Grandpa's Coins

When I was five years old I thought I understood coins and I was convinced that Grandpa did not. He once gave my sister two dimes and a nickel, and to be fair, he gave me a quarter. My protest, as one might expect, was immediate.


Rather than admit to the crooked transaction, he made up a story about how it was the same amount of money and I was not cheated out of my implied fair share. I am a little embarrassed to admit it, but the little boy I was believed him on faith, despite the troubling coin count, and I never questioned it again until yesterday. Because of my conniving Grandpa, I have misunderstood coins for decades.
Yesterday’s breakthrough in my understanding came in the form of new conservative connection. Conservatives are good to have around, as they understand all fiscal matters better than liberals, and even better than Grandpa, who solved simple puzzles of coinage, but never cracked more complex issues, like the tax code. Liberals like me think with compassion, forsaking reason. Our sense of fairness is skewed by our belief that people are entitled to republicans’ money, just because they need it. Conservatives realize that fairness is a question of equality, not who needs someone else’s stuff. I will call my conservative mentor Dooh Nibor, which is an alias I use to deny him the honorable mention that is his due.
As a liberal, the tax code confuses me. Mr. Nibor taught me that liberals like myself believe that 70% of a portion of a republican’s wealth should be purloined by the government through taxation. I had never articulated this idea, and because it is so non-intuitive, I didn’t even realize I championed it. When he put that way, it seemed quite an absurd revelation that embarrassed me to no end.
He also corrected my definitions of flat vs. progressive taxation. It would seem that some of us on the left think flat tax means that Larry David gets taxed 100.00 per paycheck and so do we impoverished liberals. Nope, not right. Flat tax means that everyone gets taxed 10 percent, for example. A progressive tax means that Larry David may get taxed 10.1 percent on a portion of his earnings while I am only taxed 10 percent on all of mine, since I do not earn the portion that would be taxed higher. As you can see, this is quite unfair. The injustice is hidden from the liberal by his misunderstanding of the terms.
He not only corrected my definition of flat tax, but he also explained that I am mistaken about my idea that some of Larry David’s income should be taxed at a higher percentage than I and my impoverished liberal band of idiots have to pay. I didn’t really grasp what a flat tax was and I also disagreed with what it really is. I am becoming a fiscal conservative precisely to avoid this lack of clarity in my thinking.
Mr. Nibor explained that just taxation, which means flat taxation, does not have to be controversial. It is the only fair system and the controversy would end if liberals would stop creating it by disagreeing with Mr. Nibor.
Dooh Nibor asked a very astute question: “when did affordability become a measure of fairness?” The question is proof of his position that it is not the tax burden that should be distributed equally, but the tax itself. I think in an effort to make me look foolish, he failed to recant his previous argument in support of flat taxation, meaning everyone pays 10 percent, which means that the wealthy pay more, which he just implied was unfair. He well knew that this approach would further befuddle my little mind, and yet, he used it anyway.
Like Grandpa, Mr. Nibor clearly understands the basic principles of equality. I and my sister did not shop when we were five years old. We just liked money. We played with it. We collected it. I don’t remember what happened to our coins, but the coins were the thing that mattered to us, not what we could buy with them. We had the same philosophy that Mr. Nibor has. Poor folk like Grandpa, however, use currency only to acquire something else. They have no inherent use for dollars, 6.1 x 2.6 inch paper with ones printed on them, or for coins.
To explain this point, I will use the example of a single mother working as a waitress who has a young boy to support. Let us assume she earns 400.00 per week and uses all of it on necessities. It could be that she suddenly has a large payment due. I will use tax as my example of the payment, since we are talking about taxes. Because she has to pay her taxes, perhaps she will be unable to buy the beans she intended to feed her son on Friday. In other words, she does not give up coins to pay her taxes. With or without the tax invoice, she would have ended up with no coins. She gives up beans.
If you are a liberal, and so instinctively confused in fiscal matters, I know what you are thinking: “Why would the government tax her in beans?” Liberals don’t understand transactions. In tax transactions, there is a payer and a recipient. So far as she knows, the government actually receives 6.1 x 2.6 inch pieces of paper with ones printed on them. It is just paper, but can serve as currency for the purchase of beans. Unlike the five year old boy I was, the waitress has no affinity for coins or for paper currency. She wants beans because her son requires them. She forfeits his beans so the government can receive payment.
That the government deprives her of beans through taxation is observable. Look what happens when she does not pay her taxes. She still has no currency, but she does have beans. However, Mr. Nibor already has all the beans his children can eat. When the government takes a 6.1 x 2.6 inch paper with a one printed on it from him, he has one fewer pieces of such paper. The paper itself is as inherently useless to him as it was to the waitress, but he has need of nothing to exchange for it, so the paper itself is the thing the government denies him. The waitress pays taxes in the form of her son’s dinner and Mr. Nibor pays taxes in paper. Paper and beans are not the same thing, so they do not seem equal to the childish liberal observer.

The mistake in the liberal’s thinking is clear now that Mr. Nibor explained things. Previously, I thought if the task was for us to move a 500 pound rock, we should divide the work each person does based on his ability to do it. Mr. Nibor teaches that this perspective violates our constitutional concept of equality, and is akin to racism, in that it makes the same mistake in assuming inequality where none exists. Dividing contributions based on the ability to lift or based on the ability to pay is discriminatory. In reality, if there were two people tasked with moving the rock, one a 20 year old body builder and the other a frail 95 year old elderly woman, each should be required to lift 250 pounds. It takes a true socialist’s mind to blind itself to this obvious formula.
With flat taxes, the waitress and Mr. Nibor are technically taxed equal percentages at the moment the tax is levied; but in reality, what each has to give up in tax, is not equal. This fact can trick the liberal into thinking nonsense. If the waitress has to give the 20,000.00 per year she earns to the government and Mr. Nibor also gives 20,000.00, nothing could be more equal, as a simple calculation will reveal. Flat taxes based on percentages are supposed to solve any objection the waitress may have, as the generous republicans are now offering to pay even more than she pays; yet, she is still not satisfied because the same issue remains: her ten percent is far more valuable and needed than the ten percent Mr. Nibor pays.
Some liberals say the waitress gave up all she had and Mr. Nibor gave up relatively little. They lack basic math skills. Remember the value of the thing the citizen gives up in payment is irrelevant. It is the value of the thing the government receives as payment that matters. We defend the republican’s right to not pay more by showing that the government receives the same percentage whether it comes from the republican or the impoverished liberal. We cannot look at the value of the payment to Mr. Nibor vs. the value to the waitress, even though it is Mr. Nibor vs. the waitress’ rights we are discussing. If we think of things that way, it breaks an equation that is pivotal in our quest for the specific truth we seek.
Mr. Nibor informs me that my idea that those who “win life’s lottery” must pay their fair share is mistaken. Before he educated me, I would have foolishly considered that the winner of life’s muscle, the body builder, should also have to lift his fair share. That notion is equally silly. It is not Mr. Nibor’s fault granny is puny and poor and he should not be penalized for it. The question of who must bear the burden of taxation and rock-lifting is all about Mr. Nibor’s rights. Since when did granny’s deficiencies have anything to do with Mr. Nibor? She must carry 250 pounds of rock and pay her fair share in taxes, which is whatever percent Mr. Nibor feels he can spare.

I used to think that currency was worth nothing more than the value of the things you could buy with it. If you need 100.00 worth of medicine to save your life, your 100.00 is worth a human life. If Mr. Nibor needs 100.00 to buy a gourmet pizza, his 100.00 is worth an edible treat.  Before Mr. Nibor corrected my thinking, I actually believed that the waitress’ 20,000.00 was somehow more relevant since it would be traded for far more relevant things, than Mr. Nibor’s 20,000.00. My thinking was backwards. Never, never, never forget that it’s the value to the recipient of a payment, not the value to the payer, that determines its worth. We cannot say that both values are real and both should be considered because that unjustly penalizes long suffering republicans. It is only fair to ignore this mismatched perception and look only at the side of the transaction that we need to be equal: in both cases the government receives 20,000.00. Have we learned nothing from the civil rights movement?
Twenty thousand dollars paid is equal to twenty thousand dollars received, regardless of who pays it or how the recipient spends it. It is a simple concept for those indoctrinated with the core conservative values we all should have. For me it wasn’t easy. I keep returning to the mistake of my childhood when I invented a relationship between the value of something and the potential use of it. It is a false correlation.
My lying grandpa was not the scoundrel I perceived him to be. He did pay my sister three coins and me only one, and I still resent it, because the coins were toys we never intended to spend, so I ended up with only one toy to her three; but things have intrinsic value, regardless of how they could be used. A dollar is worth a dollar, no matter who gets it or where, no matter who spends it or how. A dollar given to a dolphin in the ocean is the same gift as a dollar given to a child, or a dollar a waitress was allowed to keep. It is confusing for a liberal, but as Mr. Nibor, Grandpa, and any dolphin will tell you, it is really quite simple and there is no need to for us to complicate the math with real life: a dollar is a dollar, ten percent is ten percent and two dimes and a nickel are the same thing as a quarter.

