A requested topic for Trust in the Lord.

From a religious Christian standpoint, you render unto Caesar that which belongs to Caesar.

I also had a tax attorney speak at my law school once with a religious twist on tax law.  He said something to the effect that God never meant by that that you should pay as much in taxes as you can (i.e. there's nothing wrong with legally minimizing your taxes through deductions, etc.).

I'm interested in discussing the idea of whether it is legal, or if it is just something people do.

What exactly does this mean?

I figured Heath would have an understanding of the subject clearly.

Are US taxes legal? Meaning is it truly illegal to not pay taxes. I notice plenty of groups that claim taxes are not constitutional. As a result, they refuse to pay taxes.

In other words, while many people pay their taxes, they don't have to. They just do. (according to the groups that don't pay taxes that is)

I've heard the same of canadian taxes, but I haven't seen anything conclusive however. US tax laws seem to be more fought, and opposed by more groups. Not sure if they have more to stand on, or if there are just more americans, and therefore more protesters.

And to be clear, I'm not asking if you will go to jail, I'd just to like make sure that the laws are there stating you must pay taxes if you are an american.

And to be clear, I'm not asking if you will go to jail, I'd just to like make sure that the laws are there stating you must pay taxes if you are an american.

Internal Revenue Code section 7201.

That helps. Who does that apply to?

Not me, cause I'm Canadian. That's the easy part. I'm not trying to trick anyone here. So please don't think I'm trying to create an impossible situation.

Who does that apply to? Does someone have to agree to the contract in order to be held to that?

Incidentally, this is in reference to income tax.

It's US law. If you try to evade or defeat taxes, you serve up to five years in jail and must pay a fine of up to one hundred thousand dollars.

. So please don't think I'm trying to create an impossible situation.

What I'm thinking is that you may not be fully clear on the meaning of the term legal. It is the law that you have to pay taxes, so paying taxes has to be legal by the very definition of the word.

Does someone have to agree to the contract in order to be held to that?

Do you honestly think that this is true? That a person has to agree to have the laws of the land enforced on him? Don't you think that's a little ridiculous?

'Frank here murdered sixteen people in cold blood in public, but since he didn't agree to a contract concerning the laws against murder, we can't put him on trial and lock him away.'

Incidentally, this is in reference to income tax.

Well then, since you're Canadian, you have to pay taxes because of the Tax Act.
This message was last edited by the player at 11:06, Sat 09 Aug 2008.

I realize people say that, I'm trying to confirm if that is actually specified, or if it is just done. Are people who don't pay income tax in the USA actually doing something illegal.

I'm not saying taxes are legal. I'm talking about not paying taxes being illegal.

For example, if you wanted to give me money, I wouldn't prevent you from doing so. If you like, I could even tell you how much money you should pay me. But if you don't pay me, you don't go to jail. There's no law saying you have to pay me. Is there a law that states you Falkus must pay me.


So, to be sure, I'm not saying if there are tax laws. I'm asking how is it defined in law on who is to pay, and why they must pay, etc.

Not as much as you think. When you go into a court of law, you have to place your handle on the bible, and swear to tell the truth.

They are asking you to agree to tell the truth. What if you don't agree?
When you sign a contract with your cell phone company, you are agreeing to their terms.
When you sign a driver's license, you're agreeing to the terms.


That's for the safety of others. How does Mike not paying taxes affect Tom? I am making a difference between taxes, and criminal activity.

I don't wan to confuse the argument with multiple points. Why don't we come back to canadian taxes after the american taxes are "finished".

I realize people say that, I'm trying to confirm if that is actually specified, or if it is just done. Are people who don't pay income tax in the USA actually doing something illegal.

It's not because people say that, it's because it's written into the tax code.

I'm not saying taxes are legal. I'm talking about not paying taxes being illegal.

Since you go to jail if you don't pay them, that's sort of a hint.

So, to be sure, I'm not saying if there are tax laws. I'm asking how is it defined in law on who is to pay, and why they must pay, etc.

That would be the tax code.

They are asking you to agree to tell the truth. What if you don't agree?

You're held in Contempt of Court and then jailed and/or fined.

hat's for the safety of others. How does Mike not paying taxes affect Tom? I am making a difference between taxes, and criminal activity.

Because without taxes, we'd have no roads, law enforcement, fire stations, hospitals, infrastructure, etc., etc. etc. These things do not magically appear, the government has to pay for them. Taxes are how they get the money to do so.

I don't wan to confuse the argument with multiple points. Why don't we come back to canadian taxes after the american taxes are "finished".

What confusion? You pay taxes or you go to jail. Specifics might differ, but they have the same general point.

And that's what I'm asking. I'm asking to see where it's specified who is to pay, why they must pay, etc.

It's not that easy. People in the states used to, (maybe still do) go to jail just because they had a spouse, or significant other who dealt drugs. The spouse or SO did not have to be involved, they just had to know the dealer, and allow them phone use, or to stay over night in their house, or accept a gift from the proceeds of the sales of drugs.

In other words, something enforced does not mean it is following what the law is trying to enforce.

Right, as I said, I don't see where it states who must pay, why they must pay, etc.

It was a point, I'll come back to this as it's a side point. I don't want to distract from trying to find out who is specified to pay income taxes.

I'm making a distinction of income taxes. I'm not saying sales tax, gas tax, etc aren't legal. The government can continue to generate profits from user fees, licensing, sales of commodities, etc

Because Canadian tax laws are not american tax laws. I want to make sure we stick to the original point, and not go off on off shoots until we have an answer that is clear. I can appreciate that people are stating the laws exist, I'm just asking to see if anyone knows where the specifics are located, and what they say.


No different than if someone asked me why I feel something is a sin, and my answer became a generic, "It's in the bible", and left nothing else, the person would have a start, but realistically it didn't answer their question. It just provided a start of many months of additional research. And that's if they don't lose track of the original point after months of reading thousands and thousands of details.

Don't you think the difference is pretty slim? If US don't pay its military to guard its nuclear warheads, for instance, bin Laden might steal one of them and detonate it in New York or Belgrade, for instance. That way people who don't pay taxes do endanger both people living in and out of US, both American citizens and people who are not.


It is pretty clear that US Congress has at one point or other (actually on numerous occasions) erected laws that force people to pay taxes, the question (pretty dumb, but not absolutely outside of realm of logic) is if US constitution permits them to bring such legislation. This is a view point of most fundamentalist of US conservatives who believe that the government can do only what is explicitly permitted by the constitution, while they can do anything they want as long as it is not explicitly forbidden by law (and sometimes even if it's against the law (including the constitution)).

And that's what I'm asking. I'm asking to see where it's specified who is to pay, why they must pay, etc.

In the tax code. I'm not an accountant, what more do you want? I'm telling you where you can find it, I'm not sure what else there is to say.

It's not that easy. People in the states used to, (maybe still do) go to jail just because they had a spouse, or significant other who dealt drugs. The spouse or SO did not have to be involved, they just had to know the dealer, and allow them phone use, or to stay over night in their house, or accept a gift from the proceeds of the sales of drugs.

That's because they're aiding and abetting the commission of a crime.

Right, as I said, I don't see where it states who must pay, why they must pay, etc.

What are you talking about? That's exactly what the tax code says. It's the codification of how exactly your income, property, etc. is taxed.

I'm making a distinction of income taxes.

Why?

I'm just asking to see if anyone knows where the specifics are located, and what they say. 

You could check the US or Canada revenue agency websites.

No different than if someone asked me why I feel something is a sin, and my answer became a generic, "It's in the bible", and left nothing else, the person would have a start, but realistically it didn't answer their question.

Why don't you look it up yourself? Unless one of the people here is a tax lawyer, it's going to come down to Google anyway, so you might as well skip the middleman.
This message was last edited by the player at 22:55, Sat 09 Aug 2008.

I think criminals and taxes are vastly different. For example, if someone were to oppose high sales tax, I'd be less threatened if that were compared to one who opposed shoplifting fines.

I addressed that in a different post, but my context is income taxes, not all taxes.


I think that is the question I'm asking. Let's find where it states it clearly who is to pay taxes, and the why's, and so on. I'm not trying to say that liberals of the law welcome taxes, or conservative value the letter of the law, and don't want to pay taxes. I'm just trying to find out what is said to be clear, and where it is stated.

It's ok. I'm not asking you to show me where it states. I'm asking anyone where it states. I gave the example of stating a general answer that will involve hundreds of hours of research. (I'm guessing. I'm not sure how many hours it would take to read all the laws on taxes.) I think most people would admit that to be a daunting task.

Not always. My point was addressing the laws not being used as intended. The SO, or spouse don't even have to know what's going on to be convicted. In some cases, the results were the spouse or SO received more time than the dealer because the dealer would be able to cooperate with the prosecutor, and pass on details such as other dealers, and sources of supply. The SO or spouse were not even privy to such details, and so unable to provide any information to act as "collateral" for a lesser sentence. (For something they did not even participate in).


Falkus, it's not so clear how that applies to people. In the earlier link, it said it applied to anyone. And yet the USA cannot tax just anyone. They can't tax me for example. So what else is pointed out where they can tax "anyone"?



Why not? That's the one I am asking about.

Too much for me to try and break down. I'm asking the group here since I'm counting on some insight from others who have done more research than I. I'm expecting Heath and kat to be more into this than the other users here. A lawyer, and a government conspiracy theorist seems to be my first guess on getting an inside track or at least a good opinion about what they feel about their view.

I do believe Heath is a lawyer, and I remember something about corporations. That suggests taxes, and financing to me. It's just a guess, but either way, if more people get involved than just kat and Heath, I'm fine in hearing the discussion from others as well.

Perhaps you could google it... or ask your neighborhood lawyer.

Yea, I'm doing that too. I do like to hear from others with potentially more insight on the subject. I'm hoping there could be others that are interested in the subject in this forum.

TitL, is the 16th ammendment more what you're looking for?

Yes, that helps.

I've been doing more searching, specifically with the 16th amendment. What I can't find now is where there is a "cap" on taxes. There doesn't seem to be any minimum, or maximum. That doesn't seem likely though, so I'm assuming that I'm missing something.

Does the USA have the lawful right to take any amount they want from you? Do they have to be fair about what they take from you? At what point do the people have the right to withhold payment when a hardship is happening?

When I looked at the 16th amendment, it talked about a specific instance that it brought in a 2% tax rate on those who made more than 4000 dollars. I think they might be shocked that much much more than 2% of wages are taken in income tax.

http://www.givemeliberty.org/f..._xcdfr_is_income.htm
http://political-resources.com...mendment/default.htm

Apparantly Bill Benson has written a couple books on his own research that the 16th amendment was never legally ratified.


He is stating that in 1913 it was stated to be ratified, but it was not done so through the proper legal manner. It would suggest that without ratification, income taxes are not covered by the other amendments.
This message was last edited by the player at 00:07, Mon 11 Aug 2008.

To quote the seventh circuit:

"Some people believe with great fervor preposterous things that just happen to coincide with their self-interest. 'Tax protesters' have convinced themselves that wages are not income, that only gold is money, that the Sixteenth Amendment is unconstitutional, and so on. These beliefs all lead — so tax protesters think — to the elimination of their obligation to pay taxes."

