Romney pays 15% tax rate

[Bri]

Maybe so, but I don't think that's the rationale for progressive taxation.

There is no one single rationale for progressive taxation. Your argument seems to be that the rich can afford more, so they should pay more. Another rationale that I hear fairly often is that people who have prospered more from the government/society should pay more.

I've also heard "the rich should pay their fair share," and assumed that was a variation of "the rich prosper more and therefore it's only fair that they pay more." What do you think "fair share" refers to?

I think it's a good idea if the wealthy appreciate that it's not all just rugged individualism, and that they are indeed part of a society that makes their wealth possible. (At least some of them do. Warren Buffet is in favor of the "Warren Buffet" tax. Barrack Obama and Bill Clinton are both on record as saying that they themselves should be taxed at higher rates.)

I agree. The question is why should they be forced to pay taxes at higher rates? Warren Buffet is welcome to pay extra taxes if he wishes. If he wants the rich to be forced to pay higher rates, "because they can afford it" isn't a particularly good reason and has little to do with fairness.

-Bri

 

[Bri]

That's a good refutation of the claim that the rich benefit more from government than the poor.

But it only takes into account direct monetary benefits. There are plenty of non-monetary benefits of government that disproportionally help the rich, such as property rights, defense, and infrastructure.

Almost by definition, the rich have prospered more from the society and government. That can't be attributed entirely to rich people working harder than poor people. If you were to completely remove the government and replace it with some other government, it's certainly not a foregone conclusion that the same people would be wealthy.

I agree, but I don't think that's what Francesca is arguing. I don't think she's arguing that the wealthy don't benefit at all from public spending. I think she's arguing against the idea the rich get more benefit.

The rich don't receive more direct public spending, but they have certainly prospered more than the poor. And they haven't done so in a vacuum. If you're characterizing Francesca's argument accurately, she's misunderstanding my argument, which doesn't have anything to do with who receives more public spending.

Again, I don't think public spending should be proportional to wealth or even tax contribution. I think it should be based on need. And I think as a society we ought value humanitarian needs as being of the most important. (That is, we should make sure all people are fed, clothed, housed and have reasonable access to some minimum standard of healthcare before we worry about making it more possible to buy a second house or to donate a million dollars or so to a church.)

Agreed. My argument didn't have anything to do with linking taxation to how much public spending you receive.

-Bri

 

[RandFan]

I agree, but I don't think that's what Francesca is arguing. I don't think she's arguing that the wealthy don't benefit at all from public spending. I think she's arguing against the idea the rich get more benefit.

Having thought about it I think it could be argued a number of ways from a number of sides. I don't think it is something that can be falsified. However, I'm persuaded that to be rich you must leverage public good will. It's fair to credit entrepreneurs and business people for their talents and hard work and willingness to take risks but the extent to which they benefit is in proportion to that good will. IOW: They get more out of it. JMO.

Again, I don't think public spending should be proportional to wealth or even tax contribution. I think it should be based on need. And I think as a society we ought value humanitarian needs as being of the most important. (That is, we should make sure all people are fed, clothed, housed and have reasonable access to some minimum standard of healthcare before we worry about making it more possible to buy a second house or to donate a million dollars or so to a church.)

Now I understand the supply side take: that reducing taxes on people with higher incomes will stimulate the economy (and therefore provide more jobs so that the less fortunate are able to survive without the safety net). I just think the evidence weighs against this actually happening. And we certainly can spend that money (with a lot more control) if we do it as public spending.

Agreed.

 

[JoeTheJuggler]

Having thought about it I think it could be argued a number of ways from a number of sides. I don't think it is something that can be falsified. However, I'm persuaded that to be rich you must leverage public good will. It's fair to credit entrepreneurs and business people for their talents and hard work and willingness to take risks but the extent to which they benefit is in proportion to that good will. IOW: They get more out of it. JMO.

But isn't that very near the observation that getting rich (in the modern era) means participation in a society? That is, they aren't going it alone?

I think it's a more important point to make in discussing the role of government regulation. (People often forget that government regulation makes things like intellectual property possible. Think of what Big Pharma would be like without drug patents!)

But for defending progressive taxation I don't think it's a good argument. Again, primarily because what it points to: are they arguing that we ought make the tax code such that benefits derived from public spending be somehow distributed evenly or proportionate to contribution? I prefer the arguments I mentioned earlier.

 

[JoeTheJuggler]

But it only takes into account direct monetary benefits. There are plenty of non-monetary benefits of government that disproportionally help the rich, such as property rights, defense, and infrastructure.

Almost by definition, the rich have prospered more from the society and government.

Again that depends on how you compare the idea of benefiting from government. Survival to me seems to be a much more significant and important benefit than accumulating even more wealth.

That can't be attributed entirely to rich people working harder than poor people.