63 comments:

  1. I remember when Steve Forbs was running for president, he was a big proponent of the Flat Tax. It does sound good, doesn’t it – everyone pays the same flat percentage.

    But Forbs is a businessman and business owners don’t have the same “income” as you and I. Wage earners are taxed on their gross income, but business people are taxed on their “net” income after expenses/deductions.

    For example: I have a film production company. My sales are $10,000 but I also bought a nifty computer ($1,500), software ($1,000), comfy chair for my office ($500)… you get the drift. I get to subtract all those expenses before I am taxed on what is left over. But my working-stiff buddy, his taxes come off the top of his income, THEN he gets to buy his computer and software and comfy chair AFTER his taxes have been taken out.

    Pretty sneaky, those business guys who influence Congress and tinker with the tax code for their benefit and our expense.

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  2. Two things make me skeptical about a Flat Tax:
    1) Rich guys are all for it cause it apparently makes their tax burden go down.Assuming the govt doesn't vote to lower the debt ceiling, the implication is everybody else's tax burden goes up.

    2) it sounds like Flat Earth, and although all the earth I've driven or walked over has been flat, there are globes for sale in markets all over the world and I'm sure if the world wasn't really round somebody would do something, possibly raising the taxes of people who buy and sell those things.

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  3. Oso,

    I am just sick of people claiming the earth is round. I know it sometimes curves, but clearly it is not round. Were it a globe, all the blood would run to Australians’ heads and I have heard nothing about this happening.

    People who consider flat taxes fair, do so because they are convinced that the value paid in tax, thus the true contribution one makes, is not relevant. Lots of poor people think flat taxes are fair. I am not even sure that ownership itself is fair, though I am all for it, but I cannot see how anyone can weigh a fair tax payment in dollars over what they would have purchased. Dollars are currency that people trade in order to acquire other goods.

    People are "charged" tax currency. They do not get to choose how much they spend. Currency is used as a way to barter without moving actual goods around. When either party disagrees on the value of the currency, it is no longer a valid substitute for goods. People do not haggle to decide how much tax to pay and reject it or accept it. They can be forced to pay enough tax to gobble up goods they would never have traded, and cannot live without. Currency in place of bartering no longer works when one party, the government, dictates what the currency is worth to both parties and then forces you to trade it. That is how the waitress ends up paying her sons beans against her will.

    The waitress is literally giving up more of her resources for the cause. The rich man does not use his left over money for anything. He gives up nothing real-world. The poor man gives up real goods that are desperately needed. The money a rich man is not using is not good for anything until he needs it. If it is unlikely that he will ever need it, then it is unlikely it will ever be useful. Except for the warm fuzzy feeling it gives him, the money is not even worth the paper it is printed on. Charging the waitress her disparately needed goods for her privilege to live here, while charging the rich man nothing real-world at all, is something that should at least be questioned.

    I can see the argument for the other side. They have what I consider a very simple, I daresay childish, notion of equality. They see a dollar in one hand and a dollar in another and to them these dollars are equal, even when one could save a life and the other buys a package of M & M's

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  4. Robert,

    I was going to respond to you at the same time I responded to Oso, but Oso's response got wordy as often happens. I don't know what's wrong with him.

    I know a few people who make pretty good money. I discussed taxes with one of them (a former tax accountant). I think he makes at least 1.5 times my income annually and pays far lower taxes in actual dollars.

    I think fixed taxes, such as 100.00 for everyone, is unfair. I think flat tax percentages are grossly unfair also. In America we were supposed to have a progressive tax system. This is not it, but it is an example of what it was "designed" to be:

    Earnings:
    First 10,000.00 - no tax.
    Next 10,000.00 - ten percent due in tax.
    Next 20,000.00 - 20 percent due in tax.

    That is an example of the kind tax system we were “supposed” to use in America. So, if someone earned 40,000 under this system, they would be taxed this way:

    10,000 * 0 = 0.00
    10,000 * .10 = 1000.00
    20,000 * .20 = 4000.00

    Total tax = 5000.00, which comes to 12.5 percent.

    The total tax for someone who made 20,000.00 would be .05 percent, as they would only pay 0 on the first 10,000.00 and 1000.00 on the next 10,000.00. 1000.00 is five percent of 20,000.00.

    The reality is that the more someone makes, the more discounts and write offs they find. If you have your own business and work things right, you can pay very little tax. You can defer earnings through large IRA's and 401ks that poor men cannot have and by the time the tax is due, they will have grown enough to pay the tax (theoretically).

    Not only do I disagree with the original tax design in American, but what we have is thousand times less fair because of loopholes and write-offs and deferrals, options that are only available when you have lots of disposable income or a lot of money flowing through your fingers.

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  5. John,
    in spite of my wordiness in your response to me, I'm in full agreement with it.

    I would agree with corporate taxes being high as well, due to the corporate obsession with short term over long term gain. When taxes are low corporations tend to spend profits on bonuses and dividends, with high taxes and given the choice between handing their $ to uncle sam or investing in capital and even workers salary,they always choose the latter and it spurs the economy.

    Awhile back I went to the Bureau of Economic Analysis site, you can make up a lot of graphs there. I pulled GDP going back to around 1930, then % change yearly in GDP, then pulled IRS high end marginal tax rate over that period. While it may not be definitive, it was enough to convince me high taxes are the way to go, strictly from the standpoint of the economy.

    When taxes were low, GDP briefly boomed then we went into a depression. With high taxes, there was steady growth year to year.

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  6. I'm sure Larry David would agree with you.

    Oliver Wendell Holmes correctly said, “Taxes are the price we pay to live in a civil society." This would make Republicans truly uncivil. As if that were news...

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  7. I think what is overlooked in most of this is that the deductions one can take when filing his taxes need to be drastically overhauled.

    I don't have a problem with a progressive tax system per se, but it needs to be streamlined into perhaps just three brackets or so with minimal, if any, deductions being allowed.

    Same goes for businesses. Deductions, especially for large corporations, need to be dramatically reduced in scope and amount.

    The tax code is quite ridiculous in its current form with it thousands upon thousands of pages of instructions and requirements.

    I think that a even a flat tax could work if structured properly. Make people/families below the poverty level exempt and then disallow most deductions for those upto a certain middle income threshold and then disallow all deductions above the highest income threshold.

    I am sure there are probably fatal flaws in all of this, but there is an absolute necessity to streamline and refine our current tax code for sure. Although government spending probably needs to be addressed first!

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  8. Wow. T and I agree on something, kinda-sorta.

    I personally think the income tax system just isn't going to work, because politicians can skew it whenever they get the correct payoff from the correct entity. It is going to take a combination of flat tax and VAT to make the taxation system actually work.

    I do have ideas on what that would look like, but I'll articulate them at a later time.

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  9. Jolly,

    Funny, when I read Paine's comment, I could not believe it. I was convinced that he would have me in tears before I knew what hit me. I thought: "Wow, his opinion is not that different from mine." Then, much to my dismay, I realized that I am the one with the fanatic opinion in this matter. He continues to surprise me. As you know, almost everything he thinks is backwards. Yet, his logic behind it is often very enlightened.

    I used to be mystified by such things, but I came to realize that a few well-placed axioms build the box in which most of us think. I think in one box and he another. My box is better than his, but not my mind.

    Paine,

    I accept your concession in this matter.

    Dave,
    Very aggressive. Republicans know they are less civil than democrats without us bringing it up.

    Oso,
    Stay off that site. It allows anyone to build any case they need. I don’t need stats and facts. I have opinion and it’s the only data I need.