I'd agree with that. There do seem to be groups that believe that income taxes are unconstitutional. I'd like to look at that deeper, and see how they able to protest, and go without paying. It seems like it should result in a quick decision in court, but the more I look into it, the less decisive it seems to be.

I think I understand more about the quote from Falkus that talks about Gold is money. Apparently, money was considered equal to gold or silver. From my understanding, if you had money, it was given in trade for gold or silver at some point. Like if someone had gold, they put it in the bank, and the money could be spent anyway they wanted. The money always had an equal amount of gold and silver somewhere.

Eventually though the gold and silver became moot, and now banks create money from nothing, and the government agrees to back up the made up money.

It's rather strange to think that banks actually profit on money that does not exist yet, but will only exist after the loan is paid. Should we have another thread about money? That seems really interesting too.

I don't know, while I'm all for following the rules, this seems to be too worried about the letter of the law, and not enough about the spirit of the law.  He's saying that a law doesn't count as legally ratified if the states ratified a version with different capitalization used?  Or different punctuation?  I would wager that by this standard, none of the amendments passed before the 16th were "legally" ratified either.  Seems like Benson is trying to blow technicalities out of proportion.  The spirit of the law is that 3/4 of the states have to agree to the amendment for it to be put in place.  That seems pretty clearly to have been the case, even if the letter of the law might not have been met in every case (ie, some states ratified laws with different capitalization or punctuation).  I know that a lot of legal issues do boil down to the letter of the law, instead of the spirit of the law, but I really don't find this case particularly compelling.

According to the links,  21 of 48 states either did not approve of the ratification, or did not have the ability to ratify the amendment. So while punctuation seems trivial, there's still the issue that it was not ratified, (according to the source).

If 21 of 48 states don't have the ability to ratify, and the constitution requires 3/4 of the states to ratify an amendment, that would mean no amendments are possible.  Only 8 states decided not to ratify it.  What Benson seems to be doing, when I look at the links, is looking at a 40-8 vote, and saying "well, some of you who voted 'yes' didn't actually have a vote, and some of you others voted for something with the wrong punctuation, so the no's win."  Again, I can see the 'letter of the law' argument, but the 'spirit of the law' argument is much more compelling to me.  And if 40 out of 48 states were in favor of the amendment, to me that says the spirit of the law means the amendment passes.  The fact that they voted for a law with different punctuation, or different capitalization doesn't seem like a legitimate reason for overruling their intent.  If states "don't have the ability" to ratify the amendment, that sort of means the ratification process is faulty, not that the particular amendment in question has been rejected.  It sort of goes back to what I said before: I would wager that all the same objections that Benson raises for the 16th amendment could be raised against all amendments before it as well.

I think this punctuation thing is distracting. Let's stick with the states that could legally ratify the 16th amendment. Specifically, income taxes. It appears the research is stating that 21 of the states could not or did not want ratification for that amendment. That means to ratify the 16th amendment would be breaking the spirit of the law.


It's a bit of a red herring to say no amendment could done if the 16th couldn't be ratified. It doesn't really change that legally, there seems to be a problem.

8 states didn't want it.  If 13 more couldn't legally support it, that's a problem of individual states breaking their own rules, not breaking the federal laws.  Sort of like if your pastor says you can't vote for a certain politician, but you do anyway, someone can't overturn the election and say you weren't actually able to vote for that candidate.  You might have broke some rule that applies to you, but the vote itself still stands.

More than 3/4 of the states wanted to pass the law.  To me, that meets the 'spirit of the law' criteria.  If they weren't 'allowed' to be in support of the amendment by their own state rules, but voted to ratify it anyway, that says to me they've decided the no longer accept those state rules.  If they were then voted out of office, and the next set of representatives then said "the last group broke the laws, and we're not going to follow their decisions," that'd be one thing.  But that doesn't seem to be what happened.


A problem of punctuation and capitalization, perhaps.  Not the kind of thing that I think people should really be getting too fired up about.  For me, the bottom line is that more than 3/4 of the states were in favor of the amendment.  That's the criteria that the constitution intended to be met.

Let me put it this way:  What do you feel was the intent of the states here?  Were 3/4 of the states in favor of ratifying this amendment or not?  If so, is it really the right thing to do to quibble over punctuation, spelling, or capitalization?  Benson seems to want to overrule the will of the states over grammar, which I would consider a far greater abuse of the legal system than letting a law pass even though some states voted for versions with different punctuation.

Yea, I get you feel that, but that's a bit of the problem. A vote that does not meet the requirement is not standing. For example, if I voted in that amendment, my vote counts for nothing since I'm not entitled to make that vote for the state.

Which is part of the issue. The government is an employee for the people. The government is there to represent the people.


I don't agree with that. Let's talk about the 21 states that didn't agree or couldn't agree with the 16th amendment. I'm not worried about punctuation. So if you want, I'll agree the punctuation is a moot point, and I'm sure a legal vote done in the proper manner would result in the state wanting the amendment. So let's now talk about the 21 others that didn't or couldn't ratify the amendment.


 According to the report, removing the issue of punction still means it was not ratified.

Well, I consider the state legislatures entitled to make that vote.


Yes.  And since the people, by and large, have supported this law, and don't seem particularly bothered if it contradicts some state constitutions, it would seem inappropriate to overturn their will.


Okay, let's talk about them.  But let's not group all these states into the same group.  Opposing ratification, and being in favor of it but allegedly unable to ratify it are two different things.  Probably we should get this out of the way early.  Have a look at your link's list of states.  Count up all the ones that, in one form or another, supported the law (ie, we're neglecting the 'moot point' issues as you suggested).  How many are there?


Yes, it says that.  But if you look at the numbers, that doesn't seem to be true.  Only 6 states voted against ratification (2 of which later voted to ratify it), and 2 more states never voted on it.  That's only 8 states that can be said to have opposed it, 2 of which later supported ratification.  ( http://www.gpoaccess.gov/constitution/html/conamt.html ).

If you say some of those states aren't actually allowed to vote on this, that sort of defeats the purpose of the process.  The idea is make sure changes aren't made to the constitution unless they have broad support of the states.  If you over turn the will of more than 3/4 of the states on annoying details, you're doing just what the process was meant to stop: setting laws based on just a few states desires, rather than on the will of the large majority.

According to Benson, not all were entitled. That's according to what the peopple had agreed to the powers of some states.

In all fairness, would you agree the states can't make up their own laws and change them just because, right? They do have to follow a process, else if they didn't laws are meaningless if they are not followed. Would you agree with that?


Actually, that seems an ideal reason to overturn a law. In the case of an appeal, that would be one of the better reasons to over turn a ruling. Would you agree that in a court of appeals, that would be a logical, and rational reason to overturn an amendment?


In support of the amendment were 27 out of 48. So 27 were able to support it legally.


Correct. I agree. The problem being pointed out is that it wasn't legally able to be ratified, so cannot be a legal amendment.

Sounds like you're accepting while it is not ratified properly, that the desire to be ratified, is just as legally binding. I think what you're saying is defeating the purpose of the process. If it takes 3/4 of the group to ratify, and they don't have all 3/4, why did they ever say 3/4 was needed? If the law cannot stand up, then it is not worth the paper it is written on.

The large majority wanted the ratification based on 3/4 of the states agreement. If they didn't or couldn't agree to it, then that means 3/4 of the group would not be able to ratify a law. Which was the intent of making sure 3/4 was needed.

So, would you say that some states don't have the power to ratify amendments?  If so, wouldn't that sort of break the whole process, and mean that nothing could ever be ratified?


Yes, laws that a government doesn't follow are pretty meaningless, which is sort of my point.  We've all probably read the lists of absurd laws that exist in places, like you can't take a bath on your lawn in town X, or whatever.  If the government doesn't enforce those laws, and the people don't make the government enforce those laws, they cease to be laws in any real sense.  Slavery is still legal according to some state constitutions, I believe.  The fact that they haven't amended the state constitution doesn't mean you can actually get away with owning slaves there, though.



Not a federal court, no.  The states didn't break any federal rules by ratifying the amendment.  If the legislature broke their own rules by doing it, that's for their state to deal with.  Again, it's like your church telling you you're not to vote for candidate X.  If you go ahead and do it anyway, your vote it still cast, and if that's the deciding vote, that candidate still gets elected.  No one can say "but he wasn't allowed to vote, his pastor told him not to!" and overturn the election.  The issue is between your pastor and you at that point.  Likewise, if the state legislature violates its own state constitution, that's a matter for the people of that state to deal with.  They can kick the bums out, and vote in a group of people who will retract the ratification, but until they do, I don't see it as an appeal's issue.  The fundamental question in the process is "do 3/4 of the state governments support this amendment?"  And the answer was yes.  The fact that some of them weren't supposed to support it isn't really the issue, at least not for the federal government.  The federal government doesn't enforce state constitutions, any more than it forces you to follow the orders of your pastor.


Have another look at the numbers in the chart itself, not just text describing it.

Here's my count, looking at the list in your link:
-Approved but with change in spelling, punctuation, wording, or capitalization (ie, in any of the 4 right-most colums): 38
-opposed (ie, in the 1st column, but not in any of the last four): 6
-"missing or incomplete" (ie, in column 3, but not in the last four): 2
-governor didn't sign, or some other irregularity (but not in the other groups): 2


What type of "not legal" though?  Did it violate state laws, or federal laws?  This is a question of federal law, and there was no federal law preventing these states from ratifying the amendment.  If they violated their own state laws in doing so, that's an issue for them to sort out with their people, but it doesn't change the fact that they did indeed ratify it according to federal law.

An example might be me forming a club, of which you decide to become a member.  But you're also a member of your family.  I ask you, as a member of my club, if you are in favor or opposed to something happening in the club.  Your mother tells you "don't you vote for any stuff in that club of yours!" and it might be a good idea for you to listen to her.  But if you don't listen to her, your vote still counts in the club.  You might have to answer to your mother for disobeying her, but that's between you and her, and doesn't affect the club.

Similarly, as far as the federal government is concerned, the state governments can vote anyway they like.  If they've set up rules that limit that, that's there business, and the federal government isn't going to enforce it.


The law is a tool, not an end unto itself.  The purpose of the law is to make sure the will of the state governments is taken into account.  Making sure every comma and capital letter of the amendment is the same in each case isn't the purpose of the law.  The reason we have the rules is to make sure 3/4 of the states agree to the rule before it goes into effect.  That happened.  3/4 of the states did indeed agree to the rule.  You're saying 3/4 of the states didn't support the law, but that's not true.  They did support it.  You can argue they shouldn't have supported it, but the fact is that they did.  That's what's important here.  Playing "Gotcha!" games with punctuation is silly, and not within the spirit of the law.  Remember, this is 1913 we're talking about.  They couldn't just cut and past it or even xerox it to make sure punctuation was the same.


