Romney Will Explode the Debt By Trillions

[RandFan]

In the US “Conservative” has come to mean a bizarre mix of religious fanaticism and Austrian Economics which in general completely discounts externalities, both positive and negative.

Yes, fair point. I agree completely.

 

[Francesca R]

On reading back I may have slightly mischaracterized the flow of the discussion. His question was actually addressed at a paragraph where I talked about defence spending and how it’s a form of insurance for infrastructure and social systems that allow that wealth. As such it’s entirely fair for those with the most wealth as risk to pay a larger share of the cost of protecting that wealth. To my thinking this is not an additional burden, but closer to a cost of doing business.

As long as your justification for it being fair is not founded on what the wealthy ones have to lose, I don't necessarily have any quibble with it. You would need to explain why it is fair, which you haven't though in that paragraph (even if you think you have).

“Consume” perhaps isn’t the best description for this since we are basically talking about things that approximate public goods.

Consume is still the correct word though. Unless you are referring to non-rival goods, but if you are then one person's increased use of them does not diminish their availability for others, nor increase the cost of their provision. So there is no excess burden argument there either (for progressive tax).

I still don’t think additional burden is a good description for the people who receive such spin off benefits.

Agreed, it isn't. But now you are claiming that the wealthy have been bigger beneficiaries of positive externalities from public and private goods, even though they have made no greater direct call on those goods and therefore not increased the cost of their provision, be that incurred privately or publicly. There still seems to be no cost-based or resource-use-based justification for progressive tax in what you have written.

 

[Francesca R]

Again, I'm OT as to this discussion but I wanted to make a point, personally I'm more interested in the pragmatic argument.

Fair enough. However, cost-based arguments for progressive tax are apparently being used, and most of these are flawed arguments. I am highlighting some that are flawed, which I have done before in this section.

 

[Corsair 115]

I'm not pushing for non-progressive taxation, just noting that the bottom 48% don't pay IRS tax.

Just noting that between 1979 and 2007 the top 1% saw their after-tax real income grow by 275% while the bottom 20% saw their after-tax income grow by just 18%. The middle group (21st-80th percentiles) saw their after-tax real income grow by under 40%.

The current structure is plenty progressive imo, and Jan.1 the people actually hurt will be middle class taxpayers, not the wealthy.

Given the CBO analysis cited in the first reply, one could easily argue the system in not nearly progressive enough, especially compared to what it was.

 

[lomiller]

As long as your justification for it being fair is not founded on what the wealthy ones have to lose, I don't necessarily have any quibble with it.

Are you saying that you don't think it's appropriate for those who stands to lose more to pay more to prevent that loss? Again, back to the insurance analogy, do you think the person with the $10 million dollar home should pay the same price for their insurance as the person with a $100K home?

 

[lomiller]

Consume is still the correct word though. Unless you are referring to non-rival goods, but if you are then one person's increased use of them does not diminish their availability for others, nor increase the cost of their provision.

Being non-rivalrous is part of what makes something a public good. It's true that cost to provision goes up, but I was quite clear these only approximate public goods. Basically provide sufficient funding to make a basic level of education available to everyone from the perspective of the person consuming the service it acts much like a public good.

See my education example above, IMO there are clear benefits to making education available to everyone, in effect creating a public good as far as the consumers of that service are concerned. It will cost more to provide it universally but this is small in comparison to the additional wealth a well educated nation can produce.

 

[AlBell]

Just noting that between 1979 and 2007 the top 1% saw their after-tax real income grow by 275% while the bottom 20% saw their after-tax income grow by just 18%. The middle group (21st-80th percentiles) saw their after-tax real income grow by under 40%.

ok. I'm no happier than anyone else over CEO-Banksta-etal payscales.

Given the CBO analysis cited in the first reply, one could easily argue the system in not nearly progressive enough, especially compared to what it was.

Or as easily argue that lack of job creation and demand for labor was the problem.

 

[Francesca R]

Are you saying that you don't think it's appropriate for those who stands to lose more to pay more to prevent that loss? Again, back to the insurance analogy, do you think the person with the $10 million dollar home should pay the same price for their insurance as the person with a $100K home?

Insurance doesn't prevent loss or reduce its probability; it merely compensates bad fortune. Hence if the payout is unrelated to the value of the loss (which is usually the case in respect of social insurance), then how big the loss is to an individual is not related to the cost of insuring them and therefore is not a reason itself to charge them any more, still less a progressive fraction more.