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  10. I found your tale fascinating, and clearly Mr. Nibor is a fool. But I can't help but note that he seems to have asked (and tried to answer) a serious question, yet you respond with (clearly deserved) mockery and a riveting tale... but no actual rebuttal.

    Your story reminds me of an old classic from Crash Test Dummies called God Shuffled His Feet.

    "The people sipped their wine
    And what with God there, they asked him questions
    Like: do you have to eat
    Or get your hair cut in heaven?
    And if your eye got poked out in this life
    Would it be waiting up in heaven with your wife?

    "God shuffled his feet and glanced around at them;
    The people cleared their throats and stared right back at him

    "So he said:"Once there was a boy
    Who woke up with blue hair
    To him it was a joy
    Until he ran out into the warm air
    He thought of how his friends would come to see;
    And would they laugh, or had he got some strange disease?

    "God shuffled his feet and glanced around at them;
    The people cleared their throats and stared right back at him"


    You see, a serious question has been asked, yet God responds with parables containing little meaning. And that's okay, as far as it goes. Perhaps you prefer metaphorical tales to actual debate of ideological issues. To each his own, and all that, but if I might impose... do you have an alternative to the one asked by Mr. Nibor?

    The question, of course, appears to be what is fair in terms of an income tax rate. While we intellectuals here understand the lack of merit in a flat tax proposal, I'm quite curious to hear your alternative, if the question is one of fairness.

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  11. Heathen,

    Firstly, very good poem. Thanks for bringing it to me.

    I found Mr. Nibor to be quite inspirational. There were a couple of things that moved me, both of which can be resolved into questions:

    1. "The principle of 'fair' taxation doesn't have to be controversial. When did affordability become a measure of fairness?" That is common conservative position. That single notion was the inspiration for this article. Unlike you and me, Mr. Nibor and many conservatives believe that the affordability of a tax, the value to the payer, is irrelevant. This was written solely to challenge that notion. If I need 1000.00 to buy medicine to save my life, but it must be given up in tax, and Mr. Nibor has no unfulfilled financial needs, and so cannot even find anything to spend his tax on, then obviously my 1000.00 is worth a life and his tax is worth some paper with ink (or the modern equivalent). Those two things are not equal. Taking someone’s medicine to help fund the government is not the same thing as taking someone’s inky paper.

    2. The next poignant question Mr. Nibor asked was this: "What is the fair amount to pay in taxes?" As you pointed out, I offer no solution. I see the question as a good one, but one I did not feel inspired to address. If I had thought I had the answer at my fingertips, I surely would have provided it. To me the question was similar to this: I attend a hanging and the lynch men inform me that that child has stolen an apple, and he keeps stealing apples, and then throwing them away, so he must hang. I suggest that perhaps the penalty is too harsh for the crime. By making this suggestion I am not implying that I have another penalty in mind. I am making an observation of the data I have and not commenting on the data I do not. It is much the same strategy I use when I suggest the Christian God does not exist and did not create the universe. I am not suggesting I know how the universe was created. I am commenting on what I think and not trying to conjure up more thoughts at that moment.

    I am philosophically opposed to flat taxation of any kind that I am aware of.

    As for an accurate representation of Mr. Nibor's intellect in this essay, it was not achieved or intended. I do think the real Mr. Nibor is an intellect. I even think some staunch conservatives who support flat taxation are intellects. While I disagree with most of Nibor’s politics, I find him to be articulate studious and intelligent. I can't use that!


    I also am pretty sure Mr. Nibor supports a flat tax, and if not, he definitely thinks we should consider it.

    As for the parables I may have used: they explain why value cannot be computed based on paper that is used to purchase something that has intrinsic value. To mistake the paper as the thing with intrinsic value can lead one to embrace flat taxation, which I find a bit abominable. To express this and offer no example of what I mean would be confusing.

    Now that you have me thinking of it, my alternative to flat tax is a progressive tax coupled with a simplified tax code with loopholes eradicated. Not the one that Reagan killed, and not the one Bush wants. Something in between. I have no more opinion on it than that and I refuse to opine on an issue unless I have an opinion or I think it’s funny.

    And finally, I think if I were to ask him, Mr. Nibor would say I did not justly represent his article here. I focused on a few points with which I disagreed, and then exaggerated both of them and my response to them, while ignoring his sound analysis and intellectual questions. If he were to make this charge, I would have to concede. Again, my point was to address the single issue of the legitimacy of flat tax and fairness based on value. I did not focus on or report his examples, which you may have read, about the extremes that progressive taxation can reach. The question is was not my area of concern, as I don’t think those extremes exist today.

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  12. I would also support fewer deductions and loopholes, either in our current system or in a flat tax system. All they do is add complexity (making it more costly to simply comply with the law), disguise one's real tax bill, and reduce the tax bill of those with special knowledge. I'm against all of those things.

    While I'm sure we can't settle it here, I still don't understand what makes a more progressive tax system fair. It strikes me as unfair, almost definitionally. The only two arguments I can think a proponent would offer would be 1) It's fair because the wealthy can afford to pay disproportionately more or 2) Who said we want the tax system to be fair?

    Neither of which, frankly, I find compelling.

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  13. I resign in victory, sir. However, were I going to continue, I would do so thus:

    First, the wealthy are not paying more in value. They are paying more in paper. I agree we cannot settle our disagreement, because we don't even agree on what is happening, much less what should happen.

    Secondly, if you believe progressive taxation is not fair, I don't see how you can think a flat percentage is fair. In both cases, the wealthy are charged more inky pieces of paper than the poor for the same available services. If fair should be measured in inky papers paid, then both my idea and yours is unjust.

    My idea looks at the real world and what is really happening and does not try to resolve it as a math puzzle.

    "It's fair because the wealthy can afford to pay disproportionately?" I find this form of taxation unfair because the poor cannot afford to pay man more than the wealthy man pays. The poor man pays more in the value of his assets. The wealthy man actually pays more in cash. There is no equality involved if we believe the cash paid is the whole story. In fact, I don't see how anyone could consider flat tax percentages fair if we mistake the cash as the whole story. Wouldn’t a flat amount, not a flat rate be the only fair thing? Shouldn't we just charge everyone 15,000.00 per year and be done with it, in the interest of fairness?
    The question is rhetorical, as further discussion will only involve me reiterating my position and you reiterating ours, which really serves no one.

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  14. John,
    I both concur with and respect your logic,especially with relating "not having an answer" to questioning the existence of God.
    Also I agree one should either have an opinion or something funny to say before commenting.

    Heathen Republican,while I have some philosophical differences with your beliefs on taxation, I understand and respect your principles.

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  15. It appears that you have thought deeply on these issues, John. I too feel that a flat tax is not fair. Perhaps the only thing in its favor is simplicity. However, the tragedy is that even democratic goverments are moved by agendas that are quite different from the way things should be. Taxation policies are an example. The days of Kings that controlled and ruled over people have gone but even now it is the rich and powerful that control policies.In place of a single person we now have a minority group that controls the fate and life of the majority.

    A taxation system that is fairer, simple and has a flat tax includes a bsic exemption. i.e the first ten thousand dollars (that includes the price of beans) is not taxed and the rest is taxed at a flat rate

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  16. The basic exemption limit may not be ten thousand. That should vary with time and place. Perhaps there needs to be a cap on incomes too. It is just obscene what top bankers get as salaries and bonuses. In reality they have hijacked the business in collusion with the board and are drawing profits from their risks in the guise of salary and bonuses. The funny thing is that the risk is not theirs but of the shareholders and public. If the bank sinks they can move on to another bank or their resorts in the Bahamas. The funnier thing still is the unwillingness of goverments to act to restore sense.

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  17. Ashok, since John won't engage on the actual fairness of a progressive tax, perhaps you can help me understand why you also think a progressive system is more fair than a flat tax.

    I'd also love to hear how a cap on income could be construed as fair? And who would you trust to set the cap?

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  18. Heathen,

    I see no need to “engage on the fairness,” as we disagree on a fundamental assumption on which both our opinions are based. You see equality as measurable by literal dollars, pieces of paper, and not the real-world thing for which they are used. You see the paper as the thing, not its value. The real-world value of a thing is not relevant to you. I disagree with this and it is not ultimately provable one way or the other.

