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Obama on Redistribution of Wealth:

As Orin points out below, Drudge is highlighting excerpts of a 2001 interview Barack Obama did with Chicago public radio, in which he advocated "redistributive change." The context was a discussion of the Supreme Court and constitutional law.

Before getting to the controversy, the whole interview is worth listening to for another reason: Obama gives a very impressive performance as a constitutional scholar. Even though he was holding down other jobs while teaching at Chicago, he clearly had thought a lot about constitutional history, and how social change is or is not brought about through the courts. Among other things, I was impressed that rather than accept the rather cartoonish view that often prevails about the practical significance of Brown v. Board of Education, he knew that very few black students in the South were attending integrated schools as late as the early 1960s (almost a decade after Brown), and that it was only the threat of a cutoff of federal funds that really got desegregation moving. Being realistic about the practical effect of Brown is heresy in some circles, but Obama is correct. Relatedly, Obama was clearly influenced by Rosenberg/Klarman thesis that the Supreme Court rarely diverges much from social consensus, and can't be expected to.

On the issue of whether Obama endorses redistribution of wealth through the courts, it certainly sounds to me like he thinks the Rodriguez case (holding 5-4 that unequal funding of public schools does not violate the Equal Protection Clause) was wrongly decided, and that state courts that have mandated equal funding for public schools are correct. But he also seems to think that it was a huge error for activists to try to achieve more general redistribution through the Due Process Clause of the Fourteenth Amendment. (In the waning days of the Warren Court, there was a movement to try to constitutionalize a right to a minimum income.) Co-interviewee Dennis Hutchison even suggests that in pre-interview conversation, Obama agreed with him that Goldberg v. Kelley, establishing procedural protections for welfare recipients, was wrongly decided, or at least promised much more than it could possibly achieve.

Based on this interview, it seems unlikely that Obama opposes constitutionalizing the redistributive agenda because he's an originalist, or otherwise endorses the Constitution as a "charter of negative liberties," though he explicitly recognizes that this is how the Constitution has been interpreted since the Founding. Rather, he seems to think that focusing on litigation distracts liberal activists from necessary political organizing, and that any radical victories they might manage to win from the courts would be unstable because those decisions wouldn't have public backing. The way to change judicial decisions, according to Obama, is to change the underlying political and social dynamics; changes in the law primarily follow changes in society, not vice versa. Again, he's channeling Rosenberg and Klarman. And this attitude on Obama's part shouldn't be surprising, given that he decided to go into politics rather than become a full-time University of Chicago constitutional law professor, as he was offered. Had he been committed to the idea that courts are at the forefront of social change, he would have been inclined to take a potentially very influential position at Chicago. (And judging from this interview, he would likely have been a great con law professor, both as a teacher and scholar, and, had he been so inclined, legal activist.)

All that said, there is no doubt from the interview that he supports "redistributive change," a phrase he uses at approximately the 41.20 mark in a context that makes it clear that he is endorsing the redistribution of wealth by the government through the political process.

What I don't understand is why this is surprising, or interesting enough to be headlining Drudge [UPDATE: Beyond the fact that Drudge's headline suggests, wrongly, that Obama states that the Supreme Court should have ordered the redistribution of income; as Orin says, his views on the subject, beyond that it was an error to promote this agenda in historical context, are unclear.]. At least since the passage of the first peacetime federal income tax law about 120 years ago, redistribution of wealth has been a (maybe the) primary item on the left populist/progressive/liberal agenda, and has been implicitly accepted to some extent by all but the most libertarian Republicans as well. Barack Obama is undoubtedly liberal, and his background is in political community organizing in poor communities. Is it supposed to be a great revelation that Obama would like to see wealth more "fairly" distributed than it is currently?

It's true that most Americans, when asked by pollsters, think that it's emphatically not the government's job to redistribute wealth. But are people so stupid as to not recognize that when politicians talk about a "right to health care," or "equalizing educational opportunities," or "making the rich pay a fair share of taxes," or "ensuring that all Americans have the means to go to college," and so forth and so on, that they are advocating the redistribution of wealth? Is it okay for a politician to talk about the redistribution of wealth only so long as you don't actually use phrases such as "redistribution" or "spreading the wealth," in which case he suddenly becomes "socialist"? If so, then American political discourse, which I never thought to be especially elevated, is in even a worse state than I thought.

UPDATE: At Overlaywered, Walter Olson and Ted Frank (in the comments) talk about how all this might impact Obama judicial nominations. There are two basic possibilities. One is that Obama might believe that appointing far left Justices to the Court would be unlikely to accomplish much in the long-term, and could ultimately harm the progressive agenda, and his own presidency, by reviving "unelected judges imposing their will on the American people" as a Republican campaign theme. The other possibility is that Obama, intoxicated by victory, and having the very healthy ego that all successful politicians have, will decide that the election of a very liberal African-American president, along with large Democratic majorities in the House and Senate, signals that the social and political winds have shifted sufficiently that the Supreme Court could successfully launch an activist liberal agenda, and he will nominate justices accordingly. But there is nothing in either Obama's radio remarks, his voting record in the Senate, or his public statements on judges to suggest that he objects in principle to the equalitarian "living Constitution" of Brennan, Warren, et al., and there is much to the contrary.

FURTHER UPDATE: Obama advisor Cass Sunstein tells Politico's Ben Smith that Obama wasn't referring to redistribution of wealth in general,but "to the narrower forms of redistribution -- education, legal filing fees, legal representation, and other issues --that had been discussed in the case Obama cited and in discussions around it.

That's very hard to swallow, if one looks at the transcript.

If you look at the victories and failures of the civil rights movement and its litigation strategy in the court, I think where it succeeded was to vest formal rights in previously dispossessed peoples. So that I would now have the right to vote, I would now be able to sit at the lunch counter and order and as long as I could pay for it I'd be okay.

But the Supreme Court never ventured into the issues of redistribution of wealth and sort of more basic issues of political and economic justice in this society. And to that extent as radical as people tried to characterize the Warren court, it wasn't that radical. It didn't break free from the essential constraints that were placed by the founding fathers in the Constitution, at least as it's been interpreted, and the Warren court interpreted it in the same way that generally the Constitution is a charter of negative liberties. It says what the states can't do to you, it says what the federal government can't do to you, but it doesn't say what the federal government or the state government must do on your behalf. And that hasn't shifted. One of the I think tragedies of the civil rights movement was because the civil rights movement became so court focused, I think that there was a tendency to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalitions of power through which you bring about redistributive change and in some ways we still suffer from that.

Later, a caller asks, "is it too late for that kind of reparative work, economically, and is that the appropriate place for reparative economic work to change place?"

Obama responds, "You know, I'm not optimistic about bringing about major redistributive change through the courts."

Related Posts (on one page):

  1. Obama on Redistribution of Wealth:
  2. Obama on the Warren Court:
cboldt (mail):
-- What I don't understand is why this is surprising --
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It's not. It's political theater, See also "Spread the wealth." It's an accurate indication, being blown out of proportion by partisans. Elections are won and lost on emotions, not on facts. See the voters interviewed by Howard Stern.
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Very nice summary of the audio recording, thank you very much for the effort.
10.27.2008 8:11am
Slocum (mail):
But are people so stupid as to not recognize that when politicians talk about a "right to health care," or "equalizing educational opportunities," or "making the rich pay a fair share of taxes," or "ensuring that all Americans have the means to go to college," and so forth and so on, that they are advocating the redistribution of wealth?

But there are practical and philosophical differences between taxing Peter more heavily than Paul to pay for shared public services and taxing Peter to subsidize Paul directly with the goal of equalizing their after tax incomes. So one issue is whether or not Paul remains a taxpayer or becomes a net recipient of government funding. And another issue is the goal -- is it to provide for public services? Or is it to redistribute between Peter and Paul with the public services a secondary concern? Americans, I think, are opposed to citizens above the poverty line becoming net recipients and they are opposed to policies whose main (not secondary) goal is redistribution -- with the obvious exception of safety net programs.
10.27.2008 8:12am
Ryan Waxx (mail):

redistribution of wealth has been a (maybe the) primary item on the left populist/progressive/liberal agenda, and has been implicitly accepted to some extent by all but the most libertarian Republicans as well



Sure, if you want include all degrees of wealth redistribution all the way from means-testing for college grants all the way to consitutionally mandating a minimum income, then EVERYBODY's for it.

Now, I'm waiting for Anti-Abortionists to 'prove' that EVERYONE is pro-life in some way or another using the same method and the same standards.

Defocusing a term in order to minimize its impact is sophistry and nothing more.
10.27.2008 8:15am
Ryan Waxx (mail):
In an effort to confound the positions of the libertarian/statis spectrum, you're also ignoring the "Equality of Oppurtunity" versus "Equality of Outcome" dynamic, which for example explains why a republican might support subsidizing a college education for a child with low income but good grades, and yet not support subsidizing getting him an x-box because the rich kids have one.
10.27.2008 8:21am
Ryan Waxx (mail):
Correction: libertarian/statist spectrum
10.27.2008 8:22am
Balok (mail):
The Drudge-ing of 'redistribution' makes sense because, although cynicism re how voters tthink can get a little tedious, fact remains people primarily rely on an emotional impression of a candidate and it's clear Obama is trying to give the impression he's a moderate - invoking 'redistribution', a dark evil lurking in the swamps of socialism, works on that emotional level to correct the impression.
10.27.2008 8:27am
smitty1e:

But are people so stupid as to not recognize that when politicians talk about a "right to health care," or "equalizing educational opportunities," or "making the rich pay a fair share of taxes," or "ensuring that all Americans have the means to go to college," and so forth and so on, that they are advocating the redistribution of wealth?



There is a fine line between advocating a level playing field, and expressing discomfort with cartel-like behavior from societal elites, and advocating redistribution of wealth.
Does one want a government passively checking excesses on the part of a minority, or a government actively becoming The One True Business?
10.27.2008 8:29am
Tom Perkins (mail):

What I don't understand is why this is surprising, or interesting enough to be headlining Drudge.


Something the media is supposed to do is expose the truth without spin. In this election, Obama's spin has not merely been unhindered, but faithfully transmitted by the media very nearly 100%.

It's so bad hard fair questions are called tendentious by people who must really know better.

It's surprising because the truth about Obama is swathed in sugar by the media so the feces is acceptable sounding to the masses. This interview and his overly forthcoming response to Joe the Plumber is the straight poop. Doesn't taste so good, it's a shock.

People who've paid attention aren't too surprised.

Of course, I hear Democrat and I assume support for increased socialism until proven otherwise.

Yours, TDP, ml, msl, &pfpp
10.27.2008 8:30am
krs:

It's true that most Americans, when asked by pollsters, think that it's emphatically not the government's job to redistribute wealth. But are people so stupid as to not recognize that when politicians talk about a "right to health care," or "equalizing educational opportunities," or "making the rich pay a fair share of taxes," or "ensuring that all Americans have the means to go to college," and so forth and so on, that they are advocating the redistribution of wealth? Is it okay for a politician to talk about the redistribution of wealth only so long as you don't actually use phrases such as "redistribution" or "spreading the wealth," in which case he suddenly becomes "socialist"? If so, then American political discourse, which I never thought to be especially elevated, is in even a worse state than I thought.


(1) Political discourse seems to be all about distorting the meanings of words and accusing the other side of doing so. This shouldn't be surprising.

(2) As Ilya's noted before, it takes more time and brain power than most people have to think substantively about everything politicians say and to gather enough information to hold truly informed opinions about most of this stuff.

(3) Broad cynical platitudes aside, as you note, I think most people are ok with the general ideas that (a) wealthier people should pay more taxes (both relative and absolute) than less wealthy, and (b) that there should be some minimal form of welfare for people who can't meet their basic needs. Republicans' and Democrats' differences are a matter of degree. To be opposed to "redistribution" in principle, one would either have to oppose taxes entirely or favor only benefits that are given out in accordance with how much taxes are paid in. No one in the political mainstream will admit to holding that opinion, afaik.

(4) "Redistribution of wealth" has this strange visceral connotation to it, as though the government takes everyone's money away and then gives it back to people according to arbitrary criteria that may have little or nothing to do with how much people earned in the first place. It sounds like shuffling cards and has the feel of being antithetical to the idea that people have "earned" any of their income. It might mean the same thing as raising taxes on the wealthier and raising benefits for the less wealthy, but it sounds different, and when people as polished as Obama use different-sounding terms, they often mean something different.
10.27.2008 8:37am
cboldt (mail):
How about redistribution through mandatory federal paid vacation? err, I mean sick days?
10.27.2008 8:39am
taney71:
Obama is much more socialist than his personality lets on. Can't wait for the next four years! At least the Bush administration has prepared me not to expect much from the president.
10.27.2008 8:59am
cboldt (mail):
-- Something the media is supposed to do is expose the truth without spin. --
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No. It is not supposed to do that. The listener is supposed to THINK. The outcome of what you propose is that the listener will believe objective reality based on a report. Blind trust opens readers to gross and rank manipulation.
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It's a testimony to the media's persistent self-promotion as being a purveyor of truth, champion of accuracy, and effective bastion against encroachment of government on individual liberty.
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Media is comprised largely of people who fancy themselves elite and educated. They look down on the public - and deservedly so, because they can see they are able to FORM and TRANSFORM public thought via rank manipulation, even with falsehood.
10.27.2008 9:12am
J. Aldridge:
Didn't the court sign off with redistribution of wealth when it bowed to FDR and gave the green light to the Social Security Act?
10.27.2008 9:21am
mls (www):
"But are people so stupid as to not recognize that when politicians talk about a "right to health care," or "equalizing educational opportunities," or "making the rich pay a fair share of taxes," or "ensuring that all Americans have the means to go to college," and so forth and so on, that they are advocating the redistribution of wealth?"

Although it is tempting to answer this rhetorical question with a "yes," it seems to me that there is a difference between the policies you identify and "redistribution of wealth." One can believe that the government ought to provide certain services to the public, either because everyone has a "right" to education, health care, etc. or because the public as a whole is benefited by everyone having a minimal level of education and health care, without believing that equality of wealth per se is a legitimate aim of the government. No doubt the distinction can be blurred in application, which is why someone who advocates redistribution of wealth could be a particularly dangerous steward of the welfare state.
10.27.2008 9:23am
Angus:
It's headlining Drudge because Drudge hopes to tip the election to his candidate, McCain. Media bias goes both ways.
10.27.2008 9:26am
DavidBernstein (mail):
Oddly enough, the great libertarian Milton Friedman advocated the redistribution of wealth, but not the "services" mentioned, though he would have targeted money to parents for primary education. Much of what the governments does is just shifting around money from some reasonably well-off people to others and back, all under the moral guise of helping the poor etc. Friedman thought it was better to just send the poor a check, and get rid of the rest of it. I'm inclined to agree; actually giving government money to poor people who need it is not objectionable to me. It's the other 95% of non-defense/police government I can live without.
10.27.2008 9:27am
AF:
Clearly Americans do support the redistribution of wealth. Hence the national consensus in favor of progressive income taxes, public education, Social Security and Medicaid, and the majority in favor of universal health care.

