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Philosophy of Taxation [SPLIT]
ElJeffe
Registered User, ClubPA regular
Registered User, ClubPA regular
I have an almost moral dislike of taxing them simply because we can. That said, I can not dismiss the fact that somebody has to pay for it. I do question whether or not the only richest can afford the receipts we are talking about, though. I fully expect everyone currently paying taxes today to be paying larger percentages in the not so distant future.
We tax them at a higher rate because they own a higher percentage of the nation's wealth.
Which is another way of saying "because we can".
We need to get a certain amount of money. If we take it from the poor, it will hurt them and hurt the economy. If we take it from the middle class, it will hurt them and hurt the economy. If we take it from the wealthy, they and the economy will be fine. We take a higher percentage from the wealthy because it's in everyone's long-term interest for us to do so.
I also object to taxing people just because we can. I hate hearing people suggest we should up cigarette taxes as a money making scheme because, hey, everyone hates smokers, right? That's a terrible justification. Taxing people because you can, because it's politically expedient, because they're in the minority and can't bitch, these are shitty, immoral reasons to tax.
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.... so, let me see if I understand what you are saying. No bank will support a company wanting to invest in future growth because they do not see it as viable. However, we should force taxpayers to do so because we think it will ultimately be viable?
You do realize that the argument pro-savings is that it gives the banks more cash such that they have incentives to make loans. (I believe they are actually required to invest a portion of it, no?)
I don't think I could give this a better response than ElJeffe.
And if you want an intellectual justification, it's because that money that the rich have is made off of the collective society that resides under them. So they get to pay for having that opportunity to make tons of cash.
It's not "because we can," it's because the rich use the tools of society provided by and propped up by the government more than the middle and lower classes. When you amass wealth on the backs of other people you are expected to pick up some of the costs of those people.
EDIT: Beat'd by geckahn!
For the other, you are saying that "they get to pay for having that opportunity to make tons of cash." Except, that isn't quite right. Otherwise, everyone that had the opportunity would have to pay. What you are saying is they have to pay because they successfully used the opportunity.
The simple truth is that somebody has to pay for things. Most of us can not afford it, so we push that burden to those that can. You can argue it is in their best interests to have a stable society, but to claim that they automatically owe the rest of the populace money because they are rich is.... I don't really know the word. Weak, I guess.
There is some justification for the fact that the rich should be taxed more because they have the resources to avoid paying many taxes through loopholes, and that they don't contribute the same percentage of their money back into the economy, most of it just ends up sitting in bank accounts or some non liquid form. That certainly doesn't account for the amount they pay though, it's simply because they have to or we would be fucked as a nation.
A great many rich people realize that without their incredibly high taxes it would lead to them not being rich long term because of economic damage, a few are incredibly stupid though and want taxes to be "Fair". Ah Bill O'reilly, if you didn't pay such high taxes your viewers wouldn't be able to buy your crappy books, so why do you complain?
Okay, lets take schooling as an example.
First, we have Joe Middleclasserson. Joe's just an office worker, so his relationship with the school system is that it gave him the preparation to be able to work. In comparison, when we look at John Deeppockets, the guy who owns the company Joe works for, he relies on the school district not only to provide him with an education, but also to make sure that his workforce is educated. As such, he uses the school district to a much larger degree than Joe ever did.
In a similar vein the rich pay for crap like roads because they use them more, without them their employees wouldn't be able to work and their customers wouldn't be able to consume whatever they are selling.
but anybody could have done that! so we shouldnt tax him more, because he had the balls to exploit workers excess labor!
Which is some stupid bullshit. at least my philosophy makes rational sense.
That works on established rich folks. One example, however, does not make the view correct. Take another.
Joe and John are classmates at the same shitty public school. Joe excels in all of his studies and eventually takes several successful risks and gets a good business going. John also did decent in his studies, however, he got burned on a risk and is currently simply employed at Joe's business.
Unless you can claim that it is guaranteed they did not both have the same opportunities, the argument that they are being taxed for having the opportunities is lost. As for using more of the resources.... Unless we are ok with double taxation, it is the same basic idea. John, even though he did not go on to start his own successful business, was still paying for the resources he used. To claim that Joe owes money to those resources because he was able to take advantage of John using it, is nothing more than the first argument again.
If you think that the only way to get rich is to exploit workers, your philosophy scares me.