    You ask that I knowingly ignore this disparity in our perceptions of reality and continue to the discussion as if it were not there. We are not speaking the same language, so to continue on without settling that disagreement would be to debate in gibberish.

    We simply have different axioms on which our opinions are based. For me a flat tax implies that one person pays food, medicine, or other necessities while another pays something that is virtually irrelevant in real life, a portion of his surplus of funds for which he has no use. You are OK with this and see it as equal, since his surplus of funds are made of the same atoms as what will become the poor man’s necessities. A dollar is a dollar. I fundamentally disagree with your logic, just as you fundamentally disagree with mine.

    You further imply that if I disagree with flat taxes, I must provide the exact solution to replace them. In so doing, you support the religious notion that if I see a problem with one answer, I am required to then provide a replacement for it, else the problem is invalid. I could say that progressive taxes that only raised the rate slightly, say 1%, every 10k up to a 30% ceiling would be a more fair replacement. That would not be my answer, though. It is just a more fair replacement to help appease the dissonance of your arbitrary assumption. Your almost religious faith that to challenge an idea, you must have a replacement for it is an axiom with which I don’t agree. No point in debating it. I have had the debate with creationists plenty of times. No one changes their mind.

    There is no place to go from here. I promise you that you will find any further discussion unfulfilling. I can keep reiterating my position and you yours, but that is unproductive. Each of us will grow more foolish to the other as we continue to reiterate our shallow views. I made my argument already, and your rebuttal was that you don’t agree, or that a progressive system seems unfair to you (for reasons that would also make a flat percentage, which you seem to support, unfair, oddly enough). You now ask me to refute: “I don’t agree.”I cannot refute that. You said it and I believe you do not agree. Therefore, I concede to your disagreement and we have nothing else to discuss.

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  19. John, I know that we disagree on the basics, that's why I asked Ashok. Perhaps he can explain it in a way that I'll understand, since you choose not to.

    I sincerely don't understand the argument that progressive taxes are fair, so I'm trying to see your and his perspective.

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  20. As for Ashok, I think he is suggesting that a flat tax seems ultimately unfair for the reasons I stated in the article, and for the reasons that all those who reject it as unfair have. He also seems sympathetic to the idea of a flat tax as a workable alternative to an imperfect system with a complex problem (fair taxation). He mentions the simplicity of a flat tax and implies the practical application of it.

    You seem to be attempting to both ignore, rather than reject, the progressive tax argument and at once try to “engage” those more sympathetic to your position, after refusing to acknowledge or address the points of those who are more dogmatic about it. I am not encouraging a squabble, as it is pointless. Our positions about taxation are the product of other ideas, so debating taxation will get us nowhere. We are thinking in different philosophical languages. I think the rational thing to do at this point is to say that you and I fundamentally disagree, probably because of more basic beliefs that would have to be addressed first to make progress, and that Ashok is both philosophical and practical and sympathizes with the merits of both arguments.

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  21. Heathen, two points of views have prevailed in human economic systems - one the socialist one that there should not be much disparity in the incomes of humans - the extreme of that is equal or need based incomes and the perversion of that concept was communism that killed private initiative and collapsed.

    The other point of view Heathen is the extreme conservative one that you appear to hold.

    My own view is something between the two. I understand the need for different humans to have different incomes in order to encourage initiative and enterprise, however within limits with fixed minimum and maximums. In the present day US price index the minimum may be around 12000 per year dollars and the maximum salary needs to be capped at around half a million dollars.

    The reason is that often some unfair practice is involved in higher incomes as the bankers have been indulging in. Further more one does not need more even if the practice appears fair.

    Heathen imagine three brothers/ sisters sitting on a table. One gets a plate full of fries, the second gets half a plate and the third an empty plate. It would be fair that the one with the full plate gave half to the one with empty rather than both brothers giving some. That way the brother with the half plate may be left with just two fries or so. It is not fair to my mind.

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  22. Heathen, in ancient times Kings had all the wealth and others hardly anything. The Kings justified it as God given rights. Human society has moved on from there now. it is now held that wealth belongs to all.

    In modern times in capitalistic economies a few persons have managed to amass huge amounts very often using very greedy and immoral practices ( if not illegal). Such persons with the help of there money power support, propogate and uphold the extreme conservative view in order to protect their wealth in a manner similar to ancient Kings. I am certain that human society will move on from this point of view too.

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  23. Ashok, I would say that we need to far better police those rich people that have gotten their filthy lucre through illegal means. If we would investigate and prosecute instead of bailing out the rich bankers, perhaps we could make a dent in this problem.

    As for your hypothetical situation, the brother with the full plate of fries should voluntarily give some of his to the brother with nothing out of charity and love. When forced to do so by government decree, you have the potential to create a whole other set of problems.

    And who is to say how much money one can have is too much? Our congress seems to exempt themselves from everything else (social security, health care, etc.) so why would we expect them to abide by a new such law that would limit their own pocket books? You would simply create a permanent political power class.

    Not to mention that, in my opinion, putting such restrictions on people is immoral.

    Have you heard of John Huntsman Senior? He is a billionaire and it is his goal to die broke. He has donated millions and millions to public causes, including the building and funding of the Huntsman Cancer Institute in Salt Lake City where some of the world's cutting edge research in the disease is done and patients are treated.

    Limiting a person's ability to create wealth and jobs may indeed stop the greedy and evil in the world, but it also stops much good that can be found in humanity too, sir.

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  24. It's clear to me that John feels like we're spinning our wheels, so instead of continuing here, I've posted a reply at The Heathen Republican if you'd like to continue the conversation.

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  26. I agree Paine, as you say there are examples of some rich persons such as Huntsman that put their money to good use, in many ways better than governments. Bill Gates is heading in that direction too. You have a point that the creation of such wealth is good. On the other hand there are also others that do not put their wealth to such charitable use but rather use it to unfairly monopolize or waste large amounts of scarce planetary resources. The entire question of wealth and its creation needs much more thought. It is because of that perhaps that humans have not reached a conclusion on the matter, with perfectly intelligent and reasonable persons reaching opposite positions such as the extreme socialist or capitalist one. As I mentioned in an earlier comment it is because of this that I prefer to take the middle road.

    Whatever the policy, it is OK if it is arrived at for common good. In practice however policies get skewed to maintain the privilege of the rich and powerful in any society. I think that happened with the healthcare debate in USA. Any citizen should be able to get basic and urgent healthcare in any civilized society irrespective of the fact that they can afford it or not. There is a post on the inherently contradictory practices of modern economies in my blog.

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  27. I feel it somewhat strange, as a non-believer, to approvingly quote Christian scripture, but I feel the following story of Jesus might be enlightening to conservatives and Republicans - many of whom (Heathen Republican notwithstanding :-)) - like to describe themselves as Christians:

    "Jesus sat down opposite the place where the offerings were put and watched the crowd putting their money into the temple treasury. Many rich people threw in large amounts. But a poor widow came and put in two very small copper coins, worth only a few cents.
    Calling his disciples to him, Jesus said, “Truly I tell you, this poor widow has put more into the treasury than all the others. They all gave out of their wealth; but she, out of her poverty, put in everything—all she had to live on.”"(Mark 12:41-44)

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  28. Jesus was not selfish. Common sense says the rich paying more is fair. I cant pay what they pay. I not rich. Why not we all pay the 3k dollars I pay annually and then just put a going out of business sign on America. If you are selfish you will not be able to understand very much about not being selfish. No reason trying to explain it. What do selfish people care about fairness?

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  29. Mr. hunt,

    "They all gave out of their wealth; but she, out of her poverty, put in everything—all she had to live on.”

    This theory expresses a principle that many people don't just disagree with, per se, but find completely incomprehensible. Until this post, I did not realize that many of those who claim to disagree literally don't comprehend the value of something in terms of what one could use it for.

    Mr. Sol,

    They don’t disagree with the argument. The argument is a deeper philosophical analysis then they can do. I don’t think dissenting conservatives are necessarily “greedy” or self-centered just because just because they are not always circumspect in their thinking. If you don't understand the value of a thing, such as the opportunity cost of paying taxes, then to you a coin is a coin and nothing could be more equal than everyone contributing a coin. It sounds childish and not real-world if you get the basic principle, but if you don't, the idea that one person pays one tax and someone else another seems ridiculous.