No, it doesn't mean that.  It would mean that if they didn't agree to it, but if they "couldn't" agree to it, but then agreed to it anyway, they still agreed to it.  You're not legally allowed to shot someone, and if you do it anyway, it'd be a very poor defense to turn around and say "I don't know what you're talking about! I couldn't have done it, I'm not allowed!"


The intent of the requirement of 3/4 majority was to ensure broad support of an amendment before it became law.  There was clearly broad support.  You can argue that there shouldn't have been broad support, you can argue that the states shouldn't have ratified it, but that doesn't mean that there wasn't support, or that they didn't ratify it.  The intent of the 3/4 majority requirement was most certainly NOT to make it impossible to pass an amendment even when 40 or 42 out of 48 state governments were in favor of it.

Again, you're missing the spirit of the law by looking too closely at the letter of the law.  The state governments were in favor of this law.  More than 3/4 of the state governments wanted this amendment made.  That's all the constitution was looking for.

I think that's where you may be making a mistake. Benson isn't trying to say some states could not ratify amendments. He is speaking specifically about the 16th amendment.

I'm off, and will come back to the rest. This point seemed to be quick and clear though. I just wanted to say we're not taking about the ability to ratify any amendant, only the 16th.

I think that was my point actually. ;)

Unless you're argument is to say ratification on amendments do not require proper 3/4 agreement through legal proceedings, I don't see how this applies? Are you stating ratification does not need to be done in a legal valid manner?



I don't think I understand this. A non legal vote is legal when it's not caught until later? And are you stating if it were appealed at the state level, it could not change the federal level?

I'm no lawyer, but that doesn't make sense to me. That looks like saying person A is responsible, but when person B shows up and proves that person B is responsible, the group says sorry, but person A is responsible since they voted for person A. If one had no right to vote for person A, then it doesn't matter what the vote is. That just seems logical to me as a layperson.

  Yea, I guess we disagree. I would think it is an issue. Obviously the USA feels it is an issue too, as Benson was imprisoned, and abused within the prison for his stance.


Yes, I do see how you lump the groups together. And over all, I do understand a current vote today would still result in income tax. Currently, there seems to be a problem with the ratification and the way it was done. Maybe there's more to the issue, I'd like to hear more about it too. But according to Benson, the 16th amendment does have it's problem on the legal end of things.

The debate as I understand it is typically that taxes are illegal under the Takings Clause, i.e., that the government cannot take property from you without giving you due compensation.  So, for example, if it takes your house to build a road, it has to pay you the going rate for taking your house.

Taxes, however, are just taken from you.

I don't see any validity to the illegality issue, however.  The Constitution clearly makes taxes legal if they are used to carry out the powers given the federal government by the constitution.  It's part of our compromise for living in the country...we have to pay for it.  Granted, there were no federal income taxes 80+ years ago, but we have more infrastructure now too, and a more global society.

The Internal Revenue Code isn't really helpful on this front because regardless, it could not contradict the constitutional rights of the citizens.  Statutes are always trumped by the constitution.

I think most tax evaders who do it on principle are just protesting HOW the taxes are used, which also doesn't make sense to me.  You need to vote in people who will use them and be accountable for them, and then you must submit to the system to be a part of it.

Whether they're technically illegal or not, you should pay them because they're technically legal until a court says they're not.  I.e., there may be arguments about illegality, but don't count on those arguments being upheld and you getting a get out of jail free card.  We pay for our society; we do so through taxes, whether we like it or not.

I consider the state legislatures voting to approve an amendment to be a "legal valid manner."  The issue here seems that there are two sets of laws.  State laws, and federal laws.  Amending the federal constitution is a federal issue.  The process involved must follow federal law.  This happened, and the amendment was approved.  Under federal law, the state governments have the right to approve or reject the amendment.  If states have laws that limit what choice their governments can make, that's all well and good, but it's not a federal issue.  If the states governments broke their own laws by ratifying the amendment, that doesn't mean the federal ratification process hasn't been followed.  It means the states governments didn't follow their own rules, which is a separate issue.  Like a jewish person ordering pork chops at a restaurant.  They're violating their own rules, not the rules of the restaurant, so the restaurant will bring the pork chop just as asked.

Another example might be a Catholic voting in the last election.  Some priest told members of their churches that they couldn't vote for any candidate who supported abortion rights.  Some people disobeyed the priests, and voted for pro-choice candidates anyway.  That doesn't invalidate the election.  It might cause problems for the voters and their priests, but it they voted by the rules of the election, and their vote counts.


No.  The vote was legal in the sense that it followed the correct procedure for amending the federal constitution.  Some of the state governments who ratified amendment might have been breaking their own state laws by doing so, but that doesn't change the fact that they did it.  They have to answer to their constituents on that.  But the states did indeed ratify the law, which is all that matters for the amendment.  You can argue that some of the states that did ratify the law shouldn't have done so, but I don't think you can make a good case that they didn't do so.

If the people of one of these states voted out their governments for violating the state constitutions, and then repealed their ratification, things might have been different.  But as they haven't done that, it's sort of a moot point.  If they want to change the law now, they should go through the process of amending the constitution again.


You're missing the issue then.  Under federal law, the state governments do have the right to ratify the amendment.  They are the one specifically given that right.  If they don't have that right, then there could be no amendments at all.  Now, the states may impose upon themselves restrictions about what they can ratify, but it's up to the states to enforce those restrictions.  If the states ignore their own laws, the federal government isn't going to force them to follow them, just as the restaurant is going to refuse to sell a pork chop to someone if they're jewish.


He was put in prison for not paying taxes, I believe.  I'd have to hear more about the alleged abuse before I could say much more about it.  I'd be rather surprised to find that the federal government is particularly worried about this guy, though.


As do the 14th and 15th amendments (and likely all others before them, though they don't get mentioned specifically in the link like those two do).

Let's put it this way:
-Who does the federal constitution give the right to accept or reject an amendment? (I would say it gives it to the state governments)
-Did 3/4 of the state governments accept the amendment? (I would say yes)
-if you agree with the answer I gave for these two questions, it seems like the spirit of the law has been met.  Would you agree with that?

I'm not really going to argue a view of law from the way you look at it Tycho. While you feel that it follows the spirit of the law Tycho, and therefore it is now valid doesn't actually change the points. It's debating opinions on the law.

Heath, I agree that the government does need to pay for things, and taxes are they way they are going to get that money from us. I bring up the subject as it's really interesting to see some of the problems that have been brought up with the laws the way they are.

Hey, anyone know anything about a maximum amount of taxes? Can the USA decide to tax 100% of income if they needed it? Do they need advance warning? Do you have the freedom to opt out of taxes if you don't like where the money is spent? For example can you opt out a portion of your taxes if you oppose half of your taxes used towards the war in Iraq?

No, you can't opt out of taxes, for any reason (unless you have a super tax shelter or something else illegal).  You have full freedom to elect people who will make laws and enact policies that will spend your money.  If you don't like them, you have absolute freedom to get together with other people and try to elect new people, or run yourself or whatever.

People that say that you have the ability to opt out of your taxes are idiots.  That may be a strong word, but this Benson guy or whoever you guys have been talking about, he's an idiot if he's saying that a person has the legal right to opt out of taxes.  You should never listen to someone like that.  Congress has enacted several laws.  Cases have been argued all the way up to the Supreme Court and the courts have always, always, always backed the laws.  Legal precedent has been set tens of hundreds of times over, you can not opt out of taxes.  If you try, you will go to jail, you will be hit with huge tax fines.  You will likely end up losing your freedom, your assets and if you lost your freedom then obviously you also lost your ability to generate income, you could potentially lose everything.  It's not a good choice.

The US already does tax 100% of your income.  If you make less than a certain amount of money in a year, then you are "tax exempt" -- they realize that collecting income tax would just be too onerous and you don't have to pay taxes.  If you make over that amount, then you do have to pay taxes, on 100% of your income.  You may have to pay 20% tax on 100% of your income, you may be in a higher tax bracket and have to pay 50% or 60% on 100% of your income, but you have to pay tax on everything that you earn, unless you are earning money tax exempt money from a tax exempt source -- this is typically only if the government is itself giving you money, but even then sometimes you do have to pay tax on money that the government gives you.

There is likely a point where taxation would be so onerous as to intrude on our fundamental rights (not to mention creating a communist state)...That limit has yet to be tested, but if Obama is elected, it might be.  :)

Too much taxes is against our fundamental rights? I agree it would make it difficult to pursue plenty of freedoms, and happiness, etc, but could you explain where the tipping point would be then? It's a subjective stance, or course. But if 100% is too much, why would 50% be ok if it's not enough to have your fundamental rights. For example the debt load one has to take right now to acquire a house is difficult for tens of millions of people in the USA. People have to choose between housing, and eating at times.

Obviously 39.6% is clearly okay, plus consumption taxes, property taxes, etc.

If people vote for it or allow it, who knows how high it could go...70%, 80%, maybe.  Even if it got really, really high, there's still be a legal battle over it, and probably it would depend on socio-economic status.  So Bill Gates could probably be taxed a lot more percentage-wise than a poor person on the street, even though the poor person consumes much more of the benefits dollar-wise than Bill Gates.

Why is 39% ok? Ok for you, ok for most?

Alright, I'm trying to be difficult in this case. I think over all, 39% can't be ok, since there are so many people who are having a difficult time in providing a sustainable future that will see their children succeed.

I do believe one concern right now is that old age pensions will run out, which will mean that there will be a point when it will affects one's ability to retire.

39.6% is the highest tax rate for income tax right now (thanks to Reagan).  It used to be higher back in the Carter years.

In Sweden tax rate is 58%.

The U.S. tax rate was an average of 2.1% in 1931.

After the "socialization" of America through the New Deal, it reached 14.2% average by 1945, the first time it had ever reached double digits.  After Republicans took over again, the average dropped again, but only to 9.1% in the 1950's.  By the end of Kennedy, it had raised to 13.3% again.  The Vietnam war raised costs so it went up to 14.5% in 1969.  By the end of Carter's reign, the average reached an all-time high of 16.1%.

Reagan passed the Economic Recovery Act, and it steadily went down over the next decade.  But then Clinton passed the Omnibus Budget Reconciliation Acts, so it started to go up after 1993.  By 2000, it had reached a high of 15.9%.

When Bush took over, it went back down to 12.6% in 2003.  Due to the war, etc. in the year or so after that, it went up to 13.1%.

These are just the national average.  Obviously, individuals are affected differently based on their circumstances and the progressive tax in the U.S.

Theoretically, I wouldn't be surprised if it exceeds 20% for the first time in history if Obama is elected, given the scope of what he wants to pass.  It would effectively be a new layer of socialization like the New Deal, except without the same expediency.  And once it goes up that drastically, it's unlikely to go down.

And that's a bad thing?

YESSS!

Think of it like this:

Taxes are bad.  PERIOD!  They are a necessary evil.  They are the government stealing money from you and redistributing it.  You may see that money put into things you take advantage of (like roads); you may be more safe because of it (like police in prisons); OR, and this is where Republicans and Democrats differ, it may be redistributed to those who did not earn your money (basically, the government playing Robin Hood).  In the latter case, it becomes a compulsory charity in which you have no say, and thus cannot benefit from generosity or use the money to help people the way you want, which might include your family.

