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Author Topic: Are you paying your fair share?
Seneca
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quote:
Originally posted by kmbboots:
quote:
Originally posted by Seneca:
quote:
Originally posted by NobleHunter:
I find certain species of libertarians take solace in casting the poor as moochers and frauds in order to avoid contemplating the misery that would arise from their unbending commitment to their moral principles.

[Roll Eyes]

Do moochers and frauds who are abusing government benefits exist or not?

So what!
People usually care if they are having their stuff being taken away and then being lied to about what happened to it...
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MattP
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quote:
Do moochers and frauds who are abusing government benefits exist or not?
Do you believe they represent the majority of those receiving benefits? What proportion of them would you say are frauds and what proportion are moochers. Do these groups overlap?
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AI Wessex
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"Do moochers and frauds who are abusing government benefits exist or not?"

Sure, would they number more or less than the number of people who commit voter fraud? That number is so low as to be statistically insignificant. I wonder if the number of people who "abuse government benefits" at the low end of the economic ladder are also statistically insignificant. I strongly suspect abuse by people at the high end and corporations happens vastly more often and takes orders of magnitude more money out of the hands of the government.

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Pyrtolin
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quote:
Originally posted by Seneca:
I never made either of those judgments absolutely, I am only contending that it is fundamentally wrong for the government to confiscate property from one person to give it to another even in the name of correcting those "problems."

Which is why we don't confiscate any property to do it. Instead we create money for them to buy those things from the market. They get what they need and the people selling those things make a profit that they can apply to things they want or need as a reward for producing things for the poor and needy.
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KidTokyo
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Welfare fraud is barely a blip on the radar in terms of what is costly to the American economy. Costs imposed by corporate fraud outweigh it by at least a hundred-fold.
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Pyrtolin
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quote:
Originally posted by Seneca:
quote:
Originally posted by NobleHunter:
I find certain species of libertarians take solace in casting the poor as moochers and frauds in order to avoid contemplating the misery that would arise from their unbending commitment to their moral principles.

[Roll Eyes]

Do moochers and frauds who are abusing government benefits exist or not?

To cite a well respected source:

quote:
The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations.

According therefore, as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniencies for which it has occasion.

But this proportion must in every nation be regulated by two different circumstances; first by the skill, dexterity, and judgment with which its labour is generally applied; and, secondly, by the proportion between the number of those who are employed in useful labour, and that of those who are not so employed. Whatever be the soil, climate, or extent of territory of any particular nation, the abundance or scantiness of its annual supply must, in that particular situation, depend upon those two circumstances.

The abundance or scantiness of this supply too seems to depend more upon the former of those two circumstances than upon the latter. Among the savage nations of hunters and fishers, every individual who is able to work, is more or less employed in useful labour, and endeavours to provide, as well as he can, the necessaries and conveniencies of life, for himself, or such of his family or tribe as are either too old, or too young, or too infirm to go a hunting and fishing. Such nations, however, are so miserably poor, that from mere want, they are frequently reduced, or, at least, think themselves reduced, to the necessity sometimes of directly destroying, and sometimes of abandoning their infants, their old people, and those afflicted with lingering diseases, to perish with hunger, or to be devoured by wild beasts. Among civilized and thriving nations, on the contrary, though a great number of people do not labour at all, many of whom consume the produce of ten times, frequently of a hundred times more labour than the greater part of those who work; yet the produce of the whole labour of the society is so great, that all are often abundantly supplied, and a workman, even of the lowest and poorest order, if he is frugal and industrious, may enjoy a greater share of the necessaries and conveniencies of life than it is possible for any savage to acquire.

The relatively small number of people that cost by without working productively, at the top and at the bottom combined, are pretty much irrelevant.

Do some people abuse public support systems? Sure, but so what? We gain much more in productive labor and market demand from those who do not than the trivial costs associated with them taking actions that, ultimately, only hurt themselves (and, in fact, make everyone else around them a bit wealthier from the payment that comes from supporting them).

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AI Wessex
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"People usually care if they are having their stuff being taken away and then being lied to about what happened to it..."