How is Joe making this money? He's co-opting at least one employees labor (john), and I assume more if he's actually successful. So he gets to pay a higher portion of that cost.
That's it, simplest way to explain it.
exploitation is not a negative word in an economic sense. It means co-opting the fruits of someones labor, which is what anyone with employees does.
OK, you want an example?
Bill Gates is fantastically rich. In order to make his money, he has to have a company made up of employees.
Each one of those employees had a public school education, maybe they had federally subsidized loans for college! They drive or take the train/bus/whatever to work every day on infrastructure that was built by the federal and state governments.
Also, Microsoft has a lot of patents secured by the government. And they have government regulators who keep their competitors (and Microsoft) in check. I could go on and on about how computer technology, the internet, etc. all had big government funding but you probably already know about that.
What?! You know nothing about Joe's business. Lets say he is the owner/operator of a local coffee shop and puts in about 90 hours a week to keep the business running/thriving. John is a barista (or whatever it is called at a coffee shop) and makes a very generous $12/hour working there (assume the average pay is $9/hour).
If you want to claim he is exploiting consumers tendency to over pay for items, that is one thing. But you can not guarantee that he is exploiting his workers just because he is richer.
Also, they benefit most from protection against the torch and pitchfork crowd or the Mongol hordes from redistributing the wealth in a more direct manner.
Yes I can, because I have a BS in economics, so I know what exploitation means in economic terms. Your employee's labor is worth a certain value to a company. Say it's 20$ an hour. You pay him 15$ in wages and benefits per hour. You are exploiting joe for $5 an hour, and that's how every business man in this world makes money.
And without the roads he pays taxes on and the schools he pays taxes on I'm sure his customers would be galloping up to his coffee shops on their horses to buy his coffee
Maybe you need to move away from the negative connotations of "exploit." If we assume that Joe needs John in order for his business to survive, then Joe is relying on all of the gov't services John receives as well.
"Exploit" in the economic sense just means to use/rely on their work to make your money. Not "exploit" as in dark 15 hour shifts at the sweatshop exploit.
EDIT: geckahn explained it with his fancy "numbers"
Meanwhile, their classmate Joanna from the same public school did very poorly in her studies, but has a fabulous ass and cleavage you could suffocate in. Joe hires her as his secretary and pays her twice John's wage because she occasionally fellates him during conference calls.
(I have no idea which argument this is supporting, just throwing another example out there and my mind's in the gutter at the moment.)
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Yeah, see that going over your head? That's the point.
Joe uses more of the government because he relies on the government more. It doesn't matter how he got to where he is now, he relies on the government to provide him with educated people in his workforce. He relies on the government to maintain infrastructure not just for his own personal use, but also for the use of his business. His use of the legal system is also much larger. because he relies on the law to uphold the contracts and deals that allow him to stay in business. And because of this, since he does, in fact, lean on the government a whole lot harder, it's only fair that he pay more in return.
Let's say that after Joe starts his business, the government decides to get out of education completely, make it private. Does that suck for the lower classes? Sure. But it sucks even more for Joe, because now he can't be assured a basic level of competence in the workforce, which means that he's either going to have to spend even more time screening his potential hires or that he's going to have to take on the burden of education himself.
Seriously, it's not that fucking hard to understand.
Everything is interconnected. Everyone depends on everyone else. The actual benefits the government provides are provided equally to everyone. Everyone has access to Medicare if they happen to be broke enough. Everyone gets social security. Everyone has access to public schooling. Everyone can qualify for federally funded grants and loans to pursue college. The idea that if the government disappeared tomorrow, it would be the wealthy who would be worst off while the poor and middle class wouldn't see too bad a drop in lifestyle is asinine. The wealthy would be the most likely to rule us as our new tyrant-king overclass.
The most equitable system would be to recognize that given the equal government opportunities granted to everyone, everyone should pay a set percentage of each dollar earned. The rich would pay more, and the super rich would pay a lot more.
We don't do that, not because the rich are morally obligated to pay 95% of the tax burden while the poor shouldn't have to pay anything, but because it's the only feasible means of doing so.
Wait, you're saying that it'd be rougher for the business tycoon who now has to spend a little more time screening his applicants than for the poor, uneducated kid who has no means of learning to read and write?
How are things on your planet? What color is the sky?