But beyond this, there is a far greater effect macroeconomically.  The higher taxes that are being paid, then the more money that is going out of the economy and into the black hole of government, which proves time and again that it cannot efficiently use the money.  (As I previously explained, government funding is the opposite of private funding.  Corporations try to maximize profits by minimizing expenditures; the government tries to maximize expenditures to increase its budget and visibility.)

So the more money you take out of circulation in the economy, the worse the economy becomes, which again has been proven time and again.  The flip side is making the government a Communist country, where the government just controls all the money and tries to give everyone what they need, but they have no incentives to do better.

Here's an example:
True example: When the Luxury Tax was first imposed, the rich did not buy as many yachts.  This caused the yacht-making business...engineers, carpenters, etc...to take a huge nose dive.  Many people in that industry lost jobs.  The government didn't get any extra money really because people just stopped buying yachts and things.  So it didn't really do much good in that respect, but a lot of harm.

Let's take it down a notch.  Say right now you have to pay an extra 5% of your salary to taxes.  So perhaps you buy $100 less of stocks each month and $100 less of eating out at restaurants.  Now the companies that would have had capital investment from your buying stocks have less capital, and the restaurants get less business.  On a macro scale, this could mean huge job losses in service industries (not as many tips or business), in the retail industry (putting factory workers out of work and others along the retail chain), and not getting corporations the capital they need to create a more vibrant economy (and give jobs to people within the corporation, leading to layoffs).

We are seeing some of this happen right now with the gas prices, and my guess is that this is not even a 5% amount of most people's salary.

BUT HEY, under Obama's plan, everyone would have welfare and health care, right?  So what if they can't get a job, those who produce will be subsidizing the lives of those who don't.
This message was last edited by the GM at 16:30, Fri 15 Aug 2008.

The government isn't a "black hole."  The money spent by wasteful government programs go back into the same economy as the money spent by efficient private companies (unless the companies happen to spend their money in different countries, which they often do).  Also, I would say private companies try to maximize profit in anyway possible, whether it minimizes expenditures or not. Usually minimizing expenditures maximizes profits, but often not (ie, advetising, you need to spend money to make money, etc.) And doesn't "minimize expenditures" mean not spending the money, which sort of counters your whole position, anyway?


But again, taxes don't take money out of the economy.  The money that gets taken out gets put right back in when the government spends it.


Except that all the money that you don't spend on eating out or buying stocks is now being spent by the government on something else (even if it's just some buearocrat eating out and buying stocks).  The money isn't gone, it's just being spent elsewhere in the economy.

I'm not saying taxes for the sake of taxes are a good thing, just that the idea that taxes only do harm the the economy ignore half of the equation.

As one who has worked with the government and sued the government, I 100% disagree with this statement.  There is (1) a lack of accountability that is equal to the private sector, and (2) the money poured into the government does not go into the economy...it goes to the government.  You are trying to say that the government itself is an invigorating economic factor.  I am saying that you are comparing David and Goliath in that fashion.

For example:
WHen I was young working for the government, we were short several screws.  I had to get a signed order allowing me to go to Home Depot and buy screws.  I had to then go to Home Depot and buy screws.  I also had to have forms signed and filled out by the manager at Home Depot.  By the time all was said and done (including my salary), the 4 screws cost about $32 (this is mid 1980's, so probably $50+ today with inflation).  (THAT'S A BLACK HOLE THAT BENEFITED ONLY ONE PERSON, MY WAGES, WITH A MINIMAL, INFINITESSIMAL BENEFIT TO SOCIETY/THE ECONOMY.)  And that was just one example.  The government is laden with such examples.

Take private sector:  You avoid the paperwork to get the screws.  You send someone out for supplies to get other things AS WELL AS the screws.  You see that it would be helpful to buy a whole box of screws to avoid a shortage in the future (and avoid just buying 4 screws), and ultimately, the cost is lower for the same amount of benefit, and without wasting someone's time as much.

So I don't buy any argument that says the benefit to society is just as good with the government as it is with the private sector.  The accountability is NOT there, the money is not as expeditiously used, and the ultimate benefit is extremely low compared to the cost.


No, you are incorrect.  Minimizing expenditures mean increasing profits.  Profits to companies are "capital."  Capital is money that the company can reinvest to make a better, bigger company.  So minimizing expenditures increases the overall benefit to society by keeping in check what is unnecessary.


Wrong again.  This is only true to a small extent.  The government spends the money on many programs which do not benefit the economy at all, in addition to the wasteful spending mentioned above.  An example of this is a lot of the EPA studies and things like that.  They are not a company getting profit (and thus helping the economy).  The only help they do is by paying for salaries, and a private company could employ more people with the same money by using it more wisely.


But no, it's not necessarily going into the "economy."  I think you have this notion that money going into the government comes back out.  It doesn't.  It goes into programs and projects.  If you hire a scientist to go out and do earthquake studies, you are not going to have the same effect as a private company using that money as capital and creating more jobs for more people and putting the money right back into the flow of the system.

The government is like a dam.  A lot of money gets all backed up behind it, while only  a small stream flows out the other side compared to the river flowing into it.

I didn't say they only do harm.  I said that taxes as a principle are taking another person's property against that person's free will, which is wrong.  Yet they are necessary to make our society work:  thus, a necessary evil.

Only a person who pays the taxes and thinks that neither he nor his children (God forbid) will ever be sick can think like that.



If they are necessary how can you talk like that?



Can you call Sweden a failed state?



Yeah, right.



And the fact that all other civilized countries in the world have similar system makes no difference?

hey are the government stealing money from you and redistributing it.

Taxes are the rent you pay for the privilege of living in your country. They are no more stealing from you than my landlord is stealing from me when he cashes the checks I give him.

BUT HEY, under Obama's plan, everyone would have welfare and health care, right?  So what if they can't get a job, those who produce will be subsidizing the lives of those who don't.

As opposed to what? A system where the needy in society have their suffering maximized by an uncaring government? The purpose of a government is to protect its citizens, and that protection is not just limited to those in the middle class and above.

I'm sorry, but I don't see how that logically follows.  I think, Tzuppy and Falkus, that you're confusing the issue of socialized medicine with taxes in general.  Perhaps we should go into the health thread and discuss socialized medicine there, since we've already discussed it a lot there.

And then you took that money you earned and burned it?  Buried it in your back yard?  I'm guessing you went and...wait for it...spent that money!  Perhaps on stuff in the private sector?  The only thing this system seems to have done is allowed you, the government worker, to make that money, instead of the stock holder.


The cost is much lower to whom?  To the person who bought the screws.  The economy still benefits from people making money, even if they earn it doing something inefficient, because they spend their money after they make it.


It does?  Because the private sector never creates anything unnecessary?  I would say the vast majority of the private sector's output is unnecessary, and significant money is spent on convincing people they need unnecessary things.  The private sector tries to maximize profits, not necessarily minimize expenditures.  Often those two go hand in hand, but not always.  In many cases, you make more money by spending more money.  If the goal were only to minimize expenditures, then you'd have no advertising, no excess packaging, etc.


Where does the money spent on these programs go?  Do EPA scientists cash their paychecks and then burn the money each month?  The only difference between a government employee spending their paycheck, and a stock holder spending their dividends check is that the government employee is probably likely to have less money, and thus spend what they earn quicker.  You keep play up this idea that money spent by the government just disappears, and is removed from the system, never to be seen again, but that's simply not true.  The government isn't stockpiling money (in fact, the US is doing just the opposite).  It's spending all the money it takes in.  It might be spending it on the "wrong" stuff, but it's still spending it, and putting the money back into the economy.


Yes, I do have this notion that money that goes in comes out.  What happens to all money given to scientists?  I'm guessing they spend it.  Which means, it's back in the system.  You also seem to think private companies create jobs but government projects and programs don't.  But in the same breath you talk about EPA scientist.  That sounds like a job to me.


If so, the government should have an ever increasing pile of money.  But in fact, it has just the opposite: an ever increasing debt because it's spending more than it takes in.  Doesn't sound like a particularly effective dam to me.

Not really. I was using health care only as an example.

Let's take roads instead. They are a great example of what government spends money on.

Roads are such that no individual who uses them really needs them so badly to pay for them without some sort of government compulsion. Also, even those who do need them (industrials and capitalists for instance) cannot afford to build and maintain them. But! overall society does need them rather badly and that is why it's forcing everyone to pay for them. It is similar case with defense, environment, education, social care etc. and health care is just one of the reasons why taxes are good for you.

I think the issue is that you believe all money is created equally; I don't.

For example, businesses are in the business of making money.  Therefore, they generate new money through labor (i.e. jobs) investment of capital (i.e. helping the economy).  The government does not generate new money...typically...except through taking people's money through taxes.  So it is not the creation of new wealth; it is the redistribution of wealth.  And not only that, but it's not even redistributed with much efficiency or oversight, making it all the worse.

So it doesn't matter how the scientist spends his money.  The fact is that the scientist is NOT CREATING NEW WEALTH, just redistributing it.

Private companies do not create new money either, they just distribute it.  "Profits" don't come out of thin air, they come from someone else's pocket.  Every penny a share-holder earns is money that some other person no longer has.  Just as every penny the government spends is money that some tax-payer no longer has.  In both cases, money is redistributed.

Wealth is slightly different from money.  And both governments and companies can increase wealth, and do so by redistributing money.  If I buy something from you, we're both slightly better off (if not, I wouldn't have bought it or you wouldn't have sold it), so our total wealth increases.  If the government takes X dollars from Bob, and gives it to Joe, then Bob is worse of, but Joe is better off.  But if Joe's situation improves more than Bob's gets worse, than the total wealth is increased.  The private sector has the advantage that all un-coerced trades are beneficial for both parties (ie, a positive change in wealth for both parties), but the disadvantage that changes in wealth tend to be minimized, since both are trying to get the most they can out of the other for the least possible in return.  Thus, both sides tend to end up just slightly more wealthy.  In the tax case, though, the goal is (or at least can be, and should be) to maximize the summed total of wealth, not just one side's or the other's.

Here's an example:  Say I have a magical machine which takes pennies and turns them into quarters.  Unfortunately, due to it's magical nature, the person who puts in the penny doesn't get the quarter.  Instead, the quarter instantly appears in someone else's pocket, at random.  Now, this would clearly increase the wealth, not just redistribute it.  But it's not in anyone's best interest to put pennies in, so if it's left to the private sector, no one will ever put any pennies in the machine.  The government, though, can look at it from the sum total, and compel people to put pennies in, because it's trying to maximize the total wealth, not just one person, or one small group's wealth.

Taxes are a bit like that.  $1 to a millionaire isn't worth the same as it is to someone struggling to pay their rent.  $1 might have 25 times the importance/value to the latter person than to the former.  If so, the government forcing the first person to give $1 to the latter is like the magic penny machine.  The total wealth has been increased simply by redistributing the money.  Yes, one person suffers, and someone else benefits.  But if the benefit outweighs the suffering, then the total wealth is increased.  By compelling behavior that is not in your best interest, but is within the best interest of the economy as a whole, governments can increase wealth using taxes.