Seneca, here's a good opportunity for you to agree that you are perhaps overreaching in your condemnation of poor people, some small percentage of which are defrauding the government. Let me pose it as a question:

Do you agree that the abuse by poor people who receive government assistance (not including disabled or elderly on SS) is far outweighed by fraud, abuse and mooching by wealthy people who game the system or simply steal money, and by corporations who manipulate their books and misrepresent their corporate practices to defraud the government?

If you agree with that, do you think your outrage would be better directed at that group, since they are taking far more money out of your pocket illegally and immorally than those poor people are?

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Seneca
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Oh I'm quite aware of the upper-end abuse, in my book I'd rather cut the government down to very low levels and have a truly free market without all the crony capitalism that goes on. However, much of the the upper-end abuse and fraud is now directly mingled and entangled with the lower end, ie: the duality of food stamps and how they are tied to big agri-business as well as winning elections with the "gimme" demographics.
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KidTokyo
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quote:
However, much of the the upper-end abuse and fraud is now directly mingled and entangled with the lower end,
Insofar as being "mingled and entangled" with them involves defrauding them and competing unfairly against them, this statement is true.

Otherwise, it's completely nonsensical.

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AI Wessex
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quote:
Originally posted by Seneca:
Oh I'm quite aware of the upper-end abuse, in my book I'd rather cut the government down to very low levels and have a truly free market without all the crony capitalism that goes on. However, much of the the upper-end abuse and fraud is now directly mingled and entangled with the lower end, ie: the duality of food stamps and how they are tied to big agri-business as well as winning elections with the "gimme" demographics.

Ah, you found a way to pretend that the vastly greater high-end fraud and abuse is still somehow directly the fault of those at the low end, who have no money either before or after their so-called abuse of the system.

So, you ducked the question yet again. How about speaking directly to the billions if not trillions of $$ taken out of the hands of ordinary citizens by the rich among us and corporations. Just for a moment, pretend that the fraud conducted by poor people is a pathetically small amount compared to that.

I'll throw you a bone. The financial crisis of 2008 was entirely created by the twisted and corrupt financial industry. Those people cashed out bigtime to the tune of hundreds of billions of $$ that comes out of your pocket. No poor people gained a penny from that. How vehemently do you feel anger toward them?

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Seneca
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quote:
Originally posted by AI Wessex:
quote:
Originally posted by Seneca:
Oh I'm quite aware of the upper-end abuse, in my book I'd rather cut the government down to very low levels and have a truly free market without all the crony capitalism that goes on. However, much of the the upper-end abuse and fraud is now directly mingled and entangled with the lower end, ie: the duality of food stamps and how they are tied to big agri-business as well as winning elections with the "gimme" demographics.

Ah, you found a way to pretend that the vastly greater high-end fraud and abuse is still somehow directly the fault of those at the low end, who have no money either before or after their so-called abuse of the system.

So, you ducked the question yet again. How about speaking directly to the billions if not trillions of $$ taken out of the hands of ordinary citizens by the rich among us and corporations. Just for a moment, pretend that the fraud conducted by poor people is a pathetically small amount compared to that.

I'll throw you a bone. The financial crisis of 2008 was entirely created by the twisted and corrupt financial industry. Those people cashed out bigtime to the tune of hundreds of billions of $$ that comes out of your pocket. No poor people gained a penny from that. How vehemently do you feel anger toward them?

What I'm saying is that the "gimme" constituencies ensure that elections are now won based on bribery of government handouts or fear that the "other guy" will cut them off.
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Pyrtolin
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quote:
What I'm saying is that the "gimme" constituencies ensure that elections are now won based on bribery of government handouts or fear that the "other guy" will cut them off.
Of course the fact that low income people tend not to turn out to vote means that this effect happens mostly among wealth beneficiaries of corporate benefits and not those of social supports.
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AI Wessex
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"What I'm saying is that the "gimme" constituencies ensure that elections are now won based on bribery of government handouts or fear that the "other guy" will cut them off."

I don't understand how poor people are using their political power to ensure that rich people and rich corporations defraud the government of billions and billions and billions of $$ while they get a few food stamps to maybe misspend on wine. Since you're talking about them swaying the elections you're not talking about a few bad apples. It's sounding like you're talking about Romney's 47%. Is that what you really think is happening?

