44
   

Why should rich people pay a greater share of their wealth to taxes?

 
 
rosborne979
 
  3  
Reply Fri 5 Aug, 2011 03:10 pm
@Robert Gentel,
Robert Gentel wrote:

rosborne979 wrote:
They shouldn't. Everyone should pay an equal percentage. But the rich (and large corporations) also shouldn't have access to tax loopholes that allow them to pay less than an equal share. The tax code needs to be simplified to eliminate loopholes that allow for disproportionate taxation.


That's fine with me, but I have a question. Do you think making the rich pay more can be unethical? I am on the fence about it but it is where I lean (that not only is the populist sentiment not based in solid ethics that it may well violate my ethical precepts).

There are a lot of problems with our government, so many of the tendrils of unfairness are woven into different policies and questionable expenditures. But in general I feel that is unethical and unfair to tax anyone (Rich or Poor) differently from anyone else. If we want to uphold basic principles of freedom and privacy then the amount of money a person has shouldn't change the way the government treats them.

If I were the dictator in charge, then I would take the same percentage from everyone and then allocate any extra reserves for assisting those with real needs.

I would start with a flat tax partly because it is fair, but mostly because it is simple and I believe simplifying systems is the only way to begin to repair them and cut through the red tape. Also, it's harder to hide corruption within simple systems.
0 Replies
 
Robert Gentel
 
  1  
Reply Fri 5 Aug, 2011 03:12 pm
@DrewDad,
How are they "irrelevant" if they are a direct response to such arguments?

I don't think that the purpose of taxes should be retribution or wealth redistribution but plenty of people here do (just look at the most popular posts on the thread right now if you hadn't noticed) and the purpose of my question is to probe whether these people find it unethical to redistribute wealth in other situations.
rosborne979
 
  2  
Reply Fri 5 Aug, 2011 03:41 pm
@Setanta,
Setanta wrote:

Finally, i've already made an ethical case--perhaps you weren't paying attention.

Setanta wrote:
You get more, you should pay more.


That's a good argument. But I would like to draw a subtle distinction as a counter argument.

To me, there is an important difference between "you get more" and "you are given more".

If you are "given" more, then you should pay more, but if you are simply able to exploit the baseline resources more effectively and therefor reap more benefit, then you shouldn't have to pay more for your own ingenuity or luck. And I believe that's more accurately what's happening with how the wealthy use resources.

Putting aside all the corruption which does actually "give" them something that nobody else benefits from (the corruption is an entirely different problem and I don't think it's what you are referring to with your basic argument), most of the extra benefit the wealthy get from government services (roads and police and such) are simply a more efficient exploitation of a baseline service which everyone benefits from to varying degrees.

The risk to applying a disproportionate tax based on a person (or company's) ability to exploit available resources (government services) more efficiently is that it will hinder efficiency itself and throttle innovation and growth.

I think it's better to "take proportionally and give back disproportionally", than to "take disproportionally and give back disproportionally". The first way is transparent and encourages growth and innovation and (hopefully) chartable giving. The other way throttles innovation and efficiency and results in feelings of unfairness and tendency toward subterfuge and hoarding (to counter the perceived unfairness).
BillRM
 
  1  
Reply Fri 5 Aug, 2011 04:01 pm
@Robert Gentel,
Quote:
I don't think that the purpose of taxes should be retribution or wealth redistribution but plenty of people here do (


Well Robert the rich had been happily been using the taxes laws and others government benefits to redistribute the wealth to them for a few generations now.

In my community we are cutting all kinds of services to the poor and the middle class as we are building a sport stadium at a cost to the taxpayers of 500 millions dollars to benefit the billionaire team owner. By the times we get done paying the interests on the bonds off the total amount is going to be north of a billion dollars.

All the local polls showed that the community was against it at the time and the mayor and one commission so far had been recalled over the matter but the man still got his half a billion dollars of funding.

Oh when the team owner was not force to even open his books and it later turn out that when his books became public information due to an unrelated lawsuit to say he was being dishonest is an overstatement before the vote to grant him the funding.

Yet he is still s getting his government backing……..

When you cut the top taxes rates time after and time and then state that we need to cut benefits to the poor and the SS beneficiaries because of the national debt that is redistributing the wealth from the middle and working class to the wealthy.

Oh, for most of the lifetime of the SS program far more funds was taken in then went out and therefore one of the major holders of the government debt is the SS program in fact far larger then the debt we currently owe China for example.
0 Replies
 
DrewDad
 
  -1  
Reply Fri 5 Aug, 2011 04:38 pm
@Robert Gentel,
1. Are taxes ethical/moral? (Is the state's continued survival justification for taking private property? Is this an absolute justification? A social contract?)
1a. Is the level of taxation relevant to its morality? (Is there a level of taxation that is immoral?)
BillRM
 
  1  
Reply Fri 5 Aug, 2011 05:06 pm
@DrewDad,
Quote:
Are taxes ethical/moral? (Is the state's continued survival justification for taking private property? Is this an absolute justification? A social contract?)
1a. Is the level of taxation relevant to its morality? (Is there a level of taxation that is immoral?)