In the specific case you mention, I'm not sure why you feel a scientist working for the government isn't creating wealth, but one working for the private sector is?

I think we are cross talking.  Where does the government build wealth?  It can print money (and increase inflation), or it can distribute money.  It does very projects that actually generate wealth (as opposed to simply money, which it generates through taxes).

Let's take Microsoft as an example.  It started off as just a few people and grew, creating both wealth (including jobs and the production of value that translated to wealth) and improving people's lives.  It was focused on activities that improved the use of wealth instead of squandering it (as the government is wont to do).

The government doesn't really create wealth because that's not the government's job...not under our constitution anyway.  Companies are their to create wealth, so they use the money most wisely...plant the seeds, so to say.

Companies do not simply redistribute wealth.  Example:  If a company buys $50 in spare part, hires someone to assemble them, adds in its own software, and then distributes a piece of equipment worth $2000, then it has created wealth...improved upon its existing resources to generate more income (and thus more jobs, more capital, etc.).  To create this same piece of equipment, the government is likely to spend $4000 or $5000 worth of wealth, thus depleting wealth instead of expanding it.  (That's the typical trend anyway.)

In short, wasting resources hurts the economy; maximizing the use of resources helps the economy.  Maximizing resources = generating wealth.

I think you are thinking of wealth in terms of dollar bills...that green stuff.  Most of the world's wealth has nothing to do with the pushing of green bills across a countertop.  It is in real estate, buildings, equipment, an effective labor force, trademarks and intellectual property, etc.  These are what drive the economy, not the movement of the paper money.

Distributing money can increase wealth.  Wealth is how well-off a person is.  As you say, it's not just dollar bills, it's their overall well being.  If redistributing money makes people overall better off, that increases the total wealth.


Okay, and let's take the cigarette industry.  It was focussed on increasing its own wealth as well.  But has it increased the overall wealth of the population?  I'd say that no, it hasn't, despite making very large profits.  Making profits doesn't necessarily mean increasing total wealth, it only means increasing one group or companies wealth.


The government makes roads, which make people more wealthy.  The government creates police forces, and regulatory groups which prevent abuses, and thus also increase our wealth.  The government helps people in need of help, which makes us all more wealthy.  If we switch to a government health care system, that will increase our wealthy by giving more people access to health care.


Do you see how this doesn't make sense?  You say that if a company creates a job, that's increased wealth, but if the government creates a job, then it doesn't.


I think we have different ideas of wealth, then.  I'm using it to mean how well off people are, in the most general sense.  It's not a physical item.  It's not just money, or goods, or land.  It's overall well being.  If you're better off for the government being around, then it's increased your wealth.

What about the "life, liberty and pursuit of happiness" part? Or you don't consider that a part of your constitution?

Though I'm not necessarily agreeing with Heath on this, I would imagine his answer to your question would be that those are rights that constitution guarantees rather than wealth that it creates.

Tycho, we apparently are crossing streams here with very different ideas of what wealth and "Creation of Wealth" means.  I'm not introducing anything controversial or even disputed.  I think both liberals and conservatives understand what I've typed as being the truth behind economic theory...I think even Obama recently admitted something similar.

Instead, I'd just refer you to read some books on economics and finance.  "Creation of wealth" has a very special meaning.  Just distributing wealth cannot "create" it.  Something has to be done with the wealth to increase its value.  In any case, a good starter book for anyone interested, written in easy to understand terms is "Rich Dad, Poor Dad."  I recommend this book to anyone who has grown up thinking that going to school and becoming an "employee" ever leads to true "wealth."  This book explains what true wealth is and how to create and develop it.

As an aside, the definition of "wealthy" is not a term of money.  It is a term of expressing that a person spends less than the person makes, and thus increases the person's value.  For some people, it might be $100k, for others $1 million.  The same is true of corporations and how they create and handle wealth.  If they (or the government) redistribute all their wealth, they are not wealthy because they do not improve upon the wealth to stay liquid (and have no capital).  If they (or the government) go into debt, the situation can be even worse, even if there are short term gains.
___
Yeah, as for Tzuppy's comment, I agree with Tycho.  I'm not sure how that's relevant to this discussion.  In fact, if you bring the Constitution into it, there are fair, if erroneous, arguments that "taxes" actually take away from our right to "life, liberty and the pursuit of happiness."  They take our property, which is our means to attain those ends.  This is why there is a strict "takings clause" under the constitution requiring due process and compensation if the government takes property from you.  Except that taxes get around this clause due to the right of congress to raise taxes to pay for its constitutionally mandated rights.  So there is always a conflict there.

In essence, though, with Tzuppy's point, taxes are the necessary evil even though they take away from our right to "life, liberty and the pursuit of happiness."  This, by the way, is an individual right, so it has nothing to do with the government stepping in.  Certainly, the government does not try to create wealth because of this, except to the respect of national security.  Otherwise, we are looking at social welfare...i.e. take from those who produce and give to those who don't produce...and that's actually a Marxist philosophy, not the capitalist philosophy that gave rise to our constitution.

Okay then Heath, explain why a government worker making a road isn't creating wealth, when the guy in a factory making a car for the private sector.  Explain why a scientist working for the government isn't creating wealth, but if he went to work for a private company doing the same thing he would be.  Explain how you working as a private lawyer (I think?) creates wealth, but a public defender doesn't create wealth.  Explain how a private security guard creates wealth, when a police officer doesn't.  Or how the insurance industry creates wealth, but socialized medicine doesn't.
This message was last edited by the GM at 19:00, Tue 19 Aug 2008.

Are you so absorbed by your own "philosophy" that you actually believe that this is what I was arguing??? My point is actually the opposite -- I'm claiming that without a certain degree of wealth, or for simplicity's same money, one is unable to exercise his or her right to life, liberty and pursuit of happiness. Now, if person's family cannot or chooses not to provide that, where can it come from?


And by the way, I fully agree with Tycho's last post.

Because the guy making the road is making infrastructure while the guy in the factory is creating a product.  Everyone uses the road but it's not bought and sold and traded between people like a car can be.*

As for the rest, I don't think you're really understanding where he's coming from on that point.

*Well, unless you live in a state that allows toll roads to be built. :p

But roads are necessary for industry (and economy in general) to grow.

But "wealth" doesn't mean "product."  If Heath had said "the government doesn't make products," I'd have came up with a different example.  If your point is just that the road isn't bought and sold, I would counter that taxes, in a sense, are how people buy roads.

Keep in mind that Heath isn't just saying/didn't just say that the government isn't as good at creating wealth, he's saying/said that it creates no wealth at all.  He's called it a "black hole" and implied that all the money that goes to the government disappears from the economy altogether.

Heath seems to view "wealth" to mean "how much more money you earn than you spend," but that is not what I consider wealth to me.  If there's a finite amount of money in a system, the total wealth cannot increase in that case, because for every unit of wealth one person achieves, someone else has to lose one.  The sum total of that type of wealth has to be zero unless there's new money constantly being added to the system.  Wealth, in my view (and in most economists, I would wager), is not just a dollar value of what you own or earn, but rather a reflection of your overall well-being.  Heath's "spend less than you make" definition of wealth implies a "whoever dies with the most money wins" mentality, which I don't agree with, and I don't think the government should encourage because hording money hurts the economy.

I'm happy to agree that the government doesn't horde all it's money, but rather spends everything (and, unfortunately, more on top of that) it takes in, and thus isn't becoming wealthy in the process.  However, I don't care if the government becomes wealthy or not, but if the people do.  And not Heath's kind of "I've got $10k under my bed" kind of wealth, but the kind of wealth that reflects that they're better off that they were before.  If a person earns and spends the exact same amount of money, but now they have health care they didn't used to have, then they're more wealthy in my view.  The government can create the kind of wealth I'm talking about.

Interestingly, I just read today that one of the major factors leading to the fall of Rome was in fact overtaxation.  Higher tax rates for the sake of government programs (namely defense and also bread and circuses for the poor) squeezed out the middle class, who are the primary source of significant income for the empire.  No middle class means a significant loss in tax revenue, and the empire found itself unable to afford those services at all any longer.

But higher tax does not necessarily mean less middle class. Often it's actually the opposite. Higher tax rate means bigger state apparatus and it by definition consists of middle class. It's how one taxes. If the state taxes to provide welfare (education, social support, health care etc.) then it helps middle class. If it taxes just to make rich richer, as it did in Milošević era and I suspect in Nero's as well, then it is a recipe for disaster.

One theory I've heard is that it happened due to over reliance on food imports, the other because of spread of Christianity and yet another that it happened because citizens and army started placing the loyalty not with abstract concept of state or the republic, but with its leaders personally.

What is interesting to me is that every time attributes fall of Rome to challenges they are facing and offer solutions which are reinforcing their ideologies.

To be sure, there were several causes leading to the fall of Rome, however high taxation has been quoted several times as one of them (and unquestioningly the cause of Rome shrinking.  Leaving Great Britain and parts of Spain was completely a financial decision.)

Your suggestion about the middle class only works if the government is hiring people to do 'normal' middle class business as well, such as trade and create goods.  The US government doesn't do that.  So for instance, if you taxed all of the people who traded corn to hire more people to regulate or support the trade of corn, even though you might have a net gain of middle class people, eventually that business segment will collapse.

There's a lot of talk about taxes in the news today (understandable, given the date!), and a lot of coverage of the "tea party" tax protests going on.  The desire to not pay taxes (or not as much taxes) seems to be as high as it's been in a long time.  I was curious to hear what people here (especially those who think taxes are too high) would consider a "fair" amount of tax to pay?  How much would taxes need to be reduced before tea party-goers (the BBC editorials seem happy to call them tea-baggers, but I think that's probably not their preferred descriptor!) would say "Okay, that seems about right?"

Another question:  do people think objections to taxes is less an issue of the amount of the taxes, and more an issue of what the taxes are being spent on?  Or perhaps is it more do to the fact that the people benefiting from tax-funded programs often aren't the ones paying for them with the most tax dollars?

Also:  do people here think the tea-party-goers want the military shrunk (or at least military spending?), as that is the largest chunk of the spending in most years.  Cutting taxes significantly would seem to require a reduction of military spending, but I get the impression most anti-tax proponents also tend to be the most pro-military spending.  Can these two positions be reasonably held at the same time?

1) I think the tea-party does want lowered taxes, but the best way to effect this is by making it clear what we are spending money on and why (and eliminating that). Paying trillions to the banks seems like a very poor idea; it's a band-aid solution, and it ultimately fixes nothing, while saddling our children with an unpayable debt burden (and I do think that's an important note - our debt is something like 350% our GDP - it is basically unpayable - we have created a situation which everyone knows is going to explode, and it's going to take the country down with it. No amount of raising taxes can change that at this point.)

If we stopped spending money on silly things, the tax burden would be lowered. I don't think most of them would object to the same tax rate, as long as it's going to something responsible like paying off our debt.

