House of Eratosthenes

One of my more independent-minded Facebook friends, someone I’ve learned to respect although he’s probably to the political left of me somewhere, took his turn to bash that ignorant slut Elizabeth Warren.

To which I say, Yes. Everybody line up & grab a number.

Good (even great!) arguments for progressive taxation exist. (“We’re broke” is actually an excellent one.) Elizabeth Warren’s relay of tired academic orthodoxy is not such an argument. Though it’s worthwhile to think about the systems that lead us to be able to be able to acquire wealth, and government is part of that, so are free markets, the harnessing of self-interest as a motivational tool that our economy relies on, and the fact that we as a society respect the right of those who earn money to keep it rather than go French-Revolution* on them.

Ah. Well, he’s right about pretty much everything, and I didn’t like jumping down this little rabbit hole, but I had to.

Fantastic post Bob; well said.

I know it’s a parenthetical point, but I have to take issue with the thing about “we’re broke” being an excellent point in favor of progressive taxation. Take it downward in the hierarchy a level or two, to the state and municipal governments; they have the same argument. Now if you start flying around from city to city and buying up local newspapers, reading all these sob stories about local treasuries being broke — after awhile, the message emerges and it is crystal clear: It is the nature of government to entirely avoid accountability for living beyond means. In other words, it is ALWAYS the taxpayer’s fault for not paying enough.

The message becomes even clearer when one starts to review the line item expenses maintained by these governments. Just speaking for myself, I would characterize it as “abuse” if the average age & mileage of the local citizens’ automobiles is measurably greater than the average age & milage of those driven by government officials. Some would disagree with that viewpoint with some legitimacy; but you can just imagine how I feel about $2M spent to study monkey-fornicating habits, or $3M for researchers to play World of Warcraft.

I mean, I think you get the point. “Hey we better not approve this expense because we might not be able to come up with the money for it” — it’s a thought that just doesn’t reverberate. Maybe that can’t be done, but no, “we’re broke” is not an excellent point for progressive taxation. It isn’t even an adequate one.

Bob fessed up that he “went too far,” which is good because we were able to get back to the primary subject, about which he is completely in the right. Incremental improvement.

Since then, I see President Obama is making the news because He’s going to be speaking in Silicon Valley…and I already know what He’s going to say: We have to make the tax system more progressive, because the goverment is in debt up to its ass, and these millionaires-n-billionaires (one word there) are getting away with murder.

It makes me think back to this exchange about the virtue of progressive taxation.

Three things I think all intelligent people paying attention to the issue, realize implicitly, although nobody talks about them out loud. So it falls to The Blog That Nobody Reads to point out the elephant in the room.

One. Conservatives recognize there must be something “okay” with a progressive tax system, and that thing makes any argument about it entirely moot. We are always going to have a progressive tax scheme as long as our government is awash in red ink, and our government is always going to be awash in red ink. The math says so. Imagine what revenues we would have to raise to pay all of one year’s expenses, service the public debt, and avoid running a deficit for that year. Now divide that by the number of people who might conceivably pay taxes…and imagine the least prosperous among those taxpayers sending in that quotient to the IRS. It’s just not going to happen. So there is going to have to be some progressive-curve in what these people & businesses are forking over.

Two. President Obama’s message, “Now that we’re in deep trouble we need to ‘ask’ more of our millionaires-n-billionaires,” creates a self-perpetuating, vicious political circle that is helpful to the liberal cause although it hurts the country. We are in a “hyper-progressive” taxation posture, by which I mean not only are the people at the high end paying more than the people at the low end, but many on the low end are not paying anything at all. So when it’s time to raise the money, many of the voters will back the President in saying yeah, tax that guy over there — what do I care? I’m still paying nothing. That’s the revenue side; when it comes to spending, the electorate will then say hell yes, go ahead and spend the money. Again, what do I care?

Three. Because we’re in this vicious circle, there is an obvious anesthetizing effect coming from the progressive taxation. One thing I like to run past passionate progressives is, let’s just say as a matter of policy proposal, we compromise by remaining progressive but ceasing to be hyper-progressive. We keep the curve, but it reaches all the way over to the left side of the graph; the taxpayer of most humble means is still paying a dollar a year. Everyone has skin in the game. Not a single one of them will agree to that because “I feel that would be greedy,” they say. But maybe that’s the answer, because all the taxpayers who are voting, would have a tactile feel for what’s going on. And it is a good compromise.

