Posted on 11/28/2006 4:32:55 AM PST by Bigun
| 11/26/2006 |
| Redistribution and work |
| By William C. Whitbeck |
| Some time ago, Robert Herbert, a writer for The New York Times, authored a column in which he savagely criticized the tax cuts that President Bush had proposed and that the Congress had enacted. They were regressive, he said, designed to increase inequality in this country and the effect would be to send a "boatload of money to the rich." That last phrase has stuck with me. I have often wondered how Herbert, an obviously intelligent individual, could have reached the extraordinary conclusion that reducing taxes "sends" money to anyone. Clearly, to transfer money from one person to another, the government must first collect that money. If, because of reduced taxes, the government receives less money from a class of taxpayers -- whether those taxpayers are "rich" or not -- these taxpayers are not being "sent" anything; they are simply keeping more of what they earn. But in Herbert's world, apparently, this doesn't matter. He seems to believe that, in some fashion, the government constructively owns all of its citizens' income, collects a certain portion of that income through taxes, and then sends that which it collects here and there for various purposes. In that world, collecting money from the "rich" and transferring it to the less rich is always a good idea. By contrast, collecting less money from the "rich" is always a bad idea. Embedded in this philosophy is the belief that significant inequality of wealth is a bad thing, indeed a very bad thing. But is it? First of all, the federal government taxes income. But income does not always translate into wealth, although the two are certainly correlated. There are any number of people who earn boatloads of money but who spend even more. While they are living well, they are not wealthy. Rather, they are simply profligate. It may be emotionally satisfying to tax these individuals to the hilt. But since they do not have real wealth, collecting large sums of money of money from them in and of itself does little to decrease the disparity between the rich and the less rich. Secondly, even if we focus on income as a surrogate for wealth, that income is often directly correlated to the choices that one makes in life. One of these choices is how hard one works. This, in turn, correlates to one's level of education. As The National Review points out, "High school dropouts worked on average 38.5 hours per week in 2005. Those with high school degrees worked 39.8 hours per week. The number increases each time we jump to a higher level of education: The longest work weeks belonged to those with an advanced degree, who spent an average of 42.4 hours per week at their jobs -- 10 percent more than those without a high-school diploma." And the longer one goes to school, the higher one's income. So those who have advanced degrees (a) tend to work harder and (b) tend to make more money. Seen in this light, redistributionists like Herbert actually and inevitably favor, as The National Review puts it, "taking money from those who work hard and giving it to those who work less hard." Further, as The National Review also notes, almost all of the taxes are paid by those who receive the top half of income. That may be gratifying to New York Times columnists, but it is hardly the way to design and administer a system of taxation. Perhaps we should shift our emphasis from the taxation of income to the taxation of consumption, so that we more heavily tax something other than work.The concept of a national flat sales tax comes immediately to mind. |
What constitutes fairness in taxation is a very old debate.
By the rekconing of Thomas Hobbes, Leviathan(1651) it is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income.
"[T]he Equity of Imposition, consisteth rather in the Equality of that which is consumed, than of the riches of the persons that consume the same. For what reason is there, that he which laboureth much, and sparing the fruits of his labor, consumeth little, should be more charged, than he that living idlely, getteth little, and spendeth all he gets; seeing the one hath no more protection from the Common-wealth, than the other? "
If anyone would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all federal income, SS/Medicare payroll, and gift/estate taxes outright replacing them with with a national retail sales tax administered by the states.
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
Oh, I'm with you more than you could possibly know.
The income tax philosophically offends me on a soulfully profound level.
Actually, any tax not directly correlated to consumption and/or punitive of producers offends me in a simlar manner.
As it rightly should ANY thinking American!
If you haven' already done so, you should read Frank Chodorov's The Income Tax: Root of all Evil.
I've not read it, but based on the title alone, I am sure it is a worthy read.
Thanks for the tip!
Yes, it is sickening when employers start following the Socialist philosophy. There are many examples.
Besides giving raises to those who 'need' them rather than based on performance and market rate, one I've personally run into is the employee contribution for health insurance. At my company, the employee's contribution is based on salary -- so people with low salaries pay less for the same health insurance than people with higher salaries. So I get to pay over $2,000 per year for the same health insurance some other employee only pays $600 for.
You would think companies struggling for market-share in a capitalist society would reject such socialist policies, but they are everywhere.
I've gotten to the point of seriously considering an Atlas Shrugged move.
Scale back my lifestyle, retire at the ripe old age of 42, move to a state without income tax, and stop contributing to a government that has punished my productivity for the last 20 years. The sad thing is that income taxes even on just investment income, they'd suck more out of me than is my fair share.
The Myth of Inequality
Lobbyists and colluding politicians and bureaucrats are the root of the most destructive forces foisted onto taxpayers.
Politicians and bureaucrats owe a huge debt to the heroes of the twentieth century. Without them they'd perish. Without the heroes politicians and bureaucrats wouldn't have been able to wiled government power to plunder and pillage its way to a leviathan. Sad but true.
The entrepreneurs and risk takers -- Henry Ford, Tom Watson, Ray Kroc, etc -- and inventors and scientists -- Edison, Einstein, Telsa, etc. -- of the 20th century rose the standard of living for all Americans. They and their nineteenth century precursors are the heroes that made USA the greatest, most prosperous country in all of history. It is they that military heroes most righteously defended in times of war.
