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POLITICS APRIL 6, 2011

Share the Wealth

BY THE EDITORS

A serious conversation about managing the federal budget is under way. And that’s a good thing. Federal spending is growing faster than federal revenue. Absent changes in the law, future generations of Americans will likely have to raise taxes to unprecedented levels, dramatically reduce the reach of government programs, risk the macroeconomic consequences of uncontrolled debt, or some combination of all three. At best, these options are unappealing. At worst, they are a threat to prosperity.

But the fiscal conversation is unfolding in an unfortunate manner. For one thing, many in Washington seem to have lost sight of the fact that the economic recovery remains fragile and unemployment remains high. It is possible to believe that the deficit must eventually be addressed, while also believing that our present circumstances actually require deficit spending. As Joseph Stiglitz, the Nobel Prize-winning economist, wrote recently, “Just like it may pay for a business to borrow (‘run a deficit’) in order to increase long-run profitability, so too for government.” 

Deficits should be temporary, of course. Once the economy fully recovers, the government really should focus on reducing debt. But that begs the question of how. Right now, the two poles of the debate are extremely conservative proposals, like the spending plan recently unveiled by House Budget Chairman Paul Ryan, and more centrist proposals, like the one endorsed by Erskine Bowles and Alan Simpson, co-chairmen of the president’s commission on deficit reduction. The result is a skewed discussion, where it seems to be a given that deficit reduction will take place primarily through spending cuts—and that those cuts, in areas ranging from housing assistance to food stamps, will frequently target the poorest Americans.

This is where liberals need to make a stand on principle. Balancing the budget is important; but so is creating a fair society in which all Americans have basic economic security. The fact is that much of the moral purpose of government spending is to redistribute income downward—to provide for the least successful and least fortunate members of society. It’s easy for that general principle to be lost in the detailed debates over which programs will be cut. But liberals shouldn’t run away from talking about this overarching commitment. On the contrary, it is something to be proud of.

What does this mean in practical terms? At the broadest level, it means debt reduction partially through higher taxes: allowing all of the Bush tax cuts to expire, while also adding new sources of revenue, ideally including some form of carbon tax (a measure which, in addition to helping to balance the government’s books, might have the added benefit of helping to save the planet). With Republicans in control of the House, these proposals may or may not be politically practical right now. And they aren’t necessarily popular. But liberals must continue to make the case for them, as both an economic and a moral matter.

Of course, there should be spending cuts as well. In fact, there should be plenty—and the bulk of them should come from health care. The skyrocketing costs of Medicare and Medicaid are the primary reasons the government’s fiscal picture is so bleak. Any strategy that does not slow the growth in these programs will fail. But the approach recently introduced by House Republicans, and embraced by many self-proclaimed fiscal hawks, is simply to slap limits on what the federal government spends on these programs—even if that means leaving seniors and low-income Americans without affordable medical care. That’s not controlling the cost of health care; that’s simply transferring the cost to people who can’t afford to bear it.

A smarter strategy would take a balanced approach, one that attempts to remedy the underlying inefficiencies making insurance so expensive. The Affordable Care Act introduces incremental versions of these reforms, like encouraging doctors to form integrated groups and creating an institute that will study which treatments work better than others. Going forward, the government could bolster these efforts and add some new ones, like a government-run insurance option for people under 65—a measure even the Bowles-Simpson commission acknowledges would help save money.

Why hasn’t anybody proposed these kinds of steps? Actually, some think tanks and economists, and even a few politicians, have. But it would be helpful if more Democrats spoke up on behalf of these ideas. The test of virtue in the fiscal debate is not simply whether politicians can balance the books. It’s whether they can balance the books in a way that provides for all Americans—including the least fortunate.

This article originally ran in the April 28, 2011, issue of the magazine.

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137 comments

The Editors write: "The fact is that much of the moral purpose of government spending is to redistribute income downward—to provide for the least successful and least fortunate members of society." Huh? Did nobody on your staff attend a class in civics? Ever? This graf slipped by without a single person saying "Hey, this reads a bit strange, maybe we should revise it..." Luckily, we needn't rely upon the elite education of our esteemed editors and can rely instead upon our founding fathers to clarify: “To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.” — Thomas Jefferson, letter to Joseph Milligan, April 6, 1816 “A wise and frugal government… shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.” — Thomas Jefferson, First Inaugural Address, March 4, 1801 “With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.” — James Madison in a letter to James Robertson “[T]he government of the United States is a definite government, confined to specified objects. It is not like the state governments, whose powers are more general. Charity is no part of the legislative duty of the government.” — James Madison I'm not sure you can find many of the founding fathers that believed the role of government was to redistribute income downward. Note that they don't mind that happening at the state level. But why on earth would anyone decide this is the role of federal government? Did you guys (and gals?) ever take a civics course? If it is a moral argument you are making, then shouldn't the importance of clean water in African trump any moral claim a person barely getting by might have in the US? The poor in the US are among the wealthiest in the world. You cannot make a moral argument there. Now, if you want to bring country borders into the discussion, then fine, but at that point you no longer can claim this is a morality play. At that point, it's merely envy and greed.

- seattleeng

April 6, 2011 at 2:52am

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Ah yes, the libertarian illusion that in an industrial, let alone modern, economy, the distribution achieved by the market is the act of god, perfectly just, and that the decisions of the national government, such us to maintain unemployment in order to avoid inflation and protect the wealth of holders of financial instruments, have no bearing on outcomes. Of that those who labor receive that fictional quantum, their marginal revenue product and hence have no claim upon anything else. So much bunkum, so little time.

- roidubouloi

April 6, 2011 at 3:14am

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We are heading for a government shutdown in one of those very rare years when I have a tax refund coming. Is there no G-d?

- paskunac

April 6, 2011 at 6:07am

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For my part, I have no interest in taking instruction from Jefferson or Madison on the nexus of morality and politics, given their readily apparent ability to square both slave ownership and European manifest destiny with with both their moral and political sensibilities. If our political-moral sense has not developed beyond theirs, then the future shall be grim indeed.

- IowaBeauty

April 6, 2011 at 7:26am

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What IS it with you guys and "Morality"? Is EVERYTHING a "Moral" question now? I think you're falling into the Republican meme -- once everything is a "moral" question, "religious" points of view become the way they should be decided. Yes, absolutely we need to let the Bush tax-cuts expire. But that's because reason and history indicates that's the way to go, not some pseudo-"Morality".

- AllanL5

April 6, 2011 at 8:34am

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Our President, and our Congressional leaders, hardly ever make the arguments the editors are calling for, and seem utterly unwilling to stand by any such principles. They are so afraid of tea people and other forces of ignorance that they are almost silent in the face of Republican insistence on tax breaks for the wealthy and spending cuts for the needy. Why is it so much easier to decide to fire cruise missiles at Libyans than to decide to fund the government for the next two months? Why is it that, with unemployment at 9%, all the focus is on the debt and deficit? Obama is not Ted Kennedy. He is closer to Dick Nixon. Nobody will take up the fight the editors are calling for. It is a damn shame. Neil

- purcellneil

April 6, 2011 at 8:50am

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If it weren't tragic, it would be laughable to express concern about "redistributing income downward" when precisely the opposite has been occurring. It is a fact that the percentage of both income and wealth of the wealthiest 1% of the population has been increasing steadily over the past 30 years. That means that the net effect of government policies has been either to foster or permit that result. Those of us who view that result as unjust and damaging to our economy, myself very much included, would like to see those policies changed, starting with requiring the 1% to pay a higher proportion of taxes and ending corporate subsidies and loopholes. While politically those policies may not be feasible at present, the editorial makes a sensible distinction of what policies would serve the country in the short term and what very different policies would be appropriate for the long term. My most fervent hope is that the Obama Administration will not cave to Boehner's threat to let the government default unless a budget can attract the support of 218 Republicans. I'm waiting for Obama to take a principled stand against this blackmail, which I regard as a dangerous bluff.

- JackR

April 6, 2011 at 9:23am

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To balance a budget by sheer exploitation of the poor is immoral to the nth degree, Allan. Why is that so offensive to you?

- cspencef

April 6, 2011 at 9:30am

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I don’t find the moral argument persuasive, if for no other reasons than morality is highly personal and subjective and forever changing. I have been critical of Chait's redistribution argument for the progressive income tax that he makes from time to time (he no doubt helped write this editorial). My point is that his argument has it backwards: we don't first decide to redistribute income and then go about looking for ways to do it. No, we first identify a common problem, a major problem that could risk a stable democracy, craft a solution to the problem, and then lastly develop a system for funding. A stable democracy cannot co-exist with 25% unemployment, a stable democracy cannot co-exist with one race subject to discrimination and worse, a stable democracy cannot co-exist with our seniors destitute or unable to receive adequate health care, a stable democracy cannot co-exist with our young not having the education or skills to compete in a global economy, a stable democracy cannot co-exist with our cities, our roads, our bridges falling apart. Maybe wealth could become so concentrated that it would pose a risk to democracy, something seen in less developed countries, and redistribution would then be a goal in and of itself, but I don't believe we have reached that point yet. Our common goal is a stable, which is to say a prosperous, democracy, which sometimes requires common solutions to common problems. While those solutions may be moral, that’s a secondary benefit not the primary reason for them. Indeed, because morality is highly personal and subjective and forever changing, basing common solutions on morality almost guarantees there won’t be any.

- rayward

April 6, 2011 at 9:33am

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TNR also needs to look at its advertisers -- the page keeps having pieces of itself 'refresh', which makes entering these comments very difficult.

- AllanL5

April 6, 2011 at 9:34am

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Thanks, seattleng, for teaching us all a much-needed history lesson. I second everything roidubouloi said, and would only add that trying to stretch the views of 18th-century farmers and merchants to fit a 21st century post-industrial economy they could have never imagined is an act of transparent greediness. And it's bad history to boot. We could invite Gordon Wood to explain why, but he has an "elite education," so why don't we just keep selectively quoting a handful of Founders? Let's try this one: "I am conscious that an equal division of property is impracticable, but the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. The descent of property of every kind therefore to all the children, or to all the brothers and sisters, or other relations in equal degree, is a politic measure and a practicable one. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions or property in geometrical progression as they rise." - Thomas Jefferson, Letter to Rev. James Madison, Fontainebleau, October 28, 1785 (http://teachingamericanhistory.org/library/index.asp?document=967) Fun game. Unfortunately, it doesn't tell us much about what the founding generation thought about these issues (even assuming they were of one mind, which was almost never the case), and it certainly doesn't help us make wise political decisions in 2011.

- npippenger@gmail.com-old

April 6, 2011 at 9:59am

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The fundamental long-term deficit problem is that since about 1980, US health care costs have been increasing at a rate twice that of the rest of the civilized world, We now pay about twice the OECD average per capita for for no better results. Every other wealthy country manages to provide health care to everybody, all the time, far more cost-effectively than the US. Tinkering with insurance schemes and tax rates won't even begin to solve the problem. Whoever pays, the inefficiency of heath care in the US is not sustainable. We know what works. We have many examples. They are, alas, anathema to the religion of the free market. Hence proposals like Mr Ryan's, which is effectively a enormous transfer of resources from the sick, the poor, the disabled, and the old to the very wealthy. If this is not a moral evil, I don't know what is.

- K_Wilson

April 6, 2011 at 10:13am

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ray and Allan - I was thinking about this (perhaps not coincidentally) this morning. Morality is sadly absent from politics-but only on the side of liberals. A lifetime ago, King and RFK and JFK spoke in the language of morals: duty to your fellow citizens, to the poor, the weak, and the downtrodden, love as a response to hatred, and all the rest. Should they really not have? The fundamental reason why we should fight attempts to fund tax cuts for the wealthy by cutting food stamps and kicking elderly nursing home residents into the street is because IT IS WRONG. To deny that is to cede the moral high ground to the conservatives, who are now openly arguing that wealth is an indicator of your value as a human being, and I'm not willing to do that. As for the founding fathers...I've read a lot about Jefferson recently, and what I've seen has convinced me that Jefferson's image as an intellectual driver of early American history obscures the reality that he would fit in alarmingly well with modern Tea Party conservatives. He explicitly argued for government by the elites, suggesting that public servants' only motivation must be a sense of duty and that actually creating work conditions of anything other than "drudgery and subsistence" would lead to "degeneracy." He eliminated all federally collected taxes during his time as President, arguing that America faced a stark choice "between economy and liberty, or profusion and servitude," marking one of the earliest examples of the ridiculous argument that every dollar of government spending equals jobs and freedom lost. And he called for regular violent revolutions, to boot. One of the wisest things Jefferson ever said was a recognition of his own limitations. It's emblazoned on one of the walls of the Jefferson Memorial: "I am not an advocate for frequent changes in laws and constitutions. But laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times. We might as well require a man to wear still the coat which fitted him when a boy as civilized society to remain ever under the regimen of their barbarous ancestors." And as long as we're into the territory of morals, another quote from the Jefferson Memorial, though it was said as a response to the existence of slavery, seems a quite appropriate response to the Republicans' new policies of cruelty: "I tremble for my country when I reflect that God is just, that his justice cannot sleep forever."

- janus

April 6, 2011 at 10:35am

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JackR writes: ". It is a fact that the percentage of both income and wealth of the wealthiest 1% of the population has been increasing steadily over the past 30 years." Actually, the poor and middle class have largely held onto what they had 30, 50 and even 100 years ago. In fact, they have MORE than their counterparts did a while ago. Much more. Bigger homes, more cars, more college, more orthodontics, more TVs, better retirement, more boats, better healthcare, etc. But the country has created enormous amount of NEW wealth. It is this NEW wealth that the poor and middle class and upper middle class haven't been able to capture. In fact, the only people that have been able to capture this new wealth are those that create the wealth. On the one hand, it's not surprising. Facebook created $50B of wealth from nothing. It is a company of one thousand people. Does the middle class person living in Peoria deserve a piece of that? FB is international. Does the middle class person living in Rome deserve a piece of this? The answer is "no" and "no".

- seattleeng

April 6, 2011 at 11:07am

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mansfield writes: "Thanks, seattleng, for teaching us all a much-needed history lesson." And alas, have we not implemented the progressive tax system that Jefferson envisioned? The US has the most progressive tax system in the world, according to the UN

- seattleeng

April 6, 2011 at 11:16am

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Here's an American that supports your statement and ideas — get rid of Bush's tax cuts for the rich, raise revenues by increasing taxes (yes, on the rich AND, especially, corporations), and selectively cut expenditures but NOT on the backs of the people who can least afford it. A basic argument is that the rich and corporations OWE this country for providing the foundation for their wealth and business. There is a long list, which I won't go into, beginning with infrastructure, education, etc. Who in the heck do they think they are that they can get away without giving back? One disagreement with your position is that Medicare and Medicaid SEEM like a problem only because the real, underlying problem, the skyrocketing cost of health care (yes, we have the most costly health care in the world with very poor outcomes for a western country), keeps pushing up Medicare/Medicaid costs and taxing their systems. I fail to understand why everyone focuses on Medicare and Medicaid and not on solving those underlying problems. And, the idea of Medicare vouchers so the elderly, sick, and disabled can buy health insurance is ludicrous. Medicare's administration costs run about 3%; insurance companies about 30%. What an incredible waste of money and an insult to our intelligence!! Need I also point out that insurance companies are a huge part of the current problems with the cost of health care. I'm sick to death of the Republicons insisting they hold the moral high road when, in fact, they seem clueless about the moral implications of their draconian economic ideas. They lied to their voters to get into office (remember — it was all about jobs. What happened to that? They haven't put out a single bill to help resolve our jobs situation) and continue to lie about who and what is to blame for our current economic morass. Shame on them and shame on anyone who votes for them or supports their current 2012 budget plan.

- sustaingai

April 6, 2011 at 11:18am

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IowaBeauty writes: "For my part, I have no interest in taking instruction from Jefferson or Madison on the nexus of morality and politics, given their readily apparent ability to square both slave ownership and European manifest destiny with with both their moral and political sensibilities" Unfortunately, the fact that you are sitting in a house warmed by gas, while using a computer that is powered by electricity--at a time while others in this world are dying from lack of basics, including clean water....I just cannot believe all that you have....Given your absolute lack of compassion for your fellow man, I cannot accept anything you say. And in fact, I reject it all. That you would sit there enjoying life while others die...I just can't stomach your immorality, but more important, I can't accept the EASE at which you further this immorality. Your grandchildren and their grandchildren will also look back and you with equal incredulity and disdain. I mean, seriously, in the amount of time it took you to read this, 22 children died from diarrhea alone. 54 died from malnourishment. While you just sat there. Shame on you for living such a lux lifestyle. Sorry, Iowa, I jest, but it's a simple world you live in buddy. Everything is relative. Everything.

- seattleeng

April 6, 2011 at 11:28am

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There is such a fundamental difference between the left and the right that it is impossible to reconcile the two positions. The left believes it is entitled to everything and the right does not believe in such entitlements. The simple basic fact is that everything government touches is poorly managed and bloated with waste and fraud. So many useless, harmful and overlapping regulatory agencies with people hiding in cubicles doing nothing. Honest managers throughout government talk of having 2-3 times as many people as they need to do the work; they know this because so many do nothing other than take up management time and effort and distract from the goals of the agency. Cut their budgets by a half and let the managers manage. Freedom works; government doesn't

- dalefogden

April 6, 2011 at 11:31am

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seattle: Let's just get real here for a moment. "Facebook created $50B of wealth from nothing...Does the middle class person living in Peoria deserve a piece of that? FB is international. Does the middle class person living in Rome deserve a piece of this? The answer is 'no' and 'no'." The answers are: "Yes, absolutely. Government created the environment in which those creators grew up healthy, got their educations, got jobs where their working conditions were protected and their wages guaranteed to at least give them a reasonable standard of living. It also created the bloody internet." and "No, because there's no legitimate government that covers both the U.S. and Italy."

- janus

April 6, 2011 at 11:36am

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Dale: Your point is undone by reality; note what sustaingai pointed out a couple of posts up-private insurance administration costs run about 30%, public 3%. Freedom is not opposed to government. Government creates freedom. If you disagree, then move to Somalia. (I'm not engaging in hyperbole here; I'll buy you a ticket if you promise to never come back.)

- janus

April 6, 2011 at 11:41am

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So much libertarian nonsense. foggedin needs to move to Somalia where he can be blissfully free of government. The libertarian hokum ignores all economic data of the last 65 years, all of it. Relative income equality is associated with high growth. Income inequality with lower growth. "Wealth" is not some finite quantity, like energy, that either appears in one place or another, earned by this one or earned by that one. It is first of all the outcome of joint processes in which many people and institutions participate. The distribution of the output is affected by many things, including legal institutions, social class, international competition, the structure of particular markets, oligopoly, the list is almost endless. Virtually the least of these, and often not a factor in the slightest degree, is the individual contribution to the creation of that wealth, not least because the distribution is a function of prices and prices are not absolutes. Insofar as all social, legal, and technical factors affect prices, they can and do change distribution without the slightest bit of difference in the effort or output of individuals. foggedin is off the deep end with a religious conviction that has as much relationship to the real world as creationism. seattle does not understand anything about actual economics, preferring Randian myths to any concrete or scientifically grounded explanation. I look forward to seattle's cite for the proposition that the US tax system is the most progressive in the world, as it is not progressive at all with average tax rates for rich and poor alike in the range of 20% +/- 3%. We have been around this block many times, but seattle typically counts only federal income taxes, ignoring the many other regressive taxes in a system that is distinguished in the modern world by multiple layers of government, and also ignoring the difference between economic income and what manages to get on a tax return as adjusted gross income subject to taxation. PS, seattle, sustaingai has a much clearer understanding of the economics of healthcare than you do. He or she undertands that the issue is the real cost, not whether the price is paid with taxes or insurance premiums that might as well be taxes or, as Paul Ryan and the rest of the savages prefer, not paid at all so that people who cannot afford the care just get sick or injured and die.