That a particular word -- redistribution -- has negative connotations to many doesn't change the fact that stable majorities support redistributive policies and, at the moment, a majority supports expanding them.
10.27.2008 9:29am
cboldt (mail):
-- That a particular word -- redistribution -- has negative connotations to many doesn't change the fact that stable majorities support redistributive policies and, at the moment, a majority supports expanding them. --
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I doubt the majority grasps the principle that money doesn't grow on trees. That old saw about two wolves and one sheep voting on who is going to pay for lunch comes to mind. Once a majority figures out it can vote largess for itself from the public treasury and all that
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I think the majority-endorsed government redistribution and promises for future payouts have gone too far already, and that there will be a day of painful financial reckoning is in the future.
10.27.2008 9:35am
Oren:

The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.

Adam Smith, The Wealth of Nations.

Even without recourse to such fuzzy as fairness or reasonableness, a progressive tax makes sense from a purely utilitarian point of view. Since the marginal value of the dollar is diminishing with increasing wealth, the optimal distribution of the tax burden is necessarily not in proportion to wealth.

How these relatively uncontroversial ideas became branded with the wholly-different (and pernicious) concept of redistribution of wealth is really beyond me.
10.27.2008 9:42am
UVA 1L (mail):

If so, then American political discourse, which I never thought to be especially elevated, is in even a worse state than I thought.


I hate to say it, but as a thesis adviser of mine once posited, popular American discourse has become (if it were ever more than) trading caricatures of one's opposing viewpoints. Political argument in the general public sphere boils down to little more than reducing the opposing sides' arguments into overly-simplistic slogans and boiler-plate language against which it is relatively easy to argue. Rather than try to tackle the opposing sides' strongest arguments in an attempt to engage in deeply critical discussion (what my adviser called the "charity principle"), voters (and clearly the media, on both sides) create distractions in the form of overly-simplified arguments and then attack those distractions.

I wish I had something other than anecdotal evidence to offer for this assertion, but sitting in a restaurant, airport, bar, or many undergraduate classrooms provides a tenable measure (prima facie anyway).
10.27.2008 9:55am
cboldt (mail):
-- How these relatively uncontroversial ideas became branded with the wholly-different (and pernicious) concept of redistribution of wealth is really beyond me. --
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The level of controversy is in proportion to the degree. At the absurd extreme, taxing and redistributing to result in complete equality in personal wealth, personal incentive is stifled, and the "size of the pie" is diminished.
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That this is controversial today, for real, is an indication that a significant amount of personal incentive to produce and perform is being wasted, either by subsidizing laziness, or by taking an incremental dollar that becomes not worth the effort to produce.
10.27.2008 9:55am
Thomasly (mail):
Rosenberg is on the faculty at UofC, so if Obama weren't familiar with his work it would have been surprising.
10.27.2008 10:00am
Mahan Atma (mail):
"Is it okay for a politician to talk about the redistribution of wealth only so long as you don't actually use phrases such as "redistribution" or "spreading the wealth," in which case he suddenly becomes "socialist"?"


Obviously, especially if it's a Republican.

Last Spring the government, at Bush's behest, sent checks for $600 to everyone making less than $75,000. As far as spreading the wealth goes, it doesn't get more blatant than that.

Did a single person here accuse Bush of socialism?
10.27.2008 10:00am
Mahan Atma (mail):
"It's so bad hard fair questions are called tendentious by people who must really know better."


Like when Couric asked Palin if she disagreed with any Supreme Court case besides Roe (and she couldn't name one)?
10.27.2008 10:07am
Lily (mail):
"Did a single person here accuse Bush of socialism?"

I will. I am shocked at some of the policies of the Bush Administration. Not just the 'stimulus' checks, but the Bank Bailout, and other big gov't policies. This is one of the reasons I am no longer a Repulican. The Republicans are now Democrats and the Democrats are now Socialists (Communists, my Dad would say).

As I think about the Obama/Pelosi/Reid Axis, I wonder about the future of this country. Not so bright as it used to be. Redistributive economic policies tend to burden and shrink economies, and the middle and lower income people suffer the greatest. The winners are the policial class. I wonder when the strong / productive will have had enough and start acting.
10.27.2008 10:12am
A.C.:
This is what you get when you only look at the consumer side of life, and not at the producer side. Expect more of it as people's careers become less and less stable, and as a higher proportion of the population enters retirement.

When wealth becomes a static thing that you have (or not), rather than a thing you acquire gradually through your own efforts, the way people see it changes. Governments have been known to resort to deliberate confiscation in order to break up large holdings and hereditary class privileges.

There's a simple solution outside government, though. If companies paid their workers better and their CEOs considerably worse, there would be less political pressure for redistribution through the state. Members of the executive class should keep this in mind.
10.27.2008 10:12am
Bart (mail):

What I don't understand is why this is surprising, or interesting enough to be headlining Drudge...Barack Obama is undoubtedly liberal, and his background is in political community organizing in poor communities. Is it supposed to be a great revelation that Obama would like to see wealth more "fairly" distributed than it is currently?

Because most folks do not pay close attention to politics and the Dem media is intentionally not reporting on Obama's rather radical history, far too many ignorant voters actually believe Obama's bad faced lies that he will cut taxes for nearly everyone and pay for a trillion dollars in new spending through budget cuts as though her were some modern conservative combination of Reagan and Gingrich.
10.27.2008 10:32am
Donny:
When is Bernstein going to admit he was totally wrong about the Jewish vote? I'd give 2:1 odds that Obama does better than Kerry in this regard.
10.27.2008 10:32am
Lily (mail):
Quoting Obama: "And uh, to that extent, as radical as I think people tried to characterize the Warren Court, it wasn't that radical. It didn't break free from the essential constraints that were placed by the Founding Fathers in the Constitution"

Break free from the essential constraints that were placed by the Founding Fathers in the Constituion"???
Dear God, help us all.
10.27.2008 10:34am
Sarcastro (www):
Lily's right! Roll back the 14th Amendment!!!
10.27.2008 10:42am
Patrick216:

Is it okay for a politician to talk about the redistribution of wealth only so long as you don't actually use phrases such as "redistribution" or "spreading the wealth," in which case he suddenly becomes "socialist"? If so, then American political discourse, which I never thought to be especially elevated, is in even a worse state than I thought.


I think there's a big difference between having a public policy goal -- "education for all" -- that requires public expenditures (i.e. a redistribution of wealth) and having redistribution AS a public policy goal. Most conventional liberals have specific public policy goals in mind that require redistribution, but do not believe that taking from A and giving to B for its own sake is a virtue. Obama does.

Obama's political philosophy is expressly neomarxist in origin. I would not be surprised to see Obama take some of the steps taken by rulers such as Putin, Chavez, and Mugabe to aggregate greater and greater power to the federal government and away from the private sector (and his political opponents). [To be clear, I am not suggesting that Obama would use violence, as many of the foregoing rulers have done. Obama doesn't strike me as a violent guy.]

I see signs of that already through the nationalized health care that his people are putting together with Kennedy, the 401(k) nationalization plan that's being developed in Congress, the public advocacy by various liberals for a nationalization of the banks, the card check legislation, and so forth. He will also use the organs of government to silence dissent, such as through the implementation of the Fairness Doctrine and an aggressive use of the FBI and/or civil litigation to silence opponents. You have already seen examples of the latter: Obama's campaign has requested roughly 3-4 FBI investigations into Republicans who had the temerity to disagree with him.
10.27.2008 10:48am
Sarcastro (www):

expressly neomarxist in origin


I do wish Obama would stop citing NeoMarx in his speeches.
10.27.2008 10:57am
Bad (mail) (www):
People aren't just stupid: they are made stupid by partisan allegiance telling them to believe and chant stupid things.
10.27.2008 11:06am
Clayton E. Cramer (mail) (www):

But are people so stupid as to not recognize that when politicians talk about a "right to health care," or "equalizing educational opportunities," or "making the rich pay a fair share of taxes," or "ensuring that all Americans have the means to go to college," and so forth and so on, that they are advocating the redistribution of wealth?
Yes, they are that stupid.

More realistically, many Americans don't mind some effort to help the deserving poor (and distinguish them from the lazy and addicted poor), but (to the extent that the masses think about this at all), they regard this as an duty of a Christian commonwealth to provide for the necessities of life--not as a general principle that everyone deserves an equal slice of the pie.

If McCain wanted to win the election they would be running with this clip, very aggressively. But McCain would rather lose like a gentleman, rather than expose Obama's Marxism.
10.27.2008 11:09am
Clayton E. Cramer (mail) (www):

Last Spring the government, at Bush's behest, sent checks for $600 to everyone making less than $75,000.
I'm confused. I make a lot more than that, and I got a check too!
10.27.2008 11:12am
Brock (mail):
For myself, what I find surprising and depressing is that Barry wants to organize the community to "break free from the restraints imposed by the Founding Fathers", and apparently also to have the government enforce "positive rights." And from the Bully Pulpit in DC he'll have a powerful chance to do so, God help us all.
10.27.2008 11:16am
Melancton Smith:
I'm convinced. Raise my taxes!


Let me tell you how it will be,
There's one for you, nineteen for me,
'Cos I'm the Taxman,
Yeah, I'm the Taxman.
Should five per cent appear too small,
Be thankful I don't take it all.
'Cos I'm the Taxman,
Yeah yeah, I'm the Taxman.


Nevermind me, I'm suffering from IBS (I Become Sarcastro).
10.27.2008 11:17am
Mahan Atma (mail):
"I'm confused. I make a lot more than that, and I got a check too!"


I believe it was actually "individuals making less than $75,000" or "households making less than $150,000". So if you and your wife combined made less than $150k, you probably got a check.

Same difference...
10.27.2008 11:19am
Oren:

The level of controversy is in proportion to the degree. At the absurd extreme, taxing and redistributing to result in complete equality in personal wealth, personal incentive is stifled, and the "size of the pie" is diminished.

Well taken, cboldt. Given where we are right now in terms of income inequality and asset inequality (which are two separate animals), I don't think we are anywhere near the level of progressive taxation that qualifies as bona fide redistribution.

Clayton, it is interesting that you would bring up the distinction between deserving and undeserving poor, a sentiment that I share. We should be targeting our anti-poverty efforts at education/opportunity for those that show a strong motivation to succeed.

That said, given your political background, it is hard to cast you in the role of sincere reformer of a system that you seem think ought to be abolished outright. I'm not doubting your sincerity (because I personally know you to be thoughtful) but hopefully you can understand why proponents of a system are wary of accepting this criticism at face value.

Also, I got a check for only $285. Bush is not only a socialist, he's a cheap bastard of a socialist.
10.27.2008 11:28am
pdxbob (mail):

"That a particular word -- redistribution -- has negative connotations to many doesn't change the fact that stable majorities support redistributive policies and, at the moment, a majority supports expanding them."



There's a shocker.

'A government which robs Peter to pay Paul can always depend on the support of Paul.' - George Bernard Shaw

p.s. anyone know why Shaw would say such a thing? He was quite the Socialist.
10.27.2008 11:36am
Epictetus (mail):
"At least since the passage of the first peacetime federal income tax law about 120 years ago, redistribution of wealth has been a (maybe the) primary item on the left populist/progressive/liberal agenda, and has been implicitly accepted to some extent by all but the most libertarian Republicans as well."

Is this a joke?
10.27.2008 11:36am
Patrick216:
Sarcastro,

Among the biggest intellectual influences we can identify in Barack Obama's life include Saul Alinsky and Jeremiah Wright. They're about as neomarxist as they come.
10.27.2008 11:37am
Allan (mail):
Why no talk here of the massive redistribution in the other direction since 2000, with FICA revenues from all working folks shoveled into the pockets of the wealthiest through highest-bracket income tax cuts?
10.27.2008 11:38am
Ryan Waxx (mail):

Is this a joke?



No, it's an attempt to change reality through rhetorical definition-shifting. See my comments earlier in the thread for an explanation of what he's trying to accomplish, and how.
10.27.2008 11:50am
cboldt (mail):
-- I don't think we are anywhere near the level of progressive taxation that qualifies as bona fide redistribution. --
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The label, "redistribution" is just a label. Like all other labels, it comes with a certain amount of emotional power.
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I expressed above my opinion that I think the federal government is involved in manipulation (or micromanagement) of the present and future economy to an extent that will result in painful financial correction at best, and the imposition of even more strident regulation most probably. Progressive income tax is but one of many government activities that are redistributionist (money transfer without regard to having "earned" or created proportionate value) in nature.
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And the majority of people will cheer for the increased government intervention. The natural follow on to majority rule democracy is benevolent dictatorship. Obviously, neither of those will exist in a "pure" form; my point of view is a balance between self-determination and activities that are mandated or forbidden by the government.
10.27.2008 11:50am
anon252 (mail):
Maybe because FICA tax rates didn't go up since 2000, and tax cuts = letting people keep their money, which is the antithesis of "redistribution." Have the Democrats been so successful in equating tax cuts with a "giveaway" to the rich that you've lost sight of the fact that the money wasn't the government's to begin with?
10.27.2008 11:50am
Lily (mail):
with FICA revenues from all working folks shoveled into the pockets of the wealthiest through highest-bracket income tax cuts?

Social Security was conceived as a 'pension insurance' program. Higher earners alway have higher pensions. This is but one reason to work hard to move up the income laddder.

Would you have our Gov't remove any and every incentive to work hard? Would you have the SS system become one more welfare inititive.
10.27.2008 11:52am
Lily (mail):

The label, "redistribution" is just a label. Like all other labels, it comes with a certain amount of emotional power.


Its not emotional when the money you worked and sacrified to make is being taken away to give to another person (who did NOT earn it) in the name of 'fairness' and 'neighborliness' and 'patriotism'.

We are not now talking about keeping people from starving in the streets. We are talking about taking $$$ from the earner and giving to the non-earner to 'even things out a bit'.
10.27.2008 11:57am
Sarcastro (www):

Biggest intellectual influences we can identify in Barack Obama's life include Saul Alinsky and Jeremiah Wright


I was a Boy Scout for several years a decade ago. This means I follow Baden Powell's teachings to a T! I mean, I learned his methods, so I must agree with his philosophies! That's why I plan to go fight in the Boer Wars.

And Obama clearly gets along super well with that Wright guy! I think they're such good buds because of how similar their philosophies are.

HUGE Intellectual influence from those two! Cause Obama is such a follower and can't come up with a philosophy on his own!
10.27.2008 11:59am
josh:
I really find some of the obsession with Obama and "socialism" a bit unhinged (although I do appreciate OK's and DB's apparently evenhanded take in these two posts generally).

But I have an honest question: Do we not currently have a progressive tax system -- one in which posters on the site may oppose as a general matter, but the Republican party accepts as a practical matter?

Doesn't the dispute between Obama and McCain honestly boil down to questions, for example, of whether we're going to tax the top bracket at 39% (as in those hard-hitting, socialist days of the 1990s), or at the current 35%?

I can appreciate the arguments for or against raising the rate. I can even see Joe the Plumber's point, even if he was totally off base from his own personal tax standpoint. But ultimately, being taxed at 35 or 39%, while others are taxed at lower rates, is redistribution of wealth. Funny, that was what we were doing for 6 years during a Republican presidential administration with a Republican-controlled Congress and I never heard "socialism!!"