If you wished to refer to prevention/protection, which is distinct from insurance, then the reduction in probability of loss is worth more to someone wealthier, and if everyone could co-ordinate with each other and overcome free-riding, wealthier ones should voluntarily agree to pay more for the protection. I don't think that is what you were arguing before. It is not clear that the value of the protection would be progressively more, however--IE that it would be "worth" $10K to a $100K net-worth individual to have protection but worth more than $100K to a $1M net-worth one to have it. So I don't think that gets to a justification for progressive tax either. (The diminishing "marginal utility of money" works both ways in that consideration BTW, and the outcome is not clear).

And to repeat a reply to someone else, the cost of protecting a net-worth (or income; whatever) of $1M is very unlikely to be ten times the cost of protecting a net-worth of $100K, but more likely less than ten times--so on cost-based reasoning the tax levied would be regressive, not progressive.

(I am not arguing that there is no justification for progressive tax--but neither cost-based nor value-of-loss based reasons provide it.)

 

[Francesca R]

Being non-rivalrous is part of what makes something a public good. It's true that cost to provision goes up [ . . . ]

If a good is non-rival then what I said was that the cost of providing more of it does not go up, and cost alone does not provide a justification for charging someone more than someone else.

[ . . . ] but I was quite clear these only approximate public goods. Basically provide sufficient funding to make a basic level of education available to everyone from the perspective of the person consuming the service it acts much like a public good.

See my education example above, IMO there are clear benefits to making education available to everyone, in effect creating a public good as far as the consumers of that service are concerned. It will cost more to provide it universally but this is small in comparison to the additional wealth a well educated nation can produce.

Education is scarce and consumers (users) of it are to a large extent rivals, as are those that wish to hire them. So someone who engages the services of a large number of educated folks does suck up a larger amount of the public cost of educating them. But via both the cost of hiring them (in which one has to compete with other employers over a scarce resource) and the tax on the surplus value gained through them (profit), this cost is distributed in line with the benefit received, and once again, does not seem to justify progressive taxation by itself.

 

[lomiller]

Insurance doesn't prevent loss or reduce its probability; it merely compensates bad fortune. Hence if the payout is unrelated to the value of the loss (which is usually the case in respect of social insurance), then how big the loss is to an individual is not related to the cost of insuring them and therefore is not a reason itself to charge them any more, still less a progressive fraction more.

See the definition of analogy. In any case, If you choose to call it an additional burden then feel free. I disagree with that categorization, but there is no absolute right and wrong way to categorize something.

If you do so, however, you have answered your own question on why the wealthy impose an additional burden. I do find it strange that you would argue something be classified as an additional tax burden and then ask me to justify the claim there is an additional burden imposed when I do not agree with either the classification and never endorsed the claim.

If a good is non-rival then what I said was that the cost of providing more of it does not go up, and cost alone does not provide a justification for charging someone more than someone else.

Non-rivalrous refers to good/services where one person’s use of them does not prevent someone else’s use. When you provide a service universally and fund it to appropriate levels it approximates this situation.

 

[Francesca R]

See the definition of analogy. In any case, If you choose to call it an additional burden then feel free. I disagree with that categorization, but there is no absolute right and wrong way to categorize something.

If you do so, however, you have answered your own question on why the wealthy impose an additional burden. I do find it strange that you would argue something be classified as an additional tax burden and then ask me to justify the claim there is an additional burden imposed when I do not agree with either the classification and never endorsed the claim.

Sounds like you agree that there is no cost-based or stand-to-lose based justification for progressive tax. I will take this as agreement until you show otherwise.

Non-rivalrous refers to good/services where one person’s use of them does not prevent someone else’s use. When you provide a service universally and fund it to appropriate levels it approximates this situation.

Then you are back to these things getting consumed. Universal goods/services are consumed. Refer again to post 217 where I show there is no cost reason for progressive tax to fund these either.

And if you're not arguing that there is, then fine. But you're making a good impression of appearing to argue something then repeatedly revealing that you're not.

 

[Biscuit]

I'm not pushing for non-progressive taxation, just noting that the bottom 48% don't pay IRS tax.

Jumping back in here because i noticed you have altered your absurd argument.

Now it the bottom 48% when earlier it was just 50% of americans. Those are two different groups and I am curious if you have proof of either.

 

[AlBell]

Jumping back in here because i noticed you have altered your absurd argument.