- roidubouloi

April 6, 2011 at 11:47am

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OK, seattleeng, since clean water in the developing world seem to be your personal hobby horse, do you mind telling if you are doing anything to solve it, especially since guv'mint can't do a damned thing right? Or is it just a literary tick of yours?

- zardoz67

April 6, 2011 at 12:03pm

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"The US has the most progressive tax system in the world, according to the UN" This is not correct. The study that's been getting a lot of press lately covers only income taxes, and leaves out everything else. The US has regressive state and local taxes, plus payroll taxes. Europe has VAT, among other things. US taxes may be more or less progressive, but that study tells us nothing useful. And it also ignores the distributional effects of government programs.

- K_Wilson

April 6, 2011 at 12:10pm

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K Wilson is absolutely correct to call our attention to the fact that the tax system also has distributional effects, i.e., second and higher order effects. Because these cannot be calculated, the best means of seeing how the whole thing plays out is to look at the distribution of net income. The final outcome of the system in all its parts takes into account all factors of markets, taxation, and other structure. By this measure, the US is an outlier amongst advanced industrial economies with highly skewed distribution of net income.

- roidubouloi

April 6, 2011 at 12:43pm

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One should add that since national policy plainly is a significant causative agent in the final distribution of net income, there is absolutely no reason whatsoever, none, nada, to credit any particular distribution as the one that is "correct" of god-given. Distribution is partially a function of market forces but quite clearly also a function of policy. This fact suffices to render completely mythical the whole libertarian idea that income is created in one place and then redistributed elsewhere. The system as a whole achieves different equilibria depending in part on policy. In a democracy, we are free to choose the policy we want. We are not bound by Ayn Rand's notion of the good but by our own. Those who are sufficiently unhappy because the cannot achieve the democratic outcome they want can go to Somalia and enjoy libertarian paradise.

- roidubouloi

April 6, 2011 at 12:46pm

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Roid, I know you're in New York, but if you happen to pass through DC, let me know. I'll buy you a beverage of your choice.

- janus

April 6, 2011 at 12:49pm

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I don't care how you care to discuss it-- on moral grounds or hard-headed economic grounds. The current budget choices being debated are a disaster. They all put the burden on the poor and the moiddle class while they weaken, maybe disasterously, the economy for all. The origin of the disaster and its strong advocates are the Republicans. Much of the response that is a disaster should be assigned to Obama and the Senate Dems. Obama's tactics could win him by re-election by "bipartisan above party, hang progressive Democrats out to dry, and let Republican recalcitrance move the political center further and further to the right." However, the disasterous budget deal is mostly on Republican terms. BHO and the Dems have needlessly and cnsistently lost in major ways by negotiating down, and then touting the success of, a too-small stimulus package, weak immediate health care reform and cost containment, maintaining Iraq/Afghan wars, caving on the tax package, and NOT resolving the debt-limit and 2011 fiscal budget when they had supermajorities or near-super mahjorities. Now the debate is about how much more will they cave-- and then call it a victory and enable future cuts that dimish or prevent economic recovery and job growth. With a budget deal giving away much of the rest of the current social net, BHO and Senate Leaders will announce the economic equivalent of "Peace in our time". He may be re-elected because of the current greater stupidity of the Repubs, but that's the success of a bright, non-confrontational, but politically foolish Nevile Chamberlain beating a right-wing nut of an opponent.

- drofnats1

April 6, 2011 at 12:50pm

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"The poor in the US are among the wealthiest in the world. You cannot make a moral argument there." Not this canard again. Seattleeng must have never been outside of the US in his life if he believes that. I have lived in some of the worlds poorest regions, in remote China, Mexico, the South Pacific, I have also lived in Northern NJ nearby Newark, I would rather die than live in Newark, however living in a remote fishing village in Oaxaca or the south pacific is wonderful. The people in Santa Maria Xidani, for example, are very poor per capita income wise, but they all have guaranteed basic health care and education, the brightest kids get becas to local universities. seattleeng truly is clueless. He takes per capita income and seems to think that because a person makes $20,000 in the US compared to $4,000 in Mexico, the American MUST be 5 times better off. Hey seattle, cost of living is different in different countries. I pay $100 a month to rent my house here, utilities included. I can buy a whole cooked chicken for $3, crime is very rare (for me nonexistent because I live in a gate community, not bad for $100 a month having armed guards 24 hours a day) People do go to the states from around here but that is because if you can bust your ass for 10 years you can save enough to come back here and buy a very nice place and start your own business. But this is a quirk of currency, nothing more.

- blackton

April 6, 2011 at 1:03pm

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Hey, Janus, I will try to remember that as I do get down there from time to time. Indeed, we were there for a few days just last week-end. First time I was ever in DC when the cherry blossoms were in bloom, a happy accident. We walked around the tidal basin (and saw the FDR memorial for the first time). Despite some rain, magnificent! Nice enough to be on a picture postcard.

- roidubouloi

April 6, 2011 at 1:40pm

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I pretty much agree with drofnats. The political response of the Democratic party, most notably are otherwise eloquent president, to Republican class warfare of the rich against everyone else continues to be dismal.

- roidubouloi

April 6, 2011 at 1:41pm

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roid: I'm trying to get in the habit of taking a few pictures at each cherry blossom festival. It's always lovely, but a tiny bit different every year. (I recognized my sad signs of old fogeydom this year when I groused that a particular cherry tree limb had been taken down since last year.) So far as Obama goes, I share the frustration, but I'm still not quite as angry as you, drofnats. I have some trust left in the guy, particularly when I remember the trail of fallen political enemies who underestimated him. I hope my trust is vindicated by a knockout punch to Ryan and doesn't turn out to have become blind faith...

- janus

April 6, 2011 at 1:52pm

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Great. Republicans are scum, etc. The usual blather. Nobody addresses the problem: the current US welfare state is unsustainable in terms of its cost, and hence must be changed. How do you propose to change it, if at all? This fixation on raising taxes is laughable - OK, repeal all Bush/Obama tax cuts. In fact, raise them as high as you dare on "the rich." Cut defense by half, a liberal's fantasy. With a deficit of $1.5 trillion per year, you don't even get half way. So, again - where do you want to cut and how? Where's the D plan?

- butchie b

April 6, 2011 at 2:07pm

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"But the country has created enormous amount of NEW wealth. It is this NEW wealth that the poor and middle class and upper middle class haven't been able to capture. In fact, the only people that have been able to capture this new wealth are those that create the wealth." deluded.

- mmathog

April 6, 2011 at 2:33pm

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the founding fathers in fact wanted to establish a new aristocracy, astonishingly, the american north did NOT do that and instead established the best and most dynamic government and society the world has ever seen. so no, I don't give a shit about what jefferson and madison said on this matter, they didn't have this vision. the federal government stands as a bulwark against an emerging aristocracy, an aristocracy that would, in fact, crush the economic and entrepreneurial dynamism seattleeng claims to love.

- mmathog

April 6, 2011 at 2:35pm

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butchie, I notice you're asking the question on here again instead of addressing the other thread where roid and I answered you on what changes should be made. A question back, then: why the fixation on cutting spending? What has cut deficits before has been economic growth, not spending cuts, by a ridiculous margin. And economic growth is fueled by spending. Is the problem perhaps that liberals plan government spending using Keynesian economic theory, which has a wealth of historical data to demonstrate its veracity, while conservatives insist that the Laffer Curve, perhaps the most aptly named economic theory in history, and certainly among the most famous napkin scrawls ever, is holy writ?

- janus

April 6, 2011 at 2:39pm

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butchie, you're not getting it. 1. Means test social security and that minor problem is solved. 2. Raise upper bracket rates to eliminate the operating deficit and that problem is solved. 3. Adopt single-payer, universal health insurance, financed with a combination of energy taxes, a flat tax comparable to, say 12% of median income (the substitute for insurance premiums), and an income tax surcharge to subsidize the cost of the insurance (that is to reduce the flat tax) for the lower end of the income spectrum and you are done, iff you control medical costs. Although taxes go up, health insurance premiums vanish. Most people are better off, the wealthy, not. If we do not control medical costs, there is no solution. The problem is not the entitlement. The problem is the real cost. This works if we force our costs down to something like 12% of GDP, comparable to the French. If we don't, then the flat tax has to be higher, as do the subsidies. If we spend 20% of GDP on medical care, we are spending that much of our national income regardless of how it is paid. Okay?

- roidubouloi

April 6, 2011 at 2:43pm

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Sure, it's a Moral problem. Now, who holds the "Moral" high-ground? Who holds their religion on their sleeve? Who's united with the Religious Right? Who's against abortion rights, against separation of Church and State? The Republicans. So when you frame the debate as a Moral issue, you've lost already. You've wandered into a swamp of debateable issues -- what IS the Moral position after all? Is it more Moral to take money from the rich to provide health-care for the poor? Or more Moral to give vouchers to the poor so they can negotiate their own health-care? Where does the Morality lie? Let's discuss that some more, and NOTHING will be done. Oh, except for the immoral Socialist Affordable Care Act, let's argue about the morality of that too. You see? I'm not saying taking health-care away from the poor through vouchers is not an immoral act, clearly it is. I'm saying when you frame the debate that way, you cannot win. You cannot make a conclusive consistent Moral argument against somebody who defines morality differently than you do. When all of this is academic. What you need to look at is reason, logic, goals, and results. Don't wander around trying to SHAME your opponent through superior MORALITY.

- AllanL5

April 6, 2011 at 2:50pm

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are people talking about social security? why?? talk about healthcare if you want to talk about deficits. if you talk about social security, you're talking about something, but it sure ain't deficits, you're probably talking about ideology, which is fine, but don't act like when you talk about social security you're talking about deficits because it's probably the 14th biggest problem america faces.

- mmathog

April 6, 2011 at 2:51pm

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it's a practical position, not a moral one. the american north built an awesome dynamic economic society by resisting aristocracy. if you like what they built, then support the policies that created and sustained it. if you like a burgeoning aristocracy that will lead to a static society (the worst parts of old europe), then vote for the GOP. honest libertarians? they're just deluded and ignorant of history.

- mmathog

April 6, 2011 at 2:53pm

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zardoz writes: "OK, seattleeng, since clean water in the developing world seem to be your personal hobby horse, do you mind telling if you are doing anything to solve it, especially since guv'mint can't do a damned thing right? Or is it just a literary tick of yours?" To demonstrate greed and envy in others I don't need demonstrate my own moral purity. I merely need to demonstrate that others are willing to put their comfort above someone else's basic needs. Which I have done. Over and over again. Being progressive isn't about compassion or helping others.It's about penalizing those that have more. Full stop.

- seattleeng

April 6, 2011 at 3:04pm

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Blackton writes: "The people in Santa Maria Xidani, for example, are very poor per capita income wise, but they all have guaranteed basic health care and education, the brightest kids get becas to local universities." How many people immigrate to Mexico each year from the US? And how many to the US from Mexico? The most basic measure of desirability SMASHES your argument to pieces. Please don't bring it up again until we hear of people from Newark moving en masse to Mexico. It makes you seem kind of thick and out of touch with reality.

- seattleeng

April 6, 2011 at 3:07pm

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Allan - This forum doesn't really have space for us to share biographies, but believe me, I would be the last person to argue against reason and logic. That said, reason and logic aren't persuasive to most people. We could talk about why for ages, but you know what is persusive? Moral and emotional appeals. They get what you're pointing to as most important-results. Ignoring that (admittedly irritating) reality wins exactly 0 seats in Congress.

- janus

April 6, 2011 at 3:17pm

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I mean, seriously, look at seattle. You think reason and logic will work with him? Or the people who voted in Rand Paul?

- janus

April 6, 2011 at 3:20pm

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seattleeng: "To demonstrate greed and envy in others I don't need demonstrate my own moral purity. I merely need to demonstrate that others are willing to put their comfort above someone else's basic needs." So you don't actually care about children dying of diarrhea and malnourishment, and only use this issue as a club to bludgeon others? Sir, that makes you nothing more that a self-absorbed hypocrite.

- zardoz67

April 6, 2011 at 3:21pm

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Allan says, "What you need to look at is reason, logic, goals, and results." The fatal weakness in your argument for amoral political debate is the third item on your list -- "goals." Goals are informed by values. If nobody can agree on values, as you suggest, then nobody can agree on goals either. For example, I subscribe to the goal of universal access to state-of-the-art health care. What's that goal based on, if not a view about political morality, about individual rights, about social justice? mmathog also tries to separate out "practical" from "moral" considerations. But arguments over practicality must be assuming some goal. It's incoherent to debate means without ends. mmathog's stated goal is an "awesome dynamic society." And what's the point of that if not to benefit the members of that society? And how is that goal justified? Would it be served if the awesomeness and dynamism at issue were confined to the realtive few? When we talk about what sort of society we want, we must be either assuming or explicitly advocating a moral position. Some want to avoid debates over moral questions, because they're afraid that they're indeterminate, fuzzy, point up fundamental conflict, and resist resolution. The problem is that, to the extent that that's true, it's simply the nature of the problems we're dealing with, which can't be avoided by merely pretending that morality isn't at issue. If the idea is to base policy arguments, insofar as possible, on shared premises, I think that's fine to a point, but there may be issues where such arguments trade incisiveness and persuasiveness for broadness and suffer as a result. It's not actually necessary, remember, to convinced *everyone*. A broad-based but watered-down appeal for, say, universal health care, might result in losing sight of the importance, urgency, and most pressing purpose. They say that the budget is a moral issue. They have no compunction about saying it, even though their budget proposals are unjust. If they don't have a problem saying it, then why should we?

- JakeH

April 6, 2011 at 3:54pm

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Zardoz writes: "Sir, that makes you nothing more that a self-absorbed hypocrite." You might check the definition of hypocrite first. I've not made any claims about my own morality in all this. I'd have to have done that to be a hypocrite. But those here that have stated exhaustively their concern for the poor can indeed be called hypocrites, because their concern for the poor and needy ends the USA border. That is how we know it is really greed an envy only masquerading as concern.

- seattleeng

April 6, 2011 at 3:58pm

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Then why all the crocodile tears about the poor dying children? Sounds hypocritical to me.

- zardoz67

April 6, 2011 at 4:04pm

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Seattle's big trump card in this debate, of which he's very proud, is that people are suffering in Africa -- which, along with local suffering, we can add to the long list of moral outrages that conservatives like Seattle don't really care about. I think, Seattle, that most people would recognize that a government's primary obligation is the welfare of its own people. To me, that means that nations -- all nations -- should strive to ensure a floor of basic economic security for their citizens as a matter of individual rights. It's part of the Universal Declaration of Human Rights, it's part of FDR's so-called Second Bill of Rights -- FDR didn't have any trouble talking about morality, by the way -- and it's the right thing to do. A few of those rights: Article 22 Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality. Article 23 (1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment. (2) Everyone, without any discrimination, has the right to equal pay for equal work. (3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection. (4) Everyone has the right to form and to join trade unions for the protection of his interests. Article 24 Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay. Article 25 (1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

- JakeH

April 6, 2011 at 4:08pm

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Thanks, roi, but you can't raise upper bracket rates high enough to eliminate the deficit. Repeal of Bush tax cuts gets you only 70 billion a year, nothing in the face of the 1.5 trillion. I think you overestimate the capacity of "taxing the rich" to solve our problems. Your health care prescription is well thought out, but not politically achievable. Still, you at least know what you want.

- butchie b

April 6, 2011 at 4:12pm

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seattle: You said that "being progressive isn't about compassion or helping others. It's about penalizing those that have more." I'm a liberal because I believe that it benefits society in general (and me in particular) if government acts to lessen the extent to which bad luck (being hit by a car) or others' malfeasance (being defrauded) can ruin its citizens' lives. It is entirely about my self-interest and has nothing to do with wanting to go around "penalizing" anyone. Do you have any response to that position, rather than to the positions you choose to imagine others have?

- janus

April 6, 2011 at 4:18pm

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"The Editors write: "The fact is that much of the moral purpose of government spending is to redistribute income downward—to provide for the least successful and least fortunate members of society." Huh? Did nobody on your staff attend a class in civics? Ever? This graf slipped by without a single person saying "Hey, this reads a bit strange, maybe we should revise it..." Luckily, we needn't rely upon the elite education of our esteemed editors and can rely instead upon our founding fathers to clarify" You might read famous Das Kapital where Marx proved that unequal distribution happens during the production: so there is nothing wrong with the redistribution that US government undertakes...

- NR045568

April 6, 2011 at 4:23pm

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janus writes: "I'm a liberal because I believe that it benefits society in general (and me in particular) if government acts to lessen the extent to which bad luck (being hit by a car) or others' malfeasance (being defrauded) can ruin its citizens' lives." I don't think you'll find a conservative thinker that disagrees with you on that. But what about cases that aren't bad luck? What if people do something that ensures with some certainty that "bad luck" will come their way? For example, if I drop out of school in the 11th grade and I can't keep a job longer than 2 months. What shoudl the government provide for me then? What if I get pregant at 16 and I'm not sure who the dad is? What should the government provide for me then? What if I have $2000 worth of tatoos on my arms and no health insurance and I fall off my motorcycle because I was drunk. What shoudl governmetn provide for me then? Yes, if you are 30 years old, and having paid for a modest health care plan, and you are stricken with a horrible disease like cancer, of course society should spend $1M to make sure you well. We can do that because 1) cancer is very rate, 2) a 30 year old can be productive for a long time, and 3) that particular 30 year old was willing to pay ahead to prevent something later.

- seattleeng

April 6, 2011 at 4:29pm

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NR writes: "You might read famous Das Kapital where Marx proved that unequal distribution happens during the production: so there is nothing wrong with the redistribution that US government undertakes..." Proved? Unequal distribution will happen anytime some are willing to work hard and some are not. It will always be with us. It's nothing new.

- seattleeng

April 6, 2011 at 4:31pm

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So, Seattle, can we assume that you are willing to support government-ensured social security for all those who are "willing to work hard"?

- JakeH

April 6, 2011 at 4:36pm

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That should leave seattle out. He's an engineer, and knows nothing of "hard work."

- zardoz67

April 6, 2011 at 4:45pm

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seattle: I think I would find a great many conservatives who would disagree with me, particularly given the extremely high proportion of elected Republicans who want to repeal Dodd-Frank, which exists precisely to prevent people from being defrauded. That said, thank you for actually responding with something we can discuss, rather than spar with. My response to most of your examples is that people (in the form of government) should provide basic care, because it's in everyone's interest that everyone, regardless of circumstance, gets basic medical assistance. If that 11th-grade dropout knows he can get some assistance finding a job, he may well accept that help rather than turn to crime and mug me. If that pregnant 16-year-old can get some prenatal care, she might be able to finish high school and start a career, rather than becoming a permanent drain on her family and my community. If that tattooed drunk can get some medical care, he can appear in court, where his appearance will serve the twin purposes of assuring everyone that having tattoos doesn't result in judgmental idiot doctors refusing to provide care and his lengthy sentence will demonstrate that we have a functioning criminal justice system that protects all of us. I don't care about an individual's willingness to "pay ahead to prevent something later" detailed in your final example, because to do so wouldn't just affect him. It'd require that my treatment be dependent on others' correct assessment of my motives, and what if it turns out the doctor or police officer or lawyer or accountant seeing me today believes that all people with tattoos are aggressive morons who deserve whatever they get? What then? Better that we treat everyone equally than guess at who we should treat well, because all that really creates is a capricious lottery.

- janus

April 6, 2011 at 4:56pm

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I should also mention that I don't care that "a 30 year old can be productive for a long time," for several reasons: -I don't care about someone's ability to be "productive," because I don't want my eligibility for medical care to depend on my ability to continue to work. Even more basically, I don't want someone to take the time to assess that while I'm bleeding to death. -It is a fairly random guess, as I could be hit by a bus at 30 or 60 or 90, after successful cancer treatment or not. -Also, if medical care was rationed to the young over the old, it would be emphatically unpleasant to engage in a war of resources with my parents.