2) The people who pay the most taxes are the middle class, while most of the benefits go to either the poor or the very rich. I don't care which side of the political spectrum you fall on, but that is going to seem very wrong.

3) I think the party-goers would like military spending reduced (if we can do so safely), but military magnitudes smaller than Obama's 'give money to bankers' program. Obama's program has spent ridiculous amounts of cash. I don't think the two are even comparable.

A fourth point you didn't bring up is the complexity of the tax code. Currently the US spends something like $3b just in getting people to do our taxes. It's at the point where most intelligent people are unable to figure out their own taxes, and it's effectively added a +$150 tax to everyone in the form of 'support the accountant industry' fee. The tax code is so large that no one has read all of it. It's tens of thousands of pages, oftentimes with contradictory or undefined pieces. Paying taxes oftentimes isn't as painful as figuring out how much needs to be paid (I can say that myself - having just figured out my wife's tax with-holdings for her small business, in which she owes either $0, $740, $740 + social security and medicare, or some other unspecified amount).

I'd agree, but I'm not sure, entirely, that's what's coming out of this.  I'm not entirely convinced, based on my admittedly limited reading about the tea-partiers, that they have a great idea of exactly what our tax money gets spent on.


Possibly.  The question is whether we'd end up further in debt (due to a lose of tax revenue during a major recession/depression) if we didn't help the banks out.  I don't claim to know the answer to the question, and I could easily believe that bailing out the banks will be a long term loser.  But, for the sake of discussion, if it could be shown that bailing the banks out would lead, in the end, to a lower debt than not bailing them out, would it be a good expenditure of tax money?  You can answer that with your opinion, and that of the tea-partiers, if they're not the same.


Are you sure about that figure?  My quick looking gave a figure of about 13 or 14 trillion USD for the GDP, and national debt figure of around 11 trillion.  Still huge, and possibly unpayble, but well under 350%.  Perhaps more importantly, it's about 4 or 5 times the annual revenue of the government, which again, may be unpayable, though I think plenty of people have home loans that are on that scale (and not just those who are in danger of defaulting these days, either).  I think most people would agree it's too big.  The irony, in my eyes, though, is that the tea party people who are pushing this point seem to think the answer to the growing debt is more tax cuts.  Keep in mind that we were running a budget surplus, and paying down the debt before bush's tax cuts.


I think this is the major trouble.  The lower-my-taxes crowd, I think, would object to paying more taxes to pay down the debt.  There will always be some "silly thing" to point out for an organization as large as the US government.  But the "silly things" that the anti-tax movement tend to point to are drops in the bucket.  They're often many orders of magnitude smaller than the other stuff that isn't silly.  I often wish people would use percentages to talk about things when complaining about where there tax money goes, instead of dollar figures, because it really puts things in proper context.  It may sound like a horrible problem when someone says "The government spent one million of our tax dollars on silly thing X!" but if you rephrase it as "the government spent .00004% of our tax money on silly thing X!" you realize they're barking up entirely the wrong tree.  All the talk over earmarks and such misses the point that while earmarks are pretty bad, they're not the reason we're in so much debt.  Getting rid of them might be a moral victory, and it'd be a great thing to strive for, but it would make all that much difference to our debt levels.  This is where I have trouble with the anti-tax movement.  It seems to look at these small-scale wastes of money, and uses them to make a decision that we should lower taxes, as if that's going to make those wastes go away.


I can largely agree with this.  Why tax cuts for the wealthy would be the solution, though, I don't see.


I would strenuously disagree!  The annual expenditure on the military is 300 to 500 billion dollars (depending on if you count things like interest on past military spending, or veterans benefits, etc. as military spending).  Smaller than the bailout, but the bailout isn't an annual expense.  And that 300-500 billion doesn't include the extra that we spend in Iraq or Afghanistan.  The bailout is big, no question.  But over the course of a decade, say, I'd say the military spending is significantly larger.  And this is the think I think the anti-tax crowd largely seems to miss.  We spend more on our military then then the next 15 or so biggest military spenders combined.  Defense spending makes up over half of the discressionary spending of the government.  Getting rid of absolutely every other spending in government other than the military, would still leave your taxes at about 1/3 of what they are now.  It's simply not realistic, in my mind, to talk about debt reduction or tax relief without talking about a significant cut back of the military.  If tea-party-goers are in favor of cutting back on military spending, that will make me more sympathetic to their cause, but I really haven't picked up that message from them yet.


On this I would absolutely agree with you.  Our system is completely byzantine.  One fix I've heard suggested on this is an abolition of the income tax, and replacing it with an electronic funds transfer tax.  Essentially, any time money is moved out of one electronic account, either into another, or into cash, it gets taxed.  I'm not entirely sure how well it would work in other respects, but the simplicity of it sounds great to me.

Which is precisely the point. We have no idea what the TARP money was spent on exactly - only that it was spent. We don't have transparency, and it's pretty clear why, because of the things we DO know, most of them seem questionable at best.



I don't know about the tea-partiers. I think we're seeing multiple viewpoints converging, one, that our debt is ridiculous (which it is), two, that we shouldn't be bailing out failing companies, and if we are going to interfere, it should be via a different method, such as helping new companies, and three, that the TARP plan is going to be ineffective. All of those arguments would lose power if you could PROVE TARP is a net winner. I don't think you could prove it, however, and I certainly don't think you can prove why they need to be so opaque as to what they're actually spending money on.




I'm sorry, I was shooting from the hip and may have gotten my three figures mixed up (debt to gov't income, debt to GDP currently, and debt to GDP following the newest bout of proposed spending).



Again, you're seeing multiple people come together. I get regular letters from Ron Paul, who complains we need to reduce spending first, and taxes will follow. I do agree, reducing taxes, then spending is putting the carriage before the horse. I haven't seen any particular tea-partiers suggest we should do this, but I haven't been looking for it either (I did see several signs complaining about generational debt, which would suggest Ron Paul's view more).



Again, we might just be getting our news from different sources. My letters from Ron Paul start out pointing out our expenses on things like TARP, then suggest the high taxes are a result of this. I'd recommend going to the horse's mouth, as it were, and find the home pages of these groups before I were to really assume what message they're supporting.



TARP?



It's the theory of trickle-down economics, which generally competes with trickle-up economics. The problem is, the compromise between the two is 'trickle-out-of-the-middle' economics.



TARP was an annual expense, indeed, but Obama seems to indicate that we're looking at more expenditures in the future. A very large portion of the TARP funds have already been spent, with little or no clear benefit. He's now talking about bailing out GM and Ford. If I actually believed TARP was the last one, it wouldn't be such a problem (and this is magnified by Obama going back on his campaign promise and not posting bills 5 days before he signs them. Out of 11 bills gone across his desk, he's done this for one.)



The problem here though, is you're mixing people who think the Iraq/Afghanistan war was a good or necessary thing to start, and the people who think it's a good or necessary thing to finish. I don't think we should have gone into Iraq, but I think it is necessary for national security that we settle things before we leave. I don't think we have a choice, or else we're going to face another Afghanistan in twenty years.

However, I don't think TARP was well-executed, well-controlled or even appropriate (and I think I can make awfully strong arguments for both of these).

For the record, Ron Paul voted against the Iraq War, even while Clinton and others voted for it.

Okay, I can agree with that.  If the push here is for government transparency, I'm all for it.  How tax cuts will help with that, though, I don't see.


I can agree with all that.  Would you agree that the people responsible for TARP, though they may be wrong, at least are working under the belief that it will be a net winner?  If so, the question is more "will it work" than "should we do it?"  Or, perhaps more precisely, the disagreement over the later question is really due to a disagreement over the former?  Again, I'd agree with the idea that there's no need for opacity, and that being able to track how TARP money is spent would be a great thing.


Fair enough.  I may have read into the tea-party idea more than was intended.  I thought it was intended as a "lower my taxes!" movement.


<Tycho quote>
 But the "silly things" that the anti-tax movement tend to point to are drops in the bucket.</quote>


Fair enough, TARP isn't a drop in the bucket.  I had been thinking of the other stuff people tend to talk about in these discussions, more like McCain going on about earmarks, and the like.


That's fair, I suppose.  Again, I think it goes back to the issue of whether one thinks it will be a net winner or a net loser, and I don't know enough to make a call one way or the other that's anything more than a guess.  I hope all can agree that at best it's a question of the lesser evil, though. I can totally respect the camp that says "a major recession/depression is unavoidable, and trying to avoid it will just make things worse.  Bring it on, and get it over with," I'm just not sure that a lot of people who are complaining about the bailout are clear that that's the camp their supporting.  I think there's too many people in a position of saying "Why hasn't the government fixed this recession yet!?  And why are they spending so much money trying to do it?!"


No disagreement there.  Does seem like he's forgotten about that promise.



I would agree, but I'm not just talking about the money we spend on those wars.  I'm talking about the basic peace-time-level spending that would be going on even if we weren't in those wars.  It's still absolutely huge.  So huge, that we can't really have a reasonable discussion about tax or debt reduction, in my opinion, without putting reducing military spending on the table.


That's all fair.  I'm not sure if I agree or not, as like I've said, I don't feel like I can make much more than a guess either way.  Again, though, I would argue that tax cuts aren't the way to fix whatever problems it causes.


Which is all well and good, but doesn't really do anything for the situation at hand.  I'd love it if Ron Paul is the republican candidate next time around.  I'd love it if he's the new face of the republican party, instead of Sarah Palin or Bobby Jindal.  But I'm not sure he'd be doing any better just now than Obama is, by my measures.

It's all part of the same parcel - if we know what the government is spending on, we can say 'hey, don't spend on that, give me back my money!' As long as everything is opaque, we can't take any responsibility for how our tax dollars are being spent.



I think there were a number of people who pushed it through for personal profit (the AIG bankers, for instance). Some politicians also took very large checks from these same bankers, so I think at least their motivations can be called into question. I do think some people honestly thought it would help. 'Throwing money at things' is a fairly established tool, and by Keynesian economics, is justified (although I thik this one may have been a bit of a stretch in regards to how it was implemented. Keynesian economics does not advocate offering people free insurance for stupid, intentional decisions.



I think this will depend on the news source. Ron Paul may not represent a significant proportion of these protestors. I don't know. I do know that Ron Paul supporters have organized major tea-party oriented events before, and Mr. Paul has been campaigning on this topic for a while.



I think there is a certain amount of moral outrage over this. I don't know that anyone (well, I'm sure SOMEONE does) thinks that eliminating earmarks will seriously lower taxes. It's more of a sign of the disregard with which congress treats OUR money. If congress treated our money with more respect, earmarks would all but disappear. It's a symptom.



I know a lot of people understand we need to spend money to fix things, but they feel like we're blowing a lot of money on deadbeats who already had a fair chance and lost it, and to do that, they're taking money from people who have been responsible. You're punishing those who've been scrimping and saving and working and rewarding those who have been foolhardy and spent frivolously.