I suppose the point of discussing the audio clip was more about Obama's view of the courts' role in further extending our nation's socialistic tendencies. I don't know what to say. Those in this country and who read this blog are going to find what they want to find out of the audio.
10.27.2008 12:11pm
cboldt (mail):
-- Its not emotional when the money you worked and sacrified to make is being taken away to give to another person (who did NOT earn it) in the name of 'fairness' and 'neighborliness' and 'patriotism'. --
.
That seems to be a point where the reaction becomes emotional! Rightfully so, IMO. My comment was just that the label "redistribution," is vague, and tends to take on a range of meanings depending on what the listener wants to hear. If the degree of redistribution was reasonable in your mind, then you'd have a different reaction to the word.
.
Moving away from the emotional, a thinking rational person that has a normal "human nature" will reduce his or her production when "too much" (a personal decision) is taken away. Why work for it when you can get it for free? I'm confident in predicting that you and I share the belief that the current level of government involvement will not maximize aggregate social (sense of personal responsibility) and financial wealth; and that the proposed policies of the Democrats are more destructive to a strong, proud and durable society than the policies proposed by the Republicans.
10.27.2008 12:12pm
MartyA:
Many of you seem to think that Hussein's "changes" will be modest and, even, just matters of degree. They won't! They will be dramatic and issues like "distribution of wealth" will mask some of them.
Key will be defense. Hussein will ground (and scrap) most of the bomber fleets and reduce the carrier groups to 4 or 5, scrapping rather than mothballing the decommissioned ships.
In response to Abu Graib, all ground units will have political offers who share command responsibilities. The "savings" will be redistributed.
I also see a key redistribution target as being major cities, especially those with minority populations that delivered 110% of their votes to Hussein. Detroit, Oakland, New Orleans, St. Louis, Philadelphia, Newark will receive so much "redistributed wealth" as to satisfy crooked politicians, and even folks like Kwame Kilpatrick, Charlie Rangel and Alcee Hastings AND their friends and families.
Might I suggest a contest? What will be some of the euphemisms (leftist are always clever with a phrase) that Hussein's government will use to label it's rape and pillage of America's middle class?
10.27.2008 12:14pm
Sarcastro (www):
MartyA whoa. Are you some sort of prophet? Or maybe a time traveler from a post-commupocolypse future come to warn us though the intertubes?
10.27.2008 12:17pm
American Psikhushka (mail):
Ryan Waxx-

In an effort to confound the positions of the libertarian/statis spectrum, you're also ignoring the "Equality of Oppurtunity" versus "Equality of Outcome" dynamic...

You realize that every dollar taken from the private economy slows down economic growth and development and prevents the private economy from creating wealth, don't you? Do you realize that the private economy is the only entity that can effectively create wealth? That government can't effectively create wealth? (In this context I'm talking about "wealth" on a societal scale, but the beauty of capitalism and markets is that it creates both societal and individual wealth at the same time.)

So if you're an economy that is in a recession or depression the worst - absolutely worst - thing you can do is to increase taxes to take more money from the private economy, since it slows down or even prevents the private economy from workings its way through and growing out of a recession or depression. Now by extension do you realize that the policies that are being proposed are the absolutely worst things to do to an economy that is in a recession or depression?
10.27.2008 12:25pm
Sarcastro (www):
American Psikhushka


the private economy is the only entity that can effectively create wealth


FDR would like a word with you.
10.27.2008 12:30pm
therut (mail):
Lawyers better watch out cause I can almost guarantee that if we get single payer government health care that malpractice money is going to dry up by law. No way can lawyers keep raping the system when the .gov pays. People will demand it when they see the connection to their taxes going more directly to lawyers. Give it time and your time will come.
10.27.2008 12:33pm
Melancton Smith:
josh wrote:

I can appreciate the arguments for or against raising the rate. I can even see Joe the Plumber's point, even if he was totally off base from his own personal tax standpoint. But ultimately, being taxed at 35 or 39%, while others are taxed at lower rates, is redistribution of wealth. Funny, that was what we were doing for 6 years during a Republican presidential administration with a Republican-controlled Congress and I never heard "socialism!!"


True, but I don't recall the republican's saying that those folks in that bracket weren't paying their fair share and pushing for a higher rate.
10.27.2008 12:51pm
Wayne Jarvis:
Josh: you make good points. I guess the problem that I have with BHO, and what makes him different than his predecessors, is that he sees "fairness" (as opposed to revenue raising) as the endgame in and of itself.

His comments on captital gains taxes are a window into his thought process: he doesn't care that higher capital gains taxes will not result in higher revenue It's "fairer." End of story. Put another, it is more important to close the gap between the rich and everyone else than it is to raise revenue to pay for programs.

You can argue that this is what sets OHB apart. The progressive tax system has historically been viewed a a "fairer" way to raise revenue, not as a way of promoting "fairness" in and of itself.
10.27.2008 12:59pm
Ben P:

You realize that every dollar taken from the private economy slows down economic growth and development and prevents the private economy from creating wealth, don't you? Do you realize that the private economy is the only entity that can effectively create wealth? That government can't effectively create wealth?


I disagree.

A non-trivial portion of government spending items can quite accurately be described as "enablers." Sure, a tax dollar taken out of the economy is one less tax dollar the economy has generated, but if that tax dollar goes to the police to pay them to provide for a safe and secure environment for businesses to operate, the gain by allowing business to grow more effectively is larger than the cost to the economy of paying for it. How effectively would the US economy have been able to grow if governments didn't provide police, or build roads, or provide for a court system to settle commercial disputes, etc etc.


There's tons of arguments as to degree and efficiency and nature of this benefit. But arguing taxation is uniformly bad without even considering utility is simply an incomplete argument.
10.27.2008 1:01pm
Melancton Smith:
Sarcastro wrote:

I was a Boy Scout for several years a decade ago. This means I follow Baden Powell's teachings to a T! I mean, I learned his methods, so I must agree with his philosophies! That's why I plan to go fight in the Boer Wars.


As a former Boy Scout, I have to say that a portion of my worldview has been heavily influenced by Scouting. Probably a large part of my sense of civic and social responsibility.

We are all a product, one way or another, of the influences on our lives.

Now being a student of a particular philosophy does not necessarily make you an adherent. You might study up on it and turn against it, for instance.

You'd have to correlate the student with his/her later writings and perhaps voting record if applicable to know how a given philosophy influenced that person.
10.27.2008 1:01pm
Sarcastro (www):
[Alinsky style community organizing doesn't seem to require a particular philosophy other than thinking grassroots can be powerful.

Method is not the same as philosophy.]
10.27.2008 1:06pm
Brian G (mail) (www):
If America votes for Obama, they should be aware of the scorpion and frog story. Because they should already know what they are going to get, a pure Socialist.
10.27.2008 1:35pm
Jane (mail):
Ben: You can disagree all you want, but you cannot change basic laws of economics. A dollar spent in the public sector has a lessened impact on the economy when compared with a dollar spent in the private sector.
10.27.2008 1:44pm
Thales (mail) (www):
Good lord, even Robert Nozick advocated redistribution of income to the extent necessary to fund the minimal state and prevent it from breaking down into gang warfare (i.e., if you don't make enough money to fund your fair share of defense, police, courts, etc., the rich pay a bit more to fill the gap). If anyone is under the impression that Obama "has it in for the rich" or is going to make it even noticeably more difficult for the moneyed class or nationalize the means of production, you need a serious reality check (and to examine the levels of support he gets in Greenwich, CT). We're talking about tax relief/direct payments to people who have almost nothing, and a return to Clinton administration levels of taxation (you know, when we didn't borrow ourselves into a black hole to pay for everything). He's inarguably a moderate to progessive (depending on the issue) liberal, but this is relative to the liberalism of the 1960s and 1970s . . . that's gone and ain't coming back.
10.27.2008 1:48pm
No Communists (mail):
"The fundamentals of our economy are strong." - McCain
"He means our workforce." - Palin

People, we must be vigilant.

Sarah Palin says she reads whatever is in front of her - so I wonder if someone put a copy of Das Kapital on her desk!

Valuating the economy in terms of the quality of the labor force is classic Marxism. Marxist Labor Theory of Value.
10.27.2008 1:51pm
Sarcastro (www):
Brian G's dire prediction without any evidence or argument convinced me since I am a sucker for those talking animal fables.
10.27.2008 1:52pm
Robert Anthony Pitera (mail):
While it's not surprising that this is in Drudge (even Drudge knows McCain is a dead story) but what may surprise some conservatives is that Obama's views mirror those of Scalia more than some of his more liberal brethren.
10.27.2008 1:54pm
Cold Warrior:
To me the most interesting thing here is this: Obama clearly separates himself from the 60s/70s liberal agenda, and places himself squarely within the 90s/new millenium critique of that agenda. That is, an understanding that there are limits - legal, but mostly practical - to looking to the courts to effect social and economic change. The importance of this message is no doubt lost on non-academic types and on persons approx. 35 and under. But Obama is my age, and he lived through those same generational battles. The Ayers/Dohrn-style 70s liberals had a profound skepticism/distrust of the political process; the courts became their best hope: creation of a shadow lefty government to implement an ambitious social and economic agenda. Obama was, no doubt (right wingers, hold onto your hats here) seen as a profoundly conservative student among the prevailing lefty academic elites of the era. How do I know that? Well, because that's how I (kind of a Dukakis liberal c. 1988) was seen by the leaders of my graduate program. So I understand where Obama is coming from. Of course, the other question -where is he intending to go today? - remains a good one. I would imagine that he hasn't given up his fundamental belief that distributive (yes, REdistributive) justice is a goal to be sought after, albeit through the political process. But he is clearly no "Marxist," paleo or neo. Democratic socialist of a western European bent? Sure, I'll buy that. But in today's political climate I guess you're not allowed to say that you'd like a more French or German or Swedish (or Canadian) economic model for the USA. My guess? He's shooting for something between Canada and France.
10.27.2008 2:25pm
guest:

But are people so stupid as to not recognize that when politicians talk about a "right to health care," or "equalizing educational opportunities," or "making the rich pay a fair share of taxes," or "ensuring that all Americans have the means to go to college," and so forth and so on, that they are advocating the redistribution of wealth?


Yes, David, they people are that stupid. And people need to have it pointed out to them in black and white that, YES, Obama bluntly favors a strict socialist policy of the redistribution of wealth. The next thing they'll need to have pointed out to them bluntly is that strict socialism can be enforced only with totalitarianism.
10.27.2008 2:28pm
Bob Van Burkleo (mail):
(4) "Redistribution of wealth" has this strange visceral connotation to it, as though the government takes everyone's money away and then gives it back to people according to arbitrary criteria that may have little or nothing to do with how much people earned in the first place.

Saw a program about grifting and human psychological foibles a few months back. If given two situations of 1) you are just told you can gamble and win $40, and 2) You are given $40 and then taken back and you are told you can win it back, you will be twice as likely to engage in the gambling game.

We are wired to want to recover something that we consider to have been ours whether it objectively is or not. Framing thinks so the person thinks of it as a 'loss of mine' issue is a pretty basic propaganda technique.
10.27.2008 2:30pm
Malvolio:
A non-trivial portion of government spending items can quite accurately be described as "enablers." Sure, a tax dollar taken out of the economy is one less tax dollar the economy has generated, but if that tax dollar goes to the police to pay them to provide for a safe and secure environment for businesses to operate, the gain by allowing business to grow more effectively is larger than the cost to the economy of paying for it.
Perhaps for extremely small values of "non-trivial". It would be difficult to calculate what I call "the libertarian optimum" -- the level of government expenditure that produces the maximum economic growth -- but you can't convince me it's much more than a quarter of what we are spending now, on Social Security, excessive regulation, unneeded "defense" spending, the drug war, and so on.
10.27.2008 2:34pm
Oren:

Progressive income tax is but one of many government activities that are redistributionist (money transfer without regard to having "earned" or created proportionate value) in nature.

Then simple utilitarianism (the diminishing marginal utility of the dollars) dictates the redistribution-ism (at least in the overly broad sense you've defined it) is the optimal tax policy.
10.27.2008 2:37pm
flyerhawk:
It would seem that Republicans aren't getting the same bang for the buck with the "He's a Socialist!" battle cry. There was once a time when they could toss out that charge with an occasional reference to "redistribution of wealth" and their opponents would meekly shy away.

That isn't working in this cycle. People are actually challenging the concept of socialism as boogeyman. When the Republicans are nationalizing the banking system, their accusations of socialism ring hollow.
10.27.2008 2:42pm
Oren:

Perhaps for extremely small values of "non-trivial". It would be difficult to calculate what I call "the libertarian optimum" -- the level of government expenditure that produces the maximum economic growth -- but you can't convince me it's much more than a quarter of what we are spending now, on Social Security, excessive regulation, unneeded "defense" spending, the drug war, and so on.

The interesting thing is that everyone has their own different lists of frivolous expenditures. Perhaps if we could all agree on the useless parts of the budget, they would be easier to trim. Many on the right refuse to cut military funding or drug enforcement for any reason. Many on the left won't let you touch environmental or consumer protection. Large proportions of Americans are very opposed to touching social security or medicare.

You make it sound as if there are these obvious wastes that everyone agrees can be cut. . .
10.27.2008 2:44pm
MarkField (mail):
Apparently those too dumb to realize Obama's socialism include the Financial Times.
10.27.2008 2:45pm
Oren:

Apparently those too dumb to realize Obama's socialism include the Financial Times.

And The Economist.
10.27.2008 2:46pm
pdxbob (mail):

But in today's political climate I guess you're not allowed to say that you'd like a more French or German or Swedish (or Canadian) economic model for the USA.


Of course you're allowed to say it, but I hope it doesn't come to pass. An easier way to make it happen at a personal level is to simply move to one of those idyllic countries.

If we wanted to be like the Europeans, why step foot on the Mayflower to begin with?
10.27.2008 2:49pm
Oren:

If we wanted to be like the Europeans, why step foot on the Mayflower to begin with?

At the time the Mayflower sailed, almost all of Europe was ruled by Kings. Comparisons of that time to modern-day Europe (which owes much of its evolution to our positive influence) is disingenuous.
10.27.2008 2:55pm
Xanthippas (mail) (www):
Hmmm...a surprisingly fair post about Obama from David Bernstein. He demonstrates that is possible to disagree and yet construe your opponent's position on something accurately. This is a trait that is lacking too frequently on the lefty blogosphere, and almost entirely on the right (Volokh being a notable exception, and the reason I come here so often.)


Something the media is supposed to do is expose the truth without spin. In this election, Obama's spin has not merely been unhindered, but faithfully transmitted by the media very nearly 100%.


It is entirely possible that Americans are not infants, and realize that when they are taxed, their money is frequently given to someone who doesn't make as much as they do. Since we've had an income tax in this country for the better part of a hundred years now, this really should come as no surprise. The question is not whether there should or shouldn't be redistribution of income; the question is how much there should be. Only on the right can you equate taxation with socialism and get away with it, but as polls are demonstrating, such simple-minded attacks are having trouble gaining any traction this year.
10.27.2008 3:02pm
charlie (mail):
we need to stand against obama. he is evil. there are so many reasons why he is evil it would take all day to go into. i have baby in the womb and i don't want my little child to grow up its first years under this evil man. i pray to God that american people will go to the polls with wisdom and vote for john McCain
10.27.2008 3:04pm
Elliot123 (mail):
"Is it supposed to be a great revelation that Obama would like to see wealth more "fairly" distributed than it is currently?"

It all depends on the audience. The Obama campaign has gone out of its way to downplay his ideas about redistribution. They know people don't like to hear it in plain words, so they try to say he means tax relief, health care, or daycare. Have you heard him advocate for "redistribution" or "reparations" in the campaign?