- janus

April 6, 2011 at 5:12pm

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seatleeng: "Being progressive isn't about compassion or helping others.It's about penalizing those that have more. Full stop." We've been through this argument before. That's a caricature of liberals, not liberalism itself. It's not about penalizing others; it's about fairly apportioning the burdens of running the society we want to live in. For instance, many people won't be able to afford the market price of education. We think all people should have the right to some basic education. If so, we have to figure out how to pay for it. The poor can't. So the funding will have to come from those who have more. That's not "penalizing" the successful; it's the logical consequence of how we have to pay for the programs that we say we want. We can argue about whether housing, or health care, or retirement security, or a number of other items fall under the category of things that should be a societal obligation rather than a personal one. But the fact remains that those who have more will have to pay more to achieve whatever goals we decide upon, because those who have less by definition won't be able to do so. It's a shame we have to battle this "penalization" meme again, because I thought we resolved it some time ago. I have nothing against the wealthy, who have done very well--especially since I think I'm among them. To say that progressives are out to penalize the wealthy is about as accurate as saying that conservatives are out to screw the poor. It's better to assume that most people have good reasons to believe what they believe rather than just assume class enmity.

- dsimon

April 6, 2011 at 5:59pm

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War and piece (sp) always brings out the penis posters.

- rayward

April 6, 2011 at 8:14pm

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JakeH writes: "So, Seattle, can we assume that you are willing to support government-ensured social security for all those who are "willing to work hard"?" Sure, social security is actually pretty fair. Most everyone pays in, and you get out what you pay in with a bit of interest. Those on the low end of the pay scale see a ~6% return on investment (which is really good) and those on the high end of the pay scale see a ~1.5% return on investment (which is pretty poor, but it's better than nothing). SS is one of the fairer things we have out there since it's only modestly redistributive.

- seattleeng

April 7, 2011 at 3:00am

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Janus writes: "My response to most of your examples is that people (in the form of government) should provide basic care, because it's in everyone's interest that everyone, regardless of circumstance, gets basic medical assistance." Define basic care? Free doc check and medicine for strep throat? I actually think people should pay for that stuff. it's the best way to control costs. For chronic conditions where the cost exceeds 5-10% of your gross pay? Then the government should help AFTER you've paid that 5-10%. This is Obama's plan, and everyone I've talked to finds this fair. For rare, life changing events such as cancer, a health plan should cover any and everything over that 5-10% amount. Again, everyone I've talked to finds this fair. Regarding your hope that government could help those 3 instances I gave. Hah. It won't happen. The government safety nets is what is making all of these worse. Today, 40% of kids are born to a single parent. When you factor in divorce, most kids are raised in single family households. That is up from <5% 60 years ago. Our government plans have enabled single family households to exists. When a girl gets pregnant at 15, she has doomed her child to poverty statistically. 70% of single parents end up in poverty and never get out. A huge percentage of kids born to teen moms also become teen moms. Safety nets from the government have enabled this carefree attitude. Why is it that in 1960 and before, women NEVER became single moms unless they could afford it?

- seattleeng

April 7, 2011 at 3:11am

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dsimon writes: "For instance, many people won't be able to afford the market price of education. We think all people should have the right to some basic education. If so, we have to figure out how to pay for it. The poor can't. So the funding will have to come from those who have more. That's not "penalizing" the successful; it's the logical consequence of how we have to pay for the programs that we say we want." But where do you draw the line? We spend 10X more on education today that 50 years ago (constant dollard) with lesser results. Do you think 20X, 50X, 100X is where the dial needs to be set? even without results? A poor kid with solid grades deserves (and can easily get) free college today. What about the 3.0 student? Free college for him? The 2.0 student? Free college for him? Many of these kids WASTED the $120,000 the government spent on them for their primary education. That is a massive gift. Wasted. 40% can't read. You want to spend even more? do you think everyone should get free college? dsimon writes: " But the fact remains that those who have more will have to pay more to achieve whatever goals we decide upon, because those who have less by definition won't be able to do so." of course. But we've now drifted to a point where half the country is getting much more than they are giving. And the budget isn't balancing. If 50% of the country is keeping the other 50% afloat, where do you think that line should be? 60%? 70% Hint: It will never stop. Roid has already declared that the top 10% can pay for everyone else. dsimon writes: "It's a shame we have to battle this "penalization" meme again, because I thought we resolved it some time ago. I have nothing against the wealthy, who have done very well--especially since I think I'm among them." If you give everything you earn over $50K to charity, then I'll believe you are a believer in the larger collective. otherwise, it's just words isn't it?

- seattleeng

April 7, 2011 at 3:32am

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DSimon, this is exactly what I am talking about when I say that I put no stock in those that claim they WISH they had higher taxes.... Massachusetts this year (a very liberal state, last I checked) allowed filers to check a box indicating if they wanted to pay at the older, higher tax rate of 5.85%, or the new, lower rate of 5.15%. out of almost 2M returns, only 862 people picked the higher tax rate. In liberal Mass. This is why I say progressive that plead for higher tax rates are merely posturing. When push comes to shove, they do everything they can to keep every penny they've earned. Like I said, it's like a sinner asking to be struck by lightning if what they've done was wrong. They know it won't happen. But it sure sounds good to their friends. Keep on living the republican lifestyle, buddy. it suits you well.

- seattleeng

April 7, 2011 at 3:46am

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Janus writes: "Also, if medical care was rationed to the young over the old, it would be emphatically unpleasant to engage in a war of resources with my parents." But everyone country that offers health care does this today: the young will most always be favored over the old. Look up QALY, or "Quality Adjusted Life Year" and elderly (search on "QALY Elderly" without quotes).

- seattleeng

April 7, 2011 at 4:01am

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Seattle: "out of almost 2M returns, only 862 people picked the higher tax rate. In liberal Mass. " Seriously, that's an argument? That self interest is something that is not found in liberals? I'd say that 862 voluntarily paid the higher tax rate is amazing (assuming of course that the box wasn't chosen in error, which at that rate is possible). How on earth does the (very understandable) unwillingness to not voluntarily pay higher taxes on an individual basis show that "liberals" are not serious about wanting taxes to be higher in general? Perhaps if you had increased non-compliance among liberals to higher tax rates you'd have something, but you've got nothing there. You have on this thread a number of people putting forward thoughtful arguments about how to pay for the sort of society that we want, and you're responding with false analogies, red herrings and incredible statements such as "The US has the most progressive tax system in the world, according to the UN" when you know perfectly well that looking at income taxes in isolation is beyond meaningless. Or perhaps you don't? I guess that would be the only explanation by which you can say "If 50% of the country is keeping the other 50% afloat" which is only true if you ignore payroll taxes (which almost returned as much as income taxes in 2008 IIRC).

- Nari224

April 7, 2011 at 8:27am

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seattle, you pumped out a ton of thoughts, but four leapt out at me, mostly because of how alarming they were. "Define basic care? Free doc check and medicine for strep throat? I actually think people should pay for that stuff. it's the best way to control costs." It's in my interest (and yours) that everyone get vaccinated for some of the more unpleasantly contagious bugs; why should I (and you) be at risk of getting sick because someone else is poor? Regardless of that, how on earth is making people pay for basic care any kind of cost control whatsoever? It forces people who can't afford basic care to simply do without it, meaning that many of them will end up in the emergency room with previously preventable conditions that will cost orders of magnitude more than preventive care would have. Do you imagine that it will control costs because people will somehow just choose to not get sick? "When a girl gets pregnant at 15, she has doomed her child to poverty statistically. 70% of single parents end up in poverty and never get out. A huge percentage of kids born to teen moms also become teen moms." Even if I agreed with your stats (I haven't checked), that's precisely why offering help to get such people out of poverty is important. Is your plan simply to abandon fellow citizens (and all their descendants, apparently) at 15? Can you really say it would have been fine to you to have society abandon you entirely because of a single stupid decision you made at 15? Short of a willful crime like murder, I wouldn't say so. "A poor kid with solid grades deserves (and can easily get) free college today. What about the 3.0 student? Free college for him? The 2.0 student? Free college for him? Many of these kids WASTED the $120,000 the government spent on them for their primary education. That is a massive gift. Wasted. 40% can't read. You want to spend even more? do you think everyone should get free college?" Here's where reality starts breaking down. This paragraph is simply wrong. Virtually no one can "easily get" free college, and certainly not $120,000. (Fun Fact: Four years of out-of-state tuition at my college, a state school, would now be about $55,000, and while people get assistance, it's pretty damn rare to get a free ride. The most expensive school in the country, Georgetown, costs $160,000 for four years now.) And if you think that 40% of college graduates are illiterate...yeah, I got nothing. That would mean that the illiterate rate of college graduates is forty times that of the general populace; that's just absurd. But yes, I would like to see free college for everyone, because an educated populace will create a better society for me to live in. "If you give everything you earn over $50K to charity, then I'll believe you are a believer in the larger collective. otherwise, it's just words isn't it?" Reality breaks down further. If you demand that someone else live their life according to your arbitrary demands (50K? Why not 40, or 60, or 10?) in order to overcome your assumption that everyone else is lying so that you can engage in a discussion, it's a great prescription for sitting alone in your cave arguing with yourself. You were doing so well, too. "Safety nets from the government have enabled this carefree attitude. Why is it that in 1960 and before, women NEVER became single moms unless they could afford it?" I'm not sure if this or the literacy bit are your craziest assertions. In the 1960s and before, women did get pregnant out of wedlock. Many died trying to get abortions, trying to avoid what happened to the rest, who were shunned by their families and society. They were people; they just lost the right to be viewed as such and lived lives of hopeless misery. That you now claim they literally didn't exist is a final indignity. It also leads back to the question of what you really think is just. Maybe if you personally told a few pregnant 15-year-olds that they aren't people anymore, I could take your position seriously.

- janus

April 7, 2011 at 10:05am

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seattleeng, you've changed the topic. My comment was about your claim that progressivism was purely about penalizing the wealthy--"Full stop," as you put it. You seem to admit that to provide social services that we think should be available to all, the wealthy will have to pay more than the poor. So shouldn't you take back your remark? You ask "But where do you draw the line?" People's opinions can differ as to scope and effectiveness. That's why there's a political process. That's why we go out and vote. But how does the difficulty in drawing the line support the assumption that progressives just want to "penalize" the wealthy? I don't think it does in the slightest. "If you give everything you earn over $50K to charity, then I'll believe you are a believer in the larger collective. otherwise, it's just words isn't it?" No, it's not. Taxes are different from charity because the purpose and effect of private philanthropy is different from the role of government. Moreover, it's a lot more than "just words" to support and vote for candidates who say they will raise your taxes and willingly accept those results. You ask why people who think their taxes should be higher don't just pay more on their own. But I know that to achieve the societal goals I want, just giving more money to the government on my own is useless unless everyone else pitches in too (so your Massachusetts example doesn't prove much if anything, even if true (no cite is provided)). It's a classic tenet even among libertarians that government's proper role is to resolve such free rider problems. Sure, I'll deduct the interest on a mortgage I didn't need for an apartment I would have gotten anyway, because the law allows it. But that doesn't mean I don't support getting rid of it for everyone, or at least for people like myself where it doesn't seem to serve a valid societal benefit. Perhaps it's not entirely consistent, but a mild inconsistency doesn't refute the fact that supporting and voting for those who support higher taxes on ourselves and unjustifiable subsidies ended amounts to a whole lot more than "just words." Taking a position but doing nothing would be just words. Taking political action that may not be in one's immediate financial interest is obviously more than words. But getting back to the original claim, do you still believe that all progressives want to do is punish the wealthy? Should I go around claiming that all conservatives want to do is screw the poor?

- dsimon

April 7, 2011 at 10:14am

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"Define basic care? Free doc check and medicine for strep throat? I actually think people should pay for that stuff. it's the best way to control costs." Actually, not at all. The only way the market can control costs is if demand for medical care is elastic, which means that there are people who opt not to spend the money, as they would for any other good. But that is the outcome we do not want. We want people to get the care they need. Plus, everyone paying for their basic care changes the real cost not at all. Whether you pay it out of pocket, as an insurance premium, or as a tax is of no real consequence if the real cost is the same. The only way to control the real cost and real consumption is government, unless we are going to allocate necessary medical care by wealth and income rather than based on need. butchie, for these very reasons, what I propose may, indeed is, currently politically possible. It is also the only thing that will work. As long as we stick with universal coverage and do not allow Ryan and the savages to "solve" the fiscal problem by denying care, we will eventually come to the same solution that is working well in other industrialized countries because we will have no choice. As for your tax claim, you are wrong. I worked it out pretty carefully once, and will look at the numbers again, in response to the same claim by seattle, one that appears to be one of those "truths" that just keeps circulating around right-wing websites and such. We could pay all of the operating costs of government, meaning exclusive of Medicare and Social Security claims, with an exemption for the first $100,000 of individual income and a 50% tax rate about that. As I recall, the crossover point, the point at which the average taxpayer would pay more than today was about $225,000 of individual income.

- roidubouloi

April 7, 2011 at 10:59am

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seattleeng: "If 50% of the country is keeping the other 50% afloat, where do you think that line should be? 60%? 70% Hint: It will never stop. Roid has already declared that the top 10% can pay for everyone else." Fact: it hasn't happened. First, I don't believe Roid has proposed taxing the top 10% to the point where they're not still phenomenally better off than everyone else. What's on the table is a fairly modest increase that would go a long way to alleviating the current budget problem while leaving the affluent still phenomenally better off. I understand the fear that the less well off will simply use their greater numbers to impose ever higher burdens on the very wealthy. But that risk always exists in a democracy with such an income distribution. And more important, the evidence doesn't bear out the fear: even in the midst of what is supposedly our most dire budget crisis in decades, Congress refused to put the top tax rates back where they were in the 1990s, which most people hardly deemed confiscatory. Is the argument that monied interests really have too little political influence? Because it sure doesn't look like it to me. The claim that "it will never stop" seems wrong on the facts, whatever the theory might imply. And, as noted before, our overall tax structure is pretty flat when all taxes are taken into account.

- dsimon

April 7, 2011 at 11:12am

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Nari224 writes: "which is only true if you ignore payroll taxes" Why would I count payroll taxes? The consumer gets all those back with interest. Do I count my 401K as a tax? No. Neither is social security. SS is just like a forced 401K with lousy returns. Now, if means testing comes to be, and the millionaire is ruled "too rich" to get his SS, then yes, it become a tax on the wealthy. So, given this, looks like you agree my statement is true.

- seattleeng

April 7, 2011 at 11:20am

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DSimon: "Congress refused to put the top tax rates back where they were in the 1990s, which most people hardly deemed confiscatory. " You do know that cap gains taxes were SLASHED under clinton. Rich people adjusted earnings towards cap gains, and paid less as regular taxes. Go look at IRS figures Clinton and Bush. The wealthy paid just 1.5 to 2% more effective tax rate under Clinton. In other words, nothing. Is that all you want, is the wealthy to pay 2% more than the Bush years? Done. No problem. But you still have a massive budget calamity, which is where we are today. So what is you want? If you want the current budget to balance, then taxes on the wealthy all the way down to the middle class must increase a lot. Much higher than the 1990's. do you really think the current budget can be balanced on the backs of the top 10%? Is that what you are thinking???

- seattleeng

April 7, 2011 at 11:25am

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Roid writes: "Actually, not at all. The only way the market can control costs is if demand for medical care is elastic, which means that there are people who opt not to spend the money, as they would for any other good. But that is the outcome we do not want." This IS what we want. Preventive care isn't the big cost save we think it is. Pap smears and colonoscopy are hardly done anyplace else in the world. yet we love them here. My wife takes the kids to the doctor waaay too often. And why not? She never sees the bill. That is unfortunate. And the reason our costs are so high.

- seattleeng

April 7, 2011 at 11:29am

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seattleeng: "If you give everything you earn over $50K to charity, then I'll believe you are a believer in the larger collective. otherwise, it's just words isn't it?" The more I look at this argument, the stranger it seems. It seems like arguing that an injustice anywhere may be an injustice everywhere, but if we choose not to fight injustice everywhere then we shouldn't fight it anywhere, and any attempts to do the right thing are just words and not worthy of consideration. We intervened in Bosnia, but not Rwanda. Does that apparent inconsistency mean that intervening in Bosnia didn't amount to anything? Surely it was something (whether one agrees with it or not). Surely doing the right thing some of the time is more laudable than doing it none of the time. Doing X but not Y does not negate the propriety of doing X or reduce X to "just words." If one is against "penalizing" the wealthy, shouldn't that require being against any government attempt to provide education for those who can't afford it on their own? No public schools and no vouchers, since it requires those that have more to pay for those who don't? Shouldn't anti-penalizers require a head tax, so that those who make more don't have to pay more? If one doesn't support these positions, then the complaining about penalizing those that have more is just words, isn't it? Also, if one chooses to not do A voluntarily (just give more money to the government) but advocates B (higher taxes) which would require everyone to do A, then the apparent inconsistency isn't so great, especially when there are good collective action arguments for not doing A unless everyone similarly situated is required to do A. On another claim: "A poor kid with solid grades deserves (and can easily get) free college today. What about the 3.0 student? Free college for him? The 2.0 student? Free college for him? Many of these kids WASTED the $120,000 the government spent on them for their primary education. That is a massive gift. Wasted. 40% can't read." Cite on how easy it is for a kid with "solid grades" (whatever that is" to go to college for free? And of course some kids waste their tuition. And many others go on to be far more productive (and tax-paying) members of society than if they hadn't gotten aid. You can't just look at an unspecified subset without hard data and conclude the entire program is a waste. (If there's a means of better tailoring the program, I think there would be few objections.) And 40% can't read? Cite? Given our overall literacy rate, I find that number hard to believe, but feel free to provide support. Maybe it involves a very high standard of "read."

- dsimon

April 7, 2011 at 11:32am

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DSimon writes: "But that doesn't mean I don't support getting rid of it for everyone, or at least for people like myself where it doesn't seem to serve a valid societal benefit." And so if someone believes that the government is speeding the decline of the american social fabric and thus the money doesn't serve a valid societal social benefit, should they have to pay? If Jeb Bush won office, and decide he was going to build the most massive military EVER, and wanted to raise your taxes substantially to pay for this war machine, is it OK if you feel uneasy about that? Is it OK if you fight against that? Sure it is.

- seattleeng

April 7, 2011 at 11:35am

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seattleeng: you keep changing the topic. Neither I, nor most others, assert that the current budget can be balanced on the top 10%. But does that mean that taxes shouldn't go up on the top 10% to help solve the problem? And advocating higher taxes on the affluent (which I think should indeed be more than the 2% you claim they were under Clinton--again, a cite would be helpful) does not imply that the sole motivation is to penalize those that have more, which I thought was your claim about progressives. Are you going to maintain that view or not? After all, I thought that was the purpose of my original response, and I don't think it's been answered. And you've fudged the argument when you talk about if we want "the current budget to balance." I don't know anyone who is seriously talking about balancing the current budget. Just about everyone is talking about making changes to entitlement programs, and a lot people are talking about the military. So please let's not bring in straw man assumptions which just waste our time.

- dsimon

April 7, 2011 at 11:42am

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seattleeng: "My wife takes the kids to the doctor waaay too often. And why not? She never sees the bill. That is unfortunate. And the reason our costs are so high." Once again, you're looking only at one side of the argument. There are many people who don't see their doctors because of cost (or who would not do so if they didn't have insurance) which would allow their conditions to get worse, send them to the ER, and cost all of us waaaay more money in the long run. So yes, not seeing the bill can lead to over-use. But seeing the bill can also lead to inefficient under-use. Even if I don't see the bill for a colonscopy, that doesn't mean I'm going to get waaaay too many of them. There are plenty of disincentives to seeing your doctor, even if your wife engages in the practice wth the kids. As Uwe Reinhardt wrote, how many wealthy people, who can consume as much health care as they like, do you see saying "Gee, I don't think I'll play golf today, I'll make a doctor's appointment instead!" You say preventative care isn't the big cost savings some say it is. Perhaps. And maybe over-use isn't the big cost driver some say it is either. Without real data, we can't know.

