The Plight of the Taxéd

Cue the world’s smallest violin for this description of the plight of the wealthy, describing high taxes as the equivalent of “expropriation” or, in the alternative, wholesale confiscation of bank accounts.

Let’s define our terms: “expropriation” denotes any governmental taking. But it connotes a taking by force, and the word’s most common usage, recently, is to refer to the German state’s theft of Jewish assets during the Holocaust, abetted by some German and Swiss banks. Is this the language we want to use to discuss tax policy, especially when today’s wealthy private citizens carry only a fraction of the burden the upper class did, in previous generations?

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32 comments

  1. I’d be much more interested in a discussion of what the plight of the middle class would be if they paid more than the current rate.

    1. oneiroi · ·

      Well they would have to make harder decisions on, if their kids can go to college, if they can buy a home, if they can afford a car…a lot of affects that also have a chain of results. You kind of lessen their ability to stay middle class.

      Also, even if they are paying more, it doesn’t actually do anything. The middle class has so much less money than those in the top 20%, that additional funds from the middle class would be negligible.

      1. The middle class may have less money but are they consuming less services? Is the goal of a redistrubtive tax policy to restore income equality or simply to pay for government services?

        1. It seems like it would do both.

          1. Should income equality be the goal of the government or merely to provide enough services to mitigate its effect?

            1. I wouldn’t call it a goal in itself – it’s a means towards reducing social tensions and creating a more just and fair society.

              1. Doesn’t ‘just and fair’ translate to ‘income distribution’?

                1. Certainly. That’s not a negative concept for me.

                  1. So then to answer my previous question – yes, the goal of a redistributive tax policy is income equality contra normal market processes.

                    1. To turn your previous question on its head, the goal of income distribution is to address needs in society that the market forces are inadequate for in themselves.

                    2. But AK – what does a redistributive tax policy due to actually reduce income inequality? If it simply mitigates the effects by providing social programs then nothing really changes. Furthermore, how many middle class folks have need of those programs?

                      Or are we simply talking about transfering wealth from the top to the bottom?

                    3. The most important point is that it gives a greater share of the fiscal burdens of society to those people who are better able to carry them.

                    4. But I would argue that A) The middle class can carry more of that burden along with the upper class and B) Even the lower class needs to feel more of the pinch.

                      As I have argued before, a tax increase across the board is vital for our national mental state. We all need to realize the costs of government.

              2. Reducing income inequality is the opposite of creating a more just and fair society. Reduced income inequality would mean giving more people less income than they deserve and giving more people more income than they deserve. That’s unjust and unfair.

  2. Thankfully that’s not on the table.

    1. But why not? Why is that off limits? What’s wrong with a flat tax?

      1. A flat tax is actually regressive against disposable income/spending power.

        1. Not if you only apply the tax to incomes above a certain level. I would suggest $20,000 for individuals and $30,000 for couples.

  3. I’ve never heard that proposal before, probably because it’s definitionally, then, not a flat tax but a simplification of the existing progressive regime.

    1. It’s a flat tax in the sense that we would use the same rate for all payers. Exemptions for the poor is an effort to appease the Left. Personally I would have it across the board.

  4. Soooooooo when individuals earning more than $20,000,000/year pay higher taxes than those making under $20,000/year, it’s because the left is appeasing the poor?

    1. They are always going to pay more under any tax plan. What I’m suggesting is that asking the poor to pay none (or very little)is.

      1. You can’t take 20% from someone who only makes $20k. You have to take more than 10% from someone who makes $200k if you want to fund the government at all.

        Maybe a true flat tax would be palatable if we had very low income inequality.

        1. Why not take 20% from someone making $20K?

  5. But I would argue that A) The middle class can carry more of that burden along with the upper class and B) Even the lower class needs to feel more of the pinch.

    As I have argued before, a tax increase across the board is vital for our national mental state. We all need to realize the costs of government.

    Of course everyone needs to contribute, but the problem is that basic living expenses do not scale with income. That means that a 1% tax increase will represent a far greater share of disposable income for a low-income tax payer than a high-income one.

    So you actually need a progressive tax scheme to distribute the real burden equally across the population. A flat tax, while it perhaps seems both simpler and fairer, on the contrary takes relatively more money from those that are worst prepared to shoulder it.

    1. Yeah but if taxes go up for everyone there is more money for social programs to mitigate the negative effects on the poor – correct?

      1. That wouldn’t make for a very efficient system since, as I’m sure you’ll agree, every time money moves through the government some of it is lost. It’s better to let the poor keep a greater share of what they have, and tax the rich a bit higher instead.

        1. That brings up a good point, which is that taxing as a means of income redistribution is a wasteful process. Soooo…. if the goal is income equality, maybe rather than collecting money from the rich we’d be better off focusing on the reasons for that inequality. Very little of that has to do with the rich grabbing the money and almost everything to do with market forces that have hurt American workers on the lower half of the scale.

          1. Well, I still don’t think that income equality is a goal in itself, as much as it’s a tool to prevent excessive social stratification and an unequal tax burden that would make the poor (and probably the middle class) even worse off.

            It’s not that I have anything against rich people or that they’re grabbing money, but rather that in practice, they are able to and should contribute a greater share than those who, as you say, have been hit hard.

            1. The problem as I see it is if we focus too much on a safety net approach then we ignore the factors that make it necessary.

              1. Not so much a safety net as a “do no harm” approach – raise taxes, but primarily on those who can best afford it.

  6. david boudreau · ·

    No Government should take anything from it’s people without “due process” You are correct, we the people are NOT equally sharing in the pain of this economic depression. I might point out that this is going to be a long process clawing our way out of this hole.
    May I quote >
    Willy Sutton was a depression era bank robber. He was wanted for robberies in Miami, New Orleans, and New York. After his capture in 1950, a reporter asked him why he robbed banks. His reply was, “Because that’s where the money is.”

    Well not banks this time!

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