So, it is a revelation to many who don't track the campaign and policies advcated by each candidate. Consider the impact of his comment about "spreading the wealth around." One could also ask if that was a revelation. It wasn't to the 5% who avidly follows such things, and but it was to the lumpen, and they have the votes.
10.27.2008 3:17pm
David T (mail):
Thank you for a sane and balanced post on this. I had been getting depressed about the trivialization of political debate. It's nice to find a corner of the internet that has a relatively clear political ideology but isn't unhinged about it, and in fact is perfectly reasonable and serious. (Sadly I see that not all of the comments here fit that description.)
10.27.2008 3:17pm
Cold Warrior:
PDXBob, thanks for the brilliant insight. I agree that those on the Mayflower didn't come here to create a New World Canada. Oh, wait a minute ...

... And Charlie: I now see the light! Obama is Satan! God loves web trolls!
10.27.2008 3:17pm
Jane (mail):
we've had an income tax in this country for the better part of a hundred years now, this really should come as no surprise.

But, in the past we have agreed to be taxed to support true public goods (roads, police, military, etc), and to keep people from starving in the streets. What Obama is proposing is new - increased taxation to 'even out people's income' - That Person A has more than Person B is inherently unfair (says Obama), and this needs to be rectified by taking more money away from Person A and giving to Person B - its only neighborly, you know.

Of course, we don't need to bother ourselves with wondering why one has more than the other, do we? Perhaps Person A is older, established and has worked hard and scarified their whole lives to arrive at this point. Perhaps Person B is very young and just getting started. Wouldn't it be natural then for Person A to have more at that point in time? Or maybe Person B lived foolishly or erratically and is paying the price. Or maybe Person B just decided to choose leisure over labor - their choice, you know. But now it is UNFAIR that Person B doesn't have as much. So, the only good thing for society to do is storm Person A's property and take it, and give it to Person B to Make Things Fair.

In attempting to 'fix injustices', Obama will create new and more profound injustice. And disincentives to be productive. This is why it is said that Socialism brings suffering to a higher level.
10.27.2008 3:22pm
therut (mail):
Obama was also talking of lefty ideas of positive rights. Right to health care etc. I do not think our Constitution speaks of such rights and he agress with that. He wishes it did and he wishes he had a USSC that would make it up that it did. It is like his talking about taking guns away. He did not say he did not want to but that he did not have the votes. Can you people make up your mind if he is a socialist or not. I thougt European democratic socialism is socialism. And yes I think progressive income taxes are socialist. We do not have to have progressive income taxes and I wish we did not. I wish alot of things though.
10.27.2008 3:26pm
Gallo Caldo (mail):
Last Spring the government, at Bush's behest, sent checks for $600 to everyone making less than $75,000. As far as spreading the wealth goes, it doesn't get more blatant than that.


To be fair (and I'm right there with you in criticizing Bush as squishy on economic policy), the administration pushed for the checks to be tax rebates. Only after the Democrats got done with it did it include credits ($300) for tax filers who paid no taxes (i.e., it became a handout).
10.27.2008 3:42pm
American Psikhushka (mail):
Sarcastro-

FDR would like a word with you.

If you have a time machine, set it up. I'll slap the prissy cigarette holder out of his mouth, because his policies are thought to have prolonged the Great Depression by seven years according to a recent study by UCLA economists. And those are conventional academic economists, those in the Austrian School have known this for a long time.

Hat tip to Christopher Manion at the lewrockwell.com blog.
10.27.2008 3:46pm
josh:
Wayne Jarvis

I appreciate your point, and I think our differences demonstrate the real differences between the candidates once you wash away all the extreme rhetoric. I don't want to speak for you, but I feel it boils down to the question of how much (more) the higher income earners will pay. I see no problem with going from the 35 to 39 % bracket (on the final portion of my income -- not on all of it). And I'm guessing you differ, at least as to capital gains, because you argue they won't raise more revenue for the government (i.e., they will stymie investment and growth).

Again, I appreciate your point and your tone, but I just don't think I agree. I don't think the last eight years have shown that the higher rates of the Clinton years stymied growth. Let me please say I understand the current crisis is the result of a wide variety of factors -- some of which may be placed by history's review on Clinton's doorstep. But I do think we were better off even when the richest Americans paid slightly more in taxes.

Just the way I feel. You feel differently. I respect your opinion.
10.27.2008 4:00pm
therut (mail):
Wonder what the economic growth under Clinton would have been without the .com bubble. Remember when that burst!!!
10.27.2008 4:06pm
Melancton Smith:
oren wrote:

At the time the Mayflower sailed, almost all of Europe was ruled by Kings. Comparisons of that time to modern-day Europe (which owes much of its evolution to our positive influence) is disingenuous.


But it wasn't just Mayflower passengers that came here to escape Europe. People have been emigrating here constantly since then. They have come here to take part in our economic prosperity and our freedom. I suppose taking that all away might put a damper on legal immigration and maybe solve our illegal immigration issues...

My question is...where do the misfits of the 21st Century emigrate to? Where is our New World? With nowhere to move to, the disaffected have no outlet.

And so what if they don't have Kings anymore...tyranny by legislature is just as heinous.
10.27.2008 4:14pm
Jane (mail):
I see no problem with going from the 35 to 39 % bracket

And what is the maximum percentage of your income that will finally be too much? As long as there is a source of money (your money in this case), there will always be a need for it. And that need will grow and grow. Private property will cease to have any meaning.

You say it can't happen? Who would have imagined when the income tax was instituted that we'd be paying what we pay now? No one would have believed you if you'd predicted the current tax levels. They'd have said, "no one would stand for that! NO way!"

Laffer is right, though. Increased taxation will lead to lower tax receipts. Everybody will be poorer. But Obama doesn't care. He is just interested in 'Fairness' even if tax receipts decline. He stated this position in a televised debate with Hillary.
10.27.2008 4:16pm
Sarcastro (www):
[American Psikhushka

Even if that were the case, WW-2 would seem to be a great example of Government created wealth.]
10.27.2008 4:34pm
MarkField (mail):
Threads like this make me long for the days -- they seem so distant now -- when Obama was a secret Muslim who intended to impose Sharia on us.
10.27.2008 4:37pm
Calderon:
Even if that were the case, WW-2 would seem to be a great example of Government created wealth

Totally, making a bunch of machines in the US specifically designed to destroy factories and infrastructure in Europe and Japanese-occupied Asia was an excellent example of government-created wealth, just like (on a much smaller scale) building prisons to house those convicted in the war on drugs is another excellent example of government created wealth.
10.27.2008 4:44pm
Thales (mail) (www):
"Threads like this make me long for the days -- they seem so distant now -- when Obama was a secret Muslim who intended to impose Sharia on us."

Or when he was a crazy Christian black nationalist who was going to enslave white people as retribution.
10.27.2008 4:44pm
jukeboxgrad (mail):
oren:

Many on the right refuse to cut military funding


We spend as much on defense as the rest of the world combined. Unless we think the whole world is trying to kill us, it's very hard to think of this as rational. And even then, it's hard.
10.27.2008 4:51pm
jukeboxgrad (mail):
jane:

And what is the maximum percentage of your income that will finally be too much? As long as there is a source of money (your money in this case), there will always be a need for it. And that need will grow and grow. Private property will cease to have any meaning.


Hmm, let's see. So if taxes go up a little for some people, that will lead to a situation where "private property will cease to have any meaning." But if Bush starts snooping on people, and eroding my civil liberties, folks here would mock anyone who raised a concern that 'civil liberties will cease to have any meaning.'

Got it.
10.27.2008 4:52pm
Sarcastro (www):
I remember back in the day when he was just an inexperience "empty suit" and Hillary would wipe the floor with him.
10.27.2008 4:52pm
jukeboxgrad (mail):
calderon:

Totally, making a bunch of machines in the US specifically designed to destroy factories and infrastructure in Europe and Japanese-occupied Asia was an excellent example of government-created wealth, just like (on a much smaller scale) building prisons to house those convicted in the war on drugs is another excellent example of government created wealth.


You're absolutely right, that government has the power to create phony wealth by wasting money on dumb things. But when government puts money where it's needed, like into infrastructure, education and health, this does in fact have the potential to enhance everyone's wealth.
10.27.2008 4:52pm
American Psikhushka (mail):
Sarcastro-

Even if that were the case, WW-2 would seem to be a great example of Government created wealth

Your argument is along the lines of the "broken window fallacy". What you're not seeing is what could have been produced if the money had been left in the private economy, if the currency had not been debased, etc. Bastiat exposed this fallacy in his essay "That Which is Seen and that Which is Unseen", see a discussion of this here.
10.27.2008 5:05pm
American Psikhushka (mail):
Ben P-

Sure, a tax dollar taken out of the economy is one less tax dollar the economy has generated, but if that tax dollar goes to the police to pay them to provide for a safe and secure environment for businesses to operate, the gain by allowing business to grow more effectively is larger than the cost to the economy of paying for it.

The amount of taxes actually needed for "essential services" like police, fire, EMS, courts, etc. is actually pretty low. The problem is that every dollar above that is being taken from the private economy and actually making society as a whole poorer. If this money were left in the private economy it would be invested and increase production, increase employment, improve the standard of living, etc. making society as a whole richer.

There's tons of arguments as to degree and efficiency and nature of this benefit. But arguing taxation is uniformly bad without even considering utility is simply an incomplete argument.

Basically it's a continuum. Taxation above that necessary for essential services takes from the private economy and essentially makes society poorer as a whole. This occurs the more taxes are raised. As this progesses you wind up with socialist/communist states with stagnating/declining economies, stagnating/declining standards of living, in many cases starvation, etc.
10.27.2008 5:24pm
A. Zarkov (mail):
"But when government puts money where it's needed, like into infrastructure, education and health, this does in fact have the potential to enhance everyone's wealth."

It's not clear that all those areas need more funding. Education is over funded for example. Remember an investment in one area means less or no investment in another area. Perhaps we need investment in coal-to-liquid fuel conversion plants near the coasts rather than more roads in the interior of the country. The problem with letting the government make capital allocations decisions is that they usually do it on a political basis, not an economic one.

What make you think you know where more investment is needed?
10.27.2008 5:30pm
MarkField (mail):

Or when he was a crazy Christian black nationalist who was going to enslave white people as retribution.


Good times.... /nostalgic sigh.
10.27.2008 5:38pm
Jane (mail):
jukeboxgrad: You don't have a good argument, so you change the subject.

..goes up for a few people. Do you mean that if the Government only abuses a few people, then its OK?

And those few people would be the productive, by the way. The people who invest capital and who create jobs. Also, you're fooling yourself if you believe that only those with incomes of $250,000 and above will see an increase in taxes. Obama cannot keep his promises and also raise taxes on only a few people. I believe Bill Clinton made a similar promise, but after elected increased taxes on incomes below $50,000.

I believe Gov't has already proved its insatiable appetite for the income and wealth of the people.

Did you know Congress is scheduling hearings to 'nationalize' 401-K and similar retirement plans. Oh, yes. Hard to believe they'll actually do this, but you KNOW they want their hands on this money. Of course they do.

"Nationalize" is my characterization (they will discuss ending the tax deducction, and require you to put 5% of you income into a new plan (Social Security 2.0), and pay you 3% annual interest, plus $600/yr matching. Where is interest and matching coming from? Your income of course). But you should go read the reports yourself. Like Social Security, you know they will spend the money, and then leave us with an IOU. And how long would it be before people were complaining that the rich (ie those who contributed the most) were geting the most benefit from Social Security 2.0, and how unfair is THAT?.

The Greedy Hand the Government.
10.27.2008 5:39pm
josh:
Jane

Let me take your paragraphs one by one:

"And what is the maximum percentage of your income that will finally be too much? As long as there is a source of money (your money in this case), there will always be a need for it. And that need will grow and grow. Private property will cease to have any meaning."

I think that, as a global matter, you're delving into a little hyperbole here. The point is, during Clinton, we had this higher rate on the upper bracket. We prospered and private property seemed to do just fine. I'm willing to concede there could be more to the cause of the propserity than just presidential politics, but I think we avoided the mass hysteria, cats-and-dogs-sleeping-together scenario you envision.

"You say it can't happen? Who would have imagined when the income tax was instituted that we'd be paying what we pay now? No one would have believed you if you'd predicted the current tax levels. They'd have said, "no one would stand for that! NO way!" "

Well, I'd counter that no one would have imagined the social services we have now when the tax was instituted. I'll leave the libertarian argument about whether that's a good thing aside for a moment. But it is undisputed the government provides a great deal that the populace wants and thus requires increased revenue to fund it. Which always leads to the split-personality polling you see when people, responding the the very same poll, answer that they want their taxes to go down, but also answer (to another query) that they want more services.

"Laffer is right, though. Increased taxation will lead to lower tax receipts. Everybody will be poorer. But Obama doesn't care. He is just interested in 'Fairness' even if tax receipts decline. He stated this position in a televised debate with Hillary."

I just don't think that's right. In 2005, the non-partisan congressional budget office issued a study questioning the validity of the notion that raises in taxes definitively causes lower government revenue: http://cbo.gov/ftpdocs/69xx/doc6908/ 12-01-10PercentTaxCut.pdf.
10.27.2008 5:40pm
American Psikhushka (mail):
Xanthippas-

Since we've had an income tax in this country for the better part of a hundred years now, this really should come as no surprise. The question is not whether there should or shouldn't be redistribution of income; the question is how much there should be. Only on the right can you equate taxation with socialism and get away with it, but as polls are demonstrating, such simple-minded attacks are having trouble gaining any traction this year.

The problem is one of economic ignorance. Many on the left and right do not understand that the economy is not a zero-sum game. The rich (with some exceptions) are not rich at the expense of the poor. The rich, because they have more investible capital, provide the capital stock which is the engine which creates societal wealth. Deplete it and you make society poorer as a whole. Understanding of this quote from Mises is what is lacking:

It is not easy to explain this state of affairs to people misled by the passionate anti-capitalistic agitation. As the self-styled intellectuals see it, the capitalist system and the greed of the businessmen are to blame for the fact that the total sum of products turned out for consumption is not greater than it actually is. The only way to do away with poverty they know is to take away — by means of progressive taxation — as much as possible from the well-to-do. In their eyes the wealth of the rich is the cause of the poverty of the poor. In accordance with this idea the fiscal policies of all nations and especially also of the United States were in the last decades directed toward confiscating ever-increasing portions of the wealth and income of the higher brackets. The greater part of the funds thus collected would have been employed by the taxpayers for saving and additional capital accumulation. Their investment would have increased productivity per man-hour and would in this way have provided more goods for consumption. It would have raised the average standard of living of the common man. If the government spends them for current expenditure, they are dissipated and capital accumulation is concomitantly slowed down.

If you don't understand this dynamic you will always raise taxes to "get the rich" and slow down or stop economic growth, lower standards of living, and make society poorer. You will always be eating next year's seed corn and wondering why you have less each time.
10.27.2008 5:40pm
Asher (mail):
are people so stupid as to not recognize that when politicians talk about a "right to health care," or "equalizing educational opportunities," or "making the rich pay a fair share of taxes," or "ensuring that all Americans have the means to go to college," and so forth and so on, that they are advocating the redistribution of wealth? Is it okay for a politician to talk about the redistribution of wealth only so long as you don't actually use phrases such as "redistribution" or "spreading the wealth," in which case he suddenly becomes "socialist"? If so, then American political discourse, which I never thought to be especially elevated, is in even a worse state than I thought.