Well taking wealth in large amounts away from the bulk of society and giving it to the super rich seem somewhat questionable on a numbers of grounds including morals.

Wealth is always being move from one group to another in all societies and there is no way to have a society without that occurring that I am aware of.

The question is not if wealth is going to be transfer but to whom and in what amounts.

When and if a society get too far out of balance one way or another then that society will come apart at the seams sooner or later.

Footnote taxes are just one of the means of moving wealth around.

An example of that is if you lower the minimum wage you are taking wealth away from low end workers and transferring it to owners of business who employed low end workers.

And if you raised the wage you are doing the reverse and in neither case is a tax involved.
0 Replies
 
Thomas
 
  2  
Reply Fri 5 Aug, 2011 05:57 pm
@Robert Gentel,
Robert Gentel wrote:
Now while you know I find utilitarian arguments compelling I would not be happy with taking this argument to its extreme (total wealth equality).

That's not the extreme of the Utilitarian argument, because total equality would not be utility-maximizing. As you say, redistribution discourages production. Hence, the utility-maximizing tax policy is to redistribute income from rich to poor, but only up to a point. That point is reached when the utility gain for the poor is offset by the utility loss for the rich plus the productivity loss for everyone. In practice, we turn out to reach it well before we get to full equality, but well after we move from flat taxes to progressive taxes. That's what it means to take the utility-maximizing argument to the extreme; I don't see why we shouldn't take it there.

Robert Gentel wrote:
For example, is it ok for a family of squatters to invade the boat house of a rich single millionaire? Where do utilitarian principles end and individual property rights (and the right to act individualistically) begin for you?

It depends on the utility of the boat house to the family, on the utility of the boat house to the millionaire, and the utility to both of the social contract they're living under. If you want a categorical yes-or-no answer, I can't give it to you. That said, I do approve of the homesteading ethic, under which 19th-century small farmers in America sometimes appropriated idle land that had belonged to large private estates. And I generally approve of the "squatters" who call for homesteading-like rules of land ownership in today's Brazil.

Robert Gentel wrote:
And if you don't believe in other kinds of compelled property redistribution why is that?

I do believe in other kinds of property redistribution. For example, the takings clause of the 5th Amendment lets governments condemn property for the public good. I approve. That said, I prefer taxation over takings because it's much more predictable, which makes its psychological costs much smaller.
BillRM
 
  1  
Reply Fri 5 Aug, 2011 06:11 pm
@Thomas,
Quote:
For example, is it ok for a family of squatters to invade the boat house of a rich single millionaire? Where do utilitarian principles end and individual property rights (and the right to act individualistically) begin for you?


Interesting as if the boat house was needed to provide shelter from the elements that without that shelter the family would shortly die then the hell with property rights.

Property rights should not be more important then the right of survival and if the poor as a class are placed in life and death situations because of the imbalance of wealth history had shown time after time that the society had come apart and the wealthy had ended either running for their lives or laying somewhere with their throats cuts.
Thomas
 
  3  
Reply Fri 5 Aug, 2011 07:03 pm
@BillRM,
BillRM wrote:
Interesting as if the boat house was needed to provide shelter from the elements that without that shelter the family would shortly die then the hell with property rights.

Nonetheless, I prefer to have the state run a shelter for families like Robert's squatters, and pay for it with a property tax on boathouses. That way, the family still gets its shelter, but all boat house owners pitch in equally, and everybody lives under known and enforced legal rules.
Thomas
 
  2  
Reply Fri 5 Aug, 2011 07:18 pm
@Robert Gentel,
Robert Gentel wrote:
Where do utilitarian principles end and individual property rights (and the right to act individualistically) begin for you?

For purposes of this thread, you may tentatively assume that utilitarian principles never end for me, and that property rights themselves are both supported and limited by the principle of utility. As for the right to act individualistically, I don't see how it would tip the scale in your example at all. Aren't both parties in your conflict acting individualistically?
0 Replies
 
BillRM
 
  1  
Reply Fri 5 Aug, 2011 07:37 pm
@Thomas,
I have nothing against a society that does not force the poor and the working class up against the wall however that is not the direction we are headed in.

At fifty percents we are now half way to the goal of having the wealthy own all repeat all the wealth of this society.

I love it that when we had already reach the lowest top tax rate in generations and instead of moving that rate back up to a still low tax rates of the pre-Bush years where we was paying off the debt the call is for even lower top rates and cuts in supporting/funding such programs as SS.

