The twins, Nancy and Michelle, are learning to read and write. They think it’s cool to put their thoughts into words and see their thoughts in words. So of course they want the new iPawed, with Chitter. I’ve seen how they leave things lying around, so I’m not ready to pay a big pile of chestnuts for two phones that are smart enough to give them directions to their friend’s tree but not smart enough to say “Don’t forget me when you go home.” And of course, that answer was Not Fair.
It reminded me of a debate about taxes last night on Twitter. A progressive had spoken up for the Buffet Rule, the proposal that would ensure millionaire investors don’t pay a lower tax rate than working people. A conservative replied that the Buffet Rule would not eliminate the deficit and a higher tax on capital gains would only hurt middle-income investors, as the wealthy could easily afford it, and added:
How about a Fair Tax or a Flat tax? No loopholes to jump through. Just utter simplicity.
Against my better judgment, I jumped in:
What’s “fair” about flat tax when top 10% take home 71% of income?
A second conservative replied:
They earned it. We are an envious society. Work hard and do the best you can.
And the first conservative added:
What’s fair about the top 10% of earners paying 70% of federal income?
To which the second conservative replied:
Nothing is fair about that.
So it would be fair for the top 10% to earn 70% of the nation’s income, because “They earned it.” But “Nothing is fair” about the top 10% paying 70% of federal income taxes, because … well … just because.
It was easier to talk with the girls about that iPawed.
Good day and good nuts.
That is the whole huge problem right there in a Twitter conversation. Crap. I know I paid more in taxes than a lot of wealthy people. It’s right there on Obama’s website: millionaires who didn’t pay any taxes at all. What’s fair about that?
This economy did a whole lot better back in the days when the wealthy paid a fairer share.
The problem is that “fair” is a slippery word that means different things to different people and in different contexts. It can mean equity (sharing in proportion to contribution) or equality (equal sharing for all). With market goods and services, most see fairness as equity (buy what you can afford). With rights, most see fairness as equality (one person one vote). You can tell a market-based of about taxes or a rights-based story of taxes, and get very different views of “fairness.”
Good day and good nuts.
Taxes are not fair on an individual level. Taxes are how we fund the benefits of living together. Taxes can only be fair on a societal level.
That’s the market-based story of taxes, and one most progressives hold. The wealthy derive more benefits from civil society – almost all of their wealth exists as a function of law – and thus should pay more for civil society. Also, the wealthy can afford to pay more for civil society without giving up basic needs, while the poor can’t.
The conservative story of taxes is rights-based. That story says everyone has a right to keep what they earn and, if government must infringe on that to maintain a civil society, the infringement should be equal for everyone.
Good day and good nuts.
What is “Fair” to me is that we don’t any tax income below a certain level – the level required to food/clothe/house a family in dignity – including health care. Above that, tax all income equally – no difference between earned/unearned/deferred. If structured this way, the income that is taxed could be considered “disposable” income – and taxed at a fairly high rate. There you go – fair, flat, and doesn’t penalize the poor and struggling.
That’s actually close to one of the conservative Flat Tax plans. One such plan would have a $30,000 exemption for a family of four, and a flat tax rate for all income above that. Other conservatives say that discourages investment – relative to current tax structure – and most progressives think a $30,000 exemption for a family of four is not enough.
Welcome to BPI!
Good day and good nuts.
Actually, I’ve been on the BPI campus for about a month now. Remember when I called you a Macadamia Pusher on Twitter? This is just the first time I’ve participated!
Continuing from Twitter: “No Tax Line” MUST be indexed to local cost of living. Otherwise would be far too low to be fair to service industy employees in the NY area, or far too high for Walmart Managers.
And “No Tax” line shouldn’t just be related to household size (HS), but related to HS per earner.
I thought I’d smelled new macadamia crumbs around the campus, and the welcome was for your participation. 🙂
You make good points, and each can be advocated or rebutted under an entirely different story … taxes as social engineering. That story recognizes that taxes change behavior. If you want more investment in small businesses, tax small business investment at a lower rate. If you want less pollution, tax those who pollute. Not everyone will invest in small businesses, and not every polluter will stop polluting. But those who can best afford to do so will, and that increases small business investment and decreases pollution with the least intrusion on liberty.
The pro-local-cost-of-living argument is that we should encourage people to live in cities (which have higher costs of living) by offering a higher household tax exemption, because people in cities are more innovative and more productive. The pro-household-earner argument is that we should encourage second parents to stay home with young children – and encourage second adults to explore socially useful but not-always-marketable activities like arts and charity work – by offering a higher household tax exemption to single-earner families.
You can also imagine the anti- arguments for each, including the meta anti-argument that “government should engage in social engineering at all.”
Good day and good nuts.
Actually, I’m becoming quite opposed to ANY tax spending. If you want to encourage small business, then subsidize them as on budget, direct spending, not tax breaks. Likewise if you want to subsidize home ownership, then offer to pay 20% of mortgage interest on mortgages below a certain value. Again, on budget.
Thus I don’t propose that we “tailor” the no tax line to accomplish social goals. Do that on budget.
And frankly, this isn’t really my proposal at all! I’m very much in the progressive tax, ample social safety net crowd. I’ve just been imagining a form of flat/fair tax that I might be persuaded to support!
As for taxing to accomplish social goals, the social engineering story is that any tax structure affects behavior, so why not try to influence behavior in positive ways? The anti-engineering story admits that taxes affect behavior, but says government is not fit to choose those “positive ways.” That story also says government shouldn’t “pick winners or losers” with direct subsidies … except to subsidize those who were declared “winners” by the market. In that story, the market is inherently “fair,” an example of the just world hypothesis.
Again, it’s easier to discuss “fairness” with Nancy and Michelle wanting an iPawed. With taxes, “fair” means different things to different people. Most people will agree that taxes should be “fair” … yet they propose or support radically different tax plans … with each insisting theirs is “fair.”
Good day and good nuts.