The Lounge

Can anyone explain to me why many liberals think the wealthy aren't paying their fair share of taxes?  If you can support it with statistics, I'd much appreciate it.

Also...
1)  How will increasing Federal Income Tax help?  Would you increase it across the board or just for higher income earners?
2)  How will increasing taxes paid by large corporations help?  Keep in mind, corporation implies that it is owned by the people... taxes on corporations ultimately reduce their profits which in turn reduces value of the peoples' ownership in that company.
3)  What should be done with FICA (social security)?  Increase?  Leave the same?  Abolish it?

So to those who say that "Charities will fill in the gaps":

If you currently pay $10K a year in taxes, and you suddenly don't have to pay that money to the government, you're telling me that you'll give every penny of that $10K to charity every year, and not go buy a big screen TV, or put a down payment on a new car, etc?

Man, why do so many threads turn nasty around here, rather than healthy debates.

Enough with the personal attacks!

Original Post by burninlove:

So to those who say that "Charities will fill in the gaps":

If you currently pay $10K a year in taxes, and you suddenly don't have to pay that money to the government, you're telling me that you'll give every penny of that $10K to charity every year, and not go buy a big screen TV, or put a down payment on a new car, etc?

I think we all know the answer to that question. I know I personally would give more money to charity than I currently do, but all of it? No. Even if I no longer had to pay any taxes of any kind, I still wouldn't have enough money to take care of my brother properly without assistance.

If you currently pay $10K a year in taxes, and you suddenly don't have to pay that money to the government, you're telling me that you'll give every penny of that $10K to charity every year, and not go buy a big screen TV, or put a down payment on a new car, etc?

Of course not.  You wouldn't have to pay so much to get the same result, because you would eliminate the enormous waste of having government provide those services instead of organizations with efficiency incentives.

So yeah, I might give $5k to the Humane Society, or the Sierra Club, or the Red Cross, and ultimately my money is more likely to reach actual people/programs in need rather than lining the pockets of a bunch of bureaucrats.

If you currently pay $10K a year in taxes, and you suddenly don't have to pay that money to the government, you're telling me that you'll give every penny of that $10K to charity every year, and not go buy a big screen TV, or put a down payment on a new car, etc?

What fraction of $10K actually goes to people that need it? Our government is horriblly inefficinent. Billions are lost just to pay the burecracy. Businesses have incentive to make things efficient, less waste means more money in pocket. Government has no reason to improve efficiency, they want more money they can just raise taxes.

Original Post by moonikins:

The thing is, it would encourage investment (instead of encouraging spending, like our system does now). And it's investment that increases production capabilities and helps everyone by making goods more affordable in the long run.

This is almost 100% Reaganomics and that didn't help our country now did it? The trickle down effect doesn't trickle very far. It never did, I doubt it ever will.

Only **** rolls downhill.  Money always has a damn to hold it back, if there isn't one, someone will build one.

Kinda late to the party aren't you ;)

Y'know, everyone is talking about how inefficient government systems are. Why is it, then, that Canada's health care system, just like U.S. Medicare, spends about 4% of its budget on administrative costs whereas private health insurers in the U.S. spend about 20-30% of their budget on administrative costs? And that everything related to health care - surgeries, hospital stays, drugs, medical supplies - costs less in countries with socialized medicine, than they do in the U.S.?

dcyounts, you seem to be shaping up to become that classic example of a person "born on third base, then spending his whole life thinking he hit a triple".

Why do I support higher taxes and socialist programs?

1) Because it brings about greater social peace. That's why the programs were developed in the first place - to forestall flat-out armed revolution. The depression years and the threat of communist philosophy, together, led to social programs being developed as a way to placate the poor and working classes, alleviate their misery, and maintain social peace. I do not believe that there was much honest compassion, or egalitarian thinking, behind their development - just "enlightened self-interest", to quote Babylon 5.

2) Because no matter how successful and wealthy you are now, that can change. A disabling accident, an unfortunate diagnosis, the development of a mental illness, all these things can turn one from a productive, highly paid member of society to a "drain" on society in one fell swoop. And please don't say "disability insurance!" - you really cannot count on a company, whose only motive is profit, to pay out like it is supposed to for as long as you need it. Not to mention that a lot of common, disabling conditions don't count as "disability" on most insurance policies. (Not to mention that most people don't have disability insurance anyway, and even if they do, it's a pittance compared to what they would need to support their families, not to mention that if they "can" work at minimum wage jobs, they get nothing... "own-occupation" insurance is really really expensive and hard to come by). A wealthy family and, to a large extent, wealthy friends happen via an accident of birth, and that alone. It is a complete injustice to expect average families to bear the burdens of their disabled relatives all alone. I want to be part of a society that takes care of those who cannot take care of themselves.