Oh I agree completely, there, but I don't think merit or questions of working hard will help inform a tax policy. I don't see how it's a defense of progressive taxation anyway. The poor who benefit the most [eta: that is, those 100% dependent on some form or another of public aid] don't work at all.

Again, I'm in favor of progressive taxation precisely because some people can't contribute as much as others. And the working poor have much less (or actually, no) discretionary income than people with higher incomes. I prefer that tax policy be based on the ability to pay, not the need (or ability) to derive benefits.

If you were to completely remove the government and replace it with some other government, it's certainly not a foregone conclusion that the same people would be wealthy.

But there still would be wealthier and poorer people. And I would still favor a progressive tax system for the reasons I said (and not based on who derives more benefit from government spending).

And they haven't done so in a vacuum. If you're characterizing Francesca's argument accurately, she's misunderstanding my argument, which doesn't have anything to do with who receives more public spending.

I think you are maybe talking past one another, but I don't think it hinges on the difference between receiving public spending and merely benefiting from public spending. I think you're arguing against the assertion that wealthy people have prospered in a vacuum, while Francesca is arguing against the assertion that wealthy people derive more benefit from public spending than do the poor.

I'm pretty certain Francesca never claimed the wealthy prosper in a vacuum. I'm not sure if you have made the assertion she's arguing against.

 

[RandFan]

But isn't that very near the observation that getting rich (in the modern era) means participation in a society? That is, they aren't going it alone?

I think it's a more important point to make in discussing the role of government regulation. (People often forget that government regulation makes things like intellectual property possible. Think of what Big Pharma would be like without drug patents!)

But for defending progressive taxation I don't think it's a good argument. Again, primarily because what it points to: are they arguing that we ought make the tax code such that benefits derived from public spending be somehow distributed evenly or proportionate to contribution? I prefer the arguments I mentioned earlier.

Assuming that it's not a good argument doesn't make it less true. I understand your point. Hey, I'm a fan of capitalism. While I think it is inherently unfair that the rich and their families have an advantage over everyone else I don't know of a better system. It works. It has been an engine for financial prosperity the likes of which humans have never seen before.

I would agree with you that a good perspective would simply be to argue that it's in everyone's best interest to ensure food, shelter and health care for everyone. Social Darwinism has been falsified again and again. In fact, I argue those points almost daily. The problem is, if the issue comes up I will state my opinion even it is impolitic. I'll just not try to press it too far.

 

[Bri]

I think you are maybe talking past one another, but I don't think it hinges on the difference between receiving public spending and merely benefiting from public spending.

I think David James and RandFan got it, but you and Francesca may have misunderstood. My argument has little to do with public spending at all. I think the confusion may have to do with my use of the word "benefit" which has multiple meanings (one of which is public spending). Let me try to explain it again:

The argument is simply that people who profit more from society should pay a higher tax rate. I'm pretty sure that's what people mean when they say that the rich should pay their fair share.

-Bri

 

[DavidJames]

The argument is simply that people who prosper more from society should pay a higher tax rate. I'm pretty sure that's what people mean when they say that the rich should pay their fair share.

-Bri

Another way I would put it is if we can agree that a person receives a measure of benefit from government services. Then those that use the labor of that one person also benefit, to some extent, from he employee's benefits.

I'll call the measure of benefit from government services (or government in general) to a person 10.

The employer receives his own '10' benefit plus 1 (arbitrary number) additional benefit from each of his employees since they use government services to be available for employment and provide value to the employer. Their publicly provided education and use of roads to travel to work being two small examples.

Or maybe I just confused everyone

 

[Bri]

I don't even think it requires math. We all live in the same society and operate under the same system of government. Some of us profit more than others under the same system of government. Therefore, it seems fair that those people who profitted significantly more should pay significantly more in taxes to the system of government that allowed them to profit.

-Bri

 

[defaultdotxbe]

The employer receives his own '10' benefit plus 1 (arbitrary number) additional benefit from each of his employees since they use government services to be available for employment and provide value to the employer. Their publicly provided education and use of roads to travel to work being two small examples.

in this case the employer would pay payroll taxes on the money they pay each employee, so this benefit is paid for. unless you think payroll taxes should be higher (not being an employer my knowledge of them ends at "they exist")

personally, i agree on the grounds that the wealthy should more taxes, but i dont think necessarily means a hire tax rate. for example romneys 15% amounts to over 3 million dollars, which is certainly a lot more than i pay

 

[DavidJames]

in this case the employer would pay payroll taxes on the money they pay each employee, so this benefit is paid for. unless you think payroll taxes should be higher (not being an employer my knowledge of them ends at "they exist")

I don't think the Employer's share of the tax covers the overall benefit the employee receives from the government

 

[Kestrel]

in this case the employer would pay payroll taxes on the money they pay each employee, so this benefit is paid for. unless you think payroll taxes should be higher (not being an employer my knowledge of them ends at "they exist")

personally, i agree on the grounds that the wealthy should more taxes, but i dont think necessarily means a hire tax rate. for example romneys 15% amounts to over 3 million dollars, which is certainly a lot more than i pay

The trick is that it's rather easy to earn money if you have a big pile of it already. Especially in a system like ours that is set up to reward financial manipulation more highly that just about any other human endeavor.