Walter Williams says...
"... Let's highlight some of the phenomenal progress Americans made during the 20th century. During that century, life expectancy rose from 47 to 77 years of age. Deaths from infectious diseases fell from 700 to 50 per 100,000 of the population. Major killer diseases such as tuberculosis, polio, typhoid fever and whooping cough were virtually eliminated. Infant mortality plummeted.
The 20th century saw unprecedented material gains as well. Controlling for inflation, household assets rose from $6 trillion to $41 trillion between 1945 and 1998. Today, more than 98 percent of American homes have a telephone, electricity and a flush toilet. More than 70 percent of Americans own a car, a VCR, a microwave, air conditioning, cable TV, and a washer and dryer. In 1900, no homes had the modern conveniences of today.
Today's poor Americans have choices that yesterday's millionaires could have only dreamt of, such as cell phones, computers and color television sets. Added to all this progress, most adults have twice as much leisure time as their turn-of-the-20th-century counterparts.
You say, "Williams, it would take an idiot to deny the human progress Americans made during the 20th century. What's your point?" The productive people who made this progress possible are often painted as villains. I'm talking about the innovators and the risk-takers, in a word — entrepreneurs. Today's heroes are often seen as the people who attack entrepreneurs — among them lawyers, politicians, media people, leftist organizations, college professors and others who often contribute little or nothing to human progress. My colleague, Thomas Sowell, calls the entrepreneurs, scientists and inventors the "doers" and their attackers the "talkers."... Walter Williams
Virtually every person of the twentieth century stood at the starting line equally. What they did with their lives is testament to where they finished. At the start there was nearly the same distance among all person. At the finish there is great distance spanning from hero to degenerate. The heroes raised everyone's standard of living, including degenerates. Prisoners too. The heroes gladly did this.
Perhaps their worst words and feelings were directed at politicians, bureaucrats and government in general. For without the burdens of government increasingly heaped on them they could have raised everyone's standard of living that much higher.
Political Entrepreneurs vs. Market Entrepreneurs
Moving back to nineteenth-century heroes is the last two paragraphs from Thomas DiLorenzo's excellent article The Truth About the Robber Barons - Mises Institute:
"...Political entrepreneurs and their governmental patrons are the real villains of American business history and should be portrayed as such. They are the real robber barons.
"At the same time, the market entrepreneurs who practiced genuine capitalism, whose genius and energy fueled extraordinary economic achievement and also brought tremendous benefits to Americans, should be recognized for their achievements rather than demonized, as they so often are. Men like James J. Hill, John D. Rockefeller, and Cornelius Vanderbilt were heroes who improved the lives of millions of consumers; employed thousands and enabled them to support their families and educate their children; created entire cities because of the success of their enterprises (for example, Scranton, Pennsylvania); pioneered efficient management techniques that are still employed today; and donated hundreds of millions of dollars to charities and nonprofit organizations of all kinds, from libraries to hospitals to symphonies, public parks, and zoos. It is absolutely perverse that historians usually look at these men as crooks or cheaters while praising and advocating "business/government partnerships," which can only lead to corruption and economic decline." The Truth About the Robber Barons - Mises Institute
Politicians that whore government power collude with lobbyists to gain unfair advantages at the expense of lowering everyone's standard of living. Of course, the politicians, bureaucrats and lobbyists standard of living is temporally raised. In the long run the collusion cost them too. For the competition they squelch is the unrealized competition that would have brought perhaps cures for cancer, domestic energy independence and untold other inventions and creations.
Bringing to mind von Mises, ole Ludwig figured out what to do to turn socialist systems around to get them on a path back to recovery half a century ago.
Certainly most elements of his prescription for Austria at the end of WWII would make eminent sense in nearly any nation today.
Too bad the Europeans were too preoccupied with other ideas to pay much attention to him.
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Ludwig von Mises as Policy Analyst: Monetary Reform, Fiscal Policy, and Foreign Exchange Controls by Richard M. Ebeling http://www.heritage.org/Research/PoliticalPhilosophy/hl754.cfm#pgfId-1023417
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All done except that I'm a little older then 42 and I didn't have to move to a state without an income tax as a was already in one.
The sad thing is that income taxes even on just investment income, they'd suck more out of me than is my fair share.
Yep! They WILL get their pound of flesh no matter what but we CAN and should require that they do it in a fashion that is fair to all. The income tax - any income tax - can NEVER be that.
The income tax - any income tax - can NEVER be that.
Old news, Plato beat yah to it ;O)
- "When there is an income tax, the just man will pay more and the unjust less on the same amount of income."
It seems that ole Plato feller knew the score even way back then!
It's obvious that there are those who have a vested interest in maintaining the status quo and their reasons cover the entire spectrum but NONE of that addresses the fundamental issue which,to my mind at least, is:
"Is the income tax worthy of a FREE people?" And the answer is absolutely not!
You are absolutely right! The income tax is INTENDED to enslave a free people to central government whim.
Knowing the history that we do, or is readily available to those who don't, of the income tax and its backers, such as its recommendation by Karl Marx for enslaving a free people, its being enacted by FDR and all the Communists in his administration, there is no doubt of its purpose.
Those who support the income tax, even the flat tax, for their own selfish purposes are the useful idiots Lenin spoke of.
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