3) Because the social structure is such that a large percentage of workers cannot be expected to save enough to prepare for retirement, disability, etc.. simply because their wages are not enough to do so. Raising wages across the board would help, but the inflationary blowback would minimize the effect.

I am a future high earner living in a the most heavily taxed region in North America, and I will be happy to pay my taxes knowing that I am helping create a society that I can be proud to be a part of.

So yeah, I *might* give $5k to the Humane Society, or the Sierra Club, or the Red Cross, and ultimately my money is more likely to reach actual people/programs in need rather than lining the pockets of a bunch of bureaucrats.

That's why social programs need to be sponsored by the government.  It's great that you would be charitable with your money, but most (not all) people will just buy a bigger house, bigger car, pay off debt, etc. and would spend no where near the amount of money on charities that they would by paying through their taxes.  People have to pay taxes, they don't have to give money to charity.

And if someone is on disability and legitimately can't work, who is going to send them a check each month to make up for the money that they used to get from gov't disability?  I am not aware of any charity that does that, and what if you live in a location that is out of the reach of charities?  (No local office, etc)

And yes, I realize that only a portion of my taxes go to social programs, but my larger point was that most (not all) people would not give nearly enough to charities to make up for the amount that they have to pay through taxes.

Original Post by smartjock256:

Kinda late to the party aren't you ;)

Was a formal RSVP required?

Taxes are a necessity in order to redistribute wealth in such a way that some of that wealth actually reaches those in need, who else are you going to trust to be somewhat fair and impartial if not the system that you vote for.  There are many who are in need who don't get assistance just as there are many who are not in as much need who do get assistance.  Every system has it's abuses.  In fact, one cannot afford the liability of a lawsuit for not giving equal assistance, assuming the funding is available, to those who on paper exhibit the same need.

Taxing the wealthy at a higher rate doesn't tend to work. Even if you do get more in taxes from them, there simply are not enough of them to provide a whole lot of money.  Taxing Bill Gates simply because he's Bill Gates only works for the EU and then only through penalties on Microsoft which is not a direct tax on Bill Gates.

Taxing the middle classes tends to work better because there are more of them and they won't feel it as much as the poor.  When you tax the poor, some of them can't eat which causes more medical problems which they can't pay for which ends up being a burden that the government pays anyway.

If I didn't pay income taxes, you can bet that I'd probably spend less than that on charitable acts.  I would certainly pick and choose my charities carefully (I do anyway).  Personally a lot of my charity is given informally more in the form of helping a friend or family member when they are out of funds.

Why is it, then, that Canada's health care system, just like U.S. Medicare, spends about 4% of its budget on administrative costs whereas private health insurers in the U.S. spend about 20-30% of their budget on administrative costs?

One reason is that private health insurers tend to have actual doctors on their staff to make coverage decisions.  Doctors are costly.  Medicare, for example, does not have a single oncologist on staff, but has issued over a hundred directives about coverage for cancer treatment.  I'd rather pay to have my medical decisions made by a medical professional.

Why do I not support higher taxes and socialist programs?

1)  Because other people are not a means to an end.  Individual freedom is the greatest asset of American society.  Sacrificing individual freedom for the sake of "social peace" is just tyranny with a nice name.

2)  Because it is immoral to steal, no matter who you're stealing from or who you appoint to do the stealing.  If I came to your house, and held a gun to your head, and took your money to give to my neighbor for her kidney transplant, you would be victimized and I would deserve to go to prison.  It makes no difference when "I" am the government and "you" are the American citizenry.

3)  Because government interference does not work.  Countries with minimum wages also tend to be the countries with the highest unemployment rates, which creates a class of unskilled, uneducated, unemployable workers, which creates a demand for "safety net" welfare programs and bigger government ... etc.  We need to recognize that government cannot engineer a perfect economy by fiddling with every aspect of individuals' lives.

most (not all) people will just buy a bigger house, bigger car, pay off debt, etc. and would spend no where near the amount of money on charities that they would by paying through their taxes. 

The statistics suggest otherwise.  Americans routinely give over $150 billion per year in charitable donations on top of the taxes that they pay.  We are a wealthy nation, but I don't agree that we're a greedy one.

Instead of worrying about how much our neighbors are donating, we'd be better off examining our own actions and consciences.

And if someone is on disability and legitimately can't work, who is going to send them a check each month to make up for the money that they used to get from gov't disability?

And since when is everybody *entitled* to a monthly check?

