A tale of three rich people

[tzor]

People talk about the “rich” all the time. I’m a visual person; I like to see examples. So I’ve come up with this tale of three rich people. Each person is different. People say Rich People are evil. People say that they should pay their “fare” share. Let’s look at the three people and ask what really is fair?

Person number one is Tiger Woods. He makes a lot of money. Upfront, he makes a lot of money in endorsements. He also makes a lot of money in scoring high in professional golf games. People pay lots of money to see him play. Yet when he wins a game, he has to give more of his winnings to Uncle Sam than the person who doesn’t have the endorsements because of the progressive tax system.

Person number two is Mitt Romney. He has capital that is used in investments. Every time he takes an investment and invests in something else he has to pay a “capital gain” tax. He might not even see the money; having invested it in something else, but he still has to pay the tax. Along with dividends, which have been taxed at the corporate level before he gets to see it, he pays a lower tax rate on all the combined “income” of which only a small portion he generally uses for personal use.

Person number three is Warren Buffet. Poor, poor warren buffet; he has no money at all. He gave his money to his company Berkshire Hathaway which is orders of magnitude above Woods and Romney. In turn the company provides him with a small but modest income of around a million dollars, far less than the money that Woods makes every year (but which he has to use to invest for his retirement) and far less than the Capital rich Romney has to pay in capital gains. More over, accounting tricks probably make most of the income hidden as “corporate expenses.” So he, being the richest of the three, pays the least amount to Uncle Sam.

Obama loves Warren Buffet, hates Mitt Romney, and while we don’t officially know his relationship with Tiger Woods, probably isn’t fond of any person who plays golf better than he does. (This explains why he hates almost everyone on the planet.) That, my friend, is all you need to know about “fairness.” He hates those people who jet off to Martha’s Vineyard every other month and spend four days a week playing golf … wait, that’s Barrack Hussein Obama.

[BigBallinStalin]

I have yet to find an acceptable argument that forces people to pay more than others in order to provide an organization with the revenue to provide good/service X. Ultimately, the means (taxation) for providing such goods requires the use of force, which the State monopolizes.* Some who justify involuntary exchanges (or rather "exploitation") for goal X sometimes omit that cold fact that underlies their arguments.


"Those who earn more must surrender more of their earnings at the barrel of a gun for reasons X, Y, and Z in order to fulfill the goal of A."

At least that would be an accurate and honest start for any argument in favor of redistribution or some socialist/egalitarian agenda.


*(There are exceptions like anarcho-capitalism and anarcho-communism--if and only if the members are allowed free entry and exit, and the exchanges are voluntary--i.e. having a contract/permission is necessary).

[tzor]

I have yet to find an acceptable argument that forces people to pay more than others in order to provide an organization with the revenue to provide good/service X.

I've never seen a good argument for the progressive tax system (and the progressive tax system is just a wimped version of the max salary rule where the highest level is 100%). But I do see some merrit in a two teir tax code which is effectively a flat tax with offset (in other words you pay x% of income above the offset). One of the biggest problems is that many people don't earn "steady" income. Football players, for example, earn a lot but only have less than a decade to earn that pay. Complications in the tax such as income averaging do more harm than good.

More to the point is that the rich are not rich because of their income. They aren't even rich because of their wealth because they can move that to corporations like Buffet.

So the progressive system hurts Woods the most, makes Romney out to be the bad guy while Buffet can move mountains with his corporate wealth.

And don't forget the eternally golf playing POTUS, whose fortunes for live are guarenteed forever by the system.

[thegreekdog]

You should make this tale about four rich people. The fourth person is the person that's going to actually get a real life tax increase and that's the "rich" person that earns ordinary income (i.e. not capital gains income) who makes less than $1 million a year. Anytime any politician refers to the rich, he or she is referring to people making $150,000 a year or more in ordinary income or capital gain income. They cannot afford tax advisors, they are subject to higher rates, and they are subject to AMT. They wind up paying a whole lot in taxes.