- dsimon

April 7, 2011 at 11:49am

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seattleeng: "And so if someone believes that the government is speeding the decline of the american social fabric and thus the money doesn't serve a valid societal social benefit, should they have to pay?" We all have to pay what the law requires. I don't want to pay to maintain B-2 bombers because I don't think they serve a valid societal benefit, but I seem to have lost that argument for now. If I want that to change, I have to vote for it and convince others to do so, because obviously some people's opinions differ from mine and this is how we resolve them. "If Jeb Bush won office, and decide he was going to build the most massive military EVER, and wanted to raise your taxes substantially to pay for this war machine, is it OK if you feel uneasy about that? Is it OK if you fight against that?" Of course it is. See above. Feel free to vote however you want. If I lose the vote, I have to pay. A system of voluntary taxation doesn't work, and I have to accept the process to have any hope of getting the society I'd like, which means accepting the result if I can't get a majority to agree with me. What this has to do with our prior discussion, though, escapes me. I thought we were addressing the claim that if you don't do something personally but support a requirement that everyone do it, then the latter amounted to "posturing." It obviously isn't just posturing. It's a meaningful commitment.

- dsimon

April 7, 2011 at 11:58am

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Seattle: "Preventive care isn't the big cost save we think it is." Are you just saying things to see how far you can make peoples' jaws drop? This is beyond absurd. $360 buys a three-dose regimen of Gardisil prevents cervical cancer, whose treatment can cost anywhere from tens of thousands of dollars to millions of dollars to treat. Blood pressure medication at less than a dollar a pill prevents strokes, whose treatment can run into the hundreds of thousands of dollars. Are you actually trying to argue that treating people in the emergency room is cheaper than regular checkups? If so, you should probably reconsider, because that's a better stand-up act than it is a serious argument.

- janus

April 7, 2011 at 1:12pm

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Interesting, roi. I'd like to see those figures, because if it's that simple, why haven't Dems gotten on that bandwagon? That they have not leads to my comment about being politically not doable, or simply not so. 50% tax rates above 100K is pretty confiscatory by my lights.

- butchie b

April 7, 2011 at 1:16pm

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Real numbers can clarify a lot. In 2010, we had $14.7 trillion of GDP. The Federal budget was $3.46 trillion, split between SS/Medicare at $1.21 trillion and the operating budget, including Medicaid, at $2.25 trillion. The deficit in SS/Medicare was $244 billion, pretty much all in Medicare, not SS. The deficit in the operating budget was $1.05 trillion. The point? All this yakking about entitlements is a fraud. The core problem at the moment is that we do not collect enough personal and corporate and excise taxes to pay the operating cost of the Federal government. Subtract the $300 billion of Medicaid that I included in the operating budget and we are still more than $700 billion under water on the difference between non payroll tax receipts and the operating budget. Looking forward, Social Security is a minor problem that would be solved with a bit of means testing. We do have a serious problem of the cost of Medicare in that we have no current means of funding it. But, as explained ad nauseum, that is but a piece of the greater problem of the excessive cost of medical care in this country. Even if we got rid of Medicare, we would face a crisis, both medical and economic. But let us be clear, the entitlements problem is one going forward. The immediate problem is the under-funding of core government because our tax rates on the top earners are ridiculously low. How high would they have to be to balance the budget right now? Well, in round numbers, the operating budget is 15% of GDP. The top 10% of earners garner more than 30% of economic income. The next 10% has 20% of economic income. Let them keep the mean income free of tax. That means, let the first 20% of national income achieved by 20% of this population incur no tax. The balance needs to be taxed at 50% and you pay the full costs of the federal operating budget. The average tax on the top 10% would be 33%. The average tax on the next 10% would be 25%. Everyone else, the 60% who have less than the mean income, would pay no federal income tax at all. So, don’t tell me that the wealthy cannot pay for the cost of government or that we need huge tax increases on people earning less than the mean. We don’t have to tax the bottom 60% at all and the top 40% would have plenty of after-tax income. (Of course, a chunk of the tax receipts has to come not from personal income but from corporations and all the other hidey-holes in which the wealthy have their income.) We have two problems: medical costs and the fact that the people who have most of the income don’t pay nearly enough in taxes. We have a minor problem to adjust with social security. Throwing medical costs back onto individuals, as the Republicans propose to do, some of whom can afford it, many of whom cannot, is not a solution. And, more important, eliminating Medicare altogether would still leave us with enormous fiscal deficits because the rich are getting virtually a free ride. We have a fiscal crisis today because of tax cuts, not because of entitlements. Even without entitlements, we would still have a fiscal crisis.

- roidubouloi

April 7, 2011 at 1:35pm

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butchie, Our trade deficit is under 2% of GDP, and, given unemployment, we could produce that in a thrice if we used trade policy to eliminate the trade deficit. That means that essentially everything that we consume and invest in this country we are able to produce (including our consumption of medical care). We know this because we ARE producing it right now and always have since some time in the middle of the 19th century. If the income of everyone not wealthy were equal to their consumption and the income of the wealthy were what they consume (not chopped liver) plus our total annual investment, then, by accounting definition, the income of government would equal government expenditures, at all levels. No deficits. Do you think the wealthy don't get to consume enough, that they need to have more consumption? We could solve our fiscal problem and they could still consume exactly what they do today. What would be confiscatory about that? What you are really saying is that, for the super-rich, a top marginal rate of 50% isn't high enough. (I might agree with that.) The bottom line is that we have fiscal problems because income, even after taxes, is absurdly mal-distributed, not because of entitlements and not because government is too expensive. Is there waste? Sure. But that is a trivial issue compared to the mal-distribution of net income.

- roidubouloi

April 7, 2011 at 1:45pm

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Since I don't have time to check all this, pray tell why is this not the Dem platform? Besides, 45% of filers pay no federal income tax today. Maybe get $$ back as well. I'd love to see a D come forward with that plan - he and Ryan can debate about it. But no one will do so. Why do you think that is?

- butchie b

April 7, 2011 at 3:36pm

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Well, it's their $$, not the gov't's to begin with. you say we don't have an entitlements problem. Maybe, but I hear no economist saying that, right or left. Besides, I'm not smart enough to say what the "right" distribution of income is - why do you think you know?

- butchie b

April 7, 2011 at 3:40pm

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There is no "right" distribution of income. It is a political determination that should reflect social consensus about what is just. The whole rightwing gig is trying to persuade everyone that this sort of politically determination is either economically disastrous, which is far from the case since we did just fine with 90% marginal rates, or immoral to begin with, i.e., that the money is rightfully, in some cosmic sense "theirs" to begin with, rather than the outcome of but one possible economic arrangement out of a multitude from which society can choose. Not that there aren't trade-offs to be made, but these are trade-offs we can choose. So, 60% of filers can pay no tax and the rest can have the first $100,000 free of tax. Like I said, I believe the cross-over point is $225,000. Everyone below that would pay less than now. I think this should be the Democratic platform, but the political spectrum has moved so far to the right that it would not be politically possible today. It would be seen as beyond the pale. We need to move the spectrum of discussion leftward so that just this becomes possible to discuss. A good start would be for the left-most members to talk this up, a welcome alternative to the right-wing tax craziness. That would move the boundary of discussion outward. When I say there is no entitlements problem I mean that entitlements are but a relatively minor contributor to the present deficit, and social security almost not at all. The Republicans are doing their usual sleight of hand making everyone think that current deficits are due to entitlements. Not so.

- roidubouloi

April 7, 2011 at 3:54pm

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the underlying issue: Liberals believe that income/wealth/success should not accrue to the individual who earned/created/worked for them. Rather it is owned by the Gov. Conservatives believe otherwise. Strongly I think the liberal position, which defies legal/moral reasoning and logic, is best understood as a coping mechanism for 'chronic envy' -- a condition that condemns the infected to an incomplete and unremarkable life.

- mr_rationale

April 7, 2011 at 6:33pm

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FFS, ratface, liberals believe no such thing. Communists believe that, and liberals are not Communists (except inside your tiny warped mind.) Liberals believe that, to maintain a stable and properous society, everyone needs to contribute. And for those who prosper more from that stable society, shouldn't we require them to contribute more?

- zardoz67

April 7, 2011 at 6:52pm

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mr_rat, why not read the thread so you can see what liberals actually think instead of making up what you think they think? I'd reiterate the points I made before in response to seattleeng's claim that liberals' sole motive is to penalize those that have more, but I'm not going to do your work for you. Anyway, I assume that if you really believe that success should accrue to those who "earned/created/worked" for it, then you support an estate tax of 100% since generational wealth transfers only give sums to people who didn't earn/create/work for it themselves. The moral reasoning is that if we're going to provide things we think everyone should have, such as education, then those who have more will have to subsidize those who have less. It's not about success or failure; it's about how to pay for the things we say we want as a society. If you've got a way for the poor to pay for their own education even when the market price puts it outside of their budgets, I'd like to hear it. Otherwise, aren't you just a bit of a redistributionist too?

- dsimon

April 7, 2011 at 7:10pm

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Apart from dsimon's point about paying for what society needs, the factual premise of the libertarian point of view, that one can say who created what quantum of value, is a complete fiction in a market economy. Where there is subsistence farming in which each farms his own plot, one can say that the produce of that plot is the result of the labor of the farmer who worked it. In a continental market economy where all products and labor are marketed, the chains of production and distribution are very long, and there are many market imperfections and barriers to entry, the identification of the production of value with the efforts of an individual is not even roughly possible. There are far too many factors that intervene for it to be possible to say that the income of an individual reflects the output of that individual. In most cases, output is the product of joint effort and the notion of identification does not even have any meaning. Therefore, it is perfectly appropriate to make a social determination of what is a just outcome. We benefit from the efficiency of a market system and the decentralized management of production, but we are under no moral or practical obligation to accept the distribution of income that system generates as the last word. There is tremendous arbitrariness in the way wealth is distributed. Any wealthy individual who is dissatisfied with his net income after the social determination is applied in the form of taxation is free to do something else, far more so than someone who is barely getting by and must take whatever job is available. But if you want the benefits of the social playing field, you can expect to pay rent to society for its use, just like you would rent anything else. You don't want to pay the rent, don't play.

- roidubouloi

April 7, 2011 at 11:23pm

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I agree with much of what roid wrote above. I enjoy giving people most if not all of their premises and showing that their conclusions don't follow. Roid points out that much of the premises may be wrong as well. The guy who invented kitty litter became tremendously wealthy (and founded a large charitable foundation). Sure, it was a good idea and he worked hard, and he deserved to be well compensated. But were his efforts worth hundreds of millions of dollars? He was good, but also lucky that he happened to be the one with one simple idea that had a huge market. And it's certainly difficult to justify big Wall Street bonuses, or most big company compensation. The CEO for Hewlett Packard made about $90 million over the past three years. Is that really the value of his labor? Would he really have done such a worse job for $30 million or even $10 million? A lot of these executives get paid so much just because there's so much money walking in the door, not because their decision skills are so much better than managers at smaller companies. Citing a few counterexamples doesn't necessarily negate what would otherwise be a general rule. But one should at least question the theory of the inherent validity of supposedly market-based compensation when comparing CEO pay with, say, private school teachers. There's only so much work one can get done in a day, only so many decisions that can be made, yet some of these CEOs make in half a week what a teacher makes in an entire year. Can it really be the case that CEOs are not only more valuable but orders of magnitude more valuable, that they're working that much harder? Because I can say from experience that most teachers work pretty darn hard.

- dsimon

April 8, 2011 at 1:43am

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Iowa Beauty has give me an idea. She says she doesn't want to take moral guidance from The Founding Fathers - but - think of it. Slavery is actually a way to house and feed people is it not? And also, keep them busy. I think we should seriously consider the possibilities here.

- Sophia

April 8, 2011 at 4:07am

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Of course we can choose, and I suspect my choices would be different than most hereabuots. Still, the proposition that we adopt a Sweden-like tax system would, as you note, likely fail as an electoral proposition. If you don't like what a CEO makes, sell your stock. But I suspect most Americans are not willing to let the gov't tell any CEO what she should make. Nor take the overage to do with what it will. We're not Euros. We don't like gov't, as a general proposition. Never have, really. Something about the founding, or some such.

- butchie b

April 8, 2011 at 9:55am

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Janus writes (re preventative care): 'Are you just saying things to see how far you can make peoples' jaws drop? This is beyond absurd." Not talking about statins, BP meds, etc. Those are all part of every government's preventative regime. They have clear benefits relative to cost. But other countries have also opted to NOT do preventative measures we consider routine in this country, including colonoscopy. But my larger point was people need to participate in their health planning. They need to understand "If I take this statin now, I can avoid larger expenses and pain down the road". And yes, it makes sense for them to pay for a statin and doing with one less lunch out per month. That is they key: People need to pay and understand the costs to control the cost IF they can afford it.

- seattleeng

April 8, 2011 at 11:40am

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dsimon writes: "And maybe over-use isn't the big cost driver some say it is either. Without real data, we can't know." Of course the data is there. Countries like Japan do favor the doctor over a round of golf. Read TR Reids book. The US tends to visit the doctor 40% more than the EU.

- seattleeng

April 8, 2011 at 11:43am

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dsimon writes: "And 40% can't read? Cite? Given our overall literacy rate, I find that number hard to believe, but feel free to provide support. Maybe it involves a very high standard of "read."" Withdrawn. The correct figure is 20% of high school seniors are functionally illiterate. We've splintered in too many directions to really keep going in this limited forum, but let me try a final time to tie this up...Remember my central thesis: "Progressivism is about penalizing the wealthy. Full stop" I assert as true 1) The government is larger than ever, and probably more inefficient than ever. 2) There has never been a better time to be a poor person in the US. In other words, under FDR poor people starved. Today, they suffer from ailments related to obesity. 3) The ranks of those "needing" help is growing. This can either be because A) We've made it easy to be "needy" or B) because the modern-day climate (current downturn excepted) is bad. I don't think the last decade has been any better/worse for poor people. Therefore I think it's A). Sweden is the lead case here, as they have more "disabled" citizens than any other country in the world. Ergo, disability isn't related to ability, it's related to the size of the net. 4) Social safety nets are larger than ever 5) Social safety nets are re-destributive 6) Libs want more safety nets than republicans 7) Libs want more help for poor and needy, in spite of there being more than ever 8) Libs don't mind seeing the number of "needy" growing 9) Libs do not want to see taxes on middle class raised (those making under $100K) Ergo, the only way libs can achieve their goals is to whack the wealthy hard. They might state this isn't their goal, but given the other items enumerated above, how else can it be achieved???? Fortunately, libs are also very poor at math, and there isn't enough money in the upper ranks to satisfy the current and future appetites. This has put dems in a very, very tough spot: Biz as usual will require big tax increases on the middle class. They know they are screwed here, and they dare not propose this....That is why current times are so interesting...

- seattleeng

April 8, 2011 at 12:14pm

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PS. there is supposedly a counter to Ryan's plan called "The People's Budget" in which payroll taxes are raised on everyone (increasingly employer cost and reducing take-home pay in return for more benefits down the road) and taxes are raised on millionaires, wallstreet, etc. This will be interesting to see if if this gets any traction. This is really the battle of the philosophies that we have coming. can't wait...

- seattleeng

April 8, 2011 at 12:33pm

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sattleeng: "Countries like Japan do favor the doctor over a round of golf. Read TR Reids book." I did. I believe I recommended it to you. And I believe it says that people in a country like France don't see their doctors any more than we do even though they don't "see the bill." You say that EU citizens see their doctors 40% less than we do, but don't they also see even fewer and lower bills than we do? Doesn't that imply that the market theory that you have to see the bill to reduce usage may not apply to medical care, and that people in Japan see their doctors more out of cultural differences rather than because of the system they have? As for the assertions in your subsequent post, you're conflating means with motives. I read your statement as claiming that liberals want to penalize the wealthy simply because they're wealthy. As I've pointed out repeatedly, if one is going to provide a base level of fundamental services, then those who have more will have to by necessity subsidize those who have less. Unless you're willing to say that families who couldn't afford private schools shouldn't have their children educated, then you agree with me. And then we're talking differences of degree, not kind. As for your specific points, #3 is incorrect as to cause. The main driver of the costs of the social safety net are an aging population and rising medical expenses, not because society has made it easier to be poor. #8 is flatly wrong, and you offer no support for it (again, assuming what other people think can lead to error--why not ask us?).#9 is also false, at least for many of us. I wouldn't mind going back to the Clinton tax rates in their entirety. "Biz as usual will require big tax increases on the middle class. They know they are screwed here, and they dare not propose this" But most liberals are not proposing "biz as usual." The ACA was a first attempt to start to get medical costs under control. In response, Republicans have offered nothing except market theory which has not worked on the individual health insurance market, and without regard to the systems in other countries which have worked. And only liberals have proposed letting all the Bush tax cuts expire, including on the middle class, while conservatives have opposed letting any of them expire. While neither side's numbers add up (at least without drastically and unrealistically cutting back on health care), it seems to me that the bigger math problem is on the other side of the aisle. But coming back to the main point: I don't think your assertions prove your claim that liberals simply want to penalize the wealthy. Higher tax rates on those that make more are necessary to provide any substantial government service. If you can find a way to provide universal education without the wealthy paying more than the non-wealthy, let us know. I believe you've asserted elsewhere that the health care debate could start with an agreement that people shouldn't die because they can't get insurance and families shouldn't go bankrupt because someone got sick. Again, I don't see any way to achieve these goals without the well subsidizing the sick and those who have more subsidizing those that don't--and no one else has found another way either. If there is a way, then put it on the table. Otherwise, we're essentially in agreement that there has to be some redistribution to achieve these goals, and the question becomes one of scale, not motive.

- dsimon

April 8, 2011 at 2:37pm

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We can balance the budgetband have no income taxes on incomes below $100,000 with a 50% marginal rate above that. It is one thing to claim we should tax the middle class, quite another to claim we must when that is flatly untrue. Most of the dislocations that Seattle cites are due to ring income inequality, see Chait on that today. Thatphenomenon is the direct result of the libertarian economics that seattle advocates and can be clearly dated to the beginningof the Regan administration. Liberalism isn't our problem, libertarianism is. It as run amuck leading as from one crisis to another for which the libertarians prescribe more of the same. Nuts. Completely bonkers.

- roidubouloi

April 8, 2011 at 3:21pm

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Rising income inequality . . .

- roidubouloi

April 8, 2011 at 3:22pm

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Roid writes: "We can balance the budgetband have no income taxes on incomes below $100,000 with a 50% marginal rate above that" And so, someone that earns $1M today, and currently pays $330K in fed taxes would see their tax bill rise to $450K, is that your expectation? And what prevents the masses from wanting more "stuff" and declaring the following year that must increase to 55%? How do adjust for the massive ebb and flow of earnings encountered by the top few %? It's odd the entire EU relies so heavily on a massively wide tax base. And here you are proposing the exact opposite. Further making my point about envy, I guess. If there truly was a push towards the collective betterment, then wouldn't you want a super wide and yet very progressive tax base?

- seattleeng

April 8, 2011 at 3:52pm

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DSimon writes: "Doesn't that imply that the market theory that you have to see the bill to reduce usage may not apply to medical care, and that people in Japan see their doctors more out of cultural differences rather than because of the system they have?" Sure, but I think your assertion was that nobody really wants to see the doctor. I was just noting that some people really like it. DSimon writes: " The main driver of the costs of the social safety net are an aging population and rising medical expenses, not because society has made it easier to be poor." No. We have more than one safety net. We spend $620B a year on 85 welfare programs, and with these welfare programs we hope to make life better for 37M poor people. I'll save you the math: For a poor family of 4, that is $67,000 a year that is set aside in their name. Now, there is not a liberal person reading TNR that believes this figure is sufficient. They will tell you it needs to be higher. Much higher. They don't believe government efficiency is the issue. No, it's that the sheer dollar amount isn't enough. But think about this: A poor family of 4, over 20 years with two kids, will extract $67K * 20 in welfare, and then 12*2*$10K in schooling. That is $1.3M in direct welfare, and then another $240K in schooling. At least, that is what we give the government. That is over $1.5M we have given the government to take care of this poor family over 20 years. And at the end of the 20 years, they are still poor, and the chances are that their kids cannot read, and one of them is pregnant and fatherless. And the entire family is probably very fat, and at least 1 will have diabetes, in spite of having full free health care available to them. That's what I was referencing. it is these very programs Harry Reid is trying to save TODAY in his budget showdown with Boehner. so, I ask: Do you believe we have a big enough safety net today? And do you believe the government is showing sufficient effiency that we should entrust them with even more? And how much more? If we spend $640B on welfare today, do you think would really fix this problem? $1T?