In my opinion, you have a really serious problem with poor people who scrape pennies from the sidewalk and have nothing at all bad to say about others who swipe almost incomprehensibly large sums out from under your nose. Both are stealing from you, but you only blame the penny ante crowd, not the ones who are stealing you blind.

For a guy who waves principle whenever he can when you see poor people getting a little more than they deserve, I seriously don't get it.

This is not an insult, by the way, so don't waste your time reporting this post. It's a very serious observation where I'm saying I would really like to understand how you think, because I can't get there on my own.

Maybe somebody else can explain to me the coherence behind your philosophy.

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edgmatt
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Kid and kmboots -

Sorry about the misquotes...I definitely had the posts from the two of you as one person in my head. [DOH]

kmboots:

quote:
My point is that we do the first two no matter what. Right now, Seneca is arguing both that the poor don't deserve more than they have, nor do they really need more than they have. It is certainly as much a judgement as me deciding that they both "deserve" and need more.

The difference is that Seneca is saying that they get what they deserve through their own choices and faults. No one determined that for them. There isn't some higher power giving out money that said "you only get 0. sorry." No one purposefully took action to make them poor.

In the case of taxes, there is someone, or group of people, that determine how much money one deserves to have taken from them. Regardless of your choices, regardless of how you got the money..."we" are taking X%.

Please remember, I am not complaining (in this thread anyway) about taxes. I'm merely pointing out that 1: no one makes the decision for anyone else to be poor. 2: someone makes the decision for the richer to be less rich.

Tom said a few pages back that economically, it makes more sense for the poor to get the money redistributed to them because they are more likely to circulate it.

I don't agree on the hidden implication there which is that the poor spend more money than the wealthy. In numbers this may be true because there are so few extremely wealthy, and so many more not. But common sense tells us that the same poor people would spend more if they had more and the wealthy will spend less if they have less. Therefore, assuming we have total control of such things, we should create ways for both to have more money, not one or the other.

Taking money from the wealthy and giving it to the poor is one solution, and not the worst, but why not create ways for the poor to gain their own wealth? That would be the best solution.

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Greg Davidson
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quote:
no one makes the decision for anyone else to be poor
I disagree. There are policy changes that affect things such as public education that have a measurable effect on poverty and future income.
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Seneca
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quote:
Originally posted by Greg Davidson:
quote:
no one makes the decision for anyone else to be poor
I disagree. There are policy changes that affect things such as public education that have a measurable effect on poverty and future income.
Then why are there some poor kids who come from bad households and bad schools that become successful in life?

What about free will? Is everyone just a product of the environment around them no matter what?

I know lots of people who "defied the odds" given their circumstances. The idea that they should have been given help and not risen on their own demeans them and demeans human free will.

There are many different kinds of poor people. Two of them that I've noticed are those who want a better life and will do anything to get it no matter how hard or how many setbacks, and those that give up and blame their lives on luck/fate/society.

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TomDavidson
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quote:
But common sense tells us that the same poor people would spend more if they had more and the wealthy will spend less if they have less.
This is incorrect. There is a certain amount of money someone needs to spend to maintain a given lifestyle; anything over that is likely to be socked away, used for security or safekeeping. The poor spend nearly every penny they have; in fact, the bottom three quintiles actually spend more money than they have, as they have negative wealth and are in substantial debt in order to maintain their lifestyle. The top two quintiles spend substantially less, and the top 5% spends much less -- because they have so much money that, as a practical matter, it is difficult for them to spend it all. Taking an additional $10,000 from Bill Gates (for example) will not affect his spending habits in any meaningful way; there is nothing he will suddenly become unable to buy as a consequence.

---------

quote:
Two of them that I've noticed are those who want a better life and will do anything to get it no matter how hard or how many setbacks...
Like illegal immigrants, you mean?
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KidTokyo
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quote:
There isn't some higher power giving out money that said "you only get 0. sorry." No one purposefully took action to make them poor.
This may be true for individuals, but for communities I would say that this is the exact opposite of the truth.

quote:
In the case of taxes, there is someone, or group of people, that determine how much money one deserves to have taken from them. Regardless of your choices, regardless of how you got the money..."we" are taking X%.
Conservatives seem reluctant, or unable to get out of this narrow frame -- a frame which excludes almost everything from view.