    Many conservatives totally get it and just disagree (for various reasons that I have mostly have not seen commented here, but have encountered elsewhere). The problem with those who do get it and reject it, is not with a philosophical difference in how taxes should be levied in America. That is a symptom of the problem: liberals and some conservatives think on different plains about social issues. They see value differently. They see the world differently. If you see equality as one person paying a coin and another paying the same coin, then any other tax code seems silly. I would not expect one who mistakes the coin as the end product of what someone was forced to pay to understand the progressive taxation rationale. Not understanding is not equal to selfish and neither is disagreeing. I think nothing could be further from the truth. If you don’t understand an argument, not embracing the results does not make you selfish. If lots of people are making an argument and you don’t understand it, I would suggest that maybe you are not capable of circumspection on this issue and you should consider your own opinion suspect on that basis. Lack of circumspection is not equal to greed, though.

    However, there are some who do understand the rationale and simply disagree with it. Though I have not decided that those people are selfish, either, I wouldn’t rule it out. I suspect that the people who do comprehend but disagree anyway are mostly using different axioms to arrive at their conclusion and that also is not greed, not stupidity, but just a different perspective. It is hard to accept, because our axioms clearly lay out the obvious for us, just as theirs do for them.

    Remember, most people get a hint of a position and then use a combination of what they are told mixed with confirmation bias to complete their position. Once they have done this, they continue to embrace supporting arguments and reject refutations of any kind. Once you think you know the truth about a matter, you become naturally closed to further reason. This trap ensnares conservatives, liberals, John and Larry, and everyone else. It is normal. Seeking something you have already found never makes sense, and truth is no exception. Certainty is truth’s worst enemy.

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  30. According to the non-partisan Tax Foundation.org, the top one percent of income earners have a greater tax burden than the bottom 95% of earners combined as of now.

    http://www.taxfoundation.org/taxdata/show/24955.html

    Further, back in 2007 the top 5% of wage earners paid 60% of the federal tax burden while the bottom 50% of wage earners paid 3% of the federal tax burden, and yet we still hear how the rich do not pay their fair share.

    http://www.taxfoundation.org/news/show/22652.html

    Now I am not rich, but it would be nice if I were, at least until April 15th rolled around.

    I agree that the rich need to pay their fair share, but the definition of such seems to have been horribly skewed.

    The poor absolutely do not need to be burdened with punitive taxation, but neither does anybody else. Overall, I think the United States and its current tax code is pretty darn generous to the poorest among us.

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  31. T. Paine,

    If I were of the mindset, I would address your comical assertion that the rich get are getting richer, the poor are getting poorer and the middle class is vanishing (which is the argument you just made). Of course, those who have almost all the money, pay almost all the taxes. That is common sense, which I am sure you, the savoir of common sense, can appreciate. As the middle class vanishes, this phenomenon will increase. I will accept your numbers on faith. Since you and I both agree that progressive taxation is fair, and that, along with the assertion that flat taxation is wrong, is the subject of this article, I am not sure what you intended to prove, other than that those earning almost all the money are paying almost all the taxes, which I will concede on faith, as an irrelevant statistic, and an obvious problem any group that owns everything must face.

    You listed a statistic of the amount of taxes paid by the wealthy. You did not include the percentage of income earned by the wealthy and if you had, I suspect you would have scrounged up the one that best favored your position, but even that one would have been a problem. Since only those who earn money can pay it in taxes, I would have expected to see that fact mentioned. You compared a dollar figure to a percentage, which is a great way to make “facts” seem exaggerated. You did not address the ability of the wealthy to pay that dollar figure vs. the ability of the lower income tax brackets to pay what they pay. Of course the dollar amount the wealthy pay in taxes exceeds all lower class earnings combined, so it is obvious they could not pay that much. If I have almost 100% of the resources, then I will pay almost 100% of the taxes on those resources. You cannot force someone to do something which is beyond their capability, or force someone to pay coins they don’t have on resources they don’t own.

    The fundamental error is having a philosophical opinion and then seeking data to support it. The data you found suggests what we know already, that the upper top percent of people in this country, own the country. I agree with your evidence, and will not go fetch the rest of the data explaining that the rich own most of the assets in American, that was obviously omitted, as the whole measurement is irrelevant to the topic of this article. One need not pick through pools of facts and claims websites make and fish out the ones he thinks will support his case. It is better to support positions one holds for philosophical reasons with the philosophical arguments that actually form his opinion. All else is sophistry.

    “I agree that the rich need to pay their fair share, but the definition of such seems to have been horribly skewed.” I agree completely. But what can you do? Conservatives are built by FOX News. It is not easy to correct their thinking.


    Lastly, “I think the United States and its current tax code is pretty darn generous to the poorest among us.” I agree with that statement. It is generous to the very poorest among us. I believe that most good conservatives want the extremely wealthy and the extremely poor get extremes of generosity. The problem is that the extremely wealthy have all the money. That extreme generosity to the extremely poor, which I fully support, is meaningless for the tax recipient. Remember, transactions have two sides, a payer and a recipient. As soon as we summarily ignore either side, we are skipping truth in favor of arguing a position we hope will be persuasive.

    To the degree that we make arguments to support a position that we believe for reasons other than the arguments we make, we implicitly reject our own opinion in favor of sophistry. If our opinion is good, we should proudly share it and let it stand on the philosophical ground from which it springs. In our case, our underlying philosophies seem kind of similar. The question of taxation is one of need, but also one of justice and what is right. You are not going to find the graph that proves your case.

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  32. You did not include the percentage of income earned by the wealthy...

    Challenge accepted! Stop by when you get a chance.

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  33. "You did not include the percentage of income earned by the wealthy and if you had, I suspect you would have scrounged up the one that best favored your position, but even that one would have been a problem."

    And, just as I predicted, you scrounged up the "facts" that supported your position best.

    Though is it complete sophistry, sometimes you cannot combat sophistry with anything else. I will respond to this on your site with a made up rebuttal produced in the manner in which challenge was accepted. I do this not to extend the flat tax argument, as I believe it does not legitimately support it.

    I do it to support this contention only:

    To the degree that we make arguments to support a position that we believe for reasons other than the arguments we make, we implicitly reject our own opinion in favor of sophistry. If our opinion is good, we should proudly share it and let it stand on the philosophical ground from which it springs.

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  34. Your criticism is unfair and you're making assumptions about my motives. If you'd care to know, I didn't select any of the data. I simply located what was available on the IRS website (available at the link I provided). If I'd had my druthers, I would've used data over a 50-60 year period, through 2010. But all that was available was 2001 through 2008, so that's what I used.

    I didn't walk into the analysis with an idea of the result. I was open to your suggestion that the results would be different when accounting for income share instead of population share. And, in fact, the results were less steeply progressive than T. Paine suggested.

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  35. 2001 - 2008 is all that is available on that site? Verified. On that count, you are exonderated, sir. Rest pending ...

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  36. T Paine,
    It's true the rich pay considerably more income tax, however when payroll tax is taken into consideration I believe the numbers actually meet somewhere in the middle. I'll try to find them.

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  38. Someone once told me the way to look at taxation was not to look at it from the perspective of percentages based on income, but based on percentage of sacrifice. You seem to be on the same page.

    I thought I would never see the day when two Liberals, no make that three Liberals are on the same page on anything. We do indeed live in strange times

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  39. I'm not sure I understand the difference. How is percentage of sacrifice different? If I make $50,000 and sacrifice 20% of my income, and you make $200,000 and sacrifice 20% of your income, that's the same as a flat tax.

    Or are we talking about sacrificing until it hurts the same? I don't know how you would turn that into percentages. Sounds like another way of confiscating wealth above a certain income amount.

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  40. Note the descriptors used for taxes by the Right. Taxes are a "burden" and "sacrifice" in this thread. Propagandists like Limbaugh and other whiners for the self-proclaimed "victimized" class of economic elites love to refer to taxes as "oppression", "tyranny", and of course, "punishment". I guess most of us "freeloaders", as Limbaugh calls working class Americans, will never know the excruciating agony and endless suffering that one endures when their tax money could have bought their third vacation home or second yacht. Oh, the humanity!

    What a bunch of greedy crybabies. It's not enough for the economic elite to buy our politicians and dominate our government's policies. They want it all for nothing. They don't know the meaning of the word sacrifice.

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  41. And the civility has come to an end. Oh well, we made it through 39 comments before the wing nuts decided to see what a reasonable conversation looks like.