- seattleeng

April 8, 2011 at 5:06pm

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seatleeng: "so, I ask: Do you believe we have a big enough safety net today?" Once again, that's not the issue. The issue your claim that liberals want to penalize the wealthy. Again, any safety net is going to require the better off to subsidize the less well off. Any system of universal education is going to require it. Any health care system that provides some baseline standard will require it. Correct me if I'm wrong, but you seem to agree with that. So why continue with the claim about penalization? You obviously believe the safety net is too big. Fine. But that doesn't change the math that requires some kind of subsidy. As long as you believe in some kind of safety net (and I think from your posts, you do), then isn't some kind of transfer logically required? Otherwise, can't I just turn the reasoning around and argue that conservatives are out solely to screw the poor, "full stop"? After all, the necessary consequence of having no (or fewer) wealth transfers means that people who can't afford education on their own won't get it, people who can't afford medical care will die, and people who can't afford to eat will starve. And that includes people who have been responsible citizens but can't find a job that pays more than minimum wage, or who find themselves unemployed for an extended period through no fault of their own, or who tried to stay healthy but got cancer or whose kid has leukemia. Of course, that would be wrong. I don't think most conservatives are callous towards the less well off. I think they have different ideas on how to address these problems than I do. But if we're going to judge ideologies on effects rather than motives, I could make the claim that conservatism is about screwing the poor just as you claim that liberalism is about penalizing the well off. I don't think either is correct. Instead, I think we're debating what is reasonable and what is sustainable. But if that's the issue, then the claim that liberals want to penalize the wealthy, "full stop," simply isn't true. "We have more than one safety net. We spend $620B a year on 85 welfare programs, and with these welfare programs we hope to make life better for 37M poor people." Sure, there are lots of programs. But the vast bulk of the social safety net is Medicare, Medicaid, and Social Security. The number of programs is not very relevant; the size of each one is, and medical costs for the poor and medical costs and retirement security for the elderly are by far the largest. And there is widespread agreement that the biggest mid- and long-term cost driver is the cost of medical care, plus the increasing number of people who will qualify for it as the population ages. As for your math regarding other welfare programs, it would help (again!) if you provided cites. The 2010 budget has $571 billion for "other mandatory spending." http://en.wikipedia.org/wiki/2010_United_States_federal_budget Some of that is welfare, food stamps. Some of it is unemployment benefits. How much of that goes to the poor? Surely some of the unemployment benefits don't. So just doing the division isn't going to be accurate. (And the charge that families which receive aid will be very fat is a cheap shot. It's well-established that better-off families eat healthier food than poorer ones, in part because it's more expensive to eat healthier food. Shouldn't those concerned about poor families' weight therefore support giving them even more money? And there is research on "food deserts" showing that healthy food is often unavailable in poorer communities, which would have nothing to do with whether people in those neighborhoods get aid or not.) "I think your assertion was that nobody really wants to see the doctor. I was just noting that some people really like it." Yes, of course some might. But as I pointed out before, that needs to be balanced against people who don't see their doctor who should. Maybe the Japanese are healthier in part because they see their doctors more often. Or maybe EU citizens are healthier because they have a better sense of when a doctor's visit is appropriate. My point was that the frequency of doctor visits doesn't seem to be determined by "seeing the bill," and to the extent that not seeing the bill may encourage over-use, it may be countered in large part by removing an impediment to under-use. The stats on how often people see their doctors does not, without more, tell us much about the issue. "what prevents the masses from wanting more "stuff" and declaring the following year that must increase to 55%?" I don't know. But it hasn't happened. The "masses" have allowed effective tax rates on the very wealthy to drop. Again, I see little evidence that the wealthy lack sufficient influence on the political process to protect their interests. During the Clinton administration, the wealthy did extremely well. During the Bush administration, the wealthy did very well. Even now, the only proposal under serious consideration is to allow the upper income tax rates to go back to where they were under Clinton. So I'd say there's clearly something keeping "the masses" in check, even if we can't specifically identify it. When the supposed consequences of a theory don't come to pass, then I'd say there's probably something wrong with the theory. (Indeed, there are many conservatives among lower income groups who oppose tax increases on anyone, even if it doesn't include themselves, as a matter of principle. And just look at the recent decrease in the estate tax, which affects a tiny and most affluent portion of the population.)

- dsimon

April 8, 2011 at 7:46pm

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Seattle writes: Roid writes: "We can balance the budget and have no income taxes on incomes below $100,000 with a 50% marginal rate above that" And so, someone that earns $1M today, and currently pays $330K in fed taxes would see their tax bill rise to $450K, is that your expectation? _______________ Several points: The claim is constantly made by the right that we cannot eliminate the deficit "on the backs of the wealthy" and that our current level of government requires massive tax increases on the middle class. This is a lie. So, part of what I am pointing out is the extent to which this is a lie. We could pay the operating costs of the Federal government while exempting the first $100,000 of income with a 50% marginal rate above that. Whether we should do so is a different question, but it is essential to debunk this right-wing claim because it is used to terrify people that we are faced with a choice between massive cuts in Federal spending or massive tax increases on the middle class. Not at all. We could cut federal income taxes to zero for most of the middle class and still balance the budget with marginal rates much lower than we had during the period of our greatest growth following WWII. Second, taxes on $1 million are nowhere near $330,000 today. The IRS reports that for 2007, the last year for which I can find published data by the IRS itself, the average income tax rate on the top 1% of earners was 20.6%. It should go up to 45% as I propose, or at least a lot close to 45% than to 20%. The average rate for the top 10% was 17.5%. The average rate for the top 25% was 12.3%. Also, this is based on taxable income, which is a lot less than economic income due to a variety of exclusions. This fact, that the wealthy are paying such low taxes (while complaining incessantly about confiscation) combined with the fact that the wealthiest have such a disproportionate share of national income is the reason why we have a fiscal deficit. There is not other reason. All the whining about spending, the size of government, the safety net, all the poor who sit around collecting welfare is complete, total bullshit. All lies. Rightwing, especially libertarian rightwing, propaganda. Got that? Now, I don't think you or the other posters here are lying. You just pick up the rightwing propaganda that circulates in the echo chamber and repeat it here. You don't know how to determine whether it is true or not (and likely don't care to). In short, the entire fiscal crisis is the result of the fact that we collect pitifully low taxes in this country due to a combination of Republican lunacy and gross political incompetence on the part of Democrats. Can we verify this? Sure. Take 2010. GDP of $14.7 trillion, NDP (our national income after depreciation) of about $12.5 trillion. Federal non-payroll tax receipts of $1.2 trillion. That is less than 10% of NDP. The IRS reports for 2007 that the top 10% of earners have 50% of reported income. Bear in mind, as I have pointed out to you before, that adjusted gross income and taxable income are a lot less than economic income. Reported personal income in 2007 was $9 trillion against $12.5 trillion of NDP that year. There is no doubt that the difference between economic income and reported income for the bottom half is small as they have only wages. Almost all of the economic income that does not get onto a tax return flows to the upper half. But let's not even adjust for that, just take the IRS percentage on its face. If the top 10% of earners paid all of the $1.2 trillion of non-payroll taxes collected by the Federal government, this would amount to just 19.2% of their economic income. In fact, the bottom 90% paid more than $300 billion in income taxes, plus a share of excise taxes that we can ignore The puts the maximum average tax rate for the top 10% of earners at 14.4% of economic income. Now lets make a more realistic assumption about economic income, that almost all of the difference between the $12.5 trillion of NDP and the $9 trillion of personal income reported on tax returns flows to the top half of the income pool, the top 10% of earners, because most everyone else has little but wage or salary income all of which becomes taxable. Let's take a $1 trillion deduction for charitable income and everyone else. That gives the upper half not $6.2 trillion of economic income but $8.7 trillion of economic income and a maximum Federal tax burden of $900 billion, a rate of 10.3%. So, the wealthy are paying average Federal taxes of between 10.3% and 14.4%. That is the reason we have a fiscal crisis and the only reason we have a fiscal crisis. It is true that looking forward entitlements are a problem because of an aging population and because of the prodigious rate of growth of medical expenses. But that is not the problem now. Nor is spending the problem now. The problem is that the rich don't pay taxes combined with the fact that they have a grossly disproportionate share of national income. Because income is so disproportionately distributed, the middle class is sort of hanging on and terrified of having to pay more taxes. And so the libertarian propagandists propagate the lie that the only solution to deficits is either to cut entitlement spending, not the cause of the current problem at all, or raise middle class taxes, totally unnecessary. We have one way and only one way out of the fiscal crisis and that is to start imposing realistic taxes on the wealthy who have the lion's share of disposable. The problem of medical costs can only be solved either by denying care to people who need it, whether through price rationing or some other mechanism, or controlling the costs. There are no other possibilities. If we de-fund Medicare, as Ryan proposes to do over time, then individuals will either forego care or pay for it themselves. This means denying care to the part of the population that cannot afford it. That is what the Republicans want to do and nothing else. If, on the other hand, these people all received necessary care without any cost controls, the fiscal impact on everyone else would be the same in the aggregate as the same portion of GDP would be consumed by medical care leaving the identical amount for other consumption and investment. The distribution would, however, be much more regressive as, in the absence of cost sharing via taxation, the wealthy will pay a tiny share of their income for medical care leaving everyone else to pay much more. If the average cost to the economy rises to 20%, as it is rapidly doing, the bottom half would either pay much more than this percentage of income for care or not receive it. It is a zero sum game in the absence of cost controls. ____________________ Seattle says: How do adjust for the massive ebb and flow of earnings encountered by the top few %? My answer, why is this a problem? Who cares? ______________ seattle says: It's odd the entire EU relies so heavily on a massively wide tax base. And here you are proposing the exact opposite. Further making my point about envy, I guess. If there truly was a push towards the collective betterment, then wouldn't you want a super wide and yet very progressive tax base? _____________________ A very progressive tax is just what I propose, exempting the first $100,000 for everyone and taxing the rest at 50%. As for the Europeans, they have to tax more widely because there income is distributed much more evenly. Obviously, if everyone has the same income, progressive taxation has no meaning. When income is more evenly distributed, then progressive taxation has less meaning. Everyone must contribute because everyone has disposable income. When I pointed this out to you before, you denied that the OECD countries have much more evenly distributed income and cited an OECD report. I read the report. It supports exactly my claim, that the US is an outlier amongst industrial economies with the most uneven income distribution, "bested" only by countries like Turkey. Envy is irrelevant. The wealthy have more and more of the income and barely pay taxes. They have exploited their political power to manufacture a fiscal crisis that is completely unnecessary and now exploit the artificial crisis to pursue a reactionary agenda that has no causal relationship to that crisis. We are not poor. We have plenty of GDP. If we collected taxes sensibly, everyone could enjoy pretty much the consumption they have today and we could have the same investment we have today. The only difference would be that, instead of issuing the wealthy Treasury bonds in exchange for the unspent income they forward to the Treasury, we would be issuing them a polite thank you for paying their fair share of taxes.

- roidubouloi

April 8, 2011 at 11:07pm

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dsimon writes: "Once again, that's not the issue. The issue your claim that liberals want to penalize the wealthy. Again, any safety net is going to require the better off to subsidize the less well off. " Alas, as I noted, if libs don't want more taxes on the middle class, and if libs want massive increases to social programs, then pretty much the only way to get that is socking it to the wealthy, isn't it? Do you know another way? If libs were widely stating that this should be a shared burden, and taxes on the entire base is the way to go, then I think you might have a point. Heck, you got Roid telling us that sticking it to the rich is the way to go.

- seattleeng

April 9, 2011 at 12:53am

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Sticking it to the rich is a hell of a lot better than sticking it the working poor which, shorn of all the fancy rhetoric, is exactly what seattle and the rest of the libertarian right want to do. The pathetic fact is that the wealthiest 10%, with somewhere between 50% and 75% of national income, are paying somewhere between 10% and 15% of their economic income in Federal taxes, not more. If that percentage slightly more than doubled, the operating deficit would be gone. Shall we shed tears for the wealthiest paying an average of 25% to 30% of their income in Federal taxes? Who in the bottom 90% would not happily ascend to this class in order to have it "stuck to them?" The reason to tax the rich to pay for the operations of government is that, due to the predatory economic policies advocated by the rich and adopted by our government in response to their outsized political power, the rich now have most of the income in the country. Those with the income have to pay the costs of government because no one else can. But they and their bootlickers want all the money without any responsibility at all. They expect the rest of the country, the other 90%, to be wage slaves without health care, retirement income, or education for their children. Why? Well, according to seattle because people are starving in Africa so things could be worse. One way or another, the dystopian future that seattle and the rest of the radical right wish upon us is not going to happen. But there may be a lot of suffering and huge economic and social losses before people finally see that the libertarian credo, already responsible for our economic inequality, our fiscal crisis, and the economic bust of 2008, has been nothing but disaster and will only get worse. Even its greatest claim, that libertarian economics promote growth, is a fraud, as we enjoyed a higher rate of growth before Reagan than we have since. We are in the midst of a class war, fought relentlessly by the wealthiest against everyone else. Whether it is a long war or a short war depends on whether the Democratic party can find its latter day FDR, la leader or leaders with a clear vision of the realistic possiblities who can speak to people in terms they understand and secure their trust. So far, all the signs point to a long war.

- roidubouloi

April 9, 2011 at 1:12am

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seattleeng: "Alas, as I noted, if libs don't want more taxes on the middle class, and if libs want massive increases to social programs, then pretty much the only way to get that is socking it to the wealthy, isn't it? Do you know another way?" No, I don't. But again, that's not the point. The issue is whether this is done with the purpose of "penalizing" the wealthy. If the only way to provide such services is to have the wealthy pay more than the less wealthy, then it's done out of necessity, not out of a desire to enact a penalty. As I've asked before, do you know a way to provide education for all, or to make sure no family goes bankrupt because someone got sick, without having the wealthy pay more than everyone else? If not, then don't you believe in some degree of redistribution too? If so, then (again) we're talking about a difference in degree and not kind, and the claim that liberals just want to penalize the wealthy is not correct. And again, I think you've stacked the deck with your assumptions. Many liberals do not support "massive" increases in social programs. The increases we're dealing with are fairly modest. The recently enacted health care reform is an incremental expense over what we're already spending on Medicare and Medicaid. And it was completely paid for with a modest tax increase on the highest incomes, along with some budget cuts elsewhere. And, yet again, many libs do support letting all the Bush tax cuts expire, including those on the middle class. So I think that "if" is also incorrect. But as income inequality grows and the middle class shrinks, what would you propose as a funding mechanism for basic services? If 90% of households fell under some taxation threshold, would it be "penalizing" to tax the top 10% to make sure everyone had a basic education? Isn't roid's claim correct that "Those with the income have to pay the costs of government because no one else can"? Isn't roid right to ask: "Shall we shed tears for the wealthiest paying an average of 25% to 30% of their income in Federal taxes? Who in the bottom 90% would not happily ascend to this class in order to have it 'stuck to them?'" "If libs were widely stating that this should be a shared burden, and taxes on the entire base is the way to go, then I think you might have a point." What do you mean by "the entire base"? Everyone? Should households that have problems putting food on the table be taxed too? If not, then by necessity those who have more will have to pay more in taxes. But (and I know this is getting repetitive) that doesn't mean it's done with the purpose of penalizing that group; it's the only way to provide the services we think are essential to giving everyone a fair shot at success and/or security. Do you have an alternative? If not, why isn't that "sticking it" to the wealthy too?

- dsimon

April 9, 2011 at 1:45am

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dsimon: " As I've asked before, do you know a way to provide education for all, or to make sure no family goes bankrupt because someone got sick, without having the wealthy pay more than everyone else?" Of course the wealth must (and do) pay more. I'm not disputing that. That's already in place. In spades. Hate to be a broken record, but, the UN says, you know, we have the most progressive tax system in th world. DSimon writes: "The increases we're dealing with are fairly modest." Our welfare state has grown massively since Clinton. Do you dispute that? And you think it needs to grow even more? Can you find a liberal that thinks it only needs to grow a little bit more? Please cite a link. DSimon writes: "And, yet again, many libs do support letting all the Bush tax cuts expire, including those on the middle class." And cut the budget to match? Really? Where? Those tax cuts on the middle class are about $230M in revenue per year. What social programs are they will to give up to fund this? Please share links. Unless I'm mistaken, we just had a battle royale over a paltry $38B in cuts. DSimon writes: " Everyone? Should households that have problems putting food on the table be taxed too? " They do in Europe. They tax the working poor fairly heavily to pay for their social programs. That's because there is a belief there that the burden must be felt, at some level, but all. That is how you balance budgets. When the government says "We are going to increase SS or health benefits for everyone", then even the guy earning $40K needs to think "Hmmm, do I really want to pay more for this?" Is it worth it? It's the economic equivalent of a free buffet lunch. And as I think I've established, the left will never, ever be sated when it comes to social programs. It will always be "just a little more" from the rich.

- seattleeng

April 9, 2011 at 7:27pm

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Roid, writes: "The pathetic fact is that the wealthiest 10%, with somewhere between 50% and 75% of national income, are paying somewhere between 10% and 15% of their economic income in Federal taxes, not more." CBO reports the 91-100 percentiles have post tax share of the income of 37.4% (see Table 3 in the Dec 23, 2008 report prepared for Max Baucus). So you are wrong there. I know, I know, you have a bunch of hand-written spreadsheets that refute this. But you are alone there. There isn't a person in the world that agrees with your methodology. CBO is as solid as things get. In 2008, the IRS reported a total of 5.5T in taxable income. Taxable income over $100K was $1.6B. Taxable income over $200K was $1.18B So, if you took all taxable income (100% tax rate) on everyone earning over $100K, you'd raise $1.6B, assuming you still allowed them to take tax deductions. We have a $1.4T deficit. Think about this Roid: If you took every penny over $100K, you'd just barely close the deficit. And that means all the jobs related to building nice houses, nice cars...you know, the stuff consumed by those that make more than $100K... would completely go away. Why on earth would anyone go to school to do anything valuable for society with a $100K salary cap? It makes no sense. And a huge % of jobs would just disappear overnight. Again, you are letting greed and envy drive your thinking.

- seattleeng

April 9, 2011 at 7:54pm

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I'm sorry seattle, but you really are completely clueless about this. You don't understand the question that the CBO was answering. You don't understand the answer it gives. There is nothing wrong with the CBO methodology. The only thing wrong is that you don't understand what it means. We have an economy producing $12.5 trillion of net national product, after depreciation. If the taxable income is only $5.5 trillion, where did $7 trillion disappear to? Do we really have a $5.5 trillion economy and the Bureau of Economic Analysis (from which the CBO gets its data) is just making it up when it reports $12.5 trillion? Indeed, for 2007, the IRS too reports $9.05 trillion of household income and income taxes of $1.12 trillion. You want to read it yourself, go here: http://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html and download table 8. That same year, the BEA reported $12.5 trillion of NNP. The top 10% paid $787 billion on $4.5 trillion of income, an average rate of just 17.5%. When you find the other $3.5 trillion of income that does not get counted as adjusted gross income, you will understand that the effective rate of the wealthiest is considerably lower than that. Using just the income reported by the IRS, the top 10% had 46.8% of after-tax income. If the entire federal operating budget of $2.25 trillion were paid by the top 10%, meaning no deficit, they would still have 28.4% of the aggregate after-tax income and an average household net income (2007) of $318,783. So much for your baloney about no one willing to work for a mere $100,000. And that is still before you find the missing $3.5 trillion of NNP that the IRS does not count. If the top 10% has only half of the $3.5 trillion of NNP not counted by the IRS, a very conservative estimate, their real average household economic income would be $565,000. You could look this up yourself, seattle, but you would have to know how to read the table and how to add, subtract, multiply and divide. And you have to want to. You, however, prefer simply to repeat whatever rightwing economic nonsense you read and insist that anyone who is willing to educate themselves is driven by greed and envy. I have no one to envy, seattle. I am in the very, very top ranks of this society in terms of both income and assets. But I can still think. Rest assured that under a true progressive tax system, I would be paying the highest rate on most of my income. The greed is all yours.