The implicit assumption there is that, were it not for taxation, the money would be allocated in a manner somehow pure and unsullied, apportioned only as deserved by each recipient. Thus, taxation deprives the most successful of their fair share.

It overlooks many things. One of the most important -- anyone who makes money in the financial sector is enjoying a very lavish government subsidy. Contractual enforcement and regulation enables the complex transactions upon which the industry and finance depends. Furthermore, American industry and tech benefits from massive government investment in R&D. Also, international trade policies and support for M & A (a very complex contractual transaction) have depleted worker rights (and hence worker earnings and wealth) while boosting corporate profits. Government backed-insurance and quasi-governmental lending agencies have added value to the credit industry across the board.

A truly "laissez-faire" platform would never fly on Wall Street. Government contracts would disappear, and along with them vast swaths of our industrial base. Transactional efficiency would evaporate. An economy driven by Industry and Finance is an economy driven by heavy government subsidies and market management, without which there would be far fewer wealthy people, and much less of everything we mistakenly associate with "liberty."

So the question is: are the wealthy giving back their fair share in light of how much they benefit.

quote:
don't agree on the hidden implication there which is that the poor spend more money than the wealthy. In numbers this may be true because there are so few extremely wealthy, and so many more not. But common sense tells us that the same poor people would spend more if they had more and the wealthy will spend less if they have less. Therefore, assuming we have total control of such things, we should create ways for both to have more money, not one or the other.
It matters what they would spend it on. The poor would buy food and clothes, health care, and maybe some appliances. The wealthier would travel and invest. Hence, much more of the money spent by the wealthy would go overseas, with no benefit to the American economy.

[ December 11, 2013, 12:33 PM: Message edited by: KidTokyo ]

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Wayward Son
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quote:
G3 wrote:
I'm sure you can torture the data sufficiently.

You quoted a site that said the top 60 percent pay more than 100% of the taxes, and you're worried that I will torture the data??? [LOL]
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G3
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I'm not worried, I'm certain. Big difference.
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Greg Davidson
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quote:
Seneca: Then why are there some poor kids who come from bad households and bad schools that become successful in life?

What about free will? Is everyone just a product of the environment around them no matter what?

I know lots of people who "defied the odds" given their circumstances. The idea that they should have been given help and not risen on their own demeans them and demeans human free will.

There are many different kinds of poor people. Two of them that I've noticed are those who want a better life and will do anything to get it no matter how hard or how many setbacks, and those that give up and blame their lives on luck/fate/society.

Seneca, perhaps the difference between you and me is math. I don't disagree that there are poor people who beat the odds and become rich. But even if you could show a million specific examples, that alone does not prove that the odds are fair or just. There are 40 million people in the US who qualify as poor, 1:40 odds are pretty bad, particularly as (I believe) 2/3rds of those born into the top 20% in the US go on to be in the top 20%.

The other assumption you need to make is that there is a very high correlation between success and those who deserve success. In a sense, that would be a very optimistic view about our society - that virtuous behavior is almost always rewarded. Do you believe that? Do you generally believe that the wealthiest people you know are the best and most deserving? And that as income declines, it is due to the faults of those who are rewarded less by our economic system?

I believe there is a partial correlation - effort and capability do improve your odds, regardless of your starting position. But I also believe that policy affects the odds, and initial wealth affects the odds.

To take a simple example, a poor young adult with a chronically ailing parent or grandparent may be required to provide a great deal of care-giving themselves whereas for a wealthier family, in-home nursing care can be afforded. The poor person in that situation has a number of major additional burdens.

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edgmatt
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Kid-

quote:
quote:
quote: In the case of taxes, there is someone, or group of people, that determine how much money one deserves to have taken from them. Regardless of your choices, regardless of how you got the money..."we" are taking X%.
Conservatives seem reluctant, or unable to get out of this narrow frame -- a frame which excludes almost everything from view.