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  42. Dear HR,

    My, oh my, feeling a bit sensitive are we, if I bash your sacred cows? I was not referring to you; but you seem to take it to heart for some reason.

    They say far worse things about my kind, you know.

    Love,
    Your favorite freeloading America-hating, loony liberal, ad hominum "Wing Nut"

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  43. Heathen Republican wrote -

    I'm not sure I understand the difference. How is percentage of sacrifice different? If I make $50,000 and sacrifice 20% of my income, and you make $200,000 and sacrifice 20% of your income, that's the same as a flat tax.

    Based on your statement - yes, it would be a flat tax and the financial sacrifice would be the same in percentages.

    And then this -

    Or are we talking about sacrificing until it hurts the same? I don't know how you would turn that into percentages. Sounds like another way of confiscating wealth above a certain income amount.

    Immediately you go from one extreme right to the worst extreme you could think of. Why is that? Taxes for anyone are confiscation. You seem to be trying to make it seem worse at the top than at the bottom. On the contrary, and you know it. And if you don't, well I guess you have never been near the middle or the bottom. This just underscores the Right's unwillingness to even attempt to give an inch on their tired old notion that we grunts in the middle class and under want to rob them blind. In reality I would think that most of us would like a little more recognition of our efforts to make the rich richer. Their lack of gratitude is historic. This new assault however is not about lack of gratitude, it is about power and who wields it.

    In my mind, I would think the wealthy would be smart and give a little. Previous historical cycles indicate this might be a good idea. At some point, the people will become so angry and become unamangeable. Show some class now and avoid stupidity later. But the Right's inability to move their feet because they are cast in stone will someday cause their nose to fall off.

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  44. MRMacrum, you and I don't have any history, but I think even the comments above demonstrate that I'm not just here to score political points. I'm not afraid to ask questions and reveal my own ignorance. Sure, I have my own point of view, but I'm trying to understand your position. Believe it or not, I'm even open to being convinced.

    So maybe you can give me the benefit of the doubt, even if just for a few minutes. I didn't intentionally offer two extremes; I presented two interpretations of your statement to help clarify what you meant. Apologies if I mischaracterized your view, but my intention was to clarify.

    Here's my frustration: you read my first interpretation, and responded intelligently. You read my second interpretation, and instead of offering me a clearer interpretation, you went on the attack. So here's the news flash: I don't get it AND I've been in both the middle and the bottom of the income ladder. I'm still residing uncomfortably at the bottom of the middle (no stipend from the Koch brothers for me).

    In your entire two paragraph response, I still don't understand what you mean by "percentage of sacrifice." You agreed to one interpretation (flat tax), but you never helped me understand how your version would differ from a flat tax. So, I'd love it if you'd reply once more, assume I'm really just trying to understand, and offer a new explanation. Or you could berate me again.

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  45. Heathen Republican - Absolutely. We have no history and I certainly did not mean my remarks to be taken as an attack. Perception being what it is and all, I will give you that.

    10% of $50K bites into a budget much harder than 10% of $200,000 though the dollar amounts just based on the percentage are different. On the face of it, this would be fair, but is it right? That question can only be answered by each individual based on their view of the World. In a period of economic madness, it seems that continuing to ask less sacrifice of the wealthy, while at the same time demanding more from the lower income bracket in terms of what the financial bite does to their living standard is just plain piss poor planning for all of our futures. Fairness in my mind is not the issue. The right thing to do is.

    And suddenly we are back to our individual view of what the perfect world might be. Because the ranting and raving has reached deafening levels, any reasoned dialog about a sensible plan of action has disappeared. The arguments have sunk to ones of back and forth flames and slogans.

    If the wealthy want to continue their lifestyle outside of gated communities and body guarded limo expeditions to the malls, they ought to reexamine their priorities some and realize that it is the healthy middle class that labored for them who keeps their coffers filled up. The right thing to do is be willing to sacrifice some more money (not til it hurts) to help us reach a better economic position. After all, they are part, and I contend a huge part, of why we are in the trouble we are in. It is not taxes, it is greed that paved the road to the dead end we seem headed for.

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  46. MRMacrum,
    We're not allowed to use the word "greed". It's uncivil, you know.

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  47. All,

    Sorry for the delayed responses. I was not ignoring you. My mother has been in the hospital and I got clobbered at work simultaneously, as if I and my family were being punished by a vengeful God.

    I will now catch up. I will start here: “Challenge accepted! Stop by when you get a chance.”
    Heathen, there is so much low-hanging fruit with this short piece, I don’t know where to begin. The writer in me wants to write another very long post, but the overwhelmed side of me, wants to provide a short rebuttal. I am not sure which one will succeed. I know both you and T. Paine expressed enthusiasm for hearing it. I would love to do it now, but it feels a bit like work. I will do it tomorrow if God does not see fit to scourge my family with His wrath. I am not blaming God, I am just admitting the possibility that He is right when He implies that He is in total control and so everything is His fault. You may think I have God-given free will to can change things, but if that is true, then God is not all-powerful, as I have some power to effect things also, and I know He is omnipotent. I initially thought that He can do anything, but chooses to delegate some authority to me. However, if I have choices, but get punished unless I make the right one, then that is a false choice. It is like saying you can have some cake, but if you do, I will burn you at the stake. Well, then cake is just a tease and a trick, isn’t it. The real choice was that you can have cake and be burned at the stake, or have neither. That is not a genuine choice, as no one would knowingly choose the first one. But I digress.

    Oso, they should pay more income tax. They have more income. As for the percentage being more or less, it is obviously more in a progressive system, until all the ways to dodge it are implemented. It should be more, more income.

    MRMacrum . Exactly. Look at opportunity cost.

    Heathen: With all due respect, you well know that the rich sacrifice of 20% is not equal to the poor man’s sacrifice of 20%. It feels silly to refute something so obvious.

    Dave, I agree. Be careful. Your passion may be mistaken for incivility.

    Heathen, be careful. It is hard to indicate that you think greed is involved in a philosophy and at still remain proper. To say one cannot indicate this, even if he thinks it is possible, would be a violation of free speech.

    Dave, I warned you, you wing nut! Since everyone here is a wing nut, or at least have been described that way, myself included, what I mean is, I warned you, you left wing nut. Ok, Oso, you are not really a wing nut, but the rest of us are.

    MRMacrum, percentage of sacrifice is exactly the issue that conservatives consider irrelevant, except for Heathen who repeatedly admits that he does not understand it.

    Heathen, I respectfully submit that you are a full-time job. I still owe you a number of responses. I also have a lot of other half handled issues scattered about the blogosphere. You are at the top of my “long-response” list.

    Heathen, in defense of my uncivil brothern, it is almost impossible to be “civil” and passionate at the same time. If you believe that greed is a motivation for a philosophy, is it uncivil to admit it? Is it uncivil to think it or is it just uncivil to express it? You, sir, probably are not greedy. It is the greedy conservative who may greedy. The generous conservatives are nothing if not generous. When I get time, I will explain the whole conservative philosophy to you and then ask you if you are a conservative or a progressive.

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  48. Maybe I'm the slowest kid in the class... I understand the concept of "percent of sacrifice" philosophically, but I don't see how it would be applied in the real world. There is a point where the teacher has failed and it's not the student's fault that he doesn't get it.

    Examples would help, but I think I've hit on the crux of the issue: even your brilliant minds can't provide specific examples of how a fair tax system based on sacrifice would work. Is the current system of 10/15/25/28/33/35 still too flat for you. Which rates would change to satisfy your concept of sacrifice? Do we throw out tax rates altogether?

    Obviously your system is progressive, but how progressive? Is there an income cap? Who defines who is poor and who is rich? Would you be comfortable with your system when a Republican is in charge?

    Of course, perhaps you never intended for this discussion to be real-world relevant -- I like philosophical arguments, too. And I certainly have no desire to continue building the comment string. I can go forward with an understanding the concept, thinking maybe it's too idealistic to be applied.

    John, you don't owe me anything (particularly with a mother in the hospital; work, of course, can be ignored). I don't want to be anyone's full time job. I'll just assume your silence is a victory for the good guys.

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  49. John,
    Sorry to hear your mom has been ill.I hope she's better now,if not better I send good thoughts her/you and yours way and hope things are at a point where life is as close to normal as can be.

