Posts Tagged Deflating Conservative Arguments

Deflating Conservative Arguments: The Flat Tax

My neighbor in the apartment across the way is a good-natured centerist who is very interested in issues of taxation. He and I often get into discussions related to our tax system and he’s brought up the idea of a Flat Tax. It sure sounds like a good idea: everyone pays the same percentage of their income. After all, he argues, why should someone making a lot of money pay a higher percentage?

The problem with this idea, of course, is that it’s ultimately regressive, taking a more meaningful chunk of money from the least fortunate in our society. The counter question being, why should someone making only a little money pay the same percentage of their income as someone making much more and is it fair to tax them at the same rate?

Follow me below the fold where I level the Flat Tax in my continuing series Deflating Conservative Arguments.

I’ve found that a lot of people don’t understand how our current progressive income tax system works. Many people think that the tax bracket you reach on your last dollar in income is the one you pay on all your income. I’ve heard people say things like “I got a $2000 raise, but it bumps me into a higher tax bracket” with a disparaging tone in their voice that belies the fact that they’ll be making more money. Fortunately, they won’t really be paying the higher rate on all their income. For example, a single person pays 10% on their first $8500, 15% on their next $26,000, 25% on their next $49,100, and so on. So if you make $34,000 and get a $2000 raise, you’ll be in a new tax bracket, but you only pay the new tax rate (25%) on your last $1500, and your total tax liability will be $5125. This computes to an effective tax rate of 14.23% ($5125/$36,000).

Okay, so now that that’s all cleared up, what about the flat tax? Even some of my more liberal leaning friends have been suckered in by this one. The proposal is that everyone pays the same percentage in federal income tax on all of their income, though proposals vary as to what the percentage should be. In 2008 Senator Lamar Alexander (R-Tenn.) proposed a 17% flat tax rate. Let’s use this as our example because there is simply no concrete proposed rate that flat taxers are rallying around.

As you can already see by looking up at the previous example, a 17% rate is higher than the 14.23% rate that someone making a modest $36,000 pays today. The break even point is $48,438, meaning everyone making less than that gets a tax increase under a flat tax and everyone making more than that gets a tax break. Let’s look at the lower and upper end of the spectrum for greater relief. Billionaire hedge fund manager John Paulson (unrelated to former Goldman Sachs CEO and Treasury Secretary Henry Paulson) raked in $4.9 Billion ($4,900,000,000) in 2010. Though I know this is investment income and therefore subject to the capital gains rate, let’s pretend that it was counted as regular income taxed at the normal income tax rates. If this were the case, Mr. Paulson would be paying an effective rate of 35% under our current system or around $1.715 Billion. If his taxes were slashed to 17%, he would be paying around $833 Million, a savings of around $882 Million. On the other hand, a single person with no children living at the 2010 poverty threshold of $11,344 pays $1277 in federal income tax for an effective rate of 11.25%. If we instate the 17% flat tax, that would raise their taxes to $1928, a hike of $651.

So the question of fairness arises. What is fair? Is it just to lower billionaires’ taxes by half, but increase taxes on the poorest? Is it just? To me, the issue always come back to these simple questions.

So, what is a fair and just way to pay for our society? I believe that those who make the most money have benefited from the system much more than those who make the least. The poor tend to stay poor because they have the deck stacked against them from the get go. If both parents are working and struggling to make ends meet, children are not as able to succeed. If they live in an economically depressed area, they are likely going to schools that don’t have the resources to hire the best teachers or have the equipment necessary to prepare children for college. If you live somewhere where your life is in constant danger due to high crime (due to poverty), it makes it pretty darn hard to study. Conversely, the well off tend to become richer because they have safe places to grow up and don’t have the added stresses of poverty. They go to the best schools with the best teachers and the top of the line equipment, live in the cleanest, safest neighborhoods, and have parents who have the resources to help them achieve. The disproportionate amount of money spent on all of the services that our society provides such as schools and public safety go to the wealthier areas. This is because their local tax base (or private donations) keep their areas nice because they, as anyone, care deeply for their children and want them to succeed. The problem is that not everybody starts out at the same place, so to pretend that is the case is just fantasy.