Now it the bottom 48% when earlier it was just 50% of americans. Those are two different groups and I am curious if you have proof of either.

I've seen the 48% quoted on tv and can only guess the 50% is a round-up. I have no cite for either; thanks for asking.

ps. Where did I mention 50%?

http://taxfoundation.org/article/fe...urns-zero-or-negative-tax-liability-1950-2009

Looks like 41% in 2009.

 

[BenBurch]

You want the infirm, the retired, stay-at-home housewives, the very poor, and students to take up the slack and carry the 1% on their backs, AlBell?

Nice.

Scrooge would have envied you.

 

[Biscuit]

I've seen the 48% quoted on tv and can only guess the 50% is a round-up. I have no cite for either; thanks for asking.

ps. Where did I mention 50%?

I apologize it was Neally that made the 50% claim. This new claim that the bottom 48% don't pay the IRS is just as ridiculous and misleading. But hey you saw it on TV so lets just go with it right!?

 

[AlBell]

I apologize it was Neally that made the 50% claim.

Yup.

This new claim that the bottom 48% don't pay the IRS is just as ridiculous and misleading. But hey you saw it on TV so lets just go with it right!?

Did I say "bottom 48%"?

In 2009 it was 41% of filed returns with -0- or negative liability, see update & link in post #233.

No data yet that I've seen for 2010, and 2011 still ongoing.

 

[Biscuit]

Yup.


Did I say "bottom 48%"?

In 2009 it was 41% of filed returns with -0- or negative liability, see update & link in post #233.

No data yet that I've seen for 2010, and 2011 still ongoing.

You did say "Bottom 48%" but if you look at my responses to Neally's claim you will see why this number is misleading.

 

[lomiller]

Sounds like you agree that there is no cost-based or stand-to-lose based justification for progressive tax. I will take this as agreement until you show otherwise.

I’ve not discussed where there was a cost based argument to be made nor based my position on one. I expect if you looked you could come up with some valid examples but whether or not this is the case is irrelevant to what I’ve been discussing in this thread.


If by “stand-to-lose” you mean the monetary value of mitigating loss is greater to those who have more to lose than absolute I consider this an argument for a progressive tax rate. How much you stand to lose is directly connected to how much you are going to be willing to spend to mitigate that potential loss. There is a value proposition to mitigating/preventing/insuring against loss and the more you can lose the greater the value there is in taking steps to protect yourself.

And if you're not arguing that there is, then fine. But you're making a good impression of appearing to argue something then repeatedly revealing that you're not.

I’m not sure what you are getting at because I’ve been very clear about the arguments I’m making. I suspect you have something in mind that you would like to argue against and would like to attribute that position to me so you can argue against it. This isn’t how discussions work, however.

 

[Francesca R]

If by “stand-to-lose” you mean the monetary value of mitigating loss is greater to those who have more to lose than absolute I consider this an argument for a progressive tax rate.

To the highlight, again, you have not shown why. You have not provided any logical basis using "mitigating loss" or "more to lose" for why tax should be progressive.

You might have a valid reason but so far you have not given it, so what you "consider" is apparently a private opinion.

And I don't know what "more to lose than absolute" means

How much you stand to lose is directly connected to how much you are going to be willing to spend to mitigate that potential loss.

I have said this already. But you have suggested nothing as to why it should be a progressive function. And I could argue that it is the reverse.

There is a value proposition to mitigating/preventing/insuring against loss and the more you can lose the greater the value there is in taking steps to protect yourself.

Same again. Repeating this does not advance an argument for a progressive tax.

I’ve been very clear about the arguments I’m making

So far, none of them (of anything I have quoted) at all are logical arguments for progressive tax, and all of them are arguments for either flat tax or regressive tax.

As to "something in mind I want to argue about", apologies if that is not clear, but it is to argue against flawed reasoning: in this case, flawed reasoning for progressive tax. Those who favour progressive tax are better off using logically sound arguments for it, which are not the ones you have given.

 

[IchabodPlain]

So far, none of them (of anything I have quoted) at all are logical arguments for progressive tax, and all of them are arguments for either flat tax or regressive tax.

The crux of the issue is something Nearly said (unwittingly or not): "Tax until it hurts." All taxes hurt. They are dollars out of your hands, preventing further economic prosperity. The question is how to make taxes hurt the least for everyone evolved. Ask "Who hurts less - a tax bill of 20% on $20k or 30% on $2m?"