<qoute>I think there's too many people in a position of saying "Why hasn't the government fixed this recession yet!?  And why are they spending so much money trying to do it?!"    </quote>

I haven't seen anyone like this. Not to say they aren't there, I just haven't any encountered any. This is funny though, because it's sort of the worst of both sides - 'we agree with conservatives that we shouldn't spend a lot of money, and we agree with the liberals that the government should take charge of fixing problems, and we think both should exist simultaneously'.



That's true. I don't know that it's really been a discussion point right now because we are currently in two wars. But I suppose we've encountered people who believed in lower taxes and more military, which is sort of at odds.



I will give you, Ron Paul would probably make things tougher in the short term. He has a doctor's point of view - get your shots, they hurt, but they'll be better in the long-term. My concern is that Obama is doing soomething for the short-term, but his plans are harmful for the long-term.

I will also say, an executive and legislative full of Ron Pauls I probably wouldn't support. But a few with power to provide balance seems like a very prudent idea.

I'm in favor of lower taxes and a minimal amount of government interference. With that in mind it really shouldn't surprise anyone that I don't like the bail-out of any corporation. Those corporations failed for a reason that isn't exclusively tied to the economy (else why have some succeeded?). This means that they were mishandled and should be allowed to die. Others will fill a void. If the government consistently bails out S&Ls and Banks and making conditions for the use of bail-out money... where do the conditions end?

Government transparency:
I don't want complete transparency, and the idea bothers me to no end. I understand that some government activities need to take place without public knowledge. I don't see why TARP would be one of those.

TARP:
Yikes! That bit of financial legislation looks complicated. I remain skeptical that it will work, but I'll admit that I haven't read the whole thing.

Fair enough, but what's "lower" in your mind? How much do you feel is a fair amount for you to pay for taxes?  What government services are you willing to eliminate in order to offset lower taxes?


I don't think anybody really disagrees with those points.  The question, though, is whether letting those companies all go under will hurt everyone else more than bailing them out will.  I think most people agree that those who made bad decisions should suffer the consequencies of their bad decisions.  But how many people who didn't make bad decisions should suffer along with them, and how much?  There are lots of people who didn't have anything to do with causing all the problems in the economy who would suffer way, way more if went into a depression than they will if their taxes go up a bit.  It's a costs and benefits question at the end of the day; a choice of the lesser evil.  Like I've said a number of times now, I don't claim to know what the lesser evil is.  But I think it's crucial to keep in mind that "just let the banks suffer" isn't actually an option.  You can pick "let the banks and lots of innocent people suffer" or "save people who don't deserve to be saved in order to save a lot of people who didn't do anything wrong."  There's also the question of whether it will work, and it's fine to say you don't think it will work.  But I really feel that people's moral outrage over helping people who don't deserve to be helped out tends to ignore the fact that those people will take a lot of innocent people down with them if they go down.  It's fine if you're okay with that, I think it's just a good thing to make clear when you're talking about it.

Tycho, the problem with your post is it assumes there are only two possibilities. We could have imprisoned people who committed fraud, transferred management of bad banks (and assets) to banks which have shown themselves to be more reliable, and bolstered the same with TARP money, created/reverted to appropriate regulation to prevent this in the future, set clear penalties on the part of banks who accept bail-out money, created a 'controlled bankrupcy' environment for gradual dissolution or any number of other solutions. The one we went with was 'those bad people? Give them more money'.



To be clear, I don't think anyone is arguing the NSA should start publishing its spending details. But I do think most people agree that all laws and major or civil spending initiatives should be as transparent as possible.



That's alright, neither has your congressman.

And when people suggest such things, I'm likely to agree with them.  But if they offer no alternative when they say it shouldn't have been done, to me it sounds like they're saying "we shouldn't have done anything," which, in most cases, I think is what they're saying fairly explicitly (ie, "the market will take care of itself, it doesn't need government intervention, etc.").

If I'm thinking straight? Why must whole services be eliminated instead of reduced?

Anyway, I'd probably re-evaluate the welfare system pretty strenuously. Wipe out the Department of Homeland Defense (I've hated that thing since it started).

You know, maybe making the government budgets not dependent on previous year's expenditures would be a step in the right direction. That part has always bugged me. How about we get an external firm (lowest bidder, I know) to run estimates based on usage of services. Cost effectiveness would be shot to hell the first year, but afterwards it might work out pretty well.



Yes. Yes it is. Bailing out banks doesn't help anyone. Not even, really, the banks. Let the unemployed start new means of saving money and generating income.



That's cool. I don't agree with you 100%, but you make some valid and interesting points. I just tend to have an darwinian mindset when it comes to capitalism, including banks. I also believe that people have more options than "banks" and should explore those options or create new ones if the present ones aren't satisfactory. Hell, maybe the government should encourage the generation of new banks instead of bailing out the old ones.

Let's say I own a toy factory. My toys are incredibly popular. So popular that legislation has been written about the necessary distribution of my toys (hard to keep up with demand otherwise) and I have massive production facilities that pretty much makes up the entire economy of small countries (although I don't own the countries).

One day one of the key elements of production, Kiera root, is found to be in short supply. I can purchase the Orlando root for the continued production, but it's more expensive. I jack up the prices.

Suddenly nobody likes my toy any more.  Whole countries will be economically crushed, legislation will have to be rewritten, people are confused about what toys to buy, because of this change in price.

Should the government subsidize my root purchasing or just let the chips fall where they may? I'd say that's the nature of business.

As optimistic as I try to be about politics, I think it's fair to say that there's a good portion of America (and possibly any party on the face of the planet) that votes and decides good and bad actions in politics solely by the party name that doing the action.

I think many of us remember a popular segment during the election from a late night show that interviewed people on the street and questioned their thoughts on the party platform, but switch the names for the candidate who espouses that. Many people in that segment who liked Obama agreed with the Republican platform, if it just had Obama's name on it, and we all had a good laugh. But this kind of experiment isn't new. It's been done before, simply switching the names of the parties instead. And it's been shown with strangely consistent results in most populations.

I feel that, the fact is, there's a good portion of America who vote, praise, and condemn solely on the party lines and for no other reason, though they aren't likely to admit it. To some, anything and everything that their party does is good or has merit, and anything and everything the opposing party does is immoral or ridiculous, and it doesn't matter what those anythings and everything are. There's a good portion of the anti-war crowd that are surprisingly silent, even as Obama continues the war in Afghanistan. And I think there's a good portion of the Tea-bagging crowd here that was surprisingly silent with Bush's massive spending and notably more vocal once Democrats happen to have control of the government.

That isn't to say there isn't any merit to the protest. I think wanting lesser taxes with less spending is a reasonable philosophy. And while I think this is a poor comparison to make in terms of methodology of the protest (the Founding Fathers did this in regards to taxation without representation, while this is taxation with representation, and it seems like a lot of waist of tea, with a possible minor environmental side effects when a simple march and protest would had sufficed), but they have every right to do so, with the proper permits, which most of them had. I'll just note that is rather interesting that the Congress people who backed the effort has no problem spending silently the very money that they're protesting vocally, which may say something about opportunism and how deep their integrity lies.

Okay, which services would you like reduced, and by how much?  But, more importantly, the original question stands:  how much do you feel would be a fair amount for you to pay?  How far off the mark are we at the moment?  Are they twice what they should be?  Ten times?  A hundred?  Just ballpark figures here, how much lower are you hoping for?


Okay, what fraction of your taxes do you think the parts of welfare that you'd like to see "re-evaluated" make up?  What systems do you feel are broken, and how much do you feel could be saved by fixing them?  Is the problem for you more how much welfare costs you, or is it more an issue of not liking that people are getting something they didn't earn?  Do you feel there is any legitimate benefit to a welfare system?


Okay, no more homeland defense.  How much lower do you feel that will make your taxes?


Okay, and how much do you feel that will save?



You mean Adam Smith?  Either way, "it will work" is a somewhat vague term.  If you mean in the long run, the GDP of the US might be higher as "it works" sure, maybe it will.  But that ignores the very real fact that some real people will be adversely affected by a major recession/depression, even though they had no part in causing it.


Not instantly.  The great depression was bad.  Really, really bad for a lot of people.  Saying to all the people who didn't have jobs during it "hey, you can just get new jobs!" would probably have gotten you beaten, because they couldn't get jobs.  There weren't enough people willing to pay for services that everyone could make money providing one.  Over the course of a few years, sure, things will adjust and jobs will open up, but people will literally starve in the mean time (remember, you scaled back the welfare system, so people who don't find work, don't eat).  "They can get new jobs" is sort of a "let them eat cake" reply.


I think you're underestimating the scale of the type of recession economists are worried about here, though.  I don't think it would be fair to sum up the great depression as "a time when people got more educated."



Fair enough, just make clear that's your view when you're talking about letting the banks go under.



What I meant was that letting the banks go under affects far more than just the banks.  You can't let them go under in isolation.  You can let them go under, but lots and lots of innocent people will end up much worse off because of it than the bankers end up.  Remember, the bankers all made their millions.  They might be out of a job for a few months, but they've got plenty of cash to fall back on.  The people who suffer most in a depression will tend to be the people who had little to nothing to do with bringing it about: the poor.


I don't think anyone disagrees with you on that.  Yeah, encourage new types of banks.  The issue, though, is whether we should let grandma and grandpa down the street eat cat food for the next two years while those new banks get started.  The issue is how much unemployment we want to put up with while these new innovative ideas come through the pipeline.  The issue is how much we're willing to let crime go up while we wait for the market to sort itself out.


You're thinking in purely in terms of the banks, though, not the rest of the world that's affected by them.  Think of it like this:  Say we have some magical device that lets us improve our economy 10 years down the road, but it requires us to toss in a million innocent people to be ground up into bits to use.  Is it ethical to use it?  Even if you feel it is, hopefully there's some number of people at which you say "hmm, that's just too many people.  It's not right to kill that many people now for X goodness in 10 years."  That's sort like the question we're looking at now.  It's a question of how much suffering of innocent people now is acceptable for the long-term pay off.  It's sounding like you're taking a "no price is too high, so long as it's a long-term winner" point of view, but I think many would not agree with such a position.

I'm with TheMonk on this.  Stop taking and throwing away our money; let an honest and open market sort itself out.

I didn't follow this whole conversation, but the general idea is that a completely free market is not free.  Some governmental restrictions and regulating is necessary.

For example, let's say you use a pest control service.  The government regulates to make sure the pest chemicals are not harmful.  That's perfectly acceptable and is based on the safety and health of citizens.

The problem is when government overly regulates where it is not needed or when it "infiltrates" the private sector, as it recently did with the banks and car industry.

So you now have Obama, the president, deciding whom to fire at General Motors.  That's not his job; that's not what he was elected for; that's not his call.  But he's taken our tax money and infiltrated the system and now wants to control the private sector to "protect" us from misuse of our tax money.  Well, misuse of our tax money was accomplished when he infiltrated the system with bailouts.

