair could be taken to mean allowing families that prosper to accumulate all their wealth and pass it on to produce even more powerful offspring.

quality of life varies a great deal depending on what you think is fair.

 

[stewartcs]

this all depends on how you define things. if you took "all men are created equal" to one extreme, then fair could mean all receive the same educational, financial, nutritional, and social (am i leaving something out?) opportunities. and then see where each goes with it.

I can kind of see your point on the two being related. However, let's say this was true, then would it be fair that after everyone was given all of the same opportunities, that person A worked harder than person B to make more money and then the government taxed him more?

CS

 

[Proton Soup]

I can kind of see your point on the two being related. However, let's say this was true, then would it be fair that after everyone was given all of the same opportunities, that person A worked harder than person B to make more money and then the government taxed him more?

CS

i think i posted this somewhere else, but i don't think it makes a huge difference, except for short-term dynamics when you adjust the rates. if person A owns a company that employs 100 person Bs, and you decrease the Bs' rate while increasing A's, A will adjust salaries until all the extra tax you extracted from him comes out of the Bs' pockets. in the end, A makes as much as he did, and so do the Bs.

also, it's not a given that person A is working harder than the persons B. person A is simply leveraging off the labor of so many Bs and skimming a percentage for himself. "smarter", maybe, but not necessarily "harder".

 

[LowlyPion]

Hate no more.

New York Times map:
http://elections.nytimes.com/2008/results/president/map.html

Voting Shifts shows a lot of Big Blue Love - sea to shining sea.

 

[Gokul43201]

Saving the majority of people on average is better than only saving a few.

But is it better to save 10 people that are undeserving of it than 2 who are deserving?