From all this, I have lately had a thought. Obama’s message lately — it hasn’t varied even a single bit, for the last few months — relies on a moral premise that a hyper-progressive tax scheme becomes more virtuous as our nation’s financial stature becomes less sturdy, less solvent, more ramshackle. Maybe, instead of flinging insults back and forth, conservatives and liberals should debate that. Specifically, I’d like to see some attention placed on the question: Wouldn’t the President’s implied moral proffering make more sense if it were precisely reversed? In other words, a hyper-progressive taxation curve, in which all the bills are paid by the top 50% and the more you make, the more you pay, makes most sense and is morally defensible when the government is in the black. It spends itself into debt, cannot raise enough to pay its bills, so it starts to tax the bottom half, albeit at a much lower rate. So it has hyper-progressive taxation when it can afford that luxury, and loses it after a time when it can no longer afford it, so that everyone starts to help out. And because everyone helps out, everyone gains this “tactile feel” of the expanding crisis. Many hands make light work.

Wouldn’t that make a lot more sense than what President Obama is proposing, which is the exact opposite?

Wouldn’t that make a lot more sense than what President Obama is proposing

Yes, yes it would… which is why it will never happen.

Another reason it’ll never happen, though, is that such a system would quickly reveal how many people with the franchise contribute exactly nothing to the public fisc.

Just to take one Obama-lovin’ example: college students are a ginormous drain on federal finances. They produce nothing, and whatever minor stimulative effect they have on local convenience stores, dive bars, and tattoo parlors is offset a thousandfold by federally guaranteed student loans. Moreover, it’s obvious they know nothing — if they knew something, they wouldn’t be in college. Yet they VOTE, and in fact they were probably instrumental in pushing Glorious Leader over the finish line in 2008.

You could multiply examples almost indefinitely: old people get a shit-ton of transfer payments but don’t produce anything, and they’re the highest-turnout voting bloc of all. Denizens of our inner cities can’t even spell 1040-A, much less fill one out. Ditto all the rednecks up the holler. Seniors in high school are college kids times a thousand. And so on and so on (and God, this is making me suicidal).

Basically, your skin-in-the-game argument amounts to a property qualification for the franchise, which is still one of the better ideas the founding fathers ever had: you’re not allowed to vote yourself a living out of the public treasury if you don’t pay in.
- Severian | 09/26/2011 @ 10:36
you’re not allowed to vote yourself a living out of the public treasury if you don’t pay in.

I’d take it a step further – you don’t vote AT ALL unless you “pay in.” Back in the day – before the Civil War, I want to say – I think that was how it actually worked. Only this time around we don’t discriminate by color or gender. We do it by whether or not the person has a net tax liability. One dollar of tax liability gets you one vote, a million dollars of liability still gets you only one vote. (That way nobody can claim that only high income earners get any say in running the place.)

Of course, it would be complex to actually implement this, but think about it – the people down at the bottom who collect all the goodies are the ones who keep electing Dems, who in turn impose yet more socialism once in office, which makes the system even more progressive. The ship needs to be righted – it’s starting to list dangerously. What the Left doesn’t understand is that all this benighted “fairness” is chasing the producers out of high-tax states and often offshore entirely. (The regulations they put on these same producers is a double-whammy and a topic for another time.)
- cylarz | 09/26/2011 @ 14:14
Thought I’d chime in with a couple of words to take exception to your use of the terms “hyper-progressive” and “tax.” It’s your blog, so you make the rules and definitions I guess, but the tax system has gotten less, rather than more progressive over the last, what 20 or 30 years. From over here on the left, it looks like we’re going in the wrong direction in that regard. As far as tax, I’m figuring for “tax” above, we should really read “federal income tax” instead, right? Because if you take into account all taxes, your implication that lower to middle income folx don’t pay taxes or don’t pay their share is just flat out wrong.

I come a visitin’ via Prof Mondo’s site, if you’re keeping track. He’s a terrific guy and as smart as they come. We’ve known each other since before high school and I count him as the best friend I have. Maybe that’s proof that a wacky, left-leaning guy such as myself isn’t as far gone as you thought?
- majormaddog | 09/27/2011 @ 09:54
Welcome, Major.