- roidubouloi

April 10, 2011 at 1:35am

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Roid writes: " If the taxable income is only $5.5 trillion, where did $7 trillion disappear to?" My employer might pay me $100K, but I might also lose $20K in a business I start with my brother, making my taxable income less than $100K. That is why you must look at taxable income, rather than total income earned. The government does this today because it encourages people to take risk with capital. Note, too, that the BEA/NNP includes things like health care and retirements, things that aren't taxed today at all today. So, take a husband and wife teacher and firefighter. The teacher earns, say, $45K in salary, and then gets $50K in retirement and healthcare. And the fire fighter might have a similar package. They earn a total of $90K in salary, and $190K in salary and benefits. They are only taxed on the $90K. This is partly why the NNP number is so high. So, you will hammer these guys hard on health care and retirement, requiring them to pay taxes on those long-term benefits on that using money they earn today. Under today's rules, they'd be in the top 20%, and pay an effective income tax of 6% on 90K, or $5400. Under your new rules, they'd pay 50% on $190-100 = $90K * 0.5 tax = $45K tax bill, on salary of $90K. And of course, they'd still have SS and state and local taxes on top of that. In other words, if you go after total income and/or NNP, then you have increased their taxes 10X Congrats, Roid. In addition to making jobs like a doctor or architect completely unattractive with your new tax scheme, you've also increased the taxes paid by husband and wife civil servants from $4,500 to $45,000. Summary: Looking at taxable income, you cannot make your "soak the rich" plan come close to working, even if you take 100% of their money. Sure, if you stretch the definition of what you consider taxable income to be, then the money is there. But that would have massive implications on investments and savings in the country, and would reach WAAY down into the middle classes. And it'd also create a massive disincentive for people to do anything that required more than a few weeks of training. You'd have a nation of garbage collectors.

- seattleeng

April 10, 2011 at 1:04pm

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seattleeng: "Of course the wealth must (and do) pay more. I'm not disputing that." Fine. But if you concede that, why isn't that penalizing the wealthy too? That's the question I feel I'm not getting an answer to. You seem to agree that the wealthy have to pay more than others to support even basic social programs, yet you said that liberals just wanted to penalize the wealthy, "full stop." I don't see how that can be the case if you agree that the wealthy have to pay more to support those programs. I'd appreciate a response or clarification, but I won't ask again. On to other points. "Our welfare state has grown massively since Clinton. Do you dispute that? And you think it needs to grow even more? Can you find a liberal that thinks it only needs to grow a little bit more? Please cite a link." First, perhaps you could provide a link concerning the "massive" growth in the welfare state since Clinton. Second, the recent expansion provided in the health care reform law was paid for, according to the CBO, and it involved a modest surcharge on the highest income earners and taking away income tax deductions for businesses offering the most expensive plans. Do you dispute that? Because it hardly seems like a huge burden; indeed, it would leave upper income tax rates below where they were under Clinton if the Bush tax cuts are extended. Third, I believe the most massive expansion before that was the prescription drug benefit enacted under Bush and not paid for by a Republican Congress. Moreover, former budget director Peter Orszag said that if we had just let the Bush tax cuts expire, it would pretty much have taken care of all of the deficit except interest on the debt by 2015. http://www.theatlanticwire.com/business/2010/09/for-deficit-s-sake-should-we-let-the-bush-tax-cuts-expire-for-everyone/22965/ So no, we're not talking about a need for massive tax hikes on everyone to provide for the near-term. It's Republican recalcitrance to look at revenues that's a large part of the problem, though some kind of method of controlling heath care costs will probably be required in the mid to long term. "Unless I'm mistaken, we just had a battle royale over a paltry $38B in cuts." That "battle royale" was mostly posturing for the bases. I think they knew they were going to get a deal all along. "the UN says, you know, we have the most progressive tax system in th world." Hate to be a broken record too, but study after study shows that our system is essentially flat when all taxes are taken into account. http://economix.blogs.nytimes.com/2009/04/13/just-how-progressive-is-the-tax-system/ "They do in Europe. They tax the working poor fairly heavily to pay for their social programs." And we tax only the first $100k of income to pay for Social Security, so we tax the working poor as well to pay for a very substantial program. Some people think that's a little backwards. "When the government says 'We are going to increase SS or health benefits for everyone', then even the guy earning $40K needs to think 'Hmmm, do I really want to pay more for this?' Is it worth it? It's the economic equivalent of a free buffet lunch. And as I think I've established, the left will never, ever be sated when it comes to social programs. It will always be 'just a little more' from the rich." Several points. First, you haven't established your claim because the facts contradict it. Effective tax rates on the wealthy have gone down in the past decade. http://www.theatlantic.com/daily-dish/archive/2009/07/yet-more-bad-arguments-against-taxes/198731/ Upper income marginal tax rates used to be much higher. So the evidence simply doesn't support the theory that the wealthy will be taxed into oblivion. Perhaps it's because, as I wrote before, there are plenty of people who oppose tax hikes even when they don't pay them and want to get rid of the estate tax even though they'll never be subject to it. Or maybe there are other reasons. But it is real, and should be hard to refute reality. And the flip side of your description is just as true: when candidate X says "I'm going to lower your taxes," most people don't think about what services they should give up and whether it's worth it. That's also the equivalent of a budgetary free lunch. It's a bipartisan problem: everyone wants the good stuff without the necessary bad stuff, and neither approach is sustainable. Even the "brave" Paul Ryan isn't entirely forthcoming about the effects of his voucher program on what people will actually be able to buy relative to current Medicare benefits; it's a drastic cut, but he still says he's "saving" Medicare, because saying what's really going on would be very unpopular politically. Polls show that a majority of even those who identify with the Tea Party don't support cutting the entitlement programs, while at the same time advocating still lower taxes. I wish them good luck with that. I've commented that liberals don't want to ask the public if they're willing to pay for the government they say they want, and conservatives don't want to ask the public if they want the government they say they're willing to pay for. "'DSimon writes: 'And, yet again, many libs do support letting all the Bush tax cuts expire, including those on the middle class.' "And cut the budget to match?" Perhaps you read that one a little to quickly: letting the cuts expire on the middle class increases revenue and does not require a budget cut to match it.

- dsimon

April 10, 2011 at 9:16pm

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You're not paying attention, seattle. Even using the IRS figure on household income (which does not include corporate income), the top 10% could pay the entire operating budget of the Federal government, meaning no operating deficit, and still have and average after-tax household income of $318,000. I also said that we could tax at a 50% rate for individual income over $100,000, not joint income. As I mentioned, the crossover point at which someone would pay more under my structure than at present is in the neighborhood of $200,000. Beyond that, it is bizarre in the extreme that you think exclusions from taxable income for high earners are fine but that income support for the people at the bottom is not. Someone who does not get health care through an employer has to pay for it with after-tax dollars. What's fair about that?

- roidubouloi

April 10, 2011 at 10:25pm

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All of which merely highlights that, far from being soaked, the further down you go on the income scale, the worse the tax deal. The higher up you are the more of you income that never gets taxed. That's why Warren Buffett could honestly say that his secretary pays taxes at a higher rate than he does. Yours is a fantasy economic world, seattle, concocted by radical right ideologues to justify their predation upon working people. What they aspire to is de facto apartheid, the return of pre-revolutionary France, where a tiny minority live in splendor and everyone else struggles amidst the greatest wealth the world has ever seen. It is a hideous vision. Certainly not what Adam Smith had in mind.

- roidubouloi

April 10, 2011 at 10:29pm

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dsimon: "Fine. But if you concede that, why isn't that penalizing the wealthy too? " If someone earns X% of the income, they should pay X% of the taxes. That's fair. We are far in excess of that today at upper pay levels. The UN report notes top 10% in the US earn 33% of the income, but pay 45% of the taxes. In Germany, the top 10% earn 29.2% of the income, yet pay just 31% of the taxes. See other note below. dsimon: "First, perhaps you could provide a link concerning the "massive" growth in the welfare state since Clinton. " Under LBJ, welfare spending was <1% of GDP. Under Clinton last few years, it was 3-4%. In 2010, it is 5%. If you want to know in constant dollars, under Clinton's last few years, it was $325B, today is it $600B. See USGovernmentSpending.com DSimon: "Moreover, former budget director Peter Orszag said that if we had just let the Bush tax cuts expire, it would pretty much have taken care of all of the deficit except interest on the debt by 2015." Yes, Bush tax cuts are about $300B a year, with $70B coming from cuts on the wealthy, and $230B coming from cuts on everyone else. Interesting is about $200B (little less). But we have a $1.5T deficit THIS YEAR ALONE. So, even if Bush cuts expired, there's a $1.2B gap to cover. THIS YEAR. And again next year. And the year after. You sound like the kind of guy that celebrates making the minimum payment on a $10,000 credit card balance. DSimon: "Hate to be a broken record too, but study after study shows that our system is essentially flat when all taxes are taken into account." That study IGNORES the $1B in transfer payments to the poor (roughly $600B in welfare, and $400B in SS and Medicare subsidies). See the UN data. They consider apples to apples across the OECD nations. Their conclusion: The US has the most progressive tax system in the world. DSimon: "And we tax only the first $100k of income to pay for Social Security, so we tax the working poor as well to pay for a very substantial program" Right now, everyone gets everything back they pay into social security. So I'm not sure how you call that a regressive tax. It's a forced retirement program with a decent ROI for poor people (5-6%) and a crappy ROI for wealthy people (~1%). As soon as means testing starts, then it will become a tax proper as you'll never see that money you pay in again. DSimon: "Upper income marginal tax rates used to be much higher" Yes, effective rates have gone down in the last 2-3 two decades. They have in every modern economy as governments learn how oppressive taxes are. Yes, especially Europe. Double especially in Sweden. Now, with that said, go take a look at FDR and Nixon's tax return at taxhistory.org. Nixon earned $736K (well over $1M today) and paid $72K in tax. An effective rate of 10%. FDR earned $93K in 1937 (about $1.3M today) and paid $15K in taxes. That's an effective rate of 16%. The high marginal rates mean nothing. Loopholes ruled the day, as the tax data indicates. DSimon: "I've commented that liberals don't want to ask the public if they're willing to pay for the government they say they want, and conservatives don't want to ask the public if they want the government they say they're willing to pay for." But conservatives are. As I noted, with $1B in welfare, and a government intent on making it impossible for those on welfare to get off of welfare, it's no surprise the number of needy people is growing. There is a marginal "tax" rate on welfare recipients that is 80% to 110% today. That means that for every $1 a poor person earns, they are deprived of $0.80 to $1.10 in benefits. So, they can do a dollar of work or sit and get the same $. DSimon: "Perhaps you read that one a little to quickly: letting the cuts expire on the middle class increases revenue and does not require a budget cut to match it." Again, we have a $1.5T shortfall. Bush cuts are everyone are $300B a year.

- seattleeng

April 10, 2011 at 11:54pm

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Roid writes: "You're not paying attention, seattle. Even using the IRS figure on household income (which does not include corporate income), the top 10% could pay the entire operating budget of the Federal government, meaning no operating deficit, and still have and average after-tax household income of $318,000." Check your math. I don't think the top 10% have even a pre-tax income of $318K today. Roid writes: "All of which merely highlights that, far from being soaked, the further down you go on the income scale, the worse the tax deal. The higher up you are the more of you income that never gets taxed. That's why Warren Buffett could honestly say that his secretary pays taxes at a higher rate than he does." Buffett is demagoguing, and you are lapping it up. Buffett pays taxes on cap gains. Cap gains taxes were slashed by Clinton. Cap gains, as you know, have already been taxed at corp tax rates, and the money that went to earn those cap gains already had full taxes paid. Buffet would enjoy similar rates just about anywhere in the EU. Roid writes: "Yours is a fantasy economic world, seattle, concocted by radical right ideologues to justify their predation upon working people. What they aspire to is de facto apartheid, the return of pre-revolutionary France, where a tiny minority live in splendor and everyone else struggles amidst the greatest wealth the world has ever seen. It is a hideous vision. Certainly not what Adam Smith had in mind." And yet, the poor and middle class have more today than they have every had before. No matter how you want to measure it: Comfort? More than ever before. Cars? More than ever before. College? More than ever before. Food? More than ever before. Orthodontics? More than ever before. Cash? More than ever before. Home ownership? More than ever before. And on and on and on. The data really doesn't support what you are saying. Even a bit. Sure you can find data saying the poor haven't seen as much economic gains as the rich. But no country demonstrates that. It's just your obsessive greed that fuels these rants of yours. Don't worry, I filter all that out, buddy. :)

- seattleeng

April 11, 2011 at 12:08am

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You have a demented notion of what it means to be poor in America, or even working class. You believe taxes should be flat in principle and that nothing else is fair. I have no idea how one justifies such a position. Justice is not algebra, it s treating like cases alike and different cases in some relative order. It is not algebra. Obviously, you don't know how to justify your position either or you wouldn't have to concoct these fantasies about who has what in an effort to do so. Needless to say, you have a completely self-serving definition of greed. I want to pay higher taxes as my share to make my country more prosperous, more secure, and a decent place where all its citizens have healthcare, education, retirement income and a good standard of living along the way. You want millions to do without these things so that the things you buy are cheap and you can have more. Now, which of us is greedy?

- roidubouloi

April 11, 2011 at 9:29am

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Roid writes: "I want to pay higher taxes as my share to make my country more prosperous, more secure, and a decent place where all its citizens have healthcare, education, retirement income and a good standard of living along the way." The greatest thing a person can have is self sufficiency. Probably 3-4% of the non elderly adult population, for various reasons, cannot provide this for themselves. They must be taken care of. But what about all the other people that are able but are not contributing? Sticking them in welfare hell is about the meanest and cruelest thing that can be done. It dooms them and their offspring to a lifetime of poverty and dependency in what could only be described as hell on earth. Sweden has a disability rate approaching 20%. You can guess why. That is not good for anyone. Let's cut welfare spending in half, while making sure those that make good decisions and need help are taken care of. Let's make sure entitlements are sustainable. Let's cut the military to a lean and mean force dominated by drones. Let's establish and energy policy that ensures we are on a path to have most cars run on electricity in 20 years. Let's make sure nobody pays more than 10% of their earnings each year in health care, and help them pay 50% of their bills up until that 10% mark. And if someone is in a group that earns 25% of the income, then let's make sure they pay AT LEAST 25% of the tax bill. And let's make sure everyone is paying towards our tax bill to ensure they are each active participants in their destiny. Roid writes: " I want to pay higher taxes as my share to make my country more prosperous, more secure, and a decent place where all its citizens have healthcare, education, retirement income and a good standard of living along the way." I'll pay higher taxes too to get the things I listed. But I will not throw wasted money on top of wasted money just to feel good about it. That's the difference. And the reason you will do this, regardless of the outcomes, is because your #1 goal is to stick it to the wealthy. Results be damned. If you really did care about results, you'd also be interested in fixing many of these things first.

- seattleeng

April 11, 2011 at 11:31am

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seattleeng: "dsimon: 'Fine. But if you concede that, why isn't that penalizing the wealthy too?' "If someone earns X% of the income, they should pay X% of the taxes." But that doesn't explain why that's still not penalizing the wealthy. After all, even under a true flat tax, the more you make the more you pay, so isn't that still a penalty? If not, why not? If we didn't want to "penalize" the wealthy, why not a head tax? Isn't treating each person the same as individuals as "fair" and respectful as treating each dollar the same? Or maybe it's "fair" to try to equalize the subjective burden of paying the tax. Is it really just as easy for a family making $20k to pay $4,000 as a family making $200k to pay $40,000, or a family making $2 million to pay $400k? There is a marginal value of money; that first $20,000 is a lot more important than subsequent $20,000 increments. Why isn't trying to equalize the admittedly subjective burden of paying taxes not just as "fair" as a flat tax, or a head tax? It's hard to say what's "fair" unless one agrees on what should be equalized. All three systems--head tax, flat tax, progressive tax--can be said to be equalizing one aspect or another. I don't think just declaring one as "fair" without providing a reason makes the case for picking one over the others. "That study IGNORES the $1B in transfer payments to the poor (roughly $600B in welfare, and $400B in SS and Medicare subsidies). See the UN data." First, it would be nice to provide a cite to the UN data. Second, when most people talk about the "tax system," they're referring to revenues, not outlays. If you want to refer to the redistributive effects of the budget, then a different term should be used. Third, assuming what you assert is true, perhaps there are greater wealth transfers in the US because we have so much more income inequality. So our system may be more "progressive" not because we are so much harder on the wealthy but because the gap between the well off and the less well off is so much greater. "The UN report notes top 10% in the US earn 33% of the income, but pay 45% of the taxes. In Germany, the top 10% earn 29.2% of the income, yet pay just 31% of the taxes." If a tax system contains an exemption for low income earners, then those at the upper end will have to pay more of the total percentage of taxes. That those at the top who make 33% of the income pay 45% of "taxes" (again, is that all taxes or income taxes?) reflects a mild progressivity which does not bother me. "You sound like the kind of guy that celebrates making the minimum payment on a $10,000 credit card balance." No, I'm just wondering what dire straits we could possibly be in if a modest tax increase--indeed, taxes we were paying just a short time ago--could go so far to solve the problem. Add some spending cuts and modest revenue increases would go even further. And even if we just made payments that only covered debt interest, debt would still become less important as it decreases as a percentage of GNP due to economic growth. "Right now, everyone gets everything back they pay into social security. So I'm not sure how you call that a regressive tax. It's a forced retirement program with a decent ROI for poor people (5-6%) and a crappy ROI for wealthy people (~1%)." I'm sure you know that's not how Social Security works. Present workers pay for present retirees. There is no ROI, so it's not a valid comparison, and it's not even right to talk about "getting back" what you "pay into it." It's not a forced retirement savings program, it's a way of providing for those who worked hard but may have never made enough to retire on in the first place. "Under LBJ, welfare spending was <1% of GDP. Under Clinton last few years, it was 3-4%. In 2010, it is 5%." That doesn't prove the assertion that there has been "massive" growth recently, nor explain the reason growth that has happened. There have been few expansions of eligibility. The only ones I can think of are the prescription drug benefit (unpaid for), and the recent health care reform (paid for by very modest means). So growth has been driven by demographics, the cost of health care in the existing programs, the recession which enabled more people to qualify, and the loss of middle class jobs. Some of these trends may reverse themselves as the economy recovers. But most of the recent increased costs, it seems to me, have not occurred because of the masses demanding more from the wealthy; it's because more people now qualify for the programs that already existed due to demographic and economic conditions. "'conservatives don't want to ask the public if they want the government they say they're willing to pay for.' "But conservatives are. As I noted, with $1B in welfare, and a government intent on making it impossible for those on welfare to get off of welfare, it's no surprise the number of needy people is growing." How is government making it "impossible" for people to get off welfare? I don't know anyone who wants to be on it. Most people I think would like to be working at a good job. The biggest reason that the number of needy people is growing is the lousy economy, isn't it? And as I wrote before, even a majority of Tea Party folk don't want cuts to Medicare or Social Security, which are far larger than welfare for the poor. They'll give up someone else's benefits, but not their own. Plus they want still more tax cuts, making their fiscal position even more untenable. So no, most of them are not willing to have the government they say they're willing to pay for. "Yes, effective rates have gone down in the last 2-3 two decades. They have in every modern economy as governments learn how oppressive taxes are." So what does that do to your claim that "the masses" will always be able to vote themselves ever increasing benefits at the expense of the wealthy? Doesn't it show that that fear is to a large extent unfounded? "There is a marginal 'tax' rate on welfare recipients that is 80% to 110% today. That means that for every $1 a poor person earns, they are deprived of $0.80 to $1.10 in benefits. So, they can do a dollar of work or sit and get the same $." Assuming what you say is true (again, no cites are provided), that doesn't mean that they wouldn't jump at the chance for a job that paid decently. Again, I don't know of many people with halfway decent jobs who are giving them up to go on welfare. Do you?