The reality is that we’re all in this together and we need each other to succeed. Because the wealthy benefit more from our society, and the safety and security it affords them, they should pay more to keep our society (and the government that administers it) strong. It’s the only just thing to do.

Cross Posted on Daily Kos

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Wow. Just Wow.

As part of the US Uncut movement, on April 1st I sent an email to the organizer of the local Tea Party group in a (perhaps naive) attempt to bring the two groups together around a common cause. Here’s my email:

Subj:Portland Uncut/Portland Tea Party Alliance?

Hi XXXXX,

I’m involved in the Uncut movement an was thinking that the Tea Party may be open to working together to get corporations who are not paying any taxes to pay their fair share. While I know that we may disagree on what represents a fair share and how those tax revenues should be used, I’m sure we can agree that the corporations who are paying nothing while making huge profits (or even claiming a tax rebate), are cheaters and need to pay into the system they use, just like the rest of us. As you said at the TP rally on tax day 2009, it’s not a partisan issue, so I hope we can come together around tax fairness for these corporate tax cheats. What do you think?

Ross Lampert

I had watched a video of the Oregon Tea Party event in 2009 where the organizer spoke and he seemed somewhat reasonable. I got a response back from him fairly quickly saying:

Ross,

I’ve cc’d your message to the current TP chair.

With kind regards,

XXXXX

I asked him to keep me posted, but never heard back. A friend from the Uncut movement asked me on the 21st if I ever heard back from them and when I said I hadn’t, he said it wasn’t surprising and sent me a link from their website to a posting called Rules for Republicans.

I read this and was blown away. I understand not agreeing with someone’s ideas or their reasoning, (see my series: Deflating Conservative Arguments), but this was way beyond the pale. This seems more like hate speech than any rational thought and it actually scared me. When we cannot have a conversation with people who disagree with us, when there is no trust, when they think of us as “evil”, what is next? This is the kind of talk that lead to the genocide of my people. This is the kind of talk that lead to the genocide in Rwanda. It is wretched and it doesn’t belong in our political discourse.

Here’s the first of the “Rules for Republicans”:

1. The era of liberalism is over.
Today there are no liberals in power; there are only radical leftists. They are the enemy, not the opposition. Their ideology is not simply wrong; it is evil.

In all quotes from this document, Italics are in the original, bold is emphasis added.

In their 8 stages of genocide, Genocide Watch outlines the first stage as Classification. This means dividing people into “us and them”. The main counteraction is creating universalism among the population. For instance, we’re all Americans. While Classification is not in and of itself problematic, when combined with the third stage, Dehumanization, it becomes a veritable tinderbox of hatred.

In this first Rule, it is clear that the author is not only classifying those of us on the left as “radical”, but also dehumanizing us. This is not an isolated incident. I know people on the other side who I strongly disagree with on many topics, but I don’t think of them as the enemy or as evil. I may think of them as misguided, deluded, inaccurate, lacking the facts or simpleminded. I may even have real hatred for the policies they advance. But evil? Really??? They think we’re EVIL?

2. It is impossible to be too cynical about the intentions, motives, and truthfulness of radical leftists.
They will always exceed our most horrifying expectations.

Wow, according to Rule 2, we’re not only radical and evil, we’re worse than evil! One cannot be too cynical about our intentions because they’ll always exceed one’s most horrifying expectations! Um…what? I don’t understand my intentions, I guess. I thought I just wanted what’s best for all of us. I’m not really sure what my motivations are either. I suppose they must be rooted in pure evil and borne of satanic vice. I guess I just don’t get myself…oh, that’s because I’m obviously not able to be truthful!

3. Radical leftists are continually seeking to destroy America’s historic foundations, particularly our Constitution.
Their goal is to rebuild upon the rubble according to their own evil vision and to gratify their insatiable lust for tyrannical power.

Oh, that’s my goal! I had no idea. It seems that the author of this document has no knowledge that the foundation of our republic is based on the work of the father of liberalism, John Locke. Our constitution was written by liberals steeped in Lockean philosophy. “Life, Liberty and the Pursuit of Happiness”, ya know, that quote so oft used by the tea party which is taken from some declaration is a paraphrase from Locke’s Second Treatise of Civil Government. According to Rule 3, we want to destroy the constitution! I’m not sure what our “evil vision” is that we want to replace it with, but this whole point is ridiculous. While I do think we need to amend the constitution to eliminate corporate personhood and thus help to roll back wealthfare (aka. corporate welfare and welfare for the rich), I’m not in favor of scrapping the document itself. Or at least I didn’t know I was…until now.