There are charities that provide housing, food, clothing, job training, medical and dental treatment, and pretty much every other essential there is.  Why should I be robbed of the fruits of my work to put the money in somebody else's pocket?

The huge assumption there is that a person's wealth is entirely the fruit of their own labour. That's not how capitalism works.

I'm not assuming that.  I know that the money people pay in income taxes are the fruit of their labor.  I know that this year, Americans worked from January 1 to April 23 simply to pay for their tax burden.

Wealth has a lot of sources, but ultimately it's an accumulation of time, labor, risk management, and sound investment.

The statistics suggest otherwise.  Americans routinely give over $150 billion per year in charitable donations on top of the taxes that they pay.  We are a wealthy nation, but I don't agree that we're a greedy one.

How much of that $150 billion goes to charities that would not replace any current government social program?  Donations to the humane society are good, but they won't help replace social security.  Also how much of that charitable donation is done becuase people can deduct it from their taxes?  If taxes go away, how would that impact donations?

And since when is everybody *entitled* to a monthly check?

What if the person got the disability fighting for their country?  Are we supposed to throw them out on the streets?  What if they didn't do anything to deserve the disability and have no friends or famiily to fall back on?  Are we just supposed to say, "sorry about your luck, sucks to be you..."  and go the other way?

 

burninlove - I'm not sure I get your point.  Mine is that Americans use their income to help others and express their values.  If people believe in Social Security, they will voluntarily pay to support it.  They already do, even when they have much less disposable income because of their burden to support a bunch of (questionably beneficial) social programs.

As for the veterans, OF COURSE we should NOT throw them out on the street!!  But that is a matter of MORALITY, not politics!  Government doesn't belong there!  The reality is, good Americans with good consciences (of which there are MANY!) will help take care of him.  We don't need the government telling us that's the right thing to do!

Original Post by lysistrata:

HG - I don't deny that as a practical reality, you have to pay to play. But should it be that way? Does that make it right? Does history = destiny?

No. Unquestionably, No.

Yes, it should be that way. It is right. Your history=destiny equation is a logical fallacy. It has nothing to do with history and everything to do with being a willing participant in a society. Today.

Though I probably grumble as much as the next person for paying my share of taxes, I guess (now that I am a bit older), I don't see them as the GREAT EVIL that I saw them as when I was in my early 20s.

Every time I enjoy one of our local National Parks, I better appreciate being taxed.

Every time my DH gets paid (he is active duty military), I better appreciate being taxed.

Every time I marvel that I can send a card thousands of miles across the country for just a stamp, I better appreciate being taxed.

Every time I enjoy a local park, or see kids playing in the school yards, I better appreciate being taxed.

Firefighters fighting fires.

Law enforcement catching criminals.

People getting "their day in court."

Water delivered right to my faucet, sewage going down the drain. Street lights. Paved roads. Bridges over rivers. Mosquito abatement. Park Rangers. Coast Guardsmen rescuing boaters. People enforcing rules and laws that protect us all. Regulation of certain industries.  These things cost money, after all.

Answering the OP's original questions:

1. I don't think increasing federal income tax will help. Re-allocating existing resources would be my first choice/higher priority.

2. The only corporate income taxes I would approve of would be industry-specific ones tied to necessary regulation. (In other words, if we need to better regulate the meat packing industry and hire more beef inspectors, then a specific tax on them to fund that specific need would be ok by me.)

3. I don't know what to do with Social Security ... but I don't think it should be abolished.

MOLLY

2)  Because it is immoral to steal, no matter who you're stealing from or who you appoint to do the stealing.  If I came to your house, and held a gun to your head, and took your money to give to my neighbor for her kidney transplant, you would be victimized and I would deserve to go to prison.  It makes no difference when "I" am the government and "you" are the American citizenry.

You don't have to pay taxes. You can move somewhere else. You VOLUNTARILY pay taxes by remaining here. It isn't theft.

America is all about choice, right? Choose to leave.

Ah, a social contract theorist.

I'm afraid your definition of "voluntary" is a bit off.  Let's go back to the gun example.  You can certainly choose to deny me your money and be shot in the head.  Does that make your choice to pay me off voluntary?  Um, no.  Duress, necessity, feasibility, and other circumstances have to be factored in.  I pay my taxes primarily because I don't want to go to jail.  But if you can show me a country that doesn't have higher taxes and more socialism than America ... I might consider it.  Let's leave aside the fact that ex-pats still have to pay US income taxes, which is unique to America.

I do have the right to leave, which is a great thing about America.  But I certainly don't have to.  The other great thing about America is that I can choose to pay the taxes that I think are immoral and petition my government, and my fellow Americans, for political change.

America ... she's fabulous!