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Tuesday, September 20, 2011

I don't understand "tax the rich" rhetoric

Not THAT kind of class warfare!
There is one thing in politics that I’m completely unable to understand. I can’t even put my brain into the mode of recognizing the thought process- the thinkers’ logical path- that leads to this belief. This is, of course, the progressive tax system and its proponents as identified by their cries of “tax the rich.”

First, let’s discuss the “paying their fair share” argument. What exactly does that mean? I love how such a subjective term as “fair share” is used here, as opposed to “equal share” or “proportionate share”. What is the fair share of someone who makes $10,000/year? Is it zero dollars? Is that fair? What about the services they use? What about the high income earners? According to this http://www.nationalreview.com/corner/277652/progressive-income-tax-veronique-de-rugy the top 5% of earners pay 60% of all taxes, but only ear.35% of personal income. Is that fair? So, what is fair? The best answer I can come up with is that “fair share” is more than whatever they’re paying at the time the argument it being made. Fair share for the top earners = more; for the bottom earners it = less. It does not, however, equal a percentage of income in any way, shape, or form.

Second, let’s look at the next argument I hear most often. “They can afford it.” This is perhaps the most immoral, horrific argument I’ve ever heard. Who cares if they can afford it? What right does anyone else have to their money simply because they can afford it? I don’t need my entire bag of chips, or even the second half of my $5 foot-long; I also don’t need to give them to you. Should I give them to you, if you’re starving- or just hungry and without cash? Maybe. I’ll entertain that argument. Should I give them to you if you are, as you’re asking me for it, looking up reasons why I should on your Smartphone- or taking a picture of my waste with your flip camera phone? Maybe, if I can lecture you on how your phone is a luxury and your monthly bill could have bought you some lunches. Now, I should do a lot of things. I should have gotten a veggie sub instead of the meatball. I should have remembered to actually bring my lunch from home. However, if I don’t, or don’t want to, I should NOT be forced to do something you think I should do. Does it make me an evil person to go eat that other half of my sandwich- and get overstuffed- in front of someone who’s dying of starvation? That’s a pretty good chance. However, it does NOT mean, at all, that I should be forced to give the other half of my sandwich to someone of your choosing. If you start doing that, I’ll never buy a foot-long again, and then we all lose. Bottom line, because someone should does not give the majority the right to force them to. This is imposing your morality on other people via guns and force- which is always wrong.

But, you say, they don’t NEED that much money. No one should ever have hundreds of millions of dollars while other people starve in the street, or die of treatable diseases. Here, however, is the rub. That money wasn’t gotten through ill means (more often than not). If it was, prosecute. However, to take the Bill Gates example- he earned his money by providing something of value at a price that matched what consumers were willing to pay. This was fair. This was good. It’s the same principle behind selling saltines. Someone got rich off of selling saltines at a price that other people were willing to pay. However, Bill Gates did this so well- he provided SO MUCH VALUE TO SO MANY PEOPLE- that he collected an almost unheard of amount of wealth… actually, he earned an almost unheard of amount of income that he- through other value for money transactions, turned into wealth. His income was taxed. The product he sold was taxed. The income the purchasers used to buy it was taxed. The products they sold to make that income was taxed. No one has ripped anyone off here. Everything is above board and good for everyone. In fact, a LOT of taxes have been paid to the government (if you’re wondering why the government should take any money from this, I’m not answering that here, but good question!) So, the windows user gets value and is happy (or decides they overpaid and doesn’t do it again), Gates gets the money and is happy. The government gets its money and should be happy.

That’s not the end, though. See, Bill Gates has provided so much value, and received so much income in exchange, that he can’t spend it all. (Well, he probably COULD spend it all, but he doesn’t want to.) So, what happens is Bill gets sales pitches to buy things- well, not things so much as parts of companies. He’s not stupid and, like every other human alive, doesn’t want to spend his money on things that don’t have a value that matches this asking price, so he spends his money on things (parts of companies) that offer a good value- maybe even, in the long run, a very good value. However, this is, in essence, the same as above. These companies have valued themselves at a certain price. Bill has agreed upon that value- or negotiated a new value that they both agree upon- and an honest transaction has been made. This company then goes on to produce something of value and sell to other people- same as above- and lots of taxes are paid. Because of Bill’s investment, this company is now worth a whole lot more than Bill originally paid for it. Bill has amassed wealth. (Same thing goes with buying gold, cotton, oil, etc. Bill buys was an agreed price for accepted value, hoping the value will increase, it’s honest and above board.)