4. Radical leftists are continually seeking to infiltrate and undermine American institutions.
They are especially attracted to institutions where there are unearned wealth, sinecures, and ambiguous standards of accomplishment.

I’m not even really sure what this means. I suppose it means that we’re trying to destroy the government from within by…working? Or perhaps somehow gaining positions that require little or no work but pay anyhow? How? Your guess is as good as mine.

5. Our people must always be seeking to restore America’s tested, historic, foundational principles and to guard and protect our Constitution and our cherished institutions.

Again with the us vs. them. So, the Tea Party is the defender of true American values, principles and guardian of our constitution. Oh, I get it, if you say you support the constitution and its values and principles even while the politicians you support actively work to undermine those same institutions, values and principles, you’re the true patriots!

6. Civility must never trump truthfulness.
Civility is a highly commendable virtue; truthfulness is vastly more commendable.

‘Cause you can’t be both truthful and civil. Sometimes truth is indeed hard for someone to take, but it doesn’t mean you should be nasty in how you say it.

7. Ideology must never trump truthfulness.
We Republicans need to constantly examine our own ideological principles to make sure they are, first and foremost, true. Then we must proclaim them boldly and straightforwardly.

HahahHaHAHahhahhahHHAHhahAHHAhahahHAHahA!!! Oh, let me breathe for a second…hahahahhahHHhahhahhhahahahahHhaAhaHaHHahahAhaAhahahaahahaahhAhaaa. *whew* Wow…damn.

I don’t really even know where to start here. This is the most hilarious thing I’ve read from the right in a long time. They don’t usually know how to use humor, but this is outstanding. What?!? It’s not meant to by funny? Yeah, this must come from someone who doesn’t understand the meaning of the terms “ideology” or “truth/truthfulness”. If they did, perhaps they wouldn’t support people like Jon Kyl.

8. Never try to out-compassion a bleeding-heart radical leftist.
Conservatism is the most compassionate — and most truthful — political philosophy there is. Radical leftism, by contrast, is based on false promises intended not to better the lives of anyone, but to recruit gullible, ignorant people as “useful idiots.”

Another doozy. The last line in this Rule seems an awful lot like psychological projection. If Conservatism were the most compassionate political philosophy, why are there so many people going hungry in America? Why are there so many poor? Why after over 30 years of trickle down economics is there a growing income gap? These are not merely Republican problems, they are problems that both parties have contributed to over the years, mostly because they have both become more conservative and have thus followed the failed policies of supply side “voodoo economics“. If Conservatism was truthful, it would recognize its own failures.

9. Challenge radical leftists to live up to their own publicly proclaimed ethical principles.
They never do. They just fake it. (Cf. Alinsky Rule #4: “Make the enemy live up to their [sic] own book of rules.”)

Well, they may have a point here. A lot of what we believe in may be impossible to live up to in our current society because of the way our society is set up. I’m not sure it means we are faking it, it just means that some things are not possible to do. While I am all for living in a more ecological way, if I need to visit my family in Chicago, bicycling there is not really a viable option. I must say however, that there are an awful lot of members of the Tea Party who are on government support (social security, medicaid, medicare, employment insurance, etc.) or use government infrastructure such as roads or mass transit to attend the rallies to protest the taxes that pay for these services. While I try to live up to my ethical principles to my utmost ability, I’m not sure most Tea Party members even understand the impact of the policies they’re advocating upon their own lives. I also find it endlessly amusing that people on the right are quoting from Alinsky. Most of them have probably never read his work as it seems some of his statements are grossly misunderstood.

10. Refuse to use the favorite language of the radical left.
Their language is always intended to spread lies and propaganda and to create confusion, fear, and retreat, not to convey truthful information.

Again, this is intended to sow the seeds of distrust. It is one thing to be skeptical, but quite another to accuse a whole group of people of lying and spreading propaganda.