The implicit assumption there is that, were it not for taxation, the money would be allocated in a manner somehow pure and unsullied, apportioned only as deserved by each recipient. Thus, taxation deprives the most successful of their fair share.

Is the part I put in bold the part you are calling my "narrow frame"?

Because the part you quoted me on does not imply what you said it did, and I do not suggest that "were it not for taxation, the money would be allocated in a manner somehow pure and unsullied, apportioned only as deserved by each recipient."

My quote is a fact, not an opinion. Tax laws say, we take this much. Period. Does it not?

And in the context, I was comparing it to the claim made by kmboots that "we" purposfully choose to make people poor.

Tom-

quote:
This is incorrect. There is a certain amount of money someone needs to spend to maintain a given lifestyle; anything over that is likely to be socked away, used for security or safekeeping. The poor spend nearly every penny they have; in fact, the bottom three quintiles actually spend more money than they have, as they have negative wealth and are in substantial debt in order to maintain their lifestyle. The top two quintiles spend substantially less, and the top 5% spends much less -- because they have so much money that, as a practical matter, it is difficult for them to spend it all. Taking an additional $10,000 from Bill Gates (for example) will not affect his spending habits in any meaningful way; there is nothing he will suddenly become unable to buy as a consequence.
I accept this, for the most part. Can you (or anyone) determine what the max amount is that won't affect them? Your most likely right that $10,000 won't affect Bill Gates spending habits, but what is the number that will? (I'm sure he paid much more than $10,000 in taxes on any given year in the past decade.)

What about each and every one of the other people in the country? It's a very easy thing to say "you don't need this" to someone that has a lot of something. Can you actually make that determination? There are hundreds or thousands of details that *you* would need to know about that persons life to make that kind of call.

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KidTokyo
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quote:
My quote is a fact, not an opinion. Tax laws say, we take this much.
Yes, correct.

quote:
Period.
Wrong. That's what I mean by a frame that excludes crucial information.

quote:
And in the context, I was comparing it to the claim made by kmboots that "we" purposfully choose to make people poor.
Is it your understanding the existence of slums, huge wealth imbalances, and so forth is not the product of the same top-down influence of power that creates tax policy?
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TomDavidson
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quote:
It's a very easy thing to say "you don't need this" to someone that has a lot of something. Can you actually make that determination?
Nope. In the same way, I can't say that a given 15-year-old isn't mature enough to drive, or that a given 21-year-old is mature enough to handle alcohol, or that a given felon shouldn't be trusted to own a gun. The whole idea of tax brackets is that we're basically engaging in semi-granular generalizations, and sometimes those generalizations do break down (like, for example, the way Republicans always trot out farmers when they're arguing against the estate tax, since versions of the estate tax without specific exemptions for things like farmland can create unfortunate situations.)

But I'd also like to note that our inability to say specifically that "family X doesn't need this" is actually a pretty good argument for not trying to bring morality and concepts of "need" and "merit" into taxation. The point of modern taxation is to a) feed the government and b) keep money flowing through the economy. It is not to move money from the undeserving to the deserving, but rather from inefficient channels to efficient ones.

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edgmatt
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Ok. I can get behind all of that.

quote:
But I'd also like to note that our inability to say specifically that "family X doesn't need this" is actually a pretty good argument for not trying to bring morality and concepts of "need" and "merit" into taxation.
I'm not sure if I follow that all the way through. Could you re-phrase?

quote:
The point of modern taxation is to a) feed the government and b) keep money flowing through the economy. It is not to move money from the undeserving to the deserving, but rather from inefficient channels to efficient ones.
Awesome. That, in my opinion, is exactly what taxes are supposed to do. I suppose I've been (very) slowly coming around to that point in this thread. Obviously, the only argument I have left now is with what the government thinks is efficient and inefficient.

Kid-

quote:
Wrong. That's what I mean by a frame that excludes crucial information.
Care to go into detail?

quote:
Is it your understanding the existence of slums, huge wealth imbalances, and so forth is not the product of the same top-down influence of power that creates tax policy?
No. Is it your understanding that the influence(s) you are speaking of creates slums, huge wealth imbalances and so forth directly and intentionally?