Yes, yes, and you're right.
10.27.2008 5:51pm
runape (mail):
David,
I admittedly agree with you only rarely, so I'm sure this will be taken with a grain of salt, but I think you're misinterpreting Sunstein. (To be fair, I suspect Politico is, too.) I think the only way to understand what Sunstein was trying to say is that, to the extent Obama's comments from the transcript can be understood to be endorsing the recognition of economic rights by the courts, he is endorsing only a limited set of rights that can feasibly be implemented - e.g., education, filing fees, and so on. That is why he spends a lot of time during the conversation discussing the difficulties of implementation of equal funding for the schools.

I mentioned in one of the other threads that I think the entire conversation has to be viewed in the context of the University of Chicago Law School in the late 90s/early 00s, a time when the work of Sunstein and Stephen Holmes (and others) on the cost of rights thesis was especially influential. In that light, Obama's comments are quite moderate - even conservative - and of course Sunstein's arguments have been broadly accepted, at least on pragmatic grounds.
10.27.2008 6:10pm
Oren:

Laffer is right, though. Increased taxation will lead to lower tax receipts.

Wow. You know, there are two sides of the Laffer curve -- we might be to the left of the peak where increased taxation leads to increased revenue. Surely raising taxes from 0% to 1% will increase tax receipts.
10.27.2008 6:13pm
Oren:

The amount of taxes actually needed for "essential services" like police, fire, EMS, courts, etc. is actually pretty low. The problem is that every dollar above that is being taken from the private economy and actually making society as a whole poorer.

That depends on what the government spends the money on and whether the private market would provide those goods more or less efficiently (or not at all). The free market tends to function very poorly in some instances (for instance, in the provision of services that are natural monopolies) and very well in others (anything with low entry barriers). Deciding which is which is not as trivial as you claim.
10.27.2008 6:16pm
jukeboxgrad (mail):
zarkov:

The problem with letting the government make capital allocations decisions is that they usually do it on a political basis, not an economic one.


Government can operate competently, or it can operate incompetently. When we put government in the hands of people who are generally opposed to the very idea of government, we tend to get the latter.

And the problem with letting the market be in control of all capital allocation decisions is that the market has a certain tendency, when left completely to its own devices, to do things which are good for a very small number of people, at the expense of everyone else. Which ends up leading to bad results for everyone, in the long run.

And certain kinds of investments, like transportation, need to be conceived on a national basis, at least to some extent, or else we end up with a great deal of redundancy and inefficiency. As Oren pointed out, some markets are natural monopolies, and problems result when a natural monopoly is placed in private hands.

And the idea that large corporate institutions are inherently cleaner and more efficient than large government institutions is fiction. Something I can report after a great deal of personal involvement and observation.
===================
jane:

You don't have a good argument, so you change the subject.


I didn't change the subject. I used an analogy to prove that you don't have a good argument. And since you don't have a good argument, you're refusing to deal with the analogy.

Do you mean that if the Government only abuses a few people, then its OK?


If you think that taxation is form of abuse, then you think that the idea of government is a form of abuse. It's true that government is abusive, but it's less abusive than any other idea we've been able to come up with. Kind of like democracy; it's a rotten system, but it still beats whatever's in second place.

you're fooling yourself if you believe that only those with incomes of $250,000 and above will see an increase in taxes


You're fooling yourself if you think we can get out of the hole that Bush left us in without raising taxes. And part of the way you fool yourself is thinking that Bush cut taxes. He didn't. He just shifted them to a group that's not in a position to protest: our kids.

Simple question: if lower taxes are always good, then why not just have no taxes at all? What level of taxation do you claim is appropriate? Zero? And if not zero, then what is your basis to claim that the level you propose is inherently more rational than any other plan, like, say, Obama's?
10.27.2008 7:04pm
Fury:
jukeboxgrad writes:

"You're fooling yourself if you think we can get out of the hole that Bush left us in without raising taxes."

That hole was dug by both Bush and a Senate that has been controlled by Democrats for almost three years and Republicans for five years, and a House controlled by Republicans for six years and Democrats almost two years. There's plenty of blame to go around, plenty.
10.27.2008 7:30pm
Lily (mail):

You're fooling yourself if you think we can get out of the hole that Bush left us in without raising taxes.


Just so you know, Obama is not planning to raise taxes to reduce the debt, he want to increase spending. A lot.
10.27.2008 7:35pm
roger rainey (mail):
Its a shame to see Sunstein shill for Obama in such a way.
10.27.2008 8:34pm
therut (mail):
Cass Sunstein is being dishonest. I hope like hell he does not get on the USSC. That is all we need is a ideological political hack.
10.27.2008 8:44pm
jukeboxgrad (mail):
fury:

That hole was dug by both Bush and a Senate that has been controlled by Democrats for almost three years and Republicans for five years


I'm not shy about criticizing Ds. I think it would be good if we had a two-party system. But the national debt was not created on a 50/50 basis:

since 1776, we have racked up a cumulative deficit — the national debt — of nearly $10 trillion . . . and fully three-quarters of that was racked up under just 3 of our 43 presidents: Reagan, Bush, and Bush.


Don't forget it was Cheney who said "deficits don't matter." The GOP stopped being the party of fiscal responsibility a long time ago.
10.27.2008 8:51pm
jukeboxgrad (mail):
lily:

he want to increase spending. A lot.


You're kidding yourself if you think McCain's numbers make more sense than Obama's. They don't. The non-partisan Tax Policy Center figured out that there's a $2.8 trillion gap in McCain's economic plan. The gap is so obvious that the McCain campaign had to admit that he's been making statements that shouldn't be considered "official." In other words, "McCain may not speak for the McCain campaign."

The gap on Obama's side is a lot smaller. Look it up.
10.27.2008 8:52pm
dhlii (mail):
Regardless of the fact that it might be, The majority of us do not perceive increasing taxes on those richer than us in order to decrease our own taxes a redistribution of wealth. But when politicians start openly talking about "redistribution of wealth" rather than specific programs that accomplish that goal, we inherently (and rightly) connect that kind of talk with Socialism and Communism. I doubt you can find Smith advocating directly taking money from one group and giving it to another - what most of us think of as redistribution of wealth, regardless of the fact that he accepts that the burden of the cost of government may be distributed unevenly.
10.27.2008 9:23pm
einhverfr (mail) (www):
This is a fun issue and really does show the inherent social tensions between a statist/collectivist and a libertarian/individualist perspective. In reality, I think that a lot of this really should be a question of what we emphasize rather than what we are afraid of.

In this particular case, Obama was probably talking about one supreme court case involving educational funding. Our public education system is a socialized resource anyway and it seems reasonable to suggest that children in poor school districts shouldn't suffer just because their collective parents aren't rich enough to pay for tax levies, etc....

Yet what about other natural monopolies which are largely socialized in this country: roads/freeways, municipal water, sewers, and even in some places, the electric grid (actually in my house, the wires which bring me telephone and internet are government maintained as well, though the services over this are private-sector and competitive)? What about semi-socialized institutions like state universities? What about managed intangibles like the Free Market? These are socialized in the spirit of serving an individualist agenda, that whether rich or poor, every one of us derives a benefit from these being collective resources.

In my state we have one area that is an ideal balance. The public utility districts can and sometimes do run lines that bring phone, cable tv, and internet into peoples' homes. However, they are forbidden to phone, cable tv, or internet services over these lines. The result is that rather than having to decide whether to get cable tv from one provider, or whether to go with a land line or cell phone only, I can get *all* of these services in a competitive market. I have a choice of at least 5 providers of phone service, numerous providers (more than 20) of high-speed internet service, and a similarly large number of cable tv providers. Maybe we can do the same thing with the electric grid (government runs the lines, power plant companies compete for *your* business)? But wait, that is socialism! Or is it?
10.27.2008 9:34pm
Dick King:
The reason World War II appeared to create wealth and capital is that it caused a large number of people to be willing to work very hard, invest much of the fruits of their labor in new factories that produced materiel but could be converted to civilian uses when the war was over, and be willing to accept a very low living standard for themselves while they worked as hard as they did.

-dk
10.27.2008 9:46pm
Lily (mail):
This is a fun issue and really does show the inherent social tensions between a statist/collectivist and a libertarian/individualist perspective.

I personally find is disheartening to find so many arguing for big government.
10.27.2008 10:28pm
Oren:

I personally find is disheartening to find so many arguing for big government.

The problem, as I pointed out, is that no one can agree on what government programs ought to be cut.

Moreover, as I've shown above, progressive taxation is, itself, the optimal economic system (diminishing marginal utility!).
10.27.2008 10:35pm
Elliot123 (mail):
"And the problem with letting the market be in control of all capital allocation decisions is that the market has a certain tendency, when left completely to its own devices, to do things which are good for a very small number of people, at the expense of everyone else. Which ends up leading to bad results for everyone, in the long run."

Personal computers, high speed communications, web commerce. cars, airplanes, MRI machines, AIDS drugs, cell phones, iPods, books, artificial limbs, pacemakers... all at the expense of everyone else.
10.27.2008 10:37pm
Oren:
Elliot, you realize that aviation could not exist without the FAA breathing down its neck, right?
10.27.2008 10:48pm
Lily (mail):
Is the Tax Policy Center non-partisan in the same way that Acorn is non-partisan?

Moreover, as I've shown above, progressive taxation is, itself, the optimal economic system Your argument does not convince me.

I believe, very strongly, that government is a necessary evil and should, necessarily, be kept to an absolute minimum.

Politians are no less incented to behave in their own best interests than CEOs or Corporate Executives. However, politicians have in the power to do far more harm, as they have the full power of the state to unleash on the people.

Those who argue for big government are looters and thieves. And it is not laudable nor noble to argue for the government to take property away from your fellow citizens to give it to you or to a 3rd party who did not earn it.

It has been predicted, by more than one thoughtful person, that our democracy would fail at the point that people discover that they can vote booty for themselves from the public treasury, that they can use the government to loot from their neighbors.
10.27.2008 11:01pm
LM (mail):
jane:

And what is the maximum percentage of your income that will finally be too much? As long as there is a source of money (your money in this case), there will always be a need for it. And that need will grow and grow. Private property will cease to have any meaning.

The top marginal rate during both terms of the Eisenhower administration was over 90%. How'd the economy do then, and how close to that rate do you think even the socialist Obama would like to implement?
10.27.2008 11:01pm
MarkField (mail):

Just so you know, Obama is not planning to raise taxes to reduce the debt, he want to increase spending. A lot.


At least in the short term, he'd be crazy to anything else. A recession is no time to cut federal spending.

And as jbg has pointed out, McCain's long term projected deficits (to 2016) far exceed Obama's.
10.27.2008 11:03pm
Jane (mail):

A recession is no time to cut federal spending.


A recession is NO TIME TO INCREASE TAXES.
10.27.2008 11:10pm
Elliot123 (mail):
Aviation does demand a controlling entity. It can be public or private. There are different models around the world. However, the capital investment in aviation over the last hundred years can hardly be said to be at the "expense of everyone else." We can go to any airport and, rather than a very small number of people, we see thousands of travellers.

I bought a new iPod yeatsrday. Does that mean I'm one of the very small number of people who benefits from them, or am I one of the millions who benefits?
10.27.2008 11:10pm
Jay Ballou (mail):
"But are people so stupid as to not recognize ..."

They are that unthinking .. not the same thing (obviously, if one thinks stupidity is a static condition).

"If so, then American political discourse, which I never thought to be especially elevated, is in even a worse state than I thought."

You should have known better, just from your own comments section.
10.27.2008 11:13pm
American Psikhushka (mail):
Oren-

That depends on what the government spends the money on and whether the private market would provide those goods more or less efficiently (or not at all). The free market tends to function very poorly in some instances (for instance, in the provision of services that are natural monopolies) and very well in others (anything with low entry barriers). Deciding which is which is not as trivial as you claim.

I think it's less difficult than you're making it out to be. A lot of the central and eastern european countries that have flat taxes have shown that you can provide essential services with pretty low tax rates - flat taxes on personal incomes in the teens and twenties, similar or lower rates on corporate income, capital gains, etc.

The railroads own their tracks and right of ways, and they seem to do pretty well sorting it all out. The telecom companies lease lines, usage, etc. to each other all the time. They have some rules and laws that settle any disputes about these issues, but by and large it works pretty smoothly.
10.27.2008 11:17pm
Jay Ballou (mail):
"A recession is NO TIME TO INCREASE TAXES"

On anyone? Why?

"the socialist Obama"

Oh. Never mind, someone with errors so ideologically driven is unreachable.
10.27.2008 11:17pm
Jane (mail):

The top marginal rate during both terms of the Eisenhower administration was over 90%. How'd the economy do then, and how close to that rate do you think even the socialist Obama would like to implement?


This is your argument? That it used to be worse? It was reduced because high taxation causes the economy to weaken. Causes suffering.

Basic economics: You tax a behavior, you discourage that behavior. Obama want to tax savings, investment and productivity. (all in the name of 'fairness')

To argue that someone else's policies are just as bad, almost as bad or even worse does not support the proposed policy.
10.27.2008 11:17pm
Jane (mail):
Oh. Never mind, someone with errors so ideologically driven is unreachable.

I have a degree in Economics. I have studied this field. What are your credentials?
10.27.2008 11:19pm
Lily (mail):
Oh. Never mind, someone with errors so ideologically driven is unreachable.

Project much?
10.27.2008 11:20pm
Jay Ballou (mail):
"our democracy would fail at the point that people discover that they can vote booty for themselves from the public treasury, that they can use the government to loot from their neighbors."

A small fraction of the populace convinced a much larger number to vote for Bush just so the small fraction could loot the treasury, which they did -- that was a failure of democracy, in that a majority of the population voted against their own interests. Those who vote for McCain will be doing the same.

But the notion that you're promoting isn't a failure of democracy, it's tyranny of the majority. If you dislike democracy, just come out and honestly say so.
10.27.2008 11:25pm
Jay Ballou (mail):
I have a degree in Economics. I have studied this field. What are your credentials?

I'm not an intellectually dishonest and ignorant fool who wields fallacious arguments from self-authority.

Project much?

No, and no evidence of same.
10.27.2008 11:28pm
Elliot123 (mail):
Bill Gates and Steve Jobs are super rich men, and I'd say their imagination, innovations, and risk taking have provided huge benefits to millions of people all over the world. Is there some reason we should discourage people like them? If they paid zero taxes we would still be far ahead because of what they did.
10.27.2008 11:31pm
Jay Ballou (mail):
But when politicians start openly talking about "redistribution of wealth" rather than specific programs that accomplish that goal

a) False dichotomy.
b) Colin Powell used that phrase, not Barack Obama. The latter said "spreading the wealth around", in the context of Bush's tax policies that were strongly skewed to a very small segment of the population.
10.27.2008 11:36pm
American Psikhushka (mail):
Oren-

You know, there are two sides of the Laffer curve -- we might be to the left of the peak where increased taxation leads to increased revenue. Surely raising taxes from 0% to 1% will increase tax receipts.

And later

Moreover, as I've shown above, progressive taxation is, itself, the optimal economic system (diminishing marginal utility!).

You're viewing all this through the prism of what the government can collect, and not the effects of those collections on the economy. When the government collects taxes it takes that money out of the private economy or capital stock. Since the private economy is the engine that creates societal wealth, you are diminishing current - and more importantly because it is cumulative - future societal wealth.