11. The language our people use should boldly convey real information accurately, precisely, and above all, truthfully.

With all the emphasis that the author of these Rules puts on truth, you’d think that they’d make more of an effort to make sure their statements are true. I rarely (if ever) hear any constructive ideas coming out of the Tea Party. They just say that our budget is out of whack and we need to get it under control. I agree with this, but the question is “How?” Their only answer seems to be to take a hatchet to social programs and foreign aid. This approach will not get us to a balanced budget, it’ll just cause a lot of misery while still requiring a serious look at cutting military spending and increasing taxes on the rich.

12. Ridicule is man’s most potent weapon.
This is Alinsky Rule #5, word for word, but we Republicans have a special advantage in applying it to radical leftists because ridicule or satire, to be really effective, must be rooted in truth. That’s why leftist ridicule flops; it’s usually based on lies.

Indeed, ridicule is man’s most potent weapon, however I’m not sure why they think leftist ridicule flops as the Daily Show and the Colbert Report are top rated comedy shows. These shows are all about ridicule of the right (though they do ridicule politicians of all stripes). There aren’t too many good comedians from the right, but hey, you can’t win ’em all, right?

13. Attempting to reason with intractable, hardcore radical leftists will always end in futility.
Such people are incorrigibly anti-rational, so it is impossible to establish an authentic interlocutory interface with them. The only realistic way to engage them is to crush them politically, using any and all truthful and lawful tactics.

Therefore we shouldn’t bother to get into debate, it will only be frustrating. Let’s just go home and polish our guns instead. As the last Rule, it seems that this is trying to say, we’re right, they’re wrong, so there! This is also saying that it is impossible that we may have a valid argument. Whenever I see my hardcore reactionary rightist cousin, we have some good, productive and interesting conversations. Perhaps those in leadership positions on the right don’t want their flock talking to the other side for fear that our ideas may prove to be more powerful than theirs. Perhaps we may even sway some of the faithful to look at things in a different way. Maybe some might defect. If we don’t work to heal our political discourse, we will only become more polarized, leading to further rancor; the possibilities that flow from that are frankly frightening.

Rule 13 has the only use of the word “lawful” in this set of Rules and I’m glad it’s there. The beliefs outlined in these Rules are what leads people who are mentally unstable to commit acts of political violence. This seems to be a shot across the bow, an attempt to raise the bodies of anyone who is willing to buy into this madness. I maintain a steadfast hope that this kind of thinking could soon be eradicated and we can return to a more civil and reasonable discussion of policy and the effects thereof.

Cross Posted on Daily Kos.

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Deflating Conservative Arguments: Tax Increases Hurt the Economy

While listening to NPR on our drive home on Tuesday, my wife and I heard Rep. Tom Price (R-GA) say (emphasis mine):

Well we, we believe that tax increases, by and large, and, and for the most part, decrease the economic vitality and, and ability for this economy to recover. Uh, if you tax, uh, something you get less of it, and right now if we tax productivity or if we tax, uh, businesses to a greater degree, we think that you stymie and, and stifle the economy’s ability to grow.

This is a very typical conservative view of the effect of taxation. The only problem is that it’s, “by and large, and, and for the most part,” not true. Join me below the fold as I pop another conservative balloon with the needle of truth in my ongoing series, Deflating Conservative Arguments.

The conservative argument goes like this: increasing taxes takes money out of hands of regular people who would spend that money (as they see fit) and therefore stimulate the economy. There is a grain of truth in this if the government is taking money that would otherwise be spent on consumer goods and services or invested into productive capacity (as opposed to being used for debt reduction, speculative investment, or savings).

Even President Kennedy was for tax cuts and spoke in favor of lowering the tax rate throughout his Presidency. However, when Kennedy took office in 1961, the tax rates, were much higher than they are today. The argument that taxing income at this level would take money out of the economy made a lot more sense and led to the Tax Reform Act of 1964 which lowered all tax rates over two years in a somewhat regressive manner. Note: For purposes of illustration, I am using the rates for Single taxpayers, no exemptions, deductions or credits, and not adjusting for inflation.