That is, do you believe there is a room full of people somewhere discussing how to turn San Jose, CA (for example) into a slum?

Or is it that these things occur (often) as an externality?

Where as the tax system directly and intentionally decides how much money to take from whom. And the difference between the two is my point.

You seem to be interpreting my statements as me being for slums and wealth imbalance, and against taxes. I am not. Read Tom's last post, and my response, and things ought to be cleared up.

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KidTokyo
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quote:
Is it your understanding that the influence(s) you are speaking of creates slums, huge wealth imbalances and so forth directly and intentionally?
Yes.

quote:
That is, do you believe there is a room full of people somewhere discussing how to turn San Jose, CA (for example) into a slum?
No. This does sometimes happen (Robert Moses), but usually not, and is in no way required by the above. Conspiracy theories are neither necessary nor, for the most part, plausible.

quote:
Or is it that these things occur (often) as an externality?
Sometimes, yes.

quote:
Where as the tax system directly and intentionally decides how much money to take from whom. And the difference between the two is my point.
I understand your point, always have. My point is that the government has many other ways of re-distributing wealth in addition to tax policy, and that in the aggregate it's the wealthy few that get the benefit of the deal, even though they pay higher nominal tax rates.

quote:
Care to go into detail?
About the frame? But I already did in an earlier post on this same page. If you need more elaboration, please highlight whichever part was not clear to you.

quote:
You seem to be interpreting my statements as me being for slums and wealth imbalance, and against taxes. I am not. Read Tom's last post, and my response, and things ought to be cleared up.
Actually, no, I don't think you are "for" these things. I just disagree with your view that taxation and expenditure is a unique kind of "taking" and "redistribution."

[ December 12, 2013, 08:54 AM: Message edited by: KidTokyo ]

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kmbboots
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quote:
Originally posted by edgmatt:

It's a very easy thing to say "you don't need this" to someone that has a lot of something. Can you actually make that determination? There are hundreds or thousands of details that *you* would need to know about that persons life to make that kind of call.

Yet we seem to have no trouble telling poor people what they don't need.
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Pyrtolin
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quote:
My quote is a fact, not an opinion. Tax laws say, we take this much. Period. Does it not?

The trick is, though, that we take this much _money_, not this much _wealth_ by way of taxes. When we do that, particualrly at the higher end, prices adjust themselves based on how much money is left after taxes, so the taxes themselves have almost no affect on individual wealth, only on the nominal pricing of wealth. In effect, they monstly just serve to prevent inflation of luxury items purchased as status symbols. Even when you're talking a fair bit below what Rolls Royce needs to set is prices to be to sell the number of cars it wants to produce in a given year, the adjustment of money available to bit just affects the nominal price that conveniently located land an a house in, say, San Francisco goes for, not the actual value of that wealth, with the upshot being that preventing a relatively small number of people from bidding the prices up due to disproportionately high income levels also serves to both keep prices in the range where more people can participate in the bidding process to try and get a share and also allows down steam prices such as rent to come out a bit lower in turn.

If you want a measure of a good tax policy, that's a good place to start- ask "Does it help prevent inflation without directly limiting they payer's access to to needs or real wealth?"

quote:
I accept this, for the most part. Can you (or anyone) determine what the max amount is that won't affect them? Your most likely right that $10,000 won't affect Bill Gates spending habits, but what is the number that will? (I'm sure he paid much more than $10,000 in taxes on any given year in the past decade.)

What about each and every one of the other people in the country? It's a very easy thing to say "you don't need this" to someone that has a lot of something. Can you actually make that determination? There are hundreds or thousands of details that *you* would need to know about that persons life to make that kind of call.