“Hyper-progressive” probably needs to go in my glossary. All I’ve used it for, here, is for purpose of differentiation; “progressive” means there is a curve, “hyper” meaning the curve is confined only to some of the taxpayers. To object to the differentiation implies you have a vision that can be made appealing to others, only so long as the differentiation is not made.

Our system is actually bordering on the hyper hyper progressive: the number of taxpayers “paying” a negative income tax, or net zero tax, is close to fifty percent. At any rate, my original point stands: we’re being sold on the idea that as a crisis intensifies, the number of people paying in so the crisis can be addressed, needs to go down. And that dog won’t hunt. If the problem is real, everyone needs to become part of the solution. More buckets bailing, not fewer.
- mkfreeberg | 09/27/2011 @ 11:15
A few more thoughts, Morgan:

Maybe, instead of flinging insults back and forth, conservatives and liberals should debate that.

The only “flinging” I see is coming from the Left. Over here on the Right we propose real solutions – lower taxes on everyone, reformation of the code, balanced budget. Their response is to claim we don’t care about the poor, or something else equally idiotic. We solve the issue, they demagogue it. I’ve seen more proposals out of Congress in the last six months than in the two years prior to that.

Specifically, I’d like to see some attention placed on the question: Wouldn’t the President’s implied moral proffering make more sense if it were precisely reversed?

No.

In other words, a hyper-progressive taxation curve, in which all the bills are paid by the top 50% and the more you make, the more you pay, makes most sense and is morally defensible when the government is in the black.

I fail to see why it matters whether government is in the “black” or not. The entire spectrum of incomes should be contributing something even in the best of times.

Didn’t we just finish eviscerating “that ignorant slut Warren” for her remarks on how nobody should be getting a free ride? Well, that goes double for the people down at the bottom, who use a disproportionate share of social services – public education, counseling, jail, child protective services, and all the rest.

It spends itself into debt, cannot raise enough to pay its bills, so it starts to tax the bottom half, albeit at a much lower rate.

No, this is the problem, not the solution. I’m getting tired of government at all levels looking for more revenue sources every time it has a budget overrun. It should be planning its expenditures based its revenue, not the other way around…just as we tell it to interpret the law according to the Constitution, not the Constitution according to the law. When times are lean, that means it’s time to cut spending however possible…not raise tax rates, try to tax more people, or start slapping on a bunch of assessments and fees.

I don’t get to go and demand more money from my boss every time gas prices go up and I start getting screwed at both the pump and at the grocery store. Instead, I have to cut spending. If the last five or so years have taught society anything, it’s that government needs to live within its means like everyone else, instead of running up great big deficits for our grandchildren so it can keep buying goodies for various Democrat constituencies.

Really, a flat tax would solve all of this, assuming we need to be taxing incomes at all. Steve Forbes proposed this idea during the early phases of the Republican presidential campaign back in 1996, and I was backing him because of it. I’m disgusted that it still hasn’t gathered more support. An even better idea would be a consumption tax that everyone pays on all purchases, followed by the abolition of the IRS.
- cylarz | 09/28/2011 @ 16:42
As far as tax, I’m figuring for “tax” above, we should really read “federal income tax” instead, right?

This should have been obvious. Nobody is claiming that lower income brackets don’t pay sales taxes.

Because if you take into account all taxes, your implication that lower to middle income folx don’t pay taxes or don’t pay their share is just flat out wrong.

It’s not “flat out” anything…it’s dead-on accurate, especially if the discussion is confined to net payment of federal income taxes. The bottom half of incomes pay nothing at all, and the top 1% pays about a third. The system is wildly out of whack, and it’s only contributed to all the lower-class voters who don’t seem to give a rip that their free ride is running the country broke. Meanwhile the producers are being chased offshore (and taking the jobs with them), and all the Left’s leaders can do is argue for increasing the burden even further (both taxation and regulatory) and otherwise demagogue the issue so that its base with (hopefully) swallow the bull one more time and pull the lever for the Democrats.

As a liberal, you’ve got no credibility on this issue, major. None, zero, nada. Your guys have caused this mess, and they want to turn right around and blame ours.
- cylarz | 09/28/2011 @ 16:46

Leave a Reply

You must be logged in to post a comment.

Recent

Items of Interest

Monthly Archives

What They Say

Links

Progressive TaxesMonday, September 26th, 2011

Progressive Taxes
Monday, September 26th, 2011