The lowest marginal rate fell from 20% in 1963 to to 14% in 1965 (on your first $2000 in income) and the highest marginal rate went from 91% on income over $200,000 in ’63 to 77% in ’64 and then the top bracket was eliminated and the next bracket, income over $100,000, became the new top and was lowered to 70% in ’65. While the richest Americans certainly got the lion’s share of the tax break, the money that those in the lower classes would have gotten would be spent on consumer goods and services and therefore, would have a stimulating effect on the economy. It could even be argued that those in the top income brackets would spend more because the previous tax rates were a large bite of any income over $200,000, so even a millionaire would purchase more things or even perhaps put money into a new American business.

By contrast, today the top tax bracket (35% on income over $379,150) is the lowest it’s been since 1916, the 4th year of the federal income tax. This fact means that much more income is staying in the hands of the rich rather than feeding the governments coffers. If you made a million dollars in 1963, you’d have had a tax liability of $880,680, but if you made a million dollars today, you’d have a tax liability of $326,558. Okay, so you’d have 554,122 more dollars to spend. Great, but how much can someone really spend on consumer goods and services? How many American businesses can one person start and actually handle? How much demand can any one of us actually create?

Nobody knows the answer to that for sure and it is certain to vary to a great extent, but there is a limit somewhere. Once that limit is reached, any income over that amount is excess income that will be saved or put into non-productive (speculative) investments. Therein lies the answer to the eternal question of taxation, (ie. What is the appropriate level of taxation?) The appropriate amount to tax, in the sense of generating the most economic activity, would be the amount that puts any excess income to productive use. This level is probably somewhere closer to the 1963 tax rates than the 2011 rates.

The conservative argument that increasing taxes is bad for the economy assumes that all money that is in the hands of the income earner will be spent in the most economically productive way. This is plainly not true. After someone has reached the limit on their own consumer spending and has started as many businesses in America as they can, they will either use their money to speculate or sit on it. While investing in American businesses does increase our economy’s demand for supplies, equipment and labor in the US, speculation does not. It is merely a bet that such and such business will do well. Speculation adds no demand to the system and those dollars could therefore be used more wisely to do so. Clearly the same is true for savings although some savings is obviously necessary to have a personal cushion and be able to live with dignity in ones old age.

In contrast to the conservative argument, increasing taxation rates on top income earners, such as in the proposed Fairness in Taxation Act, which would implement new brackets of 45-49% for millionaires and billionaires, would actually increase economic activity. Rep. Jan Schakowsky, the author of the bill estimates that if it was enacted in 2011, it would generate $78 billion in new revenue. This would then get spent by the government on goods and services, generating more demand for goods, supplies, equipment and labor (read: jobs). This is money that is currently unproductive and would be put to good use.

I would even go so far as to say that lowering (or perhaps eliminating) taxes on the lowest income earners while raising taxes (even drastically) on top income earners will generate the most economic activity as it will simultaneously put more money into the hands of people who will spend it immediately and put money that is currently unproductive back into the economy. Although the People’s Budget does not include lowering taxes on low income earners, it would allow us to balance our budget without cutting needed programs, or endangering social security or medicare and medicaid and put our fiscal house on the path to sanity.

The grain of truth in the argument that tax increases hurt the economy can only be true as far as the assumption that all money that is not taxed is being put to its most economically beneficial use. Raising taxes on top income earners will not hurt the wealthy and it will not hurt the economy. It is a simple matter of fairness and justice.

Cross Posted on Daily Kos

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Deflating Conservative Arguments: The Myth of Individualism

My rabbi recently told a story about a bunch of people in a boat. One of them started drilling a hole in the boat under his seat and everyone screamed, “What are you doing?!?”. The man drilling the hole said, “What business is it of yours? I’m doing this under MY seat. It doesn’t effect you.” The commentary is, of course, that we’re all in this together even if we think our actions don’t effect others.

To me this is a perfect parable for the myth of individualism. Conservatives have seized upon the idea of individualism to further their argument toward a more corporatist state. Their argument goes that individuals, given access to all pertinent information, will make the best decisions for themselves, their communities, their states and their country. It further considers these all to be the same thing; the best decision for the individual is the best decision for everyone. This obviously ignores any conflicts that may exist among individuals and between individuals and society. It also ignores greed.