Likewise when you mention "diminishing marginal utility" that is only from the individual's perspective, it ignores capital's importance to society in the form of the private capital stock. The lion's share of the capital stock that is used for capital formation comes from the wealthy. So when the government "soaks the rich" they are taking money that would have contributed to capital formation, economic growth, and societal wealth and spending it on current expenditures, reducing future economic growth and societal wealth.
10.27.2008 11:37pm
Jay Ballou (mail):
Bill Gates and Steve Jobs are super rich men, and I'd say their imagination, innovations, and risk taking have provided huge benefits to millions of people all over the world. Is there some reason we should discourage people like them? If they paid zero taxes we would still be far ahead because of what they did.

Could you pack more false dichotomies, strawmen, and post hoc ergo propter hoc fallacies into that? Ah, but perhaps you've studied Economics, in which case you're surely right.

As David Bernstein said, "American political discourse, which I never thought to be especially elevated, is in even a worse state than I thought".
10.27.2008 11:41pm
Elliot123 (mail):
"The latter said "spreading the wealth around", in the context of Bush's tax policies that were strongly skewed to a very small segment of the population."

Would that be the segment that got a tax cut because they paid taxes?
10.27.2008 11:44pm
Elliot123 (mail):
"Could you pack more false dichotomies, strawmen, and post hoc ergo propter hoc fallacies into that? Ah, but perhaps you've studied Economics, in which case you're surely right."

Al gore couldn't have said it better.
10.27.2008 11:45pm
jukeboxgrad (mail):
elliot:

high speed communications, web commerce


You probably don't realize that the government did really and truly play an important role in the development of the internet, and you also probably don't realize that Gore did really and truly play an important role in the government work that helped in the development of the internet.

By the way, the point is not that the private sector isn't capable of producing great results. The point is that the private sector is also perfectly capable of dragging us all off a cliff if we let it run wild. Exhibit A: current events.

Bill Gates and Steve Jobs are super rich men … Is there some reason we should discourage people like them?


It's extremely silly to think that they would have behaved differently if their taxes were higher. Maybe you didn't notice that they kept working just as hard even after they became super-rich. This is the typical pattern. They are not in it primarily for the money. If you had told Gates in 1975 that his efforts were going to lead to a fortune of only $10 billion, instead of $100 billion, what would he have done differently? Answer: absolutely nothing. He would not have said, "oh well, in that case I might as well spend the next thirty years surfing."

It just doesn't work that way, and the idea that it works that way is an illusion.
10.27.2008 11:47pm
jukeboxgrad (mail):
lily:

Is the Tax Policy Center non-partisan in the same way that Acorn is non-partisan?


According to NR, they are "highly respected, center-left." If you can find a better source, I hope you'll tell us what it is.

I believe, very strongly, that government is a necessary evil and should, necessarily, be kept to an absolute minimum.


We spend as much on defense as the rest of the world combined. Does this fit your idea of "absolute minimum?" Just curious.

it is not laudable nor noble to argue for the government to take property away from your fellow citizens to give it to you or to a 3rd party who did not earn it.


Except when it's in the form of a $700 billion bailout? Just curious.

How about when the government uses money we don't have to pay for a war we don't need, and then leaves my kids with a giant Chinese credit-card bill? Is that "laudable" or "noble?"

It has been predicted, by more than one thoughtful person, that our democracy would fail at the point that people discover that they can vote booty for themselves from the public treasury, that they can use the government to loot from their neighbors.


How about when "people discover that they can vote booty … from the public treasury" for their pals in the defense business? Do you expect "democracy would fail" at that point, or would it just be good cause to declare "Mission Accomplished?"
10.27.2008 11:47pm
jukeboxgrad (mail):
jane:

Basic economics: You tax a behavior, you discourage that behavior.


Then why not reduce taxes to zero? No one seems to be interested in answering this question I already asked: if lower taxes are always good, then why not just have no taxes at all? What level of taxation do you claim is appropriate? Zero? And if not zero, then what is your basis to claim that the level you propose is inherently more rational than any other plan, like, say, Obama's?
10.27.2008 11:48pm
Jay Ballou (mail):
Al gore couldn't have said it better.

I feel your pain, Elliot; being so unable to offer anything intelligent must be quite a burden.
10.27.2008 11:57pm
Jay Ballou (mail):
Basic economics: You tax a behavior, you discourage that behavior.

Yeah, tax building wealth and everyone will be discouraged from being rich. How about taxing Paris Hilton for inheriting wealth -- that should encourage her to have her parents disown her.

Calling something "basic economics" doesn't make it true. (It doesn't even make it "basic economics").
10.28.2008 12:01am
Jay Ballou (mail):
Laffer is right, though. Increased taxation will lead to lower tax receipts.

Odd that someone who "studied the subject" doesn't even know what her authority actually claimed. Which is aside from the fact that, as Nobel laureate economist (I think that means he studied the subject) James Tobin said, "The 'Laffer Curve' idea that tax cuts would actually increase revenues turned out to deserve the ridicule with which sober economists had greeted it in 1981".
10.28.2008 12:14am
Janet Reece:

But are people so stupid as to not recognize that when politicians talk about a "right to health care," or "equalizing educational opportunities," or "making the rich pay a fair share of taxes," or "ensuring that all Americans have the means to go to college," and so forth and so on, that they are advocating the redistribution of wealth?


NO! People aren't so stupid, and that's exactly why I won't vote for Mr. Obama. You don't have to label it redistribution of wealth for me to understand what he's really after here, and his real agenda scares the crap out of me. It should scare the rest of you Obama worshippers too. College is not a right, it's an earned privilege. I went from living in poverty to paying my own way through college by WORKING HARD and eventually making six figures. Should I be penalized for my hard work while dumb people who shouldn't have taken out a big stupid home loan that are now wondering why they can't pay it will get out easy and while other unemployed entitlement-seeking morons are laying around on their asses?

The rich pay MORE than their fair share of taxes already. Who provides the jobs in this country -- poor people? Why should I have to pay for other people's stupid decision-making??

Wake up, you blind lemmings.
10.28.2008 12:22am
Jane (mail):
Jay, I know what Laffer's theory said. And if you listen and read what smaller business owners are saying in response to Obama's proposed tax increases, you will see that many are contemplating choosing leisure over labor at the proposed tax rate.

You have to remember, it isn't just the increase in the marginal tax rate. Higher income earners and business also pay other taxes. The overall burden is already quite high.

Laffer theorized that at some point of taxation, rational people will realize that their extra effort doesn't bring enough financial reward to justify that effort. The real critisim from 'sober' critics was not that it wasn't true, but that you couldn't chart the point. There was not definitive point where Gov't would see tax receipts decline.

However, the individual knows where their 'point' is. And, as the combined overall burden on the highly productive is already high, one could easily argue that increased taxation will lead to lower tax receipts.

But we shall see.
10.28.2008 12:54am
Jay Ballou (mail):
I guess Janet also won't vote for McCain since he also is in favor of social goods such as education. From his web site,


John McCain believes American education must be worthy of the promise we make to our children and ourselves. He understands that we are a nation committed to equal opportunity, and there is no equal opportunity without equal access to excellent education.

Public education should be defined as one in which our public support for a child's education follows that child into the school the parent chooses. The school is charged with the responsibility of educating the child, and must have the resources and management authority to deliver on that responsibility. They must also report to the parents and the public on their progress.

The deplorable status of preparation for our children, particularly in comparison with the rest of the industrialized world, does not allow us the luxury of eliminating options in our educational repertoire. John McCain will fight for the ability of all students to have access to all schools of demonstrated excellence, including their own homes.


Public support for home schooling should leave Janet frothing even more than was evident in her rant against "Mr. Obama" ... if she had a shred of intellectual honesty (or intellectual much else, especially considering that she's still blaming the subprime disaster on individuals who took out loans).

Once again, as David Bernstein said, "American political discourse, which I never thought to be especially elevated, is in even a worse state than I thought". There can be no question, given the inane comments of Janet, Jane, Elliot ...

I had the opportunity to make several million dollars through several months of challenging work. According to Jane, it's "basic economics" that I was discouraged from doing so by the fact that the money would be taxed -- apparently without even calculating my net gain and weighing it against my alternatives. If Jane isn't fibbing about having a degree in Economics, she has illustrated once again just how fallacious arguments from authority (especially self-authority) are, and why sensible people laugh in derision at the question "What are your credentials?".
10.28.2008 12:56am
MarkField (mail):

A recession is NO TIME TO INCREASE TAXES.


That's oversimplified. It's perfectly ok to increase taxes on some as long as you reduce taxes on others (i.e., no net increase in government receipts). You can even increase government receipts in a recession if you increase spending more, though you have to be very careful in that case. It's all a question of balance (and the commitment to pay it back when economic times are good). So when the economy does recover, we'll hopefully be increasing taxes on the upper 1% or so even further to pay back the debts we incurred under Bush. I assume that'll make you very happy.
10.28.2008 12:59am
Jay Ballou (mail):
you will see that many are contemplating choosing leisure over labor at the proposed tax rate.


What I see is that you are a crank.
10.28.2008 12:59am
MarkField (mail):

And if you listen and read what smaller business owners are saying in response to Obama's proposed tax increases, you will see that many are contemplating choosing leisure over labor at the proposed tax rate.


If we were to take such comments at face value (I don't), then that would be great news -- lots of opportunities for new entrepeneurs.
10.28.2008 1:03am
Jane (mail):
And it IS a basic axiom of Economics: If you tax a behavior you discourage it. If you subsidize a behaviour, you encourage it.

Our Government often employs this - for example, tax breaks are given for 401-Ks and other similar retirement accounts to encourge people to save for their retirments. Tax deductions for charitable giving is another example.

Some progressives have recently floated the idea of taxing junk food - not to increase gov't receipts, but to discourage the consumption of junk food.
10.28.2008 1:04am
Jane (mail):
And it IS a basic axiom of Economics: If you tax a behavior you discourage it. If you subsidize a behavior, you encourage it.

A sin tax is a good example of taxation to discourage a behavior. Some have recently floated the ideal of placing taxes on junk food, not to increase gov't receipts, but to discourage consumption of foods high in fat and sugar.

This is a generally accepted idea, and your denying it does not negate it.
10.28.2008 1:07am
Jane (mail):
lots of opportunities for new entrepeneurs.

Assuming they could get off the ground in a high tax environment.

New business involve lots of risk and hard work. People need to feel they will be rewarded for this risk and work. Just look at ole Joe the "Plumber". What this man was really saying was that he was Thinking About Buying A Business. However, he was concerned that a higher tax rate would impact his ability to earn enough to make it worth his while. And this is the problem with a high tax environment.
10.28.2008 1:12am
Jay Ballou (mail):
And it IS a basic axiom of Economics: If you tax a behavior you discourage it.

I just pointed out that one must weigh alternatives. If you don't understand that, you don't understand economics at all. And it's evident that you don't.
10.28.2008 1:13am
Freer:
No. Not a "crank." A partisan hack.
10.28.2008 1:14am
Jay Ballou (mail):
If we were to take such comments at face value (I don't)

Not even the woefully uninformed Sam the unlicensed Plumber has said that he would "contemplat[e] choosing leisure over labor". But this is the sort of mush that the heads of people like Jane are filled with -- her crank beliefs "can be easily argued" by simply writing them down, and supported by drawing upon mythical people making mythical statements that have mythical authority.

I really have to wonder where David Bernstein has been, to have thought that American discourse was in a better state.
10.28.2008 1:22am
Jay Ballou (mail):
No. Not a "crank." A partisan hack.

Those two sorts of intellectual failure support each other.
10.28.2008 1:24am
Jane (mail):
Jay, I believe it is your thinking that is sloppy.
10.28.2008 1:32am
Jay Ballou (mail):
Just look at ole Joe the "Plumber"

If one actually does so, rather than just listening to McCain reference him over and over, one finds that he's an ignorant wacko who doesn't even understand the difference between net and gross revenue. Obama's plan would, in fact, give "Joe" a better -- although still minuscule, considering his limited intellectual capabilities -- chance of some day affording that plumbing business, by lowering his tax burden now. And if he does ever afford to buy it some day, his tax rate would still be low under under Obama, since it's not one of the 5% of small businesses that would do better under McCain.

So, nice example.
10.28.2008 1:34am
Jay Ballou (mail):
Jay, I believe it is your thinking that is sloppy.

Really? You do? I'm shocked. And I guess that, since you have a degree in Economics, you must be right ... although some sort of argument to that effect might have been useful.
10.28.2008 1:36am
Jane (mail):
Personal attacks Jay? It is generally a sign that I'm winning the arguement when the other person begins to descend into personal attacks. I shall now retire for the night happy.
10.28.2008 1:38am
Jay Ballou (mail):
Here's a good illustration of my sloppy thinking:


I had the opportunity to make several million dollars through several months of challenging work. According to Jane, it's "basic economics" that I was discouraged from doing so by the fact that the money would be taxed -- apparently without even calculating my net gain and weighing it against my alternatives.


If I weren't such a sloppy thinker, I would have foregone that opportunity to instead live a life of leisure -- that it seems to me that it would have been difficult to do that without funds must just be sloppy thinking on my part. And I must be thinking sloppily indeed to imagine that my wealth (net, after taxes) resulting from such sloppy thinking allows me to live a life of such leisure today that I can afford to waste my time arguing with imbeciles.
10.28.2008 1:43am
Jay Ballou (mail):
It is generally a sign that I'm winning the arguement when the other person begins to descend into personal attacks.

Very sloppy thinking there, Jane, not to mention hypocrisy.

I shall now retire for the night happy.

Happy, but no less wrong, ignorant, or intellectually dishonest.

Nighty nite.
10.28.2008 1:45am
jukeboxgrad (mail):
jane:

if you listen and read what smaller business owners are saying in response to Obama's proposed tax increases, you will see that many are contemplating choosing leisure over labor at the proposed tax rate.


Please show us where we can "read" that.

By the way, certain families might actually be healthier, overall, if one or both parents worked only 50 hours, instead of 70. Even if it meant they could only own 2 SUVs, instead of 3. Or had to settle for living in just one house. News bulletin: money isn't everything.

What this man was really saying was that he was Thinking About Buying A Business.


I think what this man was really saying was If I Trick Obama Maybe I Can Get On Tee-Vee.
10.28.2008 1:58am
Jay Ballou (mail):
Threads like this make me long for the days -- they seem so distant now -- when Obama was a secret Muslim who intended to impose Sharia on us.

There's really not all that much difference between that and the claims here that Obama wants to equalize everyone's wealth.
10.28.2008 2:15am
Jay Ballou (mail):
I think what this man was really saying was If I Trick Obama Maybe I Can Get On Tee-Vee.

I think you're giving him too much credit. Jane's right, he was thinking about buying a business ... sort of the way Jane is thinking she's saying intelligent things about economics. But both are dreaming of something out of their reach.
10.28.2008 2:20am
RPT (mail):
"It has been predicted, by more than one thoughtful person, that our democracy would fail at the point that people discover that they can vote booty for themselves from the public treasury, that they can use the government to loot from their neighbors."

We're glad that the Halliburton era is almost over. Dick Cheney and company have been the champion booters and looters.
10.28.2008 2:46am
Melancton Smith:

I think you're giving him too much credit. Jane's right, he was thinking about buying a business ... sort of the way Jane is thinking she's saying intelligent things about economics. But both are dreaming of something out of their reach.


Keep spinning like the Obama spokespeople that keep blathering inanely about 95% of taxpayers getting a tax cut but ignoring the questions:

How can 95% get a tax cut when only 35% pay any taxes?