[Haggis_McMutton]

I have yet to find an acceptable argument that forces people to pay more than others in order to provide an organization with the revenue to provide good/service X. Ultimately, the means (taxation) for providing such goods requires the use of force, which the State monopolizes.* Some who justify involuntary exchanges (or rather "exploitation") for goal X sometimes omit that cold fact that underlies their arguments.


"Those who earn more must surrender more of their earnings at the barrel of a gun for reasons X, Y, and Z in order to fulfill the goal of A."

At least that would be an accurate and honest start for any argument in favor of redistribution or some socialist/egalitarian agenda.


*(There are exceptions like anarcho-capitalism and anarcho-communism--if and only if the members are allowed free entry and exit, and the exchanges are voluntary--i.e. having a contract/permission is necessary).

Wait, so we agree that all taxation is fundamentally extortion, but you're saying "hey, if we're gonna be extorted let's at least be extorted fairly" ?

How about this argument for unequal taxation.
The government needs money and will take it wherever it can.
The majority of people find the idea that a guy earning 50k should pay less percent tax than a guy earning 500k as morally acceptable. Therefore the government can extort the guy earning 500k more without too many repercussions, so it does just that.

[BigBallinStalin]

I have yet to find an acceptable argument that forces people to pay more than others in order to provide an organization with the revenue to provide good/service X. Ultimately, the means (taxation) for providing such goods requires the use of force, which the State monopolizes.* Some who justify involuntary exchanges (or rather "exploitation") for goal X sometimes omit that cold fact that underlies their arguments.


"Those who earn more must surrender more of their earnings at the barrel of a gun for reasons X, Y, and Z in order to fulfill the goal of A."

At least that would be an accurate and honest start for any argument in favor of redistribution or some socialist/egalitarian agenda.


*(There are exceptions like anarcho-capitalism and anarcho-communism--if and only if the members are allowed free entry and exit, and the exchanges are voluntary--i.e. having a contract/permission is necessary).

Wait, so we agree that all taxation is fundamentally extortion, but you're saying "hey, if we're gonna be extorted let's at least be extorted fairly" ?

How about this argument for unequal taxation.
The government needs money and will take it wherever it can.
The majority of people find the idea that a guy earning 50k should pay less percent tax than a guy earning 500k as morally acceptable. Therefore the government can extort the guy earning 500k more without too many repercussions, so it does just that.

Argumentum ad populum.

Next!

(The government still extorts all the people, so there's that problem as well.)


To be clear, it's not extortion. It's theft. But it's only theft if the government lacks your permission to 'tax' you. If you're a member of a free association which provides club goods (e.g. health care, insurance), then you'll most likely have to pay a fee. This wouldn't be extortion or theft because it's a voluntary agreement.

(And no, my stance isn't "Gee, if I found an argument in support of progressive taxation, then taxation in all cases would be morally justified.")

[JBlombier]

Ah, American politics. Another sad day in the Off-Topics forum.

[Haggis_McMutton]

Argumentum ad populum.

Next!

(The government still extorts all the people, so there's that problem as well.)

My point is you're asking for a moral justification for a variation on what is fundamentally an immoral act.
It's like saying "I haven't ever got an argument for why the boston strangler only murdering women is morally justified"
The problem isn't him only murdering women, the problem is the whole murder thing. You cannot discuss the morality of what is already immoral.

So if we're disregarding the moral aspect, then the answer is the one I gave(which wasn't ad populum, it was just explaining why the government can take more, the reason itself is irrelevant). The ones who have more pay more because the government is able to take more from them. That's it.

And saying taxation isn't mandatory in today's system because you can always leave the country is like saying that paying money for mob protection isn't mandatory, cause you could always close down the shop and leave. Technically correct, but not a very good solution.

[BigBallinStalin]

Argumentum ad populum.

Next!

(The government still extorts all the people, so there's that problem as well.)

My point is you're asking for a moral justification for a variation on what is fundamentally an immoral act.
It's like saying "I haven't ever got an argument for why the boston strangler only murdering women is morally justified"
The problem isn't him only murdering women, the problem is the whole murder thing. You cannot discuss the morality of what is already immoral.