- dsimon

April 11, 2011 at 2:02pm

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The real economy (not to be confused with the imaginary economy defined by GDP, wherein government spending is counted the same as private spending) is not helped by having millions of "employed" but non-productive people "working" for government. Those things that government should do, maybe 20% of what it currently does, could be done by 10% of the number of government employees if they merely worked full time rather than standing around half or more of the day as now happens. Go to your local government buildings and walk around and watch; there is miserable productivity by people who have been made lazy by the system and now feel "entitled" to their jobs, paid for by the small remaining productive portion of society. It is only due to the magnificent wealth created by capitalism that all the deadbeats and parasites can live off the productive creators of wealth. If instead we moved those people into the private economy where they could produce things rather than interfere with production, then the real economy would be much larger and we'd all be better off. "That government is best which governs least." —Thomas Jefferson Freedom works; government doesn't.

- dalefogden

April 11, 2011 at 3:43pm

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Here we have the classic right-wing libertarian dodge in spades. On the one hand, we have seattle who imagines that most of those who struggle in our economy are not the working poor and the working class, and a good chunk of what we call the middle class, but welfare queens, etc., etc. What planet are you living on seattle? What year do you think this is? The amount spent on "welfare" is a pittance. And, if no one is going to pay more than 10% of income for medical care, a laudable goal, then who do you think has to pay the difference between the 17% of GDP that health care costs and 10% of income, where is the money going to come from? The magic fountain? If we started by levying a flat tax of 10% for single-payer, as in France, that would be a good step in the right direction, but then where would the difference come from? You are still having trouble with addition and subtraction, let alone multiplication and division. And do you really think that of the millions without work that more than a tiny few are not desperate to find a job? You fuel your bitterness toward those at the bottom end of the ladder with this appalling myth about welfare. It is unseemly. Then we have foggedin who is really out of it. He does not notice that the private economy cannot even employ all of the workforce that is not employed by government, but he wants to decrease government employment, out of spite alone, in order to add to the ranks of the unemployed. I propose that whenever foggedin needs a government service, it be denied to him, air traffic control for example, it be denied to him. Neither of these too gentlemen have the slightest awareness that the Federal Reserve will raise interest rates to create unemployment to prevent inflation, that it is deliberate Federal policy to use unemployment to protect the value of financial assets held overwhelmingly by the wealthiest. Disgraceful. Of the two, seattle is badly misinformed, but shows no signs of wanting to be informed. Foggedin is from another universe altogether.

- roidubouloi

April 11, 2011 at 4:38pm

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seattleeng: "The UN report notes top 10% in the US earn 33% of the income, but pay 45% of the taxes. In Germany, the top 10% earn 29.2% of the income, yet pay just 31% of the taxes." I'm posting again just to show that these numbers, while looking like they show something, need a lot more analysis to be able to conclude much of anything. Say there's an income tax that starts at $25,000. Nine people make $20,000. One person makes $70,000. Then the top 10% makes 28% of the total income, yet pays 100% of the taxes. Is that unfair? Not necessarily, given that kind of income distribution. (I think one would be hard pressed to find many people who think there should be any income taxes on those making $20k or below. Even Steve Forbes, Mr. Flat Tax, favored an exemption amount.) Moreover, that top 10% would pay 100% of the income taxes no matter what the rate was, even if it were a tax of just 1%. The statistics cited above make it sound like the wealthy in the US are being taxed more than those in Germany, but it's entirely possible that the rate paid by the top 10% is lower, yet the total amount paid makes up a greater share of the total taxes because the other rates are lower still and so generate a smaller pool for comparative purposes. I'm really tired of numbers that look like they show something when a little bit of analysis shows that they don't. Maybe their proponents are correct in their conclusions anyway, but using incomplete information doesn't make the case.

- dsimon

April 11, 2011 at 9:09pm

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Precisely, dsimon. The statistics that compare income shares to shares of taxes are completely meaningless. What should be compared are the shares of pre-tax and after-tax income. What that shows is that the after-tax income distribution in the US is hugely skewed to the wealthy by comparison to the rest of the industrialized world. Thank Reagan and the Bushes and a weak Obama who has not found the words with which to mobilize the public to resist. He has not even tried as far as I can tell.

- roidubouloi

April 11, 2011 at 11:47pm

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DSimon, the UN data I referenced can be at the first link below. The reference to the marginal tax rate on welfare is discussed in the government's "Green Book" on welfare. The government considers a family in Pennsylvania. If they had no income, it would received $19217 in benefits. If the mother earned $5000 at a job, she'd gain benefits under EITC, but she'd lose benefits under AFDC, food stamps and housing assistance. The result would mean that their income would rise from $19217 to $20730 when she earns that $5000. In other words, she earned $5000, but only saw $1500 increase. So her effective marginal tax rate the government calculates as 70%. They go through many other scenarios. Earning $10,000 means her effective marginal rate is over 100%. If she earns $15,000, her effective marginal rate stays over 100%. If she earns $25000, it's over 100%. If she earns $30K, it's over 100%. Once she earns $30K, she loses the last of EITC, and she becomes a regular tax payer. But her disposable income is the same as when she started! This government example illustrates how perverse the welfare system is. Once you are in, you cannot get out. And if you believe welfare should improve peoples' lives, then there nothing more toxic than preventing someone from making a living at a job. It's cruel what it does. The "Green Book" walks you through all the math. If you are not aware of this phenomenon, I'm not sure how you can comment at all on welfare. It's what everyone debates when they talk about welfare. Dsimon writes: "No, I'm just wondering what dire straits we could possibly be in if a modest tax increase--indeed, taxes we were paying just a short time ago--could go so far to solve the problem. " But a modest increase won't solve the problem. Our receipts today are around $3T, and about half that is from individual income tax, or $1.5T. Our outlays today are $4.5T. So, if you double everyone's tax, that $1.5T would become $3T, and we'd be in balance. But if we double everyone's tax, the that means guy earning $120K today sees he's taxes go from $24K to $48K. The guy earning $85K sees his taxes go from $15K to $30K. This is what you want???? And as previously shown, there isn't enough in the ranks of the wealthy to cover this. Of those earning over $100K, there's only $1.6 in total taxable income. Those over $200K, there's only $1.2T in taxable income. DSimon writes: " The biggest reason that the number of needy people is growing is the lousy economy, isn't it?" How do you define needy? When LBJ defined needy, it was much, much, much worse than today: It was based on the number of people that could not meet minimum nutrional and caloric standards. Each year, we've redefined needy. If you were in the 12% of those in poverty under LBJ, you were in much worse shape than those in poverty today. Dsimon writes: And as I wrote before, even a majority of Tea Party folk don't want cuts to Medicare or Social Security, which are far larger than welfare for the poor. " Our annual welfare spending (with welfare defined as those with earnings below government threshold) is ~$600B. When the welfare components of SS and Medicare are added in then the amount is $1T. Medicare and SS are combined $700+453=$1.15T. When the $400B of Mediare and SS that are related to welfare are removed, their combined is $750B. Summary: Welfare all up is $1T, and nonwelfare SS and Medicare is $750B. So, welfare is indeed larger than medicare and SS combined. DSimon writes: "So what does that do to your claim that "the masses" will always be able to vote themselves ever increasing benefits at the expense of the wealthy? Doesn't it show that that fear is to a large extent unfounded?" That effective rates are diminishing is not at odds here with this at all. Effective rates have been dropping, while receipts as a % of GDP have held steady and while spending has increased and while the deficit has increased. 1) http://www.taxfoundation.org/blog/show/23856.html

- seattleeng

April 12, 2011 at 11:45am

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dsimon: "(I think one would be hard pressed to find many people who think there should be any income taxes on those making $20k or below. Even Steve Forbes, Mr. Flat Tax, favored an exemption amount." Alas, look to the EU. They tax the living crap out of everyone. DSimon, without looking up any numbers, how much taxes do you think someone earning $50K in the Canada, UK, France and Finland pay? The problem here is you and Roid want EU benefits without EU taxes. And you believe we can do it because you believe our top 10% is far wealthier than Europe's top 10%. On balance, they are not.

- seattleeng

April 12, 2011 at 12:14pm

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Dsimon writes: "Not necessarily, given that kind of income distribution." And interesting ratio to look at is the ratio of income of our top 20% to our bottom 20%. It is currently about 12:1. The top 20% include those that graduated from Harvard, and the bottom 20% includes a lot of retirees, but also those that punch their (soon to be ex-) boss in the face due to anger issues. But the data gets even more interesting when the start to normalize it for the following (and when you understand that the bottom 20% consists of a lot of 2 or 1-person families that are retirees living on a fixed income and owning their own home). 1) In-kind transfers. In other words, add government help (such as medicaid) to the bottom 20%, and subtract taxes paid in the top 20% 2) Household size. Those int eh top 20% generally have larger families (they are also in their prime years), and you'd expect them to be earning more money as they NEED more money. So, how does a per-capita earning look instead of a household earning? 3) Labor. If family A works twice as many hours as family B, you'd expect in a fair society than Family A would earn twice as much as family B. When adjusted for these 3 things, the ratio drops to 2.9 to 1. I'd be curious to understand where you thought this should be

- seattleeng

April 12, 2011 at 12:29pm

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"But a modest increase won't solve the problem." I never wrote it would. I wrote it would go a long way towards solving the problem. "This is what you want????" I'm not trying to balance the budget this year. Nor is anyone else, to my understanding. The goal is to get a handle on the budget for the mid-long term. I put forward Orszag's statement, apparently verified by independent analysts, that allowing all the Bush tax cuts to expire would balance the budget exclusive of interest on the debt by 2015. Of course we need to take care of interest on the debt at some point too. But those are different questions as to what it would take to balance the budget this year. Do you dispute Orszag's claim? "How do you define needy?" I define it as those qualifying for benefits. Those standards have not changed for adults over the past two years. So if there are more expenses recently, they're due mostly to people who have lost their jobs and now qualify for unemployment, Medicaid, food stamps, and other benefits. "Our annual welfare spending..." ...does not really address my point, which was that conservatives as a whole aren't willing to confront the consequences of the "smaller" government they say they're willing to pay for. Again, there aren't even conservative majorities for cutting Medicare and Social Security, and Ryan isn't up front about the consequences of voucherizing Medicare. So I don't think conservatives are any more coherent on fiscal matters than liberals, and I think the polling data backs me up. "Effective rates have been dropping, while receipts as a % of GDP have held steady and while spending has increased and while the deficit has increased." I don't see how that supports the claim that the masses will always extort more benefits at the expense of the wealthy. The increased benefit expenditures--again, which appear over the past decade (I'm not going back to LBJ) to be due to an aging population and a poor economy, not to a drastic redefinition of eligibility--are being put on the national credit card as upper income tax rates have dropped. "Alas, look to the EU. They tax the living crap out of everyone." But you wrote that someone who makes X% of income should pay X% of taxes, which requires a flat tax. So isn't that your position, that everyone should pay the same rate no matter how little one makes? My other questions have gone unaddressed. I don't see why a flat tax is inherently "fairer" over a head tax or a progressive tax. I don't know if you favor an exemption or not. This makes it hard to have a discussion. "The problem here is you and Roid want EU benefits without EU taxes." Well, I know you've read The Healing Of America, and if you accept the data presented there then you know that the EU gets comparable health care results at much less cost. So yes, they pay more in taxes, but people then pay far less in premiums and co-pays. I want value for my money, and I don't really care if it comes out of my taxes or if I pay it on my own. Would it matter to you? "And you believe we can do it because you believe our top 10% is far wealthier than Europe's top 10%. On balance, they are not." I never made that claim. I only said that the numbers provided did not show what you implied they show, and that more information was needed to conclude much of anything.

- dsimon

April 12, 2011 at 2:33pm

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seattleeng: "When adjusted for these 3 things, the ratio drops to 2.9 to 1. "I'd be curious to understand where you thought this should be" Franky, I have no idea. (And I could ask you the same question.) But I think it's precisely the wrong question and encapsulates the problem in our discussion. It assumes I think that there is a proper ratio, which I think implies that I want to "penalize" the wealthy to achieve that ratio. That's not how I think about it. We agree that there should be some kind of baseline societal support. We agree that even if you can't afford basic education, it should be provided. We agree that even if you can't obtain medical insurance through your employer or on the private market, some degree of medical care should be provided. We agree (I think) that if you've worked but haven't been able to save enough for retirement, some kind of social support is not unwarranted. The next step is to figure out an equitable way of paying for those supports. But it doesn't require achieving some kind of ratio of the top 20% to the bottom 20%. Though the degree of income inequality may have some impact on how the burden of providing for the safety net is apportioned, the result is a matter of practicality, not a desire to achieve a certain proportional relationship between the wealthy and the poor. It comes down to an admittedly subjective and ill-defined concept of what is fair and pragmatic. "without looking up any numbers, how much taxes do you think someone earning $50K in the Canada, UK, France and Finland pay?" Without looking at the numbers, how much in out-of-pocket health care costs (including premiums) do you think they pay? You can't just look at taxes in these systems without also looking at the expenses they may replace. And, again, people making $50k in the US do pay a lot in regressive taxes too (sales, gas, payroll). I have no problem structuring welfare so that it is more advantageous to work than to not work. But I doubt that the amount of tinkering with the benefits to achieve that result would create markedly lower expenditures. And of course the high unemployment rate today is not caused by bad welfare incentives but by a lack of jobs. (If the incentives were so perverse, I wonder why unemployment was so low during the 1990s.) So I doubt that the incentives problem really relates to the issue of how to fairly distribute the cost of baseline social programs. One of the biggest disincentives to getting a job is losing eligibility for health insurance. There are families with a sick child who are covered by Medicaid where parents can't get a job without losing Medicaid coverage, and can't get coverage through the employer or on the individual market due to the child's preexisting condition. Even if no one in the family is sick the possibility of losing coverage is a disincentive. If you're in favor of disconnecting such benefits from employment, I'm with you.

- dsimon

April 12, 2011 at 8:05pm

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DSimon writes: " I put forward Orszag's statement, apparently verified by independent analysts, that allowing all the Bush tax cuts to expire would balance the budget exclusive of interest on the debt by 2015. " If you believe that over the next few years Obama's outlays will reduce dramatically (which he has forecast), then I believe it. Each year he revises the next year up, so I don't believe they will... DSimon writes: "I define it as those qualifying for benefits. Those standards have not changed for adults over the past two years. " Actually, they have changed. The 2009 stimulus bill removed work requirements from teh food stamp program (put there by Clinton) and reduced eligibility requirements. And to update the figures I noted earlier, our spending on 77 programs THIS YEAR is $953B, not including the parts of SS and Medicare that are spent on the poor. This is 42% greater than Bush's last budget. When you consider SS and Medicare, this means welfare spending is $1.4T. That is staggering. DSimon writes: "does not really address my point, which was that conservatives as a whole aren't willing to confront the consequences of the "smaller" government they say they're willing to pay for." Some are, some aren't. Like most libs, most don't understand the math. When they do understand the math, I suspect their inclination (like mine) will be to reduce taxes and benefits. That's how I'm wired. Most dems will opt to increase taxes and benefits. That's how they are wired. Most dems think a bit more tax on the wealthy will get us there. Hah. DSimon writes: "I don't see how that supports the claim that the masses will always extort more benefits at the expense of the wealthy. " Look at yourself: You believe a bit more from the rich can completely close the gaps we have. You have said that. And you would like to see more benefits added. Ergo, your belief is that the rich can completely shoulder this. Right???? DSimon writes: "But you wrote that someone who makes X% of income should pay X% of taxes, which requires a flat tax. My other questions have gone unaddressed. I don't see why a flat tax is inherently "fairer" over a head tax or a progressive tax. I don't know if you favor an exemption or not. This makes it hard to have a discussion" No, it's not a flat tax. I'm not a big fan of flat tax. I like the idea of fair tax, which has a big exemption baseline requirements. This is like a VAT with a "prebate". A VAT is good, because the encourages people to save AND it will generate more revenue from the earners that live lavish lifestyles. A flat tax would be that everyone pays a fixed percentage of their earnings over a threshold. What we have today is a somewhat progressive scheme where as you earn more, your % goes up. But it's possible for those that have buckets in the bank--yet earn nothing--to pay very little in taxes. Overall, I think it's reasonable to say that some group that earns 20% of the nation's income shoudl shoulder 20% of the federal tax burden (again, this isn't a flat tax). To me, that would be fair. But in fact, our top 10% earns 34% of the nation's income, and pays 45% of the tax bill. That is getting into "unfair" territory in my book. Roid wouldn't mind seeing that 45% figure move to 100%. DSimon writes: "Well, I know you've read The Healing Of America, and if you accept the data presented there then you know that the EU gets comparable health care results at much less cost. So yes, they pay more in taxes, but people then pay far less in premiums and co-pays. I want value for my money, and I don't really care if it comes out of my taxes or if I pay it on my own. Would it matter to you?" Much less cost? No. Not when adjusted for a host of factors that need to be adjusted for (see the McKinsey study I've previously referenced). But yes, less cost. A family earning $50K in Finland pays 40% of his salary in taxes--that's $20K . In the US? just $5950. What could you do with that $14,000 difference? Buy insurance, save for college? Over 20 years of raising a kid that would be $280,000. That's a lot. Why not let the people keep it and decide for themselves??? Isn't that really the root issue here? Once we've taken care of the poor and built roads with taxes, do you let the rest of the population take care of themselves and live with bad and good decisions, or do you take all their money and decide for them????? Assume for a moment that the high EU taxes are required for the social safety net you want to deliver. Is it better to charge super high taxes and give people things they may (or may not) want? Or is it better to charge low taxes and let them decide what they want?