Plus my own: How much is my fair share? Why, if I make 300k and pay 84k am I not paying my fair share when someone making 50k is paying 8k? Someone making 6x the salary is paying 10x the tax? So is 11x fair? 12x? How much?
10.28.2008 2:47am
LM (mail):

Jane (mail):

The top marginal rate during both terms of the Eisenhower administration was over 90%. How'd the economy do then, and how close to that rate do you think even the socialist Obama would like to implement?


This is your argument? That it used to be worse? It was reduced because high taxation causes the economy to weaken. Causes suffering.

If the suffering was so intolerable, why not answer the question? How'd the economy do during those Eisenhower years when we had 90% marginal FIT rates? And since the Republicans controlled the White House and both houses of Congress from 1952-1954, why didn't they cut the top rate to 28%? Or even 78%?

IIRC, cumulative GDP growth over those 8 years was somewhere in the 45-50% range. In other words, despite what we learn in school, even the most sensible doctrines can have an inconvenient way of conflicting with actual events. When that happens, you know the flaw isn't in the events, but neither is it necessarily in the doctrine. It may just be a superficial understanding or application of a basically sound, but nuanced doctrine. Which is the case with the cynically simplistic "All Taxes Bad, All The Time" meme flogged by the Right to "starve the beast," seemingly without concern for the costs and hardships of each incremental success.
10.28.2008 8:21am
jukeboxgrad (mail):
rpt:

We're glad that the Halliburton era is almost over. Dick Cheney and company have been the champion booters and looters.


Indeed. Between 1995 and 2000 Cheney was paid $44 million by Halliburton, as their CEO. Five months after leaving Halliburton, he became the second-most powerful person in our federal government. In the next six years, his previous employer received $19.3 billion in revenues from our federal government, including $2.4 billion that was awarded on a sole-source basis. Mission accomplished!

The entire Bush administration can be quickly grasped, in less than a minute, via this photo, headline, headline, and video. Total reading: about 50 words. And very fitting, since this thread is about "Redistribution of Wealth."
10.28.2008 9:18am
cboldt (mail):
Jay Ballou: -- If you dislike democracy, just come out and honestly say so. --
.
I detest democracy. Yes, I'm serious. The founders detested democracy too. Democracy is anti-American, it is abhorrent to the US Constitution, and every government that was based on democracy went down to a messy ending.
.
"A Republic ma'am, if you can keep it."
10.28.2008 9:30am
MeToo:

By the way, certain families might actually be healthier, overall, if one or both parents worked only 50 hours, instead of 70. Even if it meant they could only own 2 SUVs, instead of 3. Or had to settle for living in just one house. News bulletin: money isn't everything.


Shouldn't that be the individual's choice? Should the Government be in the business of taxing people heavily so they have to the simple life, because some Government Official or Academmic decided it was 'healthier'?

Wouldn't that be like a sin tax? It is a sin to live well! You guys are worse than Fundamentalist Christians!
10.28.2008 10:05am
David Warner:
"Obama advisor Cass Sunstein tells Politico's Ben Smith that Obama wasn't referring to redistribution of wealth in general,but "to the narrower forms of redistribution -- education"

There is already massive redistribution baked into the cake, great gobs of it to the (relatively) wealthy elderly directly deducted from the paychecks of the struggling young and yet unborn. The other principal flows are to defense/offense contractors (largely legit, still extant) and in the form of interest payments to holders of the debt (increasingly overseas and not altogether friendly).

If there is to be a new flood, however, it will be cast (if made public) as repayment of an education debt, and will be reparations in deed if not name.
10.28.2008 10:40am
Jane:
I believe the 90%+ marginal tax rate in the Eisenhower Admin was on Household Incomes over $400K, in NON INFLATION ADJUSTED dollars. You argue for a 39% rate on incomes over $250K in today's dollars and ask us to be greatful its not 90%.

Eisenhower's economy was considered sluggish - with production growth at just around 1% annually. The public was unhappy with the economy. Kennedy won partly on the promise to improve the economy, and he cut taxes after he won. He said something like - no country ever taxed itself into prosperity. No one was arguing to keep the rate high because the Eisenhower years were so great.
10.28.2008 11:00am
American Psikhushka (mail):
jukeboxgrad-

It's extremely silly to think that they would have behaved differently if their taxes were higher. Maybe you didn't notice that they kept working just as hard even after they became super-rich. This is the typical pattern. They are not in it primarily for the money. If you had told Gates in 1975 that his efforts were going to lead to a fortune of only $10 billion, instead of $100 billion, what would he have done differently? Answer: absolutely nothing. He would not have said, "oh well, in that case I might as well spend the next thirty years surfing."

It just doesn't work that way, and the idea that it works that way is an illusion.


Actually it does overall. There are plenty of business owners that reduce investments in time and money when tax and regulatory burdens get too high. Or even leave the area in question. Take the business owners fleeing some of the high tax states to go to other states, for example. It's called "capital flight". I guess you could call scaling back time and capital investment "capital rest", "capital dormancy", or "capital in hiding". I'm sure economists have a name for it somewhere. If they don't I call dibs on any of the names I just proposed.

And as I responded to someone else above, you are only taking into account the government's receipts, not the effect of those receipts on the overall economy. The government is a horrible steward of wealth and wealth creator. In most cases it is a wealth destroyer. The capital is much more valuable in the hands of the private owner, where it can be employed in the private stock. Note this is so for both society and for the individual. A lot of the pro-tax posters in this thread ignore the societal value of the private capital stock. It's the only engine that truly creates societal wealth and prosperity. As someone quoted Kennedy above - you can't tax your way to prosperity.
10.28.2008 1:11pm
jukeboxgrad (mail):
metoo:

Shouldn't that be the individual's choice?


In some perfect universe, we could say that it 'should' "be the individual's choice" to pay no taxes at all. But we don't live in that perfect universe. Taxes are a necessary evil, even though a lot of people like to whine about them.

And I was making a different point, which is that we worship work and money. That's our true religion. It's possible that we should put some reflection into this. It's unhealthy for individuals, families, and the nation.
10.28.2008 1:38pm
jukeboxgrad (mail):
jane:

I believe the 90%+ marginal tax rate in the Eisenhower Admin was on Household Incomes over $400K, in NON INFLATION ADJUSTED dollars. You argue for a 39% rate on incomes over $250K in today's dollars and ask us to be greatful its not 90%.


These are the rates from 1954 to 1964 (pdf):

Married Filing Jointly

20.0% $0 $4,000
22.0% $4,000 $8,000
26.0% $8,000 $12,000
30.0% $12,000 $16,000
34.0% $16,000 $20,000
38.0% $20,000 $24,000
43.0% $24,000 $28,000
47.0% $28,000 $32,000
50.0% $32,000 $36,000
53.0% $36,000 $40,000
56.0% $40,000 $44,000
59.0% $44,000 $52,000
62.0% $52,000 $64,000
65.0% $64,000 $76,000
69.0% $76,000 $88,000
72.0% $88,000 $100,000
75.0% $100,000 $120,000
78.0% $120,000 $140,000
81.0% $140,000 $160,000
84.0% $160,000 $180,000
87.0% $180,000 $200,000
89.0% $200,000 $300,000
90.0% $300,000 $400,000
91.0% $400,000

The tax rate was 43% for income over $24,000. In today's dollars, that income would be $158,860.05.

You argue for a 39% rate on incomes over $250K in today's dollars and ask us to be greatful its not 90%.


You can see that "a 39% rate on incomes over $250K in today's dollars" is substantially lower than what we paid under Eisenhower.

By the way, "$250K in today's dollars" is the equivalent of $37,769.09 in 1964. The marginal rate on that income would have been 53%. This is another way to see that what Obama proposes is substantially less than what we paid under Eisenhower.

Kennedy won partly on the promise to improve the economy, and he cut taxes after he won.


Proof, please. According the reference I cited, tax rates and brackets did not change between 1954 and 1964.
10.28.2008 1:38pm
jukeboxgrad (mail):
psik:

The government is a horrible steward of wealth and wealth creator.


Especially when the GOP is in charge.

The solution to this problem is not to strangle the government, a la Norquist. The solution to this problem is to run government properly. Easier said than done, but a good first step is to exile the GOP. It's no surprise that government is especially incompetent when it's run by the people who are generally opposed to the very idea of government.
10.28.2008 1:38pm
American Psikhushka (mail):
jukeboxgrad-

Then why not reduce taxes to zero? No one seems to be interested in answering this question I already asked: if lower taxes are always good, then why not just have no taxes at all? What level of taxation do you claim is appropriate? Zero? And if not zero, then what is your basis to claim that the level you propose is inherently more rational than any other plan, like, say, Obama's?

I'll address your questions individually.

if lower taxes are always good, then why not just have no taxes at all?

As close to zero as possible. As far as libertarians go I'm a minarchist. Once you had a minarchist state (basically essential services - police, fire, EMS, courts, military) you could try to determine how much of the minarchist state could be left to the market and eventually come to an end-state that would have a very low tax rate.

And if not zero, then what is your basis to claim that the level you propose is inherently more rational than any other plan, like, say, Obama's?

Because the government is already huge and bloated and likewise the actual tax rate is huge. (We haven't even discussed how the debasement of our fiat currency is a huge hidden tax that allows practically limitless government spending.) The likely best way out of the current economic mess would be to stop inflating (and eventually enact some kind of hard currency policy) and to massively cut spending and taxes. From what I can tell this is not Obama's plan. (Or McCain's to a large extent either.) It seems like Obama's plan calls for spending to basically stay the same or increase. In my opinion this is not likely to cause things to improve any time soon.
10.28.2008 1:46pm
American Psikhushka (mail):
jane-

A recession is NO TIME TO INCREASE TAXES.

Generally I agree with this. However if, for example, a government committed serious crimes, torts, human rights violations, etc. they should make reparations, restitution, compensation, damages, etc. Even if that involved increasing taxes.

Imagine a thief going before a court and claiming that he couldn't pay his victim back because it was a "recession".
10.28.2008 2:03pm
American Psikhushka (mail):
jukeboxgrad-

Especially when the GOP is in charge.

With some exceptions they're both horrible. It's government in general. It's the dichotomy of spending someone else's money rather than your own.

It's no surprise that government is especially incompetent when it's run by the people who are generally opposed to the very idea of government.

I don't buy this non sequitur. It's a nice anti-libertarian soundbite, but it's just manipulative propaganda. Are you claiming that Ron Paul, because he believes in small government, is a worse public servant than the dirtiest big government Democratic congresspeople? Or Republicans, for that matter.

It's ideological exceptionalism, claiming that libertarian or small-government types cannot serve effectively. The small-government advocates have a right to be there just as much as the big-government or socialist advocates. In fact, getting small-government types in office may be one of the only effective ways to get any changes made. We are allegedly talking about representatives of the people here. Those with small-government views have a right to elect representatives that share their views just like anyone else.
10.28.2008 2:22pm
jukeboxgrad (mail):
psik:

As close to zero as possible.


We spend as much on defense as the rest of the world combined. Have we brought our military spending "as close to zero as possible?" Just curious.

the actual tax rate is huge


It's much lower than under, say, Eisenhower. So how are you defining "huge?"

We haven't even discussed how the debasement of our fiat currency is a huge hidden tax that allows practically limitless government spending.


Good point. I'm with you on that one.

The small-government advocates have a right to be there just as much as the big-government or socialist advocates.


I think that small-government/big-government is not a particularly helpful framework. I think a more useful framework is competent government vs incompetent government.
10.28.2008 2:30pm
Jane:

Kennedy won partly on the promise to improve the economy, and he cut taxes after he won.


Proof, please. According the reference I cited, tax rates and brackets did not change between 1954 and 1964.



I think you prove it yourself: did not change between 1954 and 1964, when Kennedy CUT Them (he took office in 1963), after promising to improve the sluggish economy.

From Kennedy's 1961 Inagural Address:


The present state of our economy is disturbing. We take office in the wake of seven months of recession, three and one-half years of slack, seven years of diminished economic growth, and nine years of falling farm income.

Business bankruptcies have reached their highest level since the Great Depression. Since 1951 farm income has been squeezed down by 25 percent. Save for a brief period in 1958, insured unemployment is at the highest peak in our history. Of some five and one-half million Americans who are without jobs, more than one million have been searching for work for more than four months. And during each month some 150,000 workers are exhausting their already meager jobless benefit rights.

Nearly one-eighth of those who are without jobs live almost without hope in nearly one hundred especially depressed and troubled areas. The rest include new school graduates unable to use their talents, farmers forced to give up their part time jobs which helped balance their family budgets, skilled and unskilled workers laid off in such important industries as metals, machinery, automobiles and apparel.

Our recovery from the 1958 recession, moreover, was anemic and incomplete. Our Gross National Product never regained its full potential. Unemployment never returned to normal levels. Maximum use of our national industrial capacity was never restored.

In short, the American economy is in trouble. The most resourceful industrialized country on earth ranks among the last in the rate of economic growth. Since last spring our economic growth rate has actually receded. Business investment is in a decline. Profits have fallen below predicted levels. Construction is off. A million unsold automobiles are in inventory. Fewer people are working--and the average work week has shrunk well below 40 hours. Yet prices have continued to rise--so that now too many Americans have less to spend for items that cost more to buy.

Economic prophecy is at best an uncertain art--as demonstrated by the prediction one year ago from this same podium that 1960 would be, and I quote, "the most prosperous year in our history." Nevertheless, forecasts of continued slack and only slightly reduced unemployment through 1961 and 1962 have been made with alarming unanimity-- and this Administration does not intend to stand helplessly by.

We cannot afford to waste idle hours and empty plants while awaiting the end of the recession. We must show the world what a free economy can do--to reduce unemployment, to put unused capacity to work, to spur new productivity, and to foster higher economic growth within a range of sound fiscal policies and relative price stability.

I will propose to the Congress within the next 14 days measures to improve unemployment compensation through temporary increases in duration on a self supporting basis--to provide more food for the families of the unemployed, and to aid their needy children --to redevelop our areas of chronic labor surplus--to expand the services of the U.S. Employment Offices--to stimulate housing and construction--to secure more purchasing power for our lowest paid workers by raising and expanding the minimum wage--to offer tax incentives for sound plant investment--to increase the development of our natural resources--to encourage price stability--and to take other steps aimed at insuring a prompt recovery and paving the way for increased long-range growth. This is not a partisan program concentrating on our weaknesses--it is, I hope, a national program to realize our national strength.

This describes your great Eisenhower Economy?
10.28.2008 2:59pm
May:

I think that small-government/big-government is not a particularly helpful framework. I think a more useful framework is competent government vs incompetent government.

Big Government can never really be Good Government. First, Government is lumbering and inefficient by nature. Second, Government is run by imperfect and often self-interested people.

I really don't know where people get their faith in Government.
10.28.2008 3:08pm
Jane:
Ooops, I made an error, Kennedy obviously took office in 1961 (silly me - I was not alive at the time). I read, however, that he had a hard time convencing people to cut taxes, and but that is was his hard work, in part, that resulted in the 1964 tax cuts.
10.28.2008 3:10pm
Bozoer Rebbe (mail) (www):
And the idea that large corporate institutions are inherently cleaner and more efficient than large government institutions is fiction. Something I can report after a great deal of personal involvement and observation.

When a corporation is not efficient, it loses money and may eventually go out of business. No government enterprise has that sword hanging over its head.
10.28.2008 3:38pm
Bozoer Rebbe (mail) (www):
>psik:

>The government is a horrible steward of wealth and wealth creator.

Especially when the GOP is in charge.

The solution to this problem is not to strangle the government, a la Norquist. The solution to this problem is to run government properly.