Edit: Boy, was I confused when I saw I was on the second page of a thread.... Reading back over what EllJeffe said, again. I think he expressed it much better.
Rocket surgery this is not.
the "no true scotch man" fallacy.
The actual marxist definition of exploitation is in fact non-negative, and comes from Das Kapital, which is actually a very impressive economic publication. There is a reason economists of all stripes take the guy seriously, and it isn't because of the communist manifesto.
I'm not trying to paint it as negative because it came from Marx. I'm just saying the wordings I have read do not sound .... "good". If that makes sense. What is the wording you prefer that does not sound like the colloquial usage of the term?
The actual benefits are provided to everyone, but not everyone enjoys those benefits equally. Some people provide their labor to others, and some people exploit others labor for their own well being. And thats all well and good, but I think that it provides justification for a progressive taxation system, which also happens to be the best way to fund a modern government.
"Double Taxation" is one of the most moronic and stupid misnomers ever created by anyone.
Hey, you want an example of double taxation? The vast majority of people get a paycheck. A payroll tax is charged to that. The money that's left over is probably used to buy consumer goods (sales tax), or possibly even to buy property (tax on the transation and property taxes), and then in April a good deal of this wealth is being triple taxed through the income tax.
Triple taxation! Norquist must be having a heart attack! No, wait, he isn't, because double taxation, just like the "death tax", is a way to make catchwords that try to cut taxes in any possible way so that social security can be destroyed and the rich can have more money.
TLDR: Double Taxation is a retarded principle and anyone who uses the term should be laughed at.
pay them less then they get out of them? Theres a reason it's an economic term, because there arn't many other words to use to represent it without using a full sentence.
The arguments are simply do we use a progressive taxation because the rich use more of the resources and therefore deserve to pay more, or because it is simply the method that has the least amount of negative impact on the economy. (I think I worded that correctly.)
Educated employees and public research are really a drop in the bucket here, actually. Gates (and most industry in the world outside of agriculture) relies also on having educated customers, because illiterate sustenance farmers typically don't care about owning computers.
I'd say it sucks less for Joe. The poor would be unable to support themselves very well without education. Joe, however, still has the resources to educate himself, his family, and (to a limited extent) his workforce. Our current health care system is similar to the hypothetical privatized education system in your example. The rich can afford health care; corporations can afford health care for their most important workers; the poor can't afford health care on their own. Most social programs are designed in order to increase equality, by bringing up standards for the lowest members of society.
A better (but still not perfect) example is the rule of law. Joe benefits far more from the rule of law, since it stops the lower class from forcibly redistributing wealth (i.e. stealing all his shit). Still, he could pay for guards and live in a secured compound.
I would justify taxation like this:
Government spending programs are a good idea. They are the best way to create stable, productive, happy societies. Even libertarians agree with this (they just disagree on the amount of spending that you need). Therefore, taxes are essential.
Progressive taxation is the best way to do it. The richer you are, the smaller marginal benefit you get from each additional dollar you get (and the less marginal loss there is for every dollar that you lose from taxation). Someone with a $100,000/yr salary could afford to be taxed $40,000 and still live well. Someone with a $20,000/yr salary probably lives paycheck to paycheck (depending on where they live) and taxing them by $8,000/yr (i.e. 40%, a flat tax) would be harmed tremendously. So, how do we get the amount of taxation that we need to support spending while reducing the amount of harm that taxes can cause? Progressive taxation.
Of course, the level of progressiveness can be debated, since taken to an extreme level, it can drastically reduce incentives to be more productive.
Those are the two most common arguments I've seen, yes.
There may be others. I dunno, economics ain't my teabag.
the "no true scotch man" fallacy.
Again, "pay them less than they get out of them" does not sound positive to me.
Right. My stance was simply that the first of those arguments is weak. It prompted a ton of debate, evidently.
That's your own thinking putting bias into the system of capitalism. I mean right now, I'm working as a government consultant. I, myself and my sole labor, is sold to the government for roughly double what I am payed. I get exploited the fuck out of, but I am happy as hell for it, because I get paid a lot.
Because eventually, he's going to run out of people who were educated under the old regime, and he's going to have to spend more of his time and money educating his workforce. Yes, in the short term, it works out great for him - but in anything resembling the long term, if Joe's business relies on anything more than "sew sheet a to sheet b" he's going to be paying out the nose to make sure his workforce is at least marginally competant in some way or another.