- seattleeng

April 13, 2011 at 12:38am

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"You believe a bit more from the rich can completely close the gaps we have. You have said that." If you can find that, please cite it. I believe I wrote initially, and clarified just above in my 2:33 post, that allowing the Bush tax cuts to expire would go a long way, not completely close it. And David Leohnardt's article in today's NY Times says the same thing, at least for the short-term budget: if Congress does nothing, allowing the Bush tax cuts to expire would solve 75% of the deficit problem over the next 5 years. http://www.nytimes.com/2011/04/13/business/economy/13leonhardt.html Unfortunately, they would cover only 40% of the problem over the next 20 years, due in large part to the growth of medical spending (not, apparently, to the expansion of individual benefits--remember, we're assuming Congress does nothing from here on out). But as Leonhardt says, 40% is a pretty darn good start, and the Clinton era rates were hardly confiscatory. "And you would like to see more benefits added." I don't believe I wrote that either. I wrote that health care reform was paid for, according to the CBO, without huge tax increases. I disputed your claim that it would take huge increases on everyone to support the system we have right now for the near future, which Leonhardt confirms. And I acknowledge that there has to be some kind of adjustment in entitlement programs for the long term, particularly regarding health care (which should be possible since our peer nations spend far less than we do). But that doesn't mean that the masses are going to continually extract more from the wealthy, as you asserted. "Ergo, your belief is that the rich can completely shoulder this." Again, I never wrote that. Again, I wrote only that health care reform was paid for by a modest surcharge on the wealthy that didn't even put their tax rates back to Clinton-era levels. "The 2009 stimulus bill removed work requirements from teh food stamp program (put there by Clinton) and reduced eligibility requirements." Is that such a great change in the definition of "the needy"? Do you think they account for a great portion of the growth (whatever it is) of welfare programs since 2009? Since these changes were in the stimulus bill, isn't it probable that those changes were the result of the economic collapse rather than a concerted effort by the masses to extract more from the rich? (And it was put on the nation's credit card, so the rich aren't paying for it so far anyway.) "I think it's reasonable to say that some group that earns 20% of the nation's income shoudl shoulder 20% of the federal tax burden (again, this isn't a flat tax)." How is it not a flat income tax, or at least its equivalent? How can you structure it otherwise? Am I missing something on the math? Can you provide an example? Take 10 people who make $10k, and one person who makes $100K. That top person makes 50% of the total income, and under a flat tax will pay 50% of total taxes. If you believe in an exemption, then won't the top person wind up paying an even higher percent of the total taxes (unless you put in a regressive rate on the lower end)? That's why it's not inherently "unfair" to have the upper end group paying a higher percent of total taxes: it will happen if the rate is at all progressive--which is what an exemption provides: a 0% rate up to the exemption, and then another rate above it. Regardless of the merits of a VAT, it seems to me that support for a VAT is inconsistent with the claim that if you make X% of income then you should pay X% of taxes, since under a VAT you could pay very little in taxes regardless of your income as long as you don't buy very much. And I still don't know where your concept of "fair" or "reasonable" is coming from. Why isn't a head tax equally reasonable? Why isn't trying to equalize the unpleasantness of paying the tax also reasonable? Again, it's hard to have a discussion when one sense of fairness is simply prioritized over another without explanation or justification. "But in fact, our top 10% earns 34% of the nation's income, and pays 45% of the tax bill. That is getting into 'unfair' territory in my book." I provided a hypothetical above where someone (or group) pays 100% of the tax bill because everyone else falls under the exemption amount. Is that "unfair"? And as I pointed out, that 100% figure would be the case whether the tax rate is 90% or 1%. Would a 1% rate be unfair, even if it amounted to 100% of the taxes? That's why these numbers may not tell us very much. "Isn't that really the root issue here?" I thought the root issue was your claim that liberals just want to penalize the wealthy "full stop." I spent some considerable space in my prior post discussing how my approach to providing a social safety net did not involve the idea of imposing a penalty but of coming up with a fair and pragmatic way of paying for those programs. You didn't respond to that argument. Instead, you're arguing about the scope of those programs. But whatever programs we have are still going to be subsidized by the wealthy, are they not? If so, then our differences are ones of degree, not of kind, and liberals are not out to penalize the wealthy after all. "Once we've taken care of the poor and built roads with taxes, do you let the rest of the population take care of themselves and live with bad and good decisions, or do you take all their money and decide for them?????" I think we have different notions of "take care of" and "poor." (Why does "take care of" include education? Why does it for some people exclude heath care?) I'm perfectly happy letting people take care of themselves for the most part. And the use of the phrase "take all of their money" is just a bit of hyperbole, no? Who is having "all of their money" taken? I think it's a hard case to make when income inequality has gotten much larger in the US over the past few decades. http://www.slate.com/id/2266025/entry/2266026 But I do think health care is an exception. I think the evidence shows that market theory just doesn't apply well to health care (adverse selection is not an issue in most markets), and leaving that arena to individual decisions will create higher expenses that will prevent people far beyond the poor from accessing decent care.

- dsimon

April 13, 2011 at 2:44pm

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I've just arrived in Taiwan for 48 hours, so I'm need to be a bit more brief.. Dsimon writes: "Congress does nothing, allowing the Bush tax cuts to expire would solve 75% of the deficit problem over the next 5 years." The current deficit is $1.5T a year. And Bush cuts (on everyone) are worth $300B a year. No way is this true without major assumptions related to spending cuts that are promised but we all know will not materialize. Bush cuts on the wealthy are worth $70B a year. Do you remember Obama's campaign promises related to spending? Do you remember the promises to go over the budget "line by line"? Laughable. Sorry, but we'll have to disagree on this. There will remain a sizable gap EVEN IF Bush tax cuts lapse. Pretending that Bush's cuts will fix this is delusional (and again, that goes back to the envy piece in all this...If you asked most readers on HuffPo, they probably believe the paltry cost of the cuts on the wealthy alone would balance the budget--I have friends that believe this). Dsimon writes (in response to me asserting "And you would like to see more benefits added") "I don't believe I wrote that either. " OK, so you think our level of welfare and health care is currently sufficient, presumably once Obama care kicks in, is that right? There is not more needed after that? Dsimon writes: "Is that such a great change in the definition of "the needy"" But that change represented a huge expansion of welfare. And you had asserted that the standards didn't change, which they clearly did. Re: whether or not the wealthy could completely shoulder all this.... Sounds like you believe that taxes on the wealthy and middle class need to rise substantially then, is that right? Dsimon writes: "How is it not a flat income tax, or at least its equivalent? " OK, good point. So it appears Europe is very close to a flat income tax (where the middle class carries a much larger portion of the burden), which is why our more progressive tax is ranked as such by the UN. Do you dispute that the US has one of the most progressive tax systems in the world? Dsimon writes: "since under a VAT you could pay very little in taxes regardless of your income as long as you don't buy very much." yes, true. But the bet you make is this: A guy with $100M in assets today might have $50M in the market, and the other $50M in houses, property, an airplane, etc. Today, he'll earn perhaps $3M on that $50M (given 5% RoR), and on that he'll pay cap gains of perhaps 20%, and thus he'll pay $600K in taxes. Under a VAT tax, he'd pay a 20% tax on everything he spends. So, you'd lose his $600K, but if it costs him more than $3M to run his life (staff, private air travel, upkeep on two large homes, etc), very quickly it seems he'd generate more VAT revenue than cap gains revenue. Dsimon writes: "I thought the root issue was your claim that liberals just want to penalize the wealthy "full stop." Yes, that still remains too. DSimon writes: "I spent some considerable space in my prior post discussing how my approach to providing a social safety net did not involve the idea of imposing a penalty but of coming up with a fair and pragmatic way of paying for those programs" Perhaps you are the exception to the rule. There are plenty, even on just this thread (Roid and MotherGai are the most vocal), that are rabidly advocating sticking it to the wealthy. the reason I didn't answer your questions on that is because you sidestepped my question on how much a middle class earner in the EU or Canada pays in taxes. :) Dsimon writes: "I think it's a hard case to make when income inequality has gotten much larger in the US over the past few decades" But income inequality is a fact of life. NO society has addressed this. Anytime you group people with different work ethics and different skills, some will pull ahead of the others. Extend that out over several generations, and the gap grows even more. It's not something to be equalized anymore than I might want to equalize the fact that Brad Pitt has more chances for sex each year than I ever would. Do we disfigure Brad Pitt's face? Do we prevent him from working out and force him to get him fat? Do we prevent him from showering so he's not as appealing? Do we force him to take me on a double date so I might get a sympathy f*** from his karma? Nowhere else do we try to tear down the successful to make them "pay" for their hard work or even luck. Except in the area of money. Why is that???? Every society is having huge issues with health care costs too. That was in the book you recommended. that's why doctors in France are renting treadmills, remember? Always enjoyable, buddy.

- seattleeng

April 13, 2011 at 7:19pm

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PS. I'll just add that if you are keen to see taxes rise on EVERYONE to cover these expansions of our social programs, then we're largely in agreement. If 51% of the country wants more SS and more healthcare AND and more education AND they are willing to see their taxes go up substantially, then I'm all for it. But that does mean we end up like Europe. But if that's the case, then so be it. What I object to is increasing everything and keeping the US style of taxation where the middle class pay practically nothing (compared to the rest of the world).

- seattleeng

April 13, 2011 at 7:27pm

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seattleeng: "No way is this true without major assumptions related to spending cuts that are promised but we all know will not materialize." The analysis is based on the assumption that Congress does nothing. That means things that are "promised" have not been acted upon and the assumption is that they won't happen. I admit I don't have Leonhardt's analysis, nor Orszag's, but (no offense) I'll trust them on this one, especially when the Washington Post says it's been confirmed by "independent budget estimates." "and again, that goes back to the envy piece in all this...If you asked most readers on HuffPo, they probably believe the paltry cost of the cuts on the wealthy alone would balance the budget--I have friends that believe this" That's hardly a scientific sample of liberals. Should I form my opinion of conservatives by those who post on FreeRepublic? Really? How about some real data? If you look at Democrats in Congress, I think most of them would agree that some combination of revenue increases and spending cuts are necessary--as opposed to most Republicans who refuse to countenance any revenue increases at all. "Sounds like you believe that taxes on the wealthy and middle class need to rise substantially then, is that right?" No, I think they need to rise modestly. Your question is complicated by an absence of a definition of "substantially." I would consider returning to the Clinton-era rates a modest increase. Even slightly above that would still be modest, in my view. After they went into effect, they seem to have been shouldered without a whole lot of complaining by the public (at least above the level of complaining that comes with the payment of any taxes). "But that change represented a huge expansion of welfare. And you had asserted that the standards didn't change, which they clearly did." I'll take your word that the standards changed. But I dispute that they account for a substantial portion of the growth in expenditures; again, you provide no data. I'd think that the economic collapse was a far greater cause of people qualifying for welfare programs; I'm pretty sure people losing their jobs, and so their health insurance, drove a lot of people into Medicaid, much less unemployment benefits and food assistance. "So, you'd lose his $600K, but if it costs him more than $3M to run his life (staff, private air travel, upkeep on two large homes, etc), very quickly it seems he'd generate more VAT revenue than cap gains revenue." I don't see how that's relevant, or consistent, with your other positions. If he's frugal, then he doesn't pay his share of income. If he generates more VAT revenue, then he's paying more than his share of income. Either way, a VAT seems uncorrelated to taxation as a percentage of income, and it doesn't ensure that those earning X% of income pay X% of taxes, which you said was "fair." So which is it? "But income inequality is a fact of life.... It's not something to be equalized" And where did I suggest this? I believe the answer is: nowhere. My comment about income inequality was in response to your statement that no one should have "all their money" taken to pay for social programs. As income inequality has grown in the US, those at the top obviously have not had "all their money" taken; indeed, they're doing better than ever (both on a relative and absolute basis). And when it comes to a pragmatic way of paying for social programs, I don't see how it's unfair for those who not only have done well but have done increasingly well to pay a little more; after all, they'll still be far, far better off than everyone else (so your Brad Pitt analogy is simply off base--if it applied, he'd still be getting increasingly handsome and getting substantially more chances for sex than he did before (assuming that's possible)). I don't see why asking all of us to pay Clinton-era rates would be even remotely controversial, especially after the economy recovers. But even that modest proposal seems to be off the table for Republicans at the moment. "Every society is having huge issues with health care costs too. That was in the book you recommended. that's why doctors in France are renting treadmills, remember?" Yes, but would you rather be in our position or theirs? That book says every country thinks their system costs too much, that each system has its own horror stories, so saying that every country has problems doesn't prove much of anything. But it's pretty much uncontested that they all spend a third less to half as much as a percentage of GDP for comparable results--and they cover everyone. So I'd take their position, thank you. And if our health care costs were a third lower, I doubt we'd be having much discussion about a budget crisis right now. Surely it's better to have their starting point for "issues" than ours. "What I object to is increasing everything and keeping the US style of taxation where the middle class pay practically nothing (compared to the rest of the world)." Again, that's simply not true. Our tax system is essentially flat. You insist on including the redistributive effects of budgetary policy, but that's not tax policy. Again, those with median household income may not pay much in federal income tax. But as you know they pay payroll taxes, sales taxes, gas taxes--all regressive--plus state income taxes in many parts of the country. And I still don't know why you think a flat (or flat-ish) tax is fair, or why a head tax would not be unfair, or why equalizing the subjective unpleasantness of paying taxes (which would leave the well-off still very well-off) is unfair. It seems to constitute "reasonableness" by fiat, not by argument or justification. You don't respond to my hypothetical where the top 10% pays 100% of the taxes, regardless of the rate, because the others fall under the exemption amount. Is that "fair"? Does it depend on the rate? What if the distribution was different? We disagree on the degree of taxation it would take to maintain the basic social safety net (perhaps we have different notions of "basic"). But I think we agree that whatever net we pick, the better off will have to subsidize the less well off. So I don't see how that doesn't show that either we both believe in "penalization," or we both don't. Perhaps you think that there's a point where the burden on the upper income earners is so high that it amounts to a penalty. But I think the facts show that we're nowhere near that point, since the top earners have continued to distance themselves from the pack. If you think that the well-off are suffering these days, I can't help you. I sure don't see people running away from the top tax brackets. I have nothing against the well-off being well-off, especially since I am among them. But I don't see why others have a problem asking them (us) to pay a little more than the rest, especially as they (we) continue to do even better than the rest. As a final point, perhaps someone could name one thing conservatives are asking the affluent to do to help with our dire, nation-endangering budget crisis. Just one. I'll take one. The affluent don't need most programs, so budget-cutting essentially doesn't affect them. The only thing they can be asked to do to help is pay a little more (perhaps along with some portion of the middle class). But since tax increases seem to be off the table for most Republicans, that means that they will ask nothing of those of means. Those that have the most will contribute nothing to solve the problem. I don't see how that's sharing the pain, or shared sacrifice, or "fair" in any sense of the term. If you've got another way of getting the affluent in the budget-rescue game, let me know.

- dsimon

April 13, 2011 at 11:44pm

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seattleeng: "Do you dispute that the US has one of the most progressive tax systems in the world?" I think your "UN data" as presented by the Tax Foundation in your link is (yet) another example that doesn't show what it purports to show. It uses a ratio, which I showed in my hypothetical above can be very misleading when it comes to actual amounts. In my hypo, the top 10% paid 100% of total taxes, even if that rate was .0001%. Even if all of that revenue was directly redistributed to the other 90%, I wouldn't consider that very "progressive" in any real sense of the word. So these numbers may say more about income disparities than about the tax system. Without more information, it's impossible to tell. I think this conclusion is bolstered by your own claims. You say we have one of the most progressive systems in the world, yet also say we'd need a huge tax increase on everyone to provide an EU-style social safety net. But if we're so progressive, why doesn't our system provide more security than those in the EU? Isn't there at least some tension there? So I think the claim about greater US "progressivity" is in large part (yet) another use of numbers that don't mean what their proponents say they mean. There can be huge variability in income distribution and actual tax rates that can be used to come up with all sorts of dodgy numbers. Place the US tax system on top of an EU country's income distribution (or vice versa), and then we'd have a more valid basis for comparison.

- dsimon

April 14, 2011 at 7:19am

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dsimon: "As a final point, perhaps someone could name one thing conservatives are asking the affluent to do to help with our dire, nation-endangering budget crisis. " As I've noted before, if the government show a shred of fiscal restraint, then those earning over $200K will probably be eager to help too. In other words, If they government shows a 5% cut in the spending, then I'd gladly pay another 5% in income tax. If they will cut the spending by 10%, then I'd pay 10% more in taxes. And we should have a very modest increase on the middle class too to help the cause. But what many reject is "we're going to spend a lot more, and how about you making over $200K pay more, because it's only fair." That was essentially Obama's speech the other night. Except he didn't come right and say he was going to spend more. Instead, he said he was going to cut spending, which, to Obama, means "spend a lot more" That, combined with Roid's desire to stick it to the wealthy (he's not alone...many TNR readers are with him) simply means a big increase in government on the backs of the wealthy.

- seattleeng

April 14, 2011 at 5:58pm

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dsimon writes: "But if we're so progressive, why doesn't our system provide more security than those in the EU?" Because it doesn't generate as much revenue. Progressivity only looks at the ratio, ergo, if the rich pay a lot OR of the poor pay a little, then you will appear to be very progressive. In the US, both of those are true. In the EU, the rich pay a lot and the poor (and everyone in between) pay a lot. Our middle class and poor pay very little, which is why our overall revenue levels are so low (compared to the EU) and why we also appear so progressive. So, if we raised tax rates on our lower, middle and upper class, our progressivity would go down (and resemble Europe) but our revenue would soar (again, just like Europe) Which is what I've been saying all along: The EU provides its social safety nets on the back of the working poor and middle class. If we want those same safety nets, ultimatly our tax system will evolve to be the same as theirs: A big tax increase on the working poor and middle class. There is nothing we can really do to avoid that. Ultimately, wanting big increases in social spending will mean tax increases on the working poor and middle class.

- seattleeng

April 14, 2011 at 6:07pm

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seattleeng: "Progressivity only looks at the ratio, ergo, if the rich pay a lot OR of the poor pay a little, then you will appear to be very progressive." So we agree on the math on that one. But then we should question whether that's a good definition of "progressive." (Perhaps you agree, as you wrote that the ratio can make a system "appear" progressive.) And the rich do not have to pay "a lot" for the system to "appear" progressive using a ratio; indeed, they can pay very little. As my hypothetical showed, one can have a system where the top 10% pays 100% of the taxes, and yet the amount actually paid is minuscule--as low as a penny a person if the rate is low enough. Yet the ratio would say that system is maximally "progressive." Another system where the top 10% pay 80% of taxes (or 50% or whatever), yet the amounts paid are substantial, could have a much lower ratio and so be deemed less "progressive" even though those funds actually assist the lower income groups. I doubt many people would deem the first system more "progressive" than the second. The differences and actual values in tax rates along the income scale would seem to be an important factor, not just the ratio (if the ratio matters at all). So yes, I contest the claim that the US has one of the most "progressive" systems in the world. Maybe it does, but the numbers provided don't show it because they don't capture the notion of progressivity that most of us use. I also agree that tax increases probably cannot be limited to upper income earners. But I still don't think they need to be as dramatic as you seem to believe. I'd be glad to return to Clinton-era tax levels overall and see what happens. That, combined with effective restraints on health care spending in the mid-long term (as other nations have shown, we can do far better than we're doing now, though rising costs are an issue everywhere), may be sufficient to have a sustainable system, at least for the mid-term. (Some may not believe that we'll ever restrain health care expenses, but then no amount of taxation will solve the problem; it's budgetary nihilism, as Ezra Klein has written.) "If they government shows a 5% cut in the spending, then I'd gladly pay another 5% in income tax. If they will cut the spending by 10%, then I'd pay 10% more in taxes." Not sure I understand that one. How far does that go? If the government cuts 100% in spending (and so ceases to exist), then people will be willing to pay 100% more in taxes--when there's no government to fund? I suspect there are further areas of agreement. But I still don't know what your standard of "fair" is (flat tax, head tax, pain-of-paying-it-tax (progressive) tax), or whether you think that liberals are out to "penalize" the wealthy when any system of social support will necessarily involve a wealth transfer (I think we agree on that part), whether those supports are in the form of direct payments or provision of programs available to all.

- dsimon

April 15, 2011 at 10:23am

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seattleeng: On the health care front, you've asked in the past why we just don't give families enough money to buy a high deductible catastrophic care policy. You might find this article interesting, as to why such an approach may not bring down health care costs--and may instead increase them. http://www.kaiserhealthnews.org/Columns/2011/March/032911cohn.aspx Such policies may be OK for those who can pick up the costs of preventative care and see their doctors regularly, but those who are deterred from getting preventative care could develop far more expensive problems down the road, raising overall costs. And a study showed that people in such plans didn't get as much preventative care, even when it was excluded from their deductible (perhaps because they were confused about their coverage, or because we're not very good judges as to what constitutes preventative care). I think the bottom line is that having more "skin in the game" may not lower costs.

- dsimon

April 15, 2011 at 12:10pm

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"Deficits should be temporary, of course. Once the economy fully recovers, the government really should focus on reducing debt. But that begs the question of how." Perhaps this is a point of usage one should simply concede but....to "beg the question" or begging the question is a logical fallacy in which the proposition to be proven is assumed, implicitly or even explicitly, in the premise. "Begs the question" does not mean "here is a question that needs to be addressed" or at least it has only recently. This usage leaves me nonplussed. Oh wait that's another usage that no longer means what it is suppose to mean. Oh well. As far as gist of the editorial. I agree.

- wayneoa

April 19, 2011 at 4:41pm

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