Sunday, October 26, 2008

Progressive arguments

Obama Wants Social Security to Be a Welfare Plan - His tax credit amounts to a radical change in the system.

"While Social Security has always been progressive, many would say this plan goes too far and risks turning Social Security into a "welfare program." Low earners receive more in benefits than they pay in taxes -- meaning their "net tax" is already negative -- and Mr. Obama's plan would increase net subsidies from the program."

Call me radical, but I can barely fathom the justification for a progressive tax system let alone a redistributive one. At least with Social Security one theoretically gets out what one puts in, but Obama would change even that! I don't know anyone my age who counts on receiving Social Security benefits, but we have yet to get mad about paying into a system we won't benefit from. Maybe Obama's perversion of the system would finally get us up at arms like we should be [and picketing the AARP as this article suggests we should be - lol].

Not only is a progressive tax system morally questionable, but it also encourages unwieldy amendments and regulations that inevitably lead to an even more unjust system.

Progressive taxation challenges the basic incentives behind wealth creation. Why should I work hard for that raise if it bumps me into the next tax bracket? Why should I start a new enterprise if a larger share of my income will be taxed? My liberal friends tell me, "Rich people should have to pay more." They still would if we were all taxed at a flat rate! 15% of a million dollars is a helluva lot more than 15% of $40,000. In fact, more would pay more under a flat tax system becuase compliance is so much higher. The point is that a progressive system disincentivizes people at the margin to invest in themselves and society like they should.

Because even liberals have to admit that not all rich people are selfish hoarders, progressive taxation has to allow for tax deductions for dependents, charitable activities, and activities that create new wealth and jobs. Once you start down this itemized road toward the complicated hell of tax returns, you welcome tax evasion, havens, special interest favoritism, and a system too complicated for lower and middle income people to navigate. But what is charitable? Who decides? What is a legitimate special interest? Who decides? Think of the voices neglected under this system and the potential for abuse. Most agree that our tax system has grown too complicated and biased, but what most ignore is the fundamental problem is the progressive nature of our tax system.

I can only hope that the Democrats don't get 60 senate seats so Obama's full economic plan can be avoided.

2 comments:

Sherman said...

Immoral? By which moral standard?


There's the early example of the church...

"The community of believers was of one heart and mind, and no one claimed that any of his possessions was his own, but they had everything in common.

"With great power the apostles bore witness to the resurrection of the Lord Jesus, and great favor was accorded them all.

"There was no needy person among them, for those who owned property or houses would sell them, bring the proceeds of the sale, and put them at the feet of the apostles, and they were distributed to each according to need."

(Acts 4:32-35)


Then John the Baptist...

"'Even now the ax lies at the root of the trees. Therefore every tree that does not produce good fruit will be cut down and thrown into the fire.'

"And the crowds asked him, 'What then should we do?'

"He said to them in reply, 'Whoever has two cloaks should share with the person who has none. And whoever has food should do likewise.'"

(Luke 3:9-11)

And finally the Lord himself...

"And the king will say to them in reply, 'Amen, I say to you, whatever you did for one of these least brothers of mine, you did for me.'"

(the whole bit is Mt 25:35-46)

And finally, there's the democratic principle of government which holds that if the people vote for such morals to be the governing of their country, they're allowed to pass them within constraints set by the Constitution to guarantee individual rights.

If 60 Democrats are in the Senate, it's because the people voted for them to be there.

Ilya said...

Before responding to your untenable proposition that Marxism is promulgated by Scripture, I will first lay out a few basics.

The proper functions of our government do not include sweeping income redistribution. In fact, defining and protecting individual property rights (preventing one’s private property to be taken from him) are at the core of why government is necessary in the first place for those of us who believe in individual liberty.

Consider the following by Abraham Lincoln:

“We all declare for liberty; but in using the same word we do not all mean the same thing. With some the word liberty may mean for each man to do as he pleases with himself, and the product of his labor; while with others, the same word many mean for some men to do as they please with other men, and the product of other men’s labor. Here are two, not only different, but incompatible things, called by the same name - liberty. And it follows that each of the things is, by the respective parties, called by two different and incompatible names - liberty and tyranny.”

In other words, to take the product of other men’s labor (i.e. redistribute their income) and to call this “liberty” is to pervert the very meaning of the word. Similarly, to argue that the Marxist concept of “spreading the wealth” on a society-wide level is moral is to turn the entire definition of what is moral on its head.

We who believe in individual liberty do not believe in one having a legal right to steal the product of another man’s labor; we believe that this act is as inherently immoral as one’s breaking into another’s home and stealing his possessions. We do not believe that man is perfect; man is imperfect. It is because of man’s imperfection that we believe in private property. Private property allows for markets. In turn, markets allow for prices, which help the imperfect being that is man to compare various courses of action to assess their costs and benefits, to solve problems of coordinating human activity. Were there no private property, therefore, there could be no possible way to organize society rationally (that is, in a way in which “winners” and “losers” are chosen as a result of millions of voluntary decisions, as opposed to an arbitrary edict by a government entity backed by the force of law).

We do not deny that there will always be “haves” and “have-nots” on a relative basis. We do not refuse to assist people who are mentally ill, truly sick, or deeply destitute. The examples that you cite from Scripture espouse aid to those who are in dire straits: “those who has two cloaks should share with the person who has none.” The early example of the church, in which “there was no needy person among them,” occurs after the coming of the messiah/resurrection of Christ. We who believe in individual liberty recognize that until man transcends the reality of his existence as we know it, a Marxist utopia in which “there is no needy person among them” will not be possible here on Earth. Until then, our best hope is to reduce the role of the state in order to enhance the role of the individual and promote his well-being.

To argue that the “poor” in America live in appalling conditions is downright disingenuous. Here are some facts, according to the Census Bureau (2003 and 2005 Data Charts):
• 43% of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a 3-bedroom house with 1.5 baths, a garage, and a porch or patio.
• 80% of poor households have air conditioning. By contrast, in 1970, only 36% of the entire U.S. population enjoyed air conditioning.
• Only 6% of poor households are overcrowded; two-thirds have more than two rooms per person.
• The typical poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
• Nearly three-quarters of poor households own a car; 31% own two or more cars.
• 97% of poor households have a color television; over half own two or more color televisions.
• 78% have a VCR or DVD player; 62% have cable or satellite TV reception.

Lastly, I agree with you that “if 60 Democrats are in the Senate, it’s because the people voted for them to be there.” However, it does not mean that these Democrats, or any politician for that matter, can legislate whatever they see fit. That is why we have a Constitution: to protect the individual and restrict the power of the state. Private property is at the heart of individual liberty and is incompatible with wealth redistribution. If you would like to live in a Marxist utopia in which you take the property of others and distribute it according to your conception of “need,” kindly amend the Constitution or set up a private commune in which you and your fellow commune inhabitants redistribute each other’s resources.

Otherwise, please get your hand out of my pocket, or leave my country.