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  50. Heathen,

    1. We cannot have a victory "for the good guys." No, that just doesn't work, but I appreciate your gracious offer.

    2. Remember the question was whether we have a flat tax rate or a progressive tax rate. The article does not suggest that the current progressive tax rate is unfair. It only contends that a flat tax rate is unjust. You call it idealistic because it does not define a flat tax rate to replace it. I finally give in to you, sir. Here it is: I believe the current progressive tax system is more fair than a flat tax system. Keep in mind that the current tax system favors the wealthy more than any system American has had since the 30's, which I will explain in more documented detail later today (I think).

    3. There is no need to attempt to refute this comment, as a much longer one is now in progress. Wait for it, as it there are more targets for you there.

    4. I have no interest in an income cap. At one time we mostly had that is this country through taxation of top margins above 90%. I am not recommending we return to that.

    5. “Even your brilliant minds can't provide specific examples of how a fair tax system based on sacrifice would work.” Yes, you have just proven that the Christian God exists because I cannot explain how everything in the universe works without him. Identifying that a flat tax is not the fairest solution is meaningless unless I crawl down the slippery slope and say exactly what the fairest solution looks like. I refuse to fall into the trap made of a false dichotomy. To appease you I said that I believe that the current tax system is more fair than a flat tax, so that gives you the target you need.

    6. Who defines who is poor and who is Rich? The only definition I have seen lately was yours, so I guess you do. I don’t think the definition is needed to formulate a progressive tax system. If we cannot define where rich begins, rich must not exist, right? Oops, we are in danger of descending another slippery slope.

    7. “Of course, perhaps you never intended for this discussion to be real-world relevant.” Actually, that charge applies to you more than me. You are the one who discusses the theoretical inherent value of a dollar. I am the one who made the argument about real-world things that the dollar can purchase. I am the one who understands and applies the real-world economic truth of opportunity costs to the equation. You are the one who claimed to “not understand” the argument. As soon as I introduced the real world, you said, “huh?”

    9. My mom is out of the hospital now and the severity of her condition is pending. As I am unable to pray with sincerity, perhaps others will on her behalf.

    8. “John, you don't owe me anything.” If Socrates promises a chicken to Asclepius he is honor-bound to deliver it if he can, regardless of other circumstances.

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  51. I haven't seen such fantastic tap dancing since Gregory Hines passed away! :)

    In all seriousness though, my fervent prayers are with you and your Mother for her full recovery, John.

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  52. Why do I keep following this thread? It's starting to make me think, and that makes my head hurt.

    For example, I just thought that a "fair" tax system might be the rates paid by the wealthy under Reagan. They should like that, right? But wait. No, they would not like that at all. I've learned that those tax rates are now called "socialism".

    Never mind.

    Good luck with your mom. I hope things can be as pain-free and emotionally calm as possible.

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  53. Mr. Heathen,

    Your belated chicken awaits here:

    Heathen's Chicken

    It is possible that I may not respond to any response you make for several days, depending on how things go, so no rush, sir. Take your time.

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  54. Myste, as Rush Limbaugh would say, it appears that I am living inside your head rent free.

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  55. Remember, sir. I backed away from the argument with you as repetitive and circular, thus fruitless and you then saw fit to response to my answer to T. Paine with bogus statistics and revive the discussion. As a matter of fact, you have repeatedly refused to drop the matter, as you carried the discussion on to a new post at your site and then chimed in on other's responses. You lured me back into the discussion only because you finally took a different turn and inspired me to respond to the new argument, which was primarily a set of pretty charts you made.

    I am deeply bored of the conversation at this point. I find virtually none of the issues addressed and there is a general unwillingness to argue the underlying philosophy involved in our opinions.

    I am totally content to call it a day, sir. As before, I resign in victory.

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  58. John,

    I enjoyed the story of grandpa's coins and thought that you expressed your positions well. I also like that with the exception of one commenter, the discussion has been very civil. Since the story was about political philosophy with regards to the flat tax and not actually finding a solution to the problem I will try and keep my comment inline with that goal. I would also like to point out that I grew up in poverty and am currently living there as well.

    I would like to ask the question, what is your idea of justice? In the book the Law, it is said that there are three options a society can have. 1. The few can plunder the many. 2. The many can plunder the few. 3. Nobody plunders anybody. It makes the case that justice is when either everyone is hurt the same amount or no one is hurt at all. It would seem that you would agree with this, only you look not at the amount of money being paid, but wether the person uses the money for essentials or not.

    You give the example of the woman who needs to buy beans vs. a man who sits on his money. What if her basic needs are met? Should she then pay more? What if a rich person (I do think it is important to define what rich means) has a kid who has a severe disability, should he then pay less than a person who is rich and has a healthy child? I would also like to ask who is the person in charge of deciding what someone needs and what is mere frivolous spending or hoarding.

    I would like to ask at what point do the rich pay enough, and at one point do the poor pay to little?

    Personally, I feel that the richest of the rich, the people that are in the Forbes 500 pay too little in tax. However, I don't feel that someone making making $100,000 should have to pay the amount that would feel the same to someone making $10,000. I strongly disagree with the notion that people with money "hit life's lottery" as most people who accumulate small fortunes did so with a life of hard work and thrift. This is why I feel it is important to define what rich is. If we don't, it is easy to lump people who have enough to comfortably retire in with people who own mansions in every major city in America.

    In speaking with fairness, should we not also look at how a person makes there money? A person who owns Microsoft has made a much bigger difference than someone who stars in a movie. Since they are both in the upper 2% should the person who makes the bigger difference in the world pay less than the person who does not? Just food for thought.

    Hopefully you find my questions interesting. Personally I do not support the flat tax. I am currently torn between the Negative Income Tax and the Consumption tax.

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  59. JPayne [Answers Part I],

    You asked a lot of very specific questions. The question this intends to answer is if a flat tax is fair. It does not pretend to provide very specific answers, which could be determined in myriad ways. That said, I will exceed the design of the article and attempt to do justice to your questions:

    What is your idea of justice? The earliest work on the topic that I have read is Plato’s Republic, which is a book dedicated to defining that term. Plato could not really do it, nor can I. Injustice is much easier to recognize than justice is. Someone giving up medicine, heating, food, a child’s support, etc. to fund a government so someone else can try to find a vacant spot in their mattress to stuff more cash is not what I consider just. Conservatives love to talk about the tax burden on the wealthy. The tax the less wealthy pay is far more burdensome than the tax the wealthy pay, even though it is fewer dollars. I don’t think taxing someone out of their life necessities if ever ethical. Some present this argument: “and at what point to you call a necessity a life necessity?” The question is a logical fallacy. To say that if I cannot locate the spot on a slippery slope where something exists, then it may not exist, is fallacious. I cannot tell you how tall is tall or at what point something becomes tall, but I can say that most reasonable people consider Mount Everest comparatively tall. That some people are too poor to justly tax is in no way challenged by asking someone to locate that exact point in dollars. (Not to mention the fact that this point is not even measurable in dollars).

    What if her basic needs are met? Should she then pay more? One plan would be to try to define a tax code that taxes disposable income. “Should” is a matter of opinion. It is not a scientific term. Therefore, I can only say one thing should happen over another if not saying it produces an ethical conflict or a logical contradiction. An example would be this: denying someone their necessities is generally unethical unless a higher ethic supersedes it. A syllogistic example would be this: taxing grandma so much that she cannot afford to buy her heart medicine gives us tax revenue we could have otherwise acquired, which is not a higher ethic than allowing grandma to keep her medicine. It is wrong to tax grandma out of her medicine.

    What if a rich person (I do think it is important to define what rich means) has a kid who has a severe disability, should he then pay less than a person who is rich and has a healthy child? Ideally, we would only tax disposable income. However, that is only an ideal because we could never define what this is (or should be). We choose our living situations and in this way some of us get to choose how much income is disposable. I believe in capitalism and in the American dream. I want an America where people can dream of wealth and make it happen. Therefore, at some point, the “needs” of the lower income become “wants,” and as that happens, flat taxation becomes more fair.