You may be asking yourself, “Why is ‘individualism’ a ‘myth’?” According to the New Oxford American Dictionary (subscription only), one definition of “myth” is:

Myth, n. A widely held, but false belief or idea.

According to The Free Dictionary, Individualism is defined as:

Individualism, n. Belief in the primary importance of the individual and in the virtues of self-reliance and personal independence.

Simply put, this is the theory that I described above. In order to believe in individualism, you must be willing to believe that what we do has no effect on the outside world, that there is no causal relationship between anything that we do and the things we see around us. It’s easy to put the lie to this by simply taking a look at any interaction between people with a material conflict such as the example provided by the boat parable, or perhaps this: the nuclear industry and those individuals working for it are making the best decisions for themselves, but it comes at a terrible cost to many others. The fact that we’re all in this together is why I call individualism a myth.

I would further argue that the myth of individualism causes self destructive behavior. There are plenty of stories of malfeasance to choose from, Enron, BP, fracking, Madoff, etc., etc., etc. All of these came about because someone thought it was the best thing for them to do. They didn’t consider the negative impacts on other people, the environment, health and safety, fairness, equality, justice or economic well being. The prime reason that the decisions leading to all of these crises are made is profit.

As Ambrose Bierce noted in his work the Devils Dictionary:

Corporation, n. An ingenious device for obtaining individual profit without individual responsibility.

It is beyond any doubt that individualism causes destructive behavior, but self destructive behavior? Well, consider that the individuals making the decisions on behalf of the corporations, or on behalf of themselves (as many of the top decision makers have incentives to make their corporations more profitable), just as the man drilling the hole in the boat, also must live with the consequences of their actions. In many cases, they might not feel those consequences immediately, but eventually, everyone is impacted.

But alas, this myth is a useful one when you’re trying to gain the support of the rural poor to advance the will of the super rich. Many of the people who make up the base of the Republican party are the same people who get beaten down by Republican policy. This is because, like most Americans, they don’t pay any attention to the policy after the election, so they believe the rhetoric. They believe in individualism because when you’re a farmer or rancher, you work the land and raise crops or cattle by the sweat of your own brow. This is the very appealing image of rugged individualism as portrayed by Reagan and before him Teddy Roosevelt. However, when you look at the results of policies of conservative governance, you see a widening of the income gap caused by upward redistribution of wealth.

Meanwhile, although the Republican party (and conservatives generally) espouse individualism as a core value, social conservatives don’t really want individuals to have any real choices that pertain to their personal lives. It really only takes one look at today’s war on women, or their fight against the rights of gay Americans, or their recent onslaught against labor. It’s clear that while they talk a lot about individualism, they really only like it when it means that corporations can do whatever the heck they please.

Many people have been taken in by the myth of individualism over the years. There are always those who are willing to believe that people can make it on their own, despite the fact that everyone needs the things society provides through our government in order to succeed. If it weren’t for our shared systems of education, transportation, sewage, water, (subsidized and regulated) power, public safety, dispute resolution (the courts), etc., it would be impossible for businesses and the individuals behind them to succeed.

The truth is that there really is no such thing as individualism. The whole concept is a falsehood, a myth. The reality is that we truly are all in this together, but in the minds of so many conservatives, you’re on your own.

Cross posted on Daily Kos.

Update: In the linked posting on Daily Kos, a few people have noted in the comments that there are positive aspects of individualism. This is not what the diarist meant to address. I was referring to individualism as a societal theory, not a personal trait. I’m specifically referring to people pursuing their individual self interest as is discussed in the free market ideological theories of Milton Friedman. Sorry if this was unclear.

In this vein, individualism causes destructive behavior because it presumes that what is right for the individual is right for all. This is a false presumption as what feels good to me might be to pillage the village, but clearly this would not be best for the village. People who see themselves as disconnected from the community (even if all they want is to be left alone), do harm to themselves and others whenever they act in a way that is harmful to society.

I’m not saying that we don’t have individual responsibilities or arguing that we should have some sort of big brother watching what we do, or that we shouldn’t be allowed to do things that we like. I am arguing however, that we have an effect on one another, whether we know it (or like it) or not.

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