Nah, it's my backstop argument. There's two ways I'll play that game. First there's the egalitarian nonsense, and second would be the more fundamental one on taxation/theft.

So if we're disregarding the moral aspect, then the answer is the one I gave(which wasn't ad populum, it was just explaining why the government can take more, the reason itself is irrelevant). The ones who have more pay more because the government is able to take more from them. That's it.

Oh, I see where our confusion is.

I'm discussing normative arguments (sorry, should've been clear about that). When I mentioned egalitarianism, I thought that it would be clear that we would be discussing in normative terms.

I know the why and how the government steals people's money (because sometimes you can vote on the reps who do this, and nationalism, etc.). This would be the positive approach, the "what is it" explanation/argument.

[BigBallinStalin]

[And saying taxation isn't mandatory in today's system because you can always leave the country is like saying that paying money for mob protection isn't mandatory, cause you could always close down the shop and leave. Technically correct, but not a very good solution.

Finally, the social contract argument.

I disagree. Simply because a group of bandits settle in my backyard, it does not grant them the right to exile me if I disagree with their stealing my money.

In order for the exile reasoning to work, you have to sign a contract with that association (the US), so that the obligations of BOTH parties are clarified (You must pay 10% of your income in order to provide X, Y, and Z for the members of our association; otherwise, you must leave our association). We live in a (rubbish) social contract, which no one signs, and where the other party (the US) is hardly obligated to hold up its promises. There's no contractual agreement here, yet somehow the US has the right to exile you. (doesn't make sense).


Another analogy: Let's say that we agree (implicitly) to a contract where you provide me $100 while I provide you and some other people health care and security. Now, suppose you thank me kindly but would wish to stop paying for something you no longer value. I (the US) will say, "go f*ck yourself and leave. You're exiled."

And somehow that's 'right' for the US to do because... you signed the constitution, right? Oh wait, no... So, you implicitly agreed to this? How so? I know I didn't, and my staying and attempting to find competing providers of security, insurance, public goods (charity), etc. does not mean that I must be exiled. You're arguing in favor of the worst kind of monopoly, the State.

(*I think I misread your post because you seem to be agreeing with me--except maybe on the solution part. If so, please let me know. Anyway, I'll just leave my criticism here for anyone who thinks taxation is justified).

[DoomYoshi]

Waste of Thread.

[Haggis_McMutton]

(*I think I misread your post because you seem to be agreeing with me--except maybe on the solution part. If so, please let me know. Anyway, I'll just leave my criticism here for anyone who thinks taxation is justified).

Yeah, I agree with you.

I should have explained my previous points better (also, you're probably the wrong person to aim them at).

Basically, I get annoyed by the "this method of taxation is unfair" arguments. ALL taxation is unfair, so let's just stop saying that. Any discussion about taxation methods should just focus on the tangible effects the method has on society and ignore any morality/fairness arguments because it's all fundamentally theft/extortion anyway.
Whether it is necessary theft is another issue that I'm probably not qualified to discuss atm.

[BigBallinStalin]

(*I think I misread your post because you seem to be agreeing with me--except maybe on the solution part. If so, please let me know. Anyway, I'll just leave my criticism here for anyone who thinks taxation is justified).

Yeah, I agree with you.

I should have explained my previous points better (also, you're probably the wrong person to aim them at).

Basically, I get annoyed by the "this method of taxation is unfair" arguments. ALL taxation is unfair, so let's just stop saying that. Any discussion about taxation methods should just focus on the tangible effects the method has on society and ignore any morality/fairness arguments because it's all fundamentally theft/extortion anyway.
Whether it is necessary theft is another issue that I'm probably not qualified to discuss atm.