A variation on the "they weren't real Christians/Real socialism has never been tried" argument.

Oh great wise one, the Democrats have been in charge of Detroit for the past 60 years, including Democratic mayors, Democratic city council, and a Democratic school board. Are you saying that the Republicans could possibly have done a worse job with Detroit than the Democrats?
10.28.2008 3:44pm
Bozoer Rebbe (mail) (www):
We spend as much on defense as the rest of the world combined. Have we brought our military spending "as close to zero as possible?" Just curious.

Military spending is half of what it was under the Kennedy administration when it represented about 8% of GDP. Military spending is a small fraction of what we spend on education.
10.28.2008 3:47pm
JFred (mail):
American political discourse is in a worse state than you thought.

They think the redistribution is from the government to them, when gov't pays for college, for example. "The government pays, they have lots of money".

If you go any further, they'll imply they're getting their own tax money back.
10.28.2008 3:56pm
Standun:
"With some exceptions they're both horrible. It's government in general. It's the dichotomy of spending someone else's money rather than your own."

What an nonsensical thing to say, as money is solely created by government.
10.28.2008 4:19pm
Sara:
"1964, when Kennedy CUT Them"

Unfortunately, Kennedy was assasinated in 1963.
10.28.2008 4:26pm
jukeboxgrad (mail):
jane:

he [JFK] took office in 1963


JFK took office on 1/20/61, and was assassinated on 11/22/63. You said JFK "cut taxes after he won." You have also acknowledged that tax rates did not change between 1954 and 1964. I see a few small problems with your knowledge, and your logic. Do I need to spell them out further?

From Kennedy's 1961 Inagural Address


I'm having trouble finding the part where he pointed out the importance of cutting the federal income tax. Maybe you can help me find it.

I read, however, that he had a hard time convencing people to cut taxes, and but that is was his hard work, in part, that resulted in the 1964 tax cuts.


Before you said JFK "cut taxes after he won." Now you're saying he cut taxes after he died. Which is it?
10.28.2008 5:00pm
jukeboxgrad (mail):
May:

Government is run by imperfect and often self-interested people


Let us know what kind of people run large corporations.
10.28.2008 5:00pm
jukeboxgrad (mail):
rebbe:

When a corporation is not efficient, it loses money and may eventually go out of business.


I realize there might be some fantasy planet where things work that way. Here on Earth, "when a corporation is not efficient," it has a good chance of being saved by a $700 billion bailout. Or it has a good chance of fooling stockholders and employees, so top management can still make out like bandits even when the whole enterprise goes down the tubes and screws everyone else.

A variation on the "they weren't real Christians/Real socialism has never been tried" argument.


Funny you should mention that, because there's no shortage of people saying that Bush was never a conservative, even though he was elected via the support of conservatives. And I'm sure in coming years we'll hear lots of people say 'real conservatism has never been tried; won't you please give us just one more chance to really botch things up.'

Are you saying that the Republicans could possibly have done a worse job with Detroit than the Democrats?


Yes.

Military spending is half of what it was under the Kennedy administration when it represented about 8% of GDP.


It would be good if you didn't express yourself in a misleading manner. The following statement is correct: when measured as a % of GDP, military spending is half of what it was under the Kennedy administration.

But that's not what you said. It is not true that "military spending is half of what it was under the Kennedy administration." Military spending, when measured in inflation-adjusted dollars, is at its highest level since WWII:

The Pentagon on Monday will unveil its proposed 2009 budget of $515.4 billion. If it is approved in full, annual military spending, when adjusted for inflation, will have reached its highest level since World War II.


You're pointing out correctly that our overall economy has grown even faster. So what? Has the world become more dangerous, and our country much more expensive to defend, just because we're wealthier? Not really. It's just that we have more money, so it's easier to not notice that we're spending so much of it on weapons.

And you haven't made even a pretense of explaining why we need a military budget as large as the rest of the world combined. How do you know that's the right level? And are you sure it's enough? Maybe we're not really safe unless we double or triple that budget. Would that be the right amount?

Military spending is a small fraction of what we spend on education.


The budget for the US Department of Education is about $69 billion. Our military budget is about $651 billion. You're right about the "small fraction," except you've got it backwards.
10.28.2008 5:01pm
cboldt (mail):
-- Military spending is a small fraction of what we spend on education. --
.
I dunno about small fraction. More like rough parity.
.
US Census figures show about 675 billion for public education (and another 150 billion for private) in 2004.
10.28.2008 5:11pm
cboldt (mail):
-- What an nonsensical thing to say, as money is solely created by government. --
.
And if it would just make more, we'd be out of this mess in a jiffy. I've mailed in my request for a giga-buck.
10.28.2008 5:15pm
BaxterJ:
It's nice to see a discussion where people have actually listened to the audio and are making mostly intelligent remarks. So many other sites I've seen today are just alarmist or ignoring the issue.
10.28.2008 5:48pm
May:

Government is run by imperfect and often self-interested people

Let us know what kind of people run large corporations.


Exactly! Thus the question - where do you get your faith in Government?
10.28.2008 5:48pm
MarkField (mail):
While Jane got a lot of details wrong, there was a Kennedy tax cut.


And you haven't made even a pretense of explaining why we need a military budget as large as the rest of the world combined. How do you know that's the right level? And are you sure it's enough? Maybe we're not really safe unless we double or triple that budget. Would that be the right amount?


Exactly. Anyone who suggests that we need the same relative defense budget today as we did in the era of the Berlin Wall, the Cuban Missle Crisis, and the beginnings of the Vietnam War is delusional.


I dunno about small fraction. More like rough parity.
.
US Census figures show about 675 billion for public education (and another 150 billion for private) in 2004.


It's clear from the context that the original post was referring to federal government spending. That's been the context of this whole discussion. If people want to bring state spending into play, then they need to justify state tax and budget policies rather than Obama's.
10.28.2008 6:12pm
May:

Anyone who suggests that we need the same relative defense budget today as we did in the era of the Berlin Wall, the Cuban Missle Crisis, and the beginnings of the Vietnam War is delusional.

That's right, we have no threats now. Not Russia, Not N Korea, Not Iran. Nothing!
10.28.2008 6:51pm
MarkField (mail):

That's right, we have no threats now. Not Russia, Not N Korea, Not Iran. Nothing!


You know, mis-stating what someone said is not very persuasive, even less so when accompanied by factual errors (check the latest news on N. Korea). Neither is hysteria. Breathe deep and try again.
10.28.2008 7:27pm
MikeS (mail):

rather than accept the rather cartoonish view that often prevails about the practical significance of Brown v. Board of Education, he knew that very few black students in the South were attending integrated schools as late as the early 1960s (almost a decade after Brown), and that it was only the threat of a cutoff of federal funds that really got desegregation moving.


Good, Lord, are there people other than Ann Coulter who don't know that? Even those who get their history from Sports Illustrated know that Little Rock Central High was closed the year after its forced integration.
10.28.2008 7:49pm
Jay Ballou (mail):
Ooops, I made an error, Kennedy obviously took office in 1961 (silly me - I was not alive at the time). I read, however, that he had a hard time convencing people to cut taxes, and but that is was his hard work, in part, that resulted in the 1964 tax cuts.

If your excuse for your idiotic mistakes is that you weren't alive at the time, then taking that to its logical conclusion you are not alive now.
10.28.2008 8:19pm
Jay Ballou (mail):
I detest democracy. Yes, I'm serious.

No doubt.

The founders detested democracy too. Democracy is anti-American, it is abhorrent to the US Constitution, and every government that was based on democracy went down to a messy ending.

You're a pig-ignorant idiot ideologue.
10.28.2008 8:32pm
Jay Ballou (mail):
How can 95% get a tax cut when only 35% pay any taxes?

Any taxes?

Is there a McCain supporter anywhere who isn't an ignoramus and a liar? You people even lie to yourselves.
10.28.2008 8:36pm
Jay Ballou (mail):
jukeboxgrad, you're wasting your time on these cretins .. who are fortunately becoming increasingly irrelevant.
10.28.2008 8:38pm
LM (mail):
Jay Ballou:

You're a pig-ignorant idiot ideologue.

That's uncalled for.
10.28.2008 8:43pm
American Psikhushka (mail):
jukeboxgrad-

We spend as much on defense as the rest of the world combined. Have we brought our military spending "as close to zero as possible?" Just curious.

When was I pounding the table defending the defense budget? I must have missed that. Go ahead and cut some of the defense budget, along with a lot of other departments. Just make sure it's paired with tax cuts so the money stays in the private capital stock and doesn't go down the black hole somewhere else.

It's much lower than under, say, Eisenhower. So how are you defining "huge?"

And it was too high then as well.

"Huge" is anything even close to the combined tax rate (and inflation) we have now. The lower tax rates are the more dynamic and growing your economy is going to be. So maybe the question is how strong and successful of an economy do you want?

I think that small-government/big-government is not a particularly helpful framework. I think a more useful framework is competent government vs incompetent government.

Unfortunately they are joined at the hip. The bigger government is, the more you're going to have to cripple and stifle the economy with higher taxes to pay for it. It's not very "competent" to cripple the economy and run it into the ground.
10.28.2008 8:45pm
American Psikhushka (mail):
Standun-

What an nonsensical thing to say, as money is solely created by government.

Yes, they do. But it is supposed to serve as a medium of exchange and a store of value. (Which is why it is theft when the government increases the supply of it.) So it comes to represent real things - compensation for labor, profits from invesments, etc. - that are owned by the individual. When the government takes part in taxes, they are taking representations of tangible things. So no, it wasn't nonsensical at all.
10.28.2008 8:57pm
May:

Is there a McCain supporter anywhere who isn't an ignoramus and a liar? You people even lie to yourselves. You're a pig-ignorant idiot ideologue. you're wasting your time on these cretins . who are fortunately becoming increasingly irrelevant.

This is what passes for discourse in your world?
10.28.2008 9:29pm
cboldt (mail):
Jay Ballou -- [cboldt is] a pig-ignorant idiot ideologue. --
LM -- That's uncalled for. --
.
Heh. I have to say, in context I thought the sincere and heartfelt outburst was damned humorous. I took it as a reflexive rejection of "democracy is bad," as routinely drummed into the students of progressive educators.
10.28.2008 10:56pm
jukeboxgrad (mail):
may:

Exactly! Thus the question - where do you get your faith in Government?


Let's put it this way: having faith in government is a bad idea, but not having faith in government is an even worse idea. It's like democracy: a rotten system, but still the best we can do.

There are certain problems that are best solved by government. There's no getting around that. So we might as well create the best possible government. On the other hand, if you decide to be cynical and throw up your hands and say it's pointless to have faith in government, and that government is inherently evil and some kind of an enemy, then this is not going to lead to good results.
10.28.2008 11:17pm
jukeboxgrad (mail):
mark:

there was a Kennedy tax cut


That's very helpful, thank you.
10.28.2008 11:18pm
jukeboxgrad (mail):
jay:

you're wasting your time on these cretins


I don't look at it that way. Most of the people reading this are not speaking up. You know, lurkers. There are many, and they appreciate what goes on. I know because I get emails.

By the way, I do name-calling, but only when someone else shoots first. Otherwise I think it does more harm than good.
10.28.2008 11:18pm
jukeboxgrad (mail):
psik:

When was I pounding the table defending the defense budget?


I didn't say you were. It was a sincere question, and I appreciate the answer.

The lower tax rates are the more dynamic and growing your economy is going to be.


But there are certain tasks that are best done by government. And if those tasks aren't done, or done well, the rest of the system suffers.
10.28.2008 11:18pm
David Warner:
BaxterJ,

"It's nice to see a discussion where people have actually listened to the audio and are making mostly intelligent remarks. So many other sites I've seen today are just alarmist or ignoring the issue."

Yeah, the audio actually made me very glad I voted for the guy. The irony is that it was the court-focused strategy itself, obviating the need to persuade the voting masses, that's left us with such a gaping chasm in our body politic that few are equipped to fully appreciate where (I'm guessing) he's coming from.
10.29.2008 12:00am
May:

Let's put it this way: having faith in government is a bad idea, but not having faith in government is an even worse idea. It's like democracy: a rotten system, but still the best we can do.

We need government to do a few things, but at this point, we're trying to use government for too much. If we keep government power small, we maximize our personal liberty and freedom, and limit opportunities for abuse by the state.
10.29.2008 12:45am
jukeboxgrad (mail):
may:

If we keep government power small, we maximize our personal liberty and freedom, and limit opportunities for abuse by the state.


That sounds nice on paper, but you should pay attention to current events. When government looks the other way while markets run wild, we maximize the opportunity for abuse by a small number of greedy people who get away with raping the rest of us. It's like having a game without a ref.

By the way, I'm guessing you voted for Bush. If so, you're in a weak position to make a fuss about how important it is to "maximize our personal liberty and freedom, and limit opportunities for abuse by the state." Maybe you should think about this:

Government agents should not have the right to stop and question Americans anywhere without suspicion within 100 miles of the border
10.29.2008 1:01am
LM (mail):
jbg:

having faith in government is a bad idea

yes

but not having faith in government is an even worse idea.

I'd put it a little differently. I think not having faith, even to the point of aggressive skepticism, is all good. But that skepticism should be accompanied by a hope that it won't be proven necessary, since we do benefit (for all the reasons you mentioned) from government that deserves our trust. It's when skepticism descends into general hostility toward government that we throw the baby out with the bath water.

Sorry for the nit-pick. I doubt you intended anything different just because you were more concise.
10.29.2008 3:10am
J Redd (mail) (www):
Sound like "old fashioned Socialism". Obama Socialist Photo
10.29.2008 4:00am
jukeboxgrad (mail):
lm:

I'd put it a little differently.


You said it better than I did, which is exactly what I would expect. Thanks.
10.29.2008 9:15am
May:
Yes, its bad when corporations run roughshod over people. But worse when governments do it because government has the power of the state. And they can take away your property, your freedom and your very life. History has proven this time and time again.
10.29.2008 10:11am
David Warner:
LM,

"I'd put it a little differently. I think not having faith, even to the point of aggressive skepticism, is all good. But that skepticism should be accompanied by a hope that it won't be proven necessary, since we do benefit (for all the reasons you mentioned) from government that deserves our trust"

Once we libertarians have some time in the wilderness to get our shit message together, I don't think we'll necessarily disagree. The message I'd suggest basically boils down to Roberts' umpire analogy.

The libertarian (I would argue that it should be called "liberal") vision of government is only "less government" coincidentally. "Less" protection of civil liberties, "less" effective regulation, or even "less" direct support for a minimal standard of living for all citizens is not more libertarian/liberal. It does, however, advocate for "less" government de facto because government currently is directly involved in so many things outside its core competencies/duties.

Less less, more focused.
10.29.2008 10:30am
LM (mail):
DW

Less less, more focused.

I agree, but if consensus around that formulation is the objective, I'd plan for a pretty raucous wilderness experience.
10.29.2008 9:15pm
LM (mail):
jbg,

I don't share that expectation, but thanks.
10.29.2008 9:18pm
David Warner:
LM,

"I agree, but if consensus around that formulation is the objective, I'd plan for a pretty raucous wilderness experience."

Depends on if Obama is Bush III or Reagan II. If the former, the consensus will form itself, and it won't take long. The latter, there will be plenty of time to find it. Then again, there's always the possibility of Obama I, where he adopts the consensus himself and we liberals take our place in a new Golden Age. I say that in all sincerity.
10.30.2008 5:28am