 

[RandFan]

...personally, i agree on the grounds that the wealthy should more taxes, but i dont think necessarily means a hire tax rate. for example romneys 15% amounts to over 3 million dollars, which is certainly a lot more than i pay

Ignoring pragmatism I don't have a problem with this argument. Thing is we are running deficits. Someone has to pay for the wars and the most expensive military in the world. If we accept the proposition that strong safety nets make for a flourishing society which in turn is better for the rich then someone has to pony up. Why can't the rich at least pay the same rate that others do? At the end of the day don't they have a hell of a lot more money left over than everyone else?

Come up with a way to have a healthy and flourishing society for less and a nation will be grateful. I don't give a damn what the solution is. I have no loyalty to an ideology. I seriously don't care. Just show that it works. So far the evidence is in favor of nations with strong social safety nets and progressive tax rates.

 

[thaiboxerken]

It would be nice to see the pay-roll taxes applied to all income.
I'd also love to see the cap taken off of those pay-roll taxes as well.
Of course, it'll never happen, but I can still dream.

 

[Francesca R]

I think what's not being understood here is that I'm not saying that the wealthy use more resources (in other words I'm not saying that the wealthy receive more from government spending). I'm saying that they benefit more from government.

If you're not saying they consume more, and you're not saying that their benefit (their wealth) is wholly due to the providence of the state, I don't know what you are saying.

I think if you say "the wealthy have a greater ability to fund the state, and part of that is luck/happenstance, and so they should compensate the poor via redistributive transfers", then you'd have the Rawlsian doctrine that I agree with.

 

[Francesca R]

If you were to cut the ENTIRE government, we would have anarchy or perhaps another country would come in and take/destroy all our stuff. So yes the rich would lose far more than the poor. In addition, if there is no government, or if the government were significantly different than it is, it is questionable whether those who are currently rich would have been able to become rich.

But what would happen if you cut every government expenditure uniformly by, say 25%? I think most people would think that this will reduce the welfare (income + other stuff) of the poor more than it would for the rich. If you agree, that indicates that the rich do not benefit more.

If you disagree, then in order to better equalise welfare (income + other stuff), you should advocate such a paring back of the state. I don't think many people interested in egalitarianism advocate that.

 

[Francesca R]

In fact, I don't much like the idea that we should benefit from government spending in proportion to our tax contribution to it. (Or adjust taxes somehow proportional to the benefits we reap from public spending.)

In the realm of healthcare, for example, it's obvious that that approach is inhumane. Some people will have conditions that require medical treatment far more expensive than their ability to pay into the system (no matter what scheme we use).

Indeed, the "those who benefit most should pay most" is individualistic, not collectivistic, and is at odds with the idea of distributional equity.

I seriously doubt it is the argument that its advancers really want to make.

 

[Francesca R]

This is the "cut your nose to spite your face" approach. So OF COURSE few would agree to that.

So then it shows up the fallacy that those who really benefit from a large state are the rich.

 

[Francesca R]

The argument is simply that people who profit more from society should pay a higher tax rate. I'm pretty sure that's what people mean when they say that the rich should pay their fair share.

I think you can drop the "from society" out of that. You already said you don't believe that their entire profit is due to the providence of society. But I don't see you trying to ex-out some portion of their wealth that isn't due to the providence of society (and which should, by your logic remain completely untouched), so I think that, really, you are indifferent as to where the rich's profit comes from. And then you are back to the "ability to pay" argument, which is a much more viable one IMO.

Suppose that the state did nothing at all except collect taxes and distribute benefits. There would still be people who were rich and people who were poor, but you would have lost the rationale for taxing the rich because you couldn't say that they profited from society at all.

 

[Francesca R]

But it only takes into account direct monetary benefits. There are plenty of non-monetary benefits of government that disproportionally help the rich, such as property rights, defense, and infrastructure.

What benefits are these, that they are "non monetary"? Your metric that the rich have benefitted seems to be that they are rich, in which case you are measuring a monetary benefit (and you're implying that their richness is all due to these goods/services because you're not going anywhere near how much of it may not be)

I think a lot of libertarians would agree with you that the rich benefit hugely from these things, probably they would even agree that they benefit more than the poor. But you're kind of making their case for them that that's the only part of government they should pay for. And I suspect in most countries (that do not have the US' massive defence spending) that accounts for a small part of public spending.