I want to agree with you, but without some moral framework, we can't decide on whether the consequences are good or bad. For example, if welfare is shown to disintegrate poor families (thus ruining the requisite network effects), we can't judge whether this is desirable or not without the use of a value judgment in the conclusion (e.g. "this should be ended." Or, "it's wrong, but it should be continued"). That's using the positive to support the normative, and it shouldn't be ignored; otherwise, if someone were to write a paper on the efficiency of the Holocaust, then why would you not support it? Why would your goals come into conflict here? Because of your value judgments (the normative).

When analysis and arguments become amoral, I think we run into some big problems. For example, we end up supporting theft on a grand scale (from the government). Many simply overlook what it actually is, so they feel justified in reaching conclusions from a positive argument, which they end up supporting from a normative position. However, they would be less apt to do so if only they knew of the immoral nature of taxation.


Therefore, people have to be reminded that taxation is unfair. They have to be shown the contradiction in their normative stances as well. They want to helps others by ultimately holding a gun to people's heads and demanding that they give them some money to... help others. It's little nutso, but only because people forgot that taxation is immoral--or they use some fallacious reasoning to justify it.

"Taxation" has become a euphemism for theft by government. The same goes for "shell shock" to "PTSD." "War" becomes "humanitarian intervention." "Shut up, because I'm the king" becomes "national interests." That which was human becomes dehumanized--except for "humanitarian intervention" which is great rhetoric. Killing people to save them. Haha, it's insane, but it's widely believed.

[Haggis_McMutton]

I want to agree with you, but without some moral framework, we can't decide on whether the consequences are good or bad. For example, if welfare is shown to disintegrate poor families (thus ruining the requisite network effects), we can't judge whether this is desirable or not without the use of a value judgment in the conclusion (e.g. "this should be ended." Or, "it's wrong, but it should be continued"). That's using the positive to support the normative, and it shouldn't be ignored; otherwise, if someone were to write a paper on the efficiency of the Holocaust, then why would you not support it? Why would your goals come into conflict here? Because of your value judgments (the normative).

When analysis and arguments become amoral, I think we run into some big problems. For example, we end up supporting theft on a grand scale (from the government). Many simply overlook what it actually is, so they feel justified in reaching conclusions from a positive argument, which they end up supporting from a normative position. However, they would be less apt to do so if only they knew of the immoral nature of taxation.


Therefore, people have to be reminded that taxation is unfair. They have to be shown the contradiction in their normative stances as well. They want to helps others by ultimately holding a gun to people's heads and demanding that they give them some money to... help others. It's little nutso, but only because people forgot that taxation is immoral--or they use some fallacious reasoning to justify it.

"Taxation" has become a euphemism for theft by government. The same goes for "shell shock" to "PTSD." "War" becomes "humanitarian intervention." "Shut up, because I'm the king" becomes "national interests." That which was human becomes dehumanized--except for "humanitarian intervention" which is great rhetoric. Killing people to save them. Haha, it's insane, but it's widely believed.

Ok, I agree with what you're saying.
I'm not saying we need to completely disregard moral arguments. They are of course usefull in looking at the effects of certain taxation methods. I am saying we can't use moral arguments to discuss the taxation methods itself, because they are all immoral. An immoral action can have an effect that is ultimately good, but that doesn't make the initial action any less immoral.

I mean let's replace taxation with mob protection payment. They are quite similar, some service is being provided for your money, but you have no real choice about whether to accept this agreement or not.
Now, would it make sense to state that it is more "fair" if the mob charges the same percentage on all businesses rather than charging a bigger percentange on particularly succesfull businesses?
This is nonsense to me, like discussing whether Ted Bundy is morally superior to Richard Kuklinski.

Basically, if we accept the need for taxation we accept that the government is allowed to do an immoral act for some perceived "greater good". We sould stop trying to rank methods of taxation based on how immoral they are and instead just look at their effects. (your welfare example would be an instance where we are discussing the morality of one result of the method, not of the method itself).

[Timminz]

I have yet to find an acceptable argument that forces people to pay more than others in order to provide an organization with the revenue to provide good/service X.