A national debt that by the way that a fairly large fraction of is owe to the SS program due to many decades of investing the over payments into the system into government bonds!!!!!!!!!!

This GOP program is nothing but a large scale attempted at seizing of the total wealth of this nation for the benefit of the wealthy.

0 Replies
 
Setanta
 
  5  
Reply Fri 5 Aug, 2011 10:37 pm
@rosborne979,
Quote:
If you are "given" more, then you should pay more, but if you are simply able to exploit the baseline resources more effectively and therefor reap more benefit, then you shouldn't have to pay more for your own ingenuity or luck. And I believe that's more accurately what's happening with how the wealthy use resources.


I see your point here, and it seems reasonable enough, as far as it goes. However, it ignores practical politics. The first paved roads built by the states and federal government came with the advent of the automobile, and it would be a generation before Henry Ford had the brilliant idea of manufacturing automobiles that the working class could afford. Paved roads only became common because the relatively wealthy owners of automobiles would benefit from it.

Furthermore, an affluent developer can buy land for a housing development or a shopping center, and property will be condemned for rights of way. If you live near that right of way, you might have wished for a paved access road for years--but you only benefit from it now because someone with clout wants it. That developer can sell off the now much more valuable property and his profit from it will be capital gains. That's a form of income, but it's a special form of income. The highest nominal rate will be 15%, even if his normal nominal tax rate is 35%. You won't be enjoying the benefits of capital gains any time soon (i'm assuming for purposes of discussion that capital gains don't constitute your ordinary form of income, no insult is intended).

Quote:
Putting aside all the corruption which does actually "give" them something that nobody else benefits from (the corruption is an entirely different problem and I don't think it's what you are referring to with your basic argument), most of the extra benefit the wealthy get from government services (roads and police and such) are simply a more efficient exploitation of a baseline service which everyone benefits from to varying degrees.


The interstate highway system is the first major infrastructure project in this country which has benefited everyone coincidentally--it's original purpose was military. It is precisely because capitalists benefit most from it, however, that i believe they should pay a much higher nominal rate. As with that right of way that the developer obtains, tax revenues are used to pave a road and then to maintain it, and the benefit to you is only coincidental. Those for whom this was done should have to pay for their additional benefit. This is not just more efficient exploitation of a baseline service. This is the exploitation of a service the intent of which was to benefit those who are exploiting it most.

Quote:
The risk to applying a disproportionate tax based on a person (or company's) ability to exploit available resources (government services) more efficiently is that it will hinder efficiency itself and throttle innovation and growth.


I cannot agree with this. This is to me the equivalent of the arguments advanced in the 19th and early 20th centuries against floors on wages and ceilings on hours. The claim was that it would stifle business and throw people out of work. But that didn't happen. If a capitalist can only make a 10% return on his investment rather than a 20% return, he's not going to put the cash in a matress and sit at home pouting. He's going to accept a situation he can't change and take his 10% return, and use as much as he feels he can afford to buy political influence to fight any new measures which threaten his capital gains, such as occupational health and safety, workers' compensation and disability insurance. And after he loses those battles, he's still going to invest his money because he's still going to generate a capital gain, and he's still going to pay a lower nominal tax rate on a capital gain than you are on your earned income.

Quote:
I think it's better to "take proportionally and give back disproportionally", than to "take disproportionally and give back disproportionally". The first way is transparent and encourages growth and innovation and (hopefully) chartable giving. The other way throttles innovation and efficiency and results in feelings of unfairness and tendency toward subterfuge and hoarding (to counter the perceived unfairness).


I think this is naive, too. In the 50s and 60s with much higher nominal tax rates for the highest brackets, the United States was a powerhouse of innovation and growth. Much of that (some would say most of it) came from government spending on the military and the space program. Your tax dollars at work (OK, maybe your dad's tax dollars at work). Other nations complained then (and still do) about the brain drain to the United States, and the reason is that our business climate makes it far easier to start a business and profit from it here than is the case anywhere else. If you get a brilliant idea tomorrow, you can charter an S-corporation in a couple of days, and the next day, in a few hours, you can have a vendor's license, withholding agent certificates and all the other official documents to start your business. You can be in business in under a week's time, and so long as you don't fiddle the employment taxes the government will pretty much leave you alone unless and until they have evidence of gross malfeasance on your part. At every point in the development of the industrial democracies capitalists have squealed about the costs of doing business if they were forced to negotiate with trades unions. (These were outlawed in most countries of Europe and North America until the late 19th century, and capital fought a rear guard action against labor well into the 1930s. Then Reagan recommenced hostilities when he busted the air traffic controllers union in the 1980s, and capital has been aggressively advancing against labor ever since.) They squealed about the cost of doing business if child labor laws were enacted. They squealed about the cost of doing business when the fire marshalls began to come around to inspect. They squealed about the cost of doing business when fair labor standards were introduced. They squealed about the cost of doing business when occupational health and safety regulations were introduced. They squealed about the cost of doing business when environmental protection legislation was introduced.