That's where using baseline metrics on the low end (such as cost of living) and things like deductions on the high end come into play. We can peg the rough average levels of "just about everyone needs to spend this much to get by" "Most spending beyond this point tends to only be on luxury goods or go into financial speculation that promotes bubbles", etc and use those points to set the base rate levels, and then we can increase the overall granularity by letting people deduct productive expenses based on their personal situations. This much is going into educational investments, that much is going into medical costs, this much is paying the wages of employees- those are productive investments and serve to also encourage desirable expansion of the related services, so they don't count toward the danger that the person in question will bid up prices on resources with less flexible supply levels or create financial pressures that lead to future instability.
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Pyrtolin
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quote:
The wealthier would travel and invest. Hence, much more of the money spent by the wealthy would go overseas, with no benefit to the American economy.
"Going over seas" is a bit of a wash (particularly since the money itself wouldn't go anywhere, unless that place over seas transacts in dollars and not its own currency)

Rather, they either bid up prices on limited resources or invest the money.

The latter issue lies not even in they fact that it's invested, but how they invest it and what signals the economy is sending for the best returns on investments. If our market is signalling that the best returns can be made investing in producing more things that people want and need, because there are people that can afford to buy them, but not enough being produced, then we get a healthy feedback cycle. If the market is signalling that people want and need more things, but don't have enough money to buy them, then investment goes to making loans to those people instead until they've got enough to buy things, but that leads to a much less healthy cycle, if not an outright unhealthy one as those loans come due, because the people they're being made to only see a marginal income benefit in the process because all of the returns on those loan go right back to the top without proportionally increasing income on the way up to any real degree, so people can't afford to pay the loans back in large and larger numbers, until the bottom falls out (while the people on top effectively retain the already realized profits on the process)

Taxes. particularly on the returns from speculative and financial investments help to keep the balance of risk/reward tiled toward productive investments that provide long term, low margin returns and away from the short term promises of high returns from speculative and financial investments- they help adjust the basic risk/reward calculus the Adam Smith used the invisible hand metaphor to describe to encourage stable, productive investments over destabilizing investments.

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KidTokyo
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Pyr,

You make good points and I don't disagree with them, but they seem inapposite of the issue.

Overseas markets transact in dollars every day, anytime someone buys a foreign currency, for instance. The dollars do eventually come back, but the purchase will be for foreign goods, services, or labor.

I would argue that there is a difference in benefit to the American economy (from an egalitarian perspective) between, say, buying labor or services in the U.S. as opposed to buying them in China. No? That difference, I would argue, is one reason for the growth in the market for credit, or what you term in somewhat Orwellian fashion "healthy" versus "unhealthy feedback cycles."

Or have I misunderstood the issue, and/or the point you were making?

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edgmatt
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quote:
Yet we seem to have no trouble telling poor people what they don't need.
This is the third or fourth time this sort of thing has been stated, and I really don't see the point. We shouldn't be telling anyone what they don't need, or do need. Pointing out that we do it on one group of people doesn't justify it to do it on others.
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kmbboots
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quote:
Originally posted by edgmatt:
quote:
Yet we seem to have no trouble telling poor people what they don't need.
This is the third or fourth time this sort of thing has been stated, and I really don't see the point. We shouldn't be telling anyone what they don't need, or do need. Pointing out that we do it on one group of people doesn't justify it to do it on others.
Except that when we make policy we make those calls. We decide that poor people don't need food stamps or subsidized healthcare because they have TVs. (People get seriously cheesed about poor people having TVs.) So why is it that we can't make those same judgements about other things. We don't dare ask if Mr. Heir really needs a second private jet because who are we to judge what he might need? We are the same people who made the judgement about who needs food stamps when we cut those programs.
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KidTokyo
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quote:
We shouldn't be telling anyone what they don't need, or do need.
Nothing wrong with asking, though.
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edgmatt
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quote:
Except that when we make policy we make those calls. We decide that poor people don't need food stamps or subsidized healthcare because they have TVs. (People get seriously cheesed about poor people having TVs.) So why is it that we can't make those same judgements about other things. We don't dare ask if Mr. Heir really needs a second private jet because who are we to judge what he might need?
Those two things aren't comparable because *we* didn't provide Mr. Heir with the jets in the first place. *We* make judgements on the food stamps because *we* provide them.
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PSRT
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quote:
Those two things aren't comparable because *we* didn't provide Mr. Heir with the jets in the first place. *We* make judgements on the food stamps because *we* provide them.
Well, no, we did provide him the jets in the first place. Its a little less obvious when we set up laws that allow wealth to accumulate than when we set up laws that distribute wealth, but we're still setting up laws and structures such that we allow wealth to accumulate. And even further down into the assumption hole, the idea that individuals can hold wealth at all is something that we determined.
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edgmatt
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That's not the same thing as a law that provides, directly and specifically, food stamps.

