29. October 2008 · Comments Off on Joe the Plumber, Can you be any Dumber? · Categories: Politics · Tags: ,

(a pretend letter to Joe the Plumber)

Joe, I can understand why McCain and Palin are so eager to stoke your fallacy equating the Obama tax plan to socialism; because fallacies, no matter how looney, sway votes… But notice how they handle it? It’s a “Joe-said-it” fallacy. They don’t want to take responsibility for initiating such a wild misconception but they love it that you did. They’re capitalizing on your ignorance Joe. What? You don’t see what wrong with what you said? Here, let me break it down for you.

Is Obama’s tax plan a form of socialism?

First of all, socialism is defined by the public ownership of production and distribution of goods… Nothing in Obama’s tax plan suggests public ownership of anything. If you want to talk about socialism you need to find examples of where the government actually owns the means of production or distribution of goods… The Pentagon for instance, a tax-funded, government agency that controls the distribution of defense-related products. Technically, THAT’S socialism.

Oh, you don’t think so? Well, no big surprise there. Despite staunch conservative support for certain government operations that take the form of socialism, the word “socialism” itself is simultaneously promoted by conservative rhetoric as a derogatory term, most frequently used to describe their liberal opponents. This leads many conservatives to the false conclusion that the very socialist features that they actually support can’t possibly be socialist for the simple reason that conservatives hate socialism. It amazes me how that social conditioning actually works.

Look, all the Obama tax plan is suggesting is that the government get more of it’s revenue from higher brackets, that’s not socialism, that’s just taxes. Granted, shifting the tax burden up the brackets does screw with trickle-down capitalism but capitalism is capitalism whether you push the money in through the top or push the money in through the bottom, it’s still the same American free-enterprise market.

Conservatives have been pushing the tax-burden down the brackets to feed cash into the top for decades. On a fundamental level the strategy is the same, like turning left or right using the same steering wheel, the most dramatic difference being that conservatives tend to borrow more so they can tell their faithful flock that through the magic of “fiscal responsibility” they don’t have to pay for their increased government spending… as if the mounting debt won’t ever become a problem. And sure enough it did… The big fat lie – “you can get something for nothing” was propagated by the mortgage industry to lure in capital debt AND by the Republican party to lure in political support.

And Joe, Get over yourself, the government isn’t there to reward your success like some kind of girl scout club handing out merit badges. The plain simple fact is that government spends money and that money has to come from somewhere. What’s that? The government should stop spending money then? Well, that would certainly eliminate the need for taxes. But for all the “opposition” to government spending, conservative politics have only increased government spending. Here’s some fiscal responsibility for ya Joe, cut spending first THEN cut taxes. Until then, we have to tax, even if we borrow we still have to pay the debt off with… taxes. So why tax the higher brackets? Well, the higher brackets happen to be where the money is. And don’t give
me that Rush Limbaugh crap about how unfair it is for the top 50% to pay for 90% of the taxes. Rush used cumulative percentages that hid the fact that it’s only the top 5% making more than $130K that actually pay more than a fair share. The rest of that top half actually pays less than their fair share and as for that top 5% they have more than enough wealth to offset the tax burden, something the bottom 90% doesn’t have. In fact when you include capital income from capital gains, dividends, interest, and rents, in other words, income generated by wealth, the top 1% actually earns more than 57% of the total, far less than their 34% share of total tax.

They’re playing with your head Joe.

And don’t EVEN give me that crap that people won’t have any incentive to work hard just because higher incomes mean higher taxes. The American dream isn’t all about taxes, it’s about houses, cars, education for the kids and everything else that goes with higher incomes, even if taxes come with it. Do you see anyone saying they don’t want to win the lottery because they would have to pay tax on it? Get real; even half of a hard-earned dollar is better than a handout quarter.

So it’s totally not socialism Joe, and it’s nothing personal either, so get over yourself, grow up, concentrate on how to offset the cost of a three point tax increase on income over $250K… a worthy business leader would know what to do. It would be the same challenge created by market driven inflation and sudden drops in sales. If you own a successful business you should work smarter not harder and if you can’t then you shouldn’t buy that business, you’ll wind up putting all your employees out of a job and I’m sure when that happens you’ll be blaming the government for taxing you too much instead of blaming yourself for not being able to steer a company through economic challenges.

Maybe you just stick to fixing pipes and let someone else with a brain run the business. You’ll be better off.

04. January 2004 · Comments Off on Do the rich really need the breaks? · Categories: Economics, Politics, Social/Culture · Tags: , ,

Here’s something I’ve heared a hundred times… “…Yeah, but the rich pay way more taxes than anyone else…” Words dispensed as indisputable evidence that the rich deserve the tax breaks being delivered by the Bush administration. Of course they’re talking about income tax and it’s true, the rich have been paying more income tax, but is that unfair? Maybe we need to look at the bigger picture.

Here’s another quote…

“Ultimately, we are interested in the question of relative standards of living and economic well-being. We need to examine trends in the distribution of wealth, which, more fundamentally than earnings or income, represents a measure of the ability of households to consume.”– Alan Greenspan.

Ah, so now we start to see two different measurements, income and wealth. A little more research and I discovered that compared to income, wealth is hardly taxed at all. This reveals a huge blindspot in the “rich need breaks” perception. But it’s not until you start looking at the difference between the distribution of income and the distribution of wealth that you really start to see the magnitude of the injustice.

These statistics were taken from the Survey of Consumer Finances sponsered by the Federal Reserve Board and ranks Americans by total wealth showing their share of national income and non-income wealth (investments etc…)

Income Wealth
Highest 20% 47.2% 84.3%
4th 20% 23.0% 10.8%
3rd 20% 15.7% 4.4%
2nd 20% 9.9% 1.0%
Lowest 20% 4.2% -.5%

Looking at these numbers, it’s easy to see that even if the rich do pay more taxes on income, which they do simply by virtue of having more income to tax, it still doesn’t have nearly the same impact on their relative standard of living and economic well-being as it does for the bottom 50% who can’t offset the discount on their income with accumulated wealth. In fact the bottom 20% are actually in debt, so not only do they have no money to offset the deductions on their income, but the taxes impede their ability to pay off their debt.

If Alan Greenspan is right and the more representative measure of our ability to consume is wealth not income, then it seems to me that wealth should be taxed more and income taxed less, that is, as long as we are insisting that we live in a society where everyone pulls their own weight.