    [To Be Continued …]

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  60. JPayne [Answers Part II],

    I would also like to ask who is the person in charge of deciding what someone needs and what is mere frivolous spending or hoarding. The question is built atop slippery slope logic. I did not propose a tax plan here. I proposed the idea that progressive taxation is more fair than flat taxation. For example, the progressive plan we have today is more fair than any flat taxation plan. That does not mean that I am now required to provide the details of a more complex plan of taxation. Actually, to make such a requirement in rebuttal would technically be known as a “fallacy of complex question.” I do not mean to suggest that you are committing such a fallacy. I know you are not. Other commenters did. I am merely stating that I do not need to have the ideal progressive tax plan laid out in my mind in order to make the logical assertion that flat taxation is not fair. In fact, I don’t even believe in the concept of an ideal plan. How a progressive plan should be implemented is nothing more than preference. There are many such plans one could devise that would not have an identifiable inherent ethical contradiction.

    I would like to ask at what point do the rich pay enough, and at one point do the poor pay to little? Again, this is a matter of opinion, and is not relevant to the question of flat tax vs. progressive tax. If you come up with the universal answer to this question, please let me know, as I also would like this data.

    I strongly disagree with the notion that people with money "hit life's lottery" Agreed. Some did and some did not. That is an obvious truth.

    … as most people who accumulate small fortunes did so with a life of hard work and thrift Though whether this is true or not, is not really germane to the topic, I would like to commend you on your faith in the matter. Some rich people worked hard and some did not. The same is true for poor people, for that matter. A person’s wealth, or lack thereof, is not a symbol of how industrious they are.

    You mentioned consumption tax. I disagree with consumption tax more than I disagree with flat tax.
    1. Progressive taxation taxes you at higher tax rates as you make more money.

    2. Flat tax, taxes everyone at the same tax rate.


    3. Consumption tax, taxes you at higher rates the less money you make, which is the most utterly egregious tax notion imaginable. If you make 10k per year and must spend 10k per year, meaning you save none of it, 100% of your income is taxed. If you make 100k per year, and must spend 30k per year, 30% of your income is taxed. If you make 100 million and you must spend 100k of that, then .01% of your income is taxed. Again, the less you make, the higher your tax rate. Currently, the wealthiest of Americans do not have substantially higher tax rates than the lower levels of Americans when you factor in current consumption tax (mainly sales tax today).

    [THE END]

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  61. John,

    Thanks for taking the time to answer all of my questions, some which admittedly, did not even pertain to your story and the point it was making. Hopefully, I am not coming across like I am trying to debate. I would hope maybe we can learn something from one another.

    With regards to the consumption tax...The version I have seen floating around gives everyone in America a check that comes to the amount that the average person spends on necessities. At that point everyone is being taxed the same amount on what they spend on non-necessities. I will concede that a rich person will pay a smaller amount of income percentage wise. They will still fund, roughly the same percentage of tax revenues that they currently do. I'm drawn to it due to the amount of time, energy, and money that is wasted preparing taxes in the current system as well as the shadow economy would then be paying taxes.

    I have a few thoughts that no one (on this post) has expressed in the way I think about them. I see every hour that I work as an hour that I didn't do something else. Because I do not have an unlimited amount of hours to live, I have always looked at taxation as a tax on life, or in a sense slavery. To a certain degree tax is unavoidable. I will gladly pay my fair share for the things we all reap the benefits from such as roads and parks. But, when I am looking at a situation where people are paying absolutely no tax, and others are paying 35% I can't help but think that some people are trading 35% of their working lives for roads, parks and various programs while others are not. Some are literally getting a free ride while others are pushing the cart. Although I fully understand where you are coming from, I also end up thinking that progressive taxation is stealing from people if the poor people's basic need are met.

    I can't get my thoughts out as clearly as they are in my head, but hopefully you get the gist. I look forward to any comments you may have.

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  62. [JPayne Consumption Tax Answer Part I]

    Hopefully, I am not coming across like I am trying to debate. You are coming across as very gentlemanly, sir.

    With regards to the consumption tax...The version I have seen floating around gives everyone in America a check that comes to the amount that the average person spends on necessities. At that point everyone is being taxed the same amount on what they spend on non-necessities. One heart splint could exceed that amount. Consumption tax is a tax that will always favor the wealthy and spread the actual effective tax burden extremely unevenly. You can try to plug the holes, but the idea is that we tax a greater percentage of your income, the less you make. I think most people would prefer a flat tax.

    People may not call it this when they “float” it around, but I think the version of “consumption tax” that you are referencing is the Republican sponsored FairTax Act, which was introduced more than a decade ago, and will never be passed into law unless we have a huge majority of republicans in both houses of Congress and the White House. It is a regressive taxation policy, by definition. The fair tax “prebate” was calculated somewhere around the same amount as the Standard Deduction is now. That does not cover anyone’s necessities, not even the impoverished, so the justification for regressive taxation was not only on philosophically shaky ground, but was an outright deception. By the way, in one version, it was calculated to match the poverty level, meaning ever dollar above poverty is taxed regressively, meaning the tax rate on income is more, the less you make. This is what they called “FairTax.”

    The FairTax Act is the one republicans used to love, I believe. If you go to FairTax.org, the PR site for this tax, they call it a non-partisan plan. It is non-partisan. It was sponsored by 60 members of congress, and two of them were blue dog democrats. See, non-partisan. FairTax.org does not bullet-point the basics of the plan. They obfuscate it and just tell you “what it will do for you,” regardless of your income class. The actual bill in its last revision is large, very complicated (and about lots of things that have nothing to do with tax). This is the bill: H.R.25.IH. If you want to browse the gibberish, you can Google that and the pdf comes up.

    [To Be Continue …]

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  63. [JPayne Consumption Tax Answer Part II]


    If someone could come up with a convincing consumption tax, then I would still not support it, because of the inherent injustice. If it rolled out of the showroom in pristine condition, after living in the real world for a few years, it would simply be a regressive tax system.

    They will still fund, roughly the same percentage of tax revenues that they currently do. I seriously doubt that accuracy of this statement. Admittedly, I have only done a surface scan of different consumption tax plans, because of the problem I just mentioned. However, the FairTax plan was an un-fair hoax in my opinion and does not bode well for the integrity of those trying to institute consumption taxation. If I took this tax plan apart, line by line, it is possible I would change my opinion, but the odds are so slim that I refuse to waste my valuable time. There are many plans about many different things, and I am but one small man. (Note: I have not even looked at the latest revision, but I have faith that it is as good as the version I did glance at. I think I saw a fairly recent revision out there). I have considered for some time posting a liberal analysis of the FairTax at Mad Mikes America. This discussion makes me more willing to do that. If I do, I will post a link to it in this comment thread.

    But, when I am looking at a situation where people are paying absolutely no tax, and others are paying 35% I can't help but think that some people are trading 35% of their working lives for roads, parks and various programs while others are not. Very profound in principle, and I am impressed by that way of examining it. You are looking at the opportunity cost of paying taxing, and not physical dollars. You are looking at the true “tax burden.” You are avoiding the mistaken logic many of your conservative compatriots fall into. However, I am not aware of anyone who is paying an actual top marginal rate on income. So far as I know, it does not happen. However, those who would theoretically pay that, earn a huge salary and they are not working more as a result of taxation. In theory, I understand your point. In practice, what you suggested does not really happen.


    As for some people paying no taxes, I am fine with that. I do not want to yank the celery from the mouths of those who are barely able to survive now. I am perfectly OK with paying tax to America when it provides a place for me to prosper and I am equally OK with those who were unable to take advantage of the potential to prosper to not pay tax for the privilege they were unable to use. I do not resent the fact that poor people are getting a free ride. There is nothing about a poor man’s ride that inspires envy or resentment in me or that makes me feel like he is blessed by America, whereas I am cursed. I have been as poor as a fellow can be, and though I am only middle class now, I have no interest in getting the poor man’s deal.

    Some are literally getting a free ride while others are pushing the cart. The poor man’s cart is empty. I am OK with pushing my cart full of money around and paying taxes on the cart full of money. The poor man who pays no taxes would be perfectly happy to change places with me if he knew how.

    Although I fully understand where you are coming from, I also end up thinking that progressive taxation is stealing from people if the poor people's basic need are met. They don’t call me Robin Hood for nothing.

    I can't get my thoughts out as clearly as they are in my head Pesky words get in the way. Much of your thoughts on this matter, and mine, and everyone else’s, are based on philosophical preference and an emotional sense of fairness and it is really hard to articulate a feeling.

    [THE END]

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