Guess what? Innovation and efficiency are alive and well in the industrial world, and capitalists live as even kings once only dreamed of. When NASA began the Mercury program, the nominal tax rate in the hightest bracket was 91%. When Neil Armstrong stepped onto the moon, the nominal tax rate in the highest bracket was 77%. It doesn't seem to have stiffled innovation or efficiency.
0 Replies
 
dlowan
 
  2  
Reply Sat 6 Aug, 2011 06:36 am
@Robert Gentel,
Keeps the poor from revolting.
0 Replies
 
roger
 
  1  
Reply Sat 6 Aug, 2011 03:11 pm
@Robert Gentel,
Capital is a component of wealth. When I was a machinist, my tools were my capital, and capital is what enabled me to produce taxable income. I must have the one to produce the taxable other. Had I been out of work for a long enough time, taxing my capital would have eventually impared my ability to produce income, and noone would have gained. Obviously, noone is talking about taxing an individual's tool set, but you should get the idea.

BillRM
 
  0  
Reply Sat 6 Aug, 2011 05:28 pm
@roger,
The idea is over simple as the wealth would still exist and be available for investments for the most part just as in the Fifties when the top tax rate was in the 80 plus range it just would be in more hands and the government would not need to run up the national debt to the degree it does now.

Take note by the theory that lower top rates is helpful we should be enjoying a wonderful economic as the rate is lower then it been in at least three or four generations.
0 Replies
 
tsarstepan
 
  2  
Reply Sat 6 Aug, 2011 05:37 pm
@Robert Gentel,
This whole thread from your side of things is disingenuous. It seems that you are only interested in keeping the status quo. The rich are getting richer not by risk of capital or talent or fate or luck but because the way government is set up, it strictly benefits the rich while any benefits for the poor are being stripped away. This isn't progression but digression into preGreat Depression era economics and politics.

Thusly, the rich getting exponentially richer and the poor getting exponentially poorer.

The only reason you seemingly created this thread is to hold useless intellectual masturbation sessions on the philosophy of why the uberwealthy SHOULDN'T be taxed at all.

This is the modern day equivalent of the philosophy debate on how many angels can dance on the head of a pin.

It's our How many bankers can dance on the head of a homeless vet debate.
ossobuco
 
  1  
Reply Sat 6 Aug, 2011 07:00 pm
@tsarstepan,
I haven't read back to check, but I think Robert was considering that the rich should not be taxed in an unequal way, and he also suggested, forgive me, I may be wrong, that he was not sure.

I generally agree with your premise re your third sentence but as all know, I'm not a data compiler, your third sentence is just what I see.
dlowan
 
  2  
Reply Sat 6 Aug, 2011 07:14 pm
@tsarstepan,
I disagree. This is a big and important debate in both our countries that affects real people, which I suggest the dancing angels do not...though the pin may have it's own thoughts on the matter.
0 Replies
 
BillRM
 
  1  
Reply Sat 6 Aug, 2011 07:24 pm
@ossobuco,
Quote:
I think Robert was considering that the rich should not be taxed in an unequal way,


Unfair?

Two percents of the country have the same net-worth as the other 98 percents of the nation due to our current tax laws and special benefits given to this group by an army of lobbies working 24/7 on their behalf.

They are getting tax break after tax break at the same time as the middle class and the working class is told they need to accept a lower standard of living and less help when they reach old age.
0 Replies
 
Robert Gentel
 
  1  
Reply Sun 7 Aug, 2011 11:52 am
@tsarstepan,
tsarstepan wrote:
This whole thread from your side of things is disingenuous.


You think my topic is "disingenuous", I think your replies are vapid. Seems like a perfect solution for both of us would be for you to find a less disingenuous thread to participate in.

Quote:
It seems that you are only interested in keeping the status quo.


No, I have no interest in the status quo, and have said nothing of the kind. I have interest in ethical discussion that is beyond your ken and your only way to respond to it is to create a caricature of me for yourself.

Quote:
The only reason you seemingly created this thread is to hold useless intellectual masturbation sessions on the philosophy of why the uberwealthy SHOULDN'T be taxed at all.


This is simply a lie. Why do you resort to just making **** up about people? I want rich people to be taxed. Full stop.

Quote:
It's our How many bankers can dance on the head of a homeless vet debate.


No it isn't and if you have no interest in abstract ethical debate I again ask you why you come to my threads where I seek it.

Why do you keep coming to ethical threads I start that you don't have anything to contribute to just to tell me that you dislike them and find them too ethereal? It's obnoxious. If you don't like the discussion I'm trying to make why not stay out of it? I don't go to your pop culture threads that I find disinteresting just to tell you I find them vapid.
 

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