There is no law that, directly and specifically, provides jets.

You can't point to the policy/law that helped Mr. Heir get his jet. You can't gauge how much *we* helped him get that jet. (Those people were all compensated for anyway, but that's a different issue.)

You can point precisely to the law that provides food stamps. You can point to the precise amount of money *we* contribute to food stamps.

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Greg Davidson
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quote:
There is no law that, directly and specifically, provides jets.
Is your principle of justice that if a group can take an action that provides them benefit, but they do so in a way that the benefit is obscured (say, for example, a change in laws that allows them to take what would normally be taxable profits, and instead through accounting make it look like the profits occur offshore as laundered thru some small Caribbean nation), then it is as if they got no benefit at all? If that were the principle, then all some rich people would have to do is pay lobbyists to come up with a hidden way to extract returns.
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edgmatt
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You guys are conflating the issue. I understand the point you have made, and I understood it before this discussion.

People benefit indirectly (although sometimes purposefully) from certain laws. This is your point, I get it.

Other people benefit directly (and very purposefully) from laws.

These are two very different things.

Do you really make no distinction between the guy with the jet and the guy on food stamps, as it relates to this discussion? (Telling someone how much they can have/how much they need.)

To be more direct, Kid asked:

quote:
We decide that poor people don't need food stamps or subsidized healthcare because they have TVs. (People get seriously cheesed about poor people having TVs.) So why is it that we can't make those same judgements about other things?
And I answered: Because these things are very different. (And I explained how.)
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PSRT
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quote:
Do you really make no distinction between the guy with the jet and the guy on food stamps, as it relates to this discussion? (Telling someone how much they can have/how much they need.)
SUre. I make a distinction. The guy with the jet got a lot of production out of a lot of people who did more work and produced more wealth than they were paid for. THe guy with the jet did a lot less work and produced a lot less wealth than he was paid for.

Our laws and systems of economic transactions which we protect with those laws do not distribute wealth according to how that wealth was produced. Since money and wealth are public resources (though of different sorts), when those laws and transactions put too much money and wealth into someone's hands compared to the amount of labor and innovation they put into production, at the expense of people who now we have to publicly support if we want them to thrive, then I see no problem telling the guy with the jet to pay up. In fact, I think saying that the stuff is his rightfully is far more immoral than making him return some of his wealth to the public.

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edgmatt
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quote:
The guy with the jet got a lot of production out of a lot of people who did more work and produced more wealth than they were paid for. THe guy with the jet did a lot less work and produced a lot less wealth than he was paid for.

That's the kind of comments that are causing confusion in this particular debate. I don't even disagree with you completely, but it's irrelevant because:

1- We don't know that.
2- There's no way to know that.
3- There's no way to calculate how much either side owes the other.

With food stamps, however, I DO know that the ones receiving it are receiving it because they haven't earned it.* I DO know exactly how much food stamps (for example) are costing the rest of the country.

So we can make a judgement about food stamps. We know precisely how much in food stamps *we* can afford to give out, we can also come close to knowing how much one *deserves*. (People who make a certain amount of money aren't eligible.) We are also limited on how much in food stamps we can provide because it's a resource, like anything else, and is limited. So we not only CAN make judgements, we NEED to so we don't waste resources.

We can't make the same judgement about jets. We can't say with any accuracy that someone does or does not deserve a jet. There isn't a government program handing out jets, so there isn't any authority there (as there is with food stamps).

quote:
Our laws and systems of economic transactions which we protect with those laws do not distribute wealth according to how that wealth was produced.
I don't agree. In most cases it does. There are instances where it does not, and there are externalites that cause imbalance, but this is not the case in the majority of economic transactions, nor in the majority of laws.

*That is the point of the program; to get these people some food because they can't get (earn) it themselves. I'm not criticizing here, but I am being clear on what's happening.

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