We’re still not finished. Bill has some kids and he’s dying. He’s dying with a net worth- not just his bank account balance- of such a huge number we can’t even imagine what it would look like. I’m talking Scrooge McDuck figures here. So, Bill decides he wants to give this all to his kids, nephews, and me. Why? Because I’m a nice guy and he’s heard about me- and this is my explanation. So, he earned all this money provide value and purchasing bits of things that provide value to other people. His money has been taxed and the money of everyone involved has been taxed. Hell, even his property is arbitrarily valued and taxed annually. He pays taxes on all his employees, etc. So, why, when this money has been earned honestly and for equally provided value (and has already been taxed) should ANY of the money he wants to give to me be taxed? What claim does the government (or any other people) have on that money? I didn’t earn it? So. Bill did and he wanted to give it to me when he died. Does the reason why matter? This money has already been taxed at some level. Why should Bill just giving it to me justify another chunk of it taken away?

So, these are the things I don’t understand the reasoning behind. I don’t understand how someone can think this through, logically, and decide that Bill needs to pay even more in taxes. If someone gives me a valid reason (that isn’t extortion- he must so the poor people don’t rise up and kill him out of anger) please do so.

9 comments:

Anonymous said...

Check out the book "Unjust Deserts" by Gar Alperovitz and Lew Daly. They present a pretty convincing and logical argument regarding why rich folks should pay higher taxes, and the myth of their actually earning the entirety of their wealth. Bill Gates is examined in detail as well. Highly recommended if you are sincere in investigating the opposing viewpoint!

Best,

-David

W said...

I agree with your arguments that real fairness should be Really Fair -- generally, the same percentage for taxes should be levied on all. I think that rate should be no more than 20% or so.

A problem, though, is that this argument really isn't an argument between the Rich and the Poor. The argument about whether to levy more against Rich is an argument that the Rich are having with other Rich.

More government income (taxes) means that the government can continue to spend more and more on terror-theatre defense industry. That industry is very much for-profit. That industry is owned and operated by the Rich. If this debate Really Were about Real Services for all (firefighters, teachers, libraries, recycling, energy cooperatives, etc.), then it might be possible to break it down in terms of This Rich Man who earns his money on our taxes being spent on his industry vs. That Rich Man who's just saved and invested and bought a welding business. The two aren't the same. The terror-theatre Rich Man has gotten rich on our taxes... and some of us would like some of those back, please -- if not into our very pockets, at least into our kids schools.

But I agree on the fairness point. 20% or so, with smaller Federal gov.

paket Haji Umroh said...

good articles..

umroh ramadhan 2016 murah

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Jill Davidson said...

Well,

To us, Bill Gates represents us. Collectively we created the conditions for Bill Gates to exist and he is one of us. He did not create anything alone but rather was an inspirational spark that fired when we collectively created the conditions necessary... water systems, food harvests, road systems, educational systems, freedom to explore, access to supplies, etc.

A little bit of free will and initiative and a lot of environment conducive for "Bill" to create. So... he did not create anything, we allowed for creation. Bill should share his wealth and distribute in best a manner possible to essentially recognize every aspect that allowed for his good fortune to prosper.


So, when you "buy" sandwich, we are collectively allowing you to "buy" a sandwich and so if you do not promote everyone having a sandwich we may collectively create other conditions where one might have to be submit to a king to eat. As far as taxes and everyone needing to "pay their fair share"... well, this is just silliness, better to discuss what is a more effective way to share one's wealth: public tax, private business, philanthropy, private family... no one really knows... but we can feel when things are good and well and when things seem a bit rotten.

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