I've never seen a good argument for the progressive tax system (and the progressive tax system is just a wimped version of the max salary rule where the highest level is 100%). But I do see some merrit in a two teir tax code which is effectively a flat tax with offset (in other words you pay x% of income above the offset).

A "two teir [sic] tax code" IS a "progressive tax system".

[tzor]

Ah, American politics. Another sad day in the Off-Topics forum.

Taxes, like death happens in every nation. I'm just too tried to create a thread on why it may be possible to see lots of rich people asking "Who is John Gault" and then vanish from the French tax rolls.

France Unveils Temporary 75 Percent Super-Rich Tax Rate

To the dismay of business leaders who fear an exodus of top talent, the government confirmed a temporary 75 percent super-tax rate for earnings over one million euros and a new 45 percent band for revenues over 150,000 euros.

Bernard Arnault, France's richest man and chief executive of luxury group LVMH, created a storm this month by declaring he had applied for Belgian nationality - but stressed he would continue to pay taxes in France.

Oh that's right. It's not "who John Gault," it's "who is Bernaed Arnault?" He's not a Frenchie, he's a Belgie.

[BigBallinStalin]

I want to agree with you, but without some moral framework, we can't decide on whether the consequences are good or bad. For example, if welfare is shown to disintegrate poor families (thus ruining the requisite network effects), we can't judge whether this is desirable or not without the use of a value judgment in the conclusion (e.g. "this should be ended." Or, "it's wrong, but it should be continued"). That's using the positive to support the normative, and it shouldn't be ignored; otherwise, if someone were to write a paper on the efficiency of the Holocaust, then why would you not support it? Why would your goals come into conflict here? Because of your value judgments (the normative).

When analysis and arguments become amoral, I think we run into some big problems. For example, we end up supporting theft on a grand scale (from the government). Many simply overlook what it actually is, so they feel justified in reaching conclusions from a positive argument, which they end up supporting from a normative position. However, they would be less apt to do so if only they knew of the immoral nature of taxation.


Therefore, people have to be reminded that taxation is unfair. They have to be shown the contradiction in their normative stances as well. They want to helps others by ultimately holding a gun to people's heads and demanding that they give them some money to... help others. It's little nutso, but only because people forgot that taxation is immoral--or they use some fallacious reasoning to justify it.

"Taxation" has become a euphemism for theft by government. The same goes for "shell shock" to "PTSD." "War" becomes "humanitarian intervention." "Shut up, because I'm the king" becomes "national interests." That which was human becomes dehumanized--except for "humanitarian intervention" which is great rhetoric. Killing people to save them. Haha, it's insane, but it's widely believed.

Ok, I agree with what you're saying.
I'm not saying we need to completely disregard moral arguments. They are of course usefull in looking at the effects of certain taxation methods. I am saying we can't use moral arguments to discuss the taxation methods itself, because they are all immoral. An immoral action can have an effect that is ultimately good, but that doesn't make the initial action any less immoral.

I mean let's replace taxation with mob protection payment. They are quite similar, some service is being provided for your money, but you have no real choice about whether to accept this agreement or not.
Now, would it make sense to state that it is more "fair" if the mob charges the same percentage on all businesses rather than charging a bigger percentange on particularly succesfull businesses?
This is nonsense to me, like discussing whether Ted Bundy is morally superior to Richard Kuklinski.

Basically, if we accept the need for taxation we accept that the government is allowed to do an immoral act for some perceived "greater good". We sould stop trying to rank methods of taxation based on how immoral they are and instead just look at their effects. (your welfare example would be an instance where we are discussing the morality of one result of the method, not of the method itself).

Club goods.

Free associations.

Those aren't 'mob protection' schemes.


http://en.wikipedia.org/wiki/Club_good
James M. Buchanan 1965. "An Economic Theory of Clubs."
http://www.dictionaryofeconomics.com/ar ... t_number=1
http://en.wikipedia.org/wiki/Freedom_of ... ibertarian
http://www.econlib.org/library/Enc/Charity.html
http://econlog.econlib.org/archives/201 ... n_exc.html