The other problem is when the taxation for regulation and other areas hits a tipping point.  There is an upside down bell curve where the more you tax, the more business is taken elsewhere, businesses go out of business, or businesses are unable to generate wealth.  (Typically, for example, every $1 in tax savings is equal to $3 in newly generated wealth, whereas that same $1 in the government's hands typically generates no wealth and, in fact, loses value.)  This is what we are seeing happen in California, one of the most socialized states.  People are leaving in droves, going places where they are taxed less, job loss is over 10%, the government has massive debts from all its spending that it cannot cover...so it decides to tax more and drives out more businesses.  Then home and commercial property values nosedive, more foreclosures hit the market, more welfare and unemployment insurance payouts are needed.  You can see how this feeds upon itself over and over after you hit that "tipping point" of the bell curve toward socialism, and that's why socialism always fails or leads to despotism.  In socialism, everyone is equally destitute.

It won't effect MY taxes one jot, since I've been unemployed since 2001 and survival is a pretty neat trick for me.


Yeah, but so what? Taking the long view, society will benefit.



I've heard.



It is mean-spirited and ambivalent at the same time.



I just don't believe that the recession is going to get that deep. We are not currently looking at the kind of economic and societal conditions that we had prior to the depression, not the least of which is a change in feelings regarding the value of education.



"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Ben Franklin (according to wikiquote)



Yeah, but I didn't think we were addressing the justice of the bankers receiving huge amounts of money and diving out the side door with their golden parachutes. The question, as I see it, is why bolster a business system that has failed?



You mean they didn't prepare for their retirement? Any reasonable retirement plan is based, the older you get, on the stability of funds and liquidity. They've failed themselves.



Whatever's necessary.



Many people I've run into aren't pro-Monk with regards to darwinian economics. And, in the case of the improvement of <variable> for <cost>, I'd probably do some math regarding value over time. If, for example, a person might be expected to generate $2 over 10 years and the machine promised $10000 (for a purely economic argument), that person would be ground chuck in pretty short order.

When I find an "honest and open" market, maybe I'll think we can do without taxes.  ;)

Again, though, how much of your tax money do you feel is "thrown away?"  What do you feel is a "fair" amount of taxes for you to pay?  What services do you think should be reduced/eliminated, and how much do you feel those will lower your taxes?  What government expenses do you feel are legitimate?

And you're complaining about taxes?


I'd agree...if we do something about it.  It's not going to get as bad as the depression, since we're taking steps to limit the damage.  How bad it gets will depend on what steps we take, and how effective those steps are.  From what I've read of economists' opinions on this, if we do nothing at all, it very well could be as bad as the great depression.  If you think they don't know what they're talking about, that's fair enough.  Maybe they're wrong, or maybe only the ones who have the most frightening views get much air time.  But I've heard enough people who try to figure these things out for a living sounding very, very worried, that I'm not prepared to take a "this will all blow over" view, and think that doing nothing is the best option.



If you think "not paying taxes" is an essential liberty, I think we have different views about essential liberties.


And, as I've said over, and over now, the answer is that because letting it fail will do a great deal of harm to people who had nothing to do with the failure.  It's sort of like saying "why should we put out a burning building, if someone living in the building started that fire?  It serves that guy on the top floor right.  If we save the building, he might just do it again!"  The people in all the other flats in the building, and the buildings next door are the reason to put out the fire, even if the guy who started the fire gets saved in the process.


Sure, let's go with that.  Say grandma and grandpa were dumb, and invested all their money in Enron, or AIG stocks, or something like that.  They made bad investments, and now they've got no money.  Do you want to live in a country that lets them starve, or one that says "okay, you messed up, but we don't want you to starve.  You might not deserve to be helped out, but we're going to help you out anyway?"  I'd much rather live in the latter.  Letting them starve isn't going to make anyone else a better investor.  It isn't going to teach them some valuable lessen that they're ever going to be able to use in the future.


Says a person who hasn't had a job in 8 years?!  I must admit, my mind boggles a bit.

I continue to have hope for employment. None can stand against my optimism!



I'm not proposing that we, as a country or planet, not take any steps to prevent economic collapse.



I'll pick "media as entertainment" for $1000, Alex.



The view I'm taking is "people get hurt. Enh."



If you think "not paying taxes" is an essential liberty, I think we have different views about essential liberties.</quote>

More like "not increasing our taxes" is an essential liberty.



Hitting pause on the argument itself I can see very different understandings of the situation. I say: "has failed." You say: "will fail."

I submit to you that the shoring up of a failing system while more permanent solutions are sought might be acceptable. Banks that are businesses run for profit should be treated like them. Once those @$%! are under, however, treat them like the toast they are.



It is not even remotely like that. People are not going to scream about being on fire while running from a collapsing bank. The news will talk about it, but the average Joe won't see or hear about it too much, what with no television and lines out the library for internet access



It will teach others to not invest in the same manner, lest they suffer the same consequences. Also, they aren't going to starve. One of the things this country does is make sure that its poor have food. Lots of food.



It's not always an easy philosophy to maintain, and I'll admit that I'd hesitate at the lip of the machine, but I'd jump in eventually.

Well in a simple reply to the Grandma and Gandpa problem. Isn't it the moral duty to care for them rest with their children, then if that is not possible if say they have none then the states and communities they live in? Why social security which was never structurally sound at the outset for long term viability if one really looks at it.

My father is old and needs help he lives with my family because its my duty to do so, and so should it be for his other four children who don't seem to want to help. Why not just allow parents to get senior support from each child if needed? And this could be handled at the state level.

Moral duty and legal duty don't always coincide.  And, many people don't have kids, or don't have kids who are able to support them.  As for states and communities they live in, that can be acceptable too.  I'm not overly fussed about which level of government keeps them from starving, just so long as some level does it.  IF that service is being provided by the state/local governments, then I probably wouldn't have a problem with the federal government not providing it.


Why social security?  Because that's the exact reason it was created.  That's sort of like asking "why use the program designed to keep grandma and grandpa from starving to keep grandma and grandpa from starving?"  It's not a perfect system, I'll freely admit, but until we have one that's better, I think it's an important one to keep around.


There's nothing stopping parents from getting support from their kids.  That is "allowed" as you put it, so nothing needs to change on that front.  But not everyone has kids, and even those that do might not have kids that are capable of supporting them.  If you loose your job, I don't want your father to starve.  Again, if you can get the protections put in place at the state level, great!  In the mean time, let's keep social security around.

Okay, cool!  What are you proposing that we do?


I find it somewhat odd, I have to admit, that you seem to have more concern for the health of "the market" than you do for actual people.


Like I said, I think we have very different views on the meaning of "essential liberty."


I have no real objection to that.  When I say "will fail," I mean in the sense of disappearing, and taking lots of people down with them.  I can certainly agree that they've failed already in a number of different ways (eg, failed to make good decisions, failed to cover their loses, failed to make a profit, etc.)


That's more less what we're trying to do, though.  Shoring up the failing system while more permanent solutions are being sought.  When we have those, and letting the banks go under won't push us into a depression, then I don't think anyone will have any real strong objection to letting them go under if they can't compete in the new markets.


Isn't that something you're opposed to, though?  Perhaps I've confused your view on this?

Redistribution of current funds. Perhaps withdraw from conflict, or take a less proactive stance. I'm not usually the one to suggest this kind of behavior, but desperate times... focus resources available on infrastructure (creating public works jobs helped us get through the Great Depression, IIRC) and education (which helped after WWII, with the return of soldiers who had education benefits (first war that included that as incentive for joining IIRC).



What you're trying to do, if I'm understanding you, is see justice in this situation. You want the guilty to suffer, but not at the expense of the innocent. If that's the case then I can almost get behind you. The problem is that neither of us can see how this might be achieved and one of us views the innocent as corporate assetts.



Opposed or not, the U.S. makes sure its poor has food. Locally there are such programs as TANF (which includes food stamps), W.I.C. (which may be under TANF), and charities that take food that grocery stores are ready to throw out. I won't even get into the personal charity that the citizens provide, nor the odds of finding some church group that'll help you out. Oh, and missions. If you live in an urban environment you don't have too many excuses about going hungry. Just the one, really. (Before you ask, it's pride.)

Better coordination of those efforts might be in order, though. Probably something a charity could work on.

That all sounds fine to me.  More money for infrastructure, and more money for education.  Sounds great to me, actually.  Though, it's tough for me to see how that's going to result in lower taxes. ;)  Getting out of Iraq will help (and is scheduled).  Getting out of afghanistan would help too, but isn't scheduled yet.  To be honest, it is refreshing to hear someone suggest that when asking for lower taxes.

Since this discussion has gone over a few posts, and I'm sort of losing track of things, is this a fair recap of your positions so far?
1.  taxes should be lower
2.  no private business should be bailed out
3.  the welfare system should be "reevaluated" (I assume that means massively scaled back?)
4.  more money should be spent on infrastructure and educate to counter the economic crisis


To be honest, I'm less worried about justice (ie, the punishing of the guilty), and more worried about injustice (ie, punishing the innocent).  I'm more concerned about the people who will suffer than about the markets that will suffer.  I don't think I understand what you mean by saying the innocent are corporate assets.  All I'm looking at, really, is how much people are likely to suffer, and what we can do to avoid it.  You seem to be looking at how the markets will suffer, and not wanting to do anything that would cause problems for the market.  It seems mostly like an ideological thing (Interfering with the free market is bad!) rather than a pragmatic one (What's the best thing to do in this particular case in order to avoid another depression).


Okay, it sounds like you're saying we don't need government programs to keep grandma and grandpa from starving, because there are plenty of charity organizations that will do that?  Do you feel the same way about housing or Medical care?  Do you feel that there's enough charity organizations to handle all this if the government programs that are currently there disappear?

And, perhaps more to the direct heart of the matter:  what do you consider an acceptable taxation rate?  When you do become employed again, what amount of taxes do you think would be a fair amount for you to pay?

Social security is literally a giant pyramid scheme built on the concept of 4+ average birth rates, managed by greedy, short-sighted leeches. If we made congress people PERSONALLY responsible for paying back every penny they spent from the SS fund on non-SS-related issues, I might possibly consider it worth keeping around. Truthfully though, it's broken, and it can't survive, and it will drag everything else down with it if we don't kill it, or at least significantly change it soon.

Would you say it's the concept of social security that you consider broken, or the practice of 'borrowing' money from the social security trust for other expenses?  I don't see that it should require a 4+ average birth rate to work (though I could certainly believe that it was set up on that assumption).  Even with no population growth, if people, on average, are working for significantly more years than they're retired for, it seems like it should be able to provide a safety net.  If we work, on average 45 years, and are retired, on average, for 15, that would mean 3 working people supporting each retired person in a steady-state situation (ie, no population growth).  If the safety net provided is 1/3 of an average working person's income, say, that'd mean each person would need to pay 11% of their income to SS, which seems at least feasible.  Of course, there's overhead, and lots of other stuff to consider, but the basic concept doesn't seem fundamentally impossible to achieve, nor require a 'pyramid scheme' assumption of perpetual growth to work.

Granted, in the medium term, the baby-boomers retiring is going to strain things considerably, because more people will be retired relative to the number of workers than in the 'steady state' situation.  This should have been somewhat offset by the extra money they put into the system when there were lots of them working compared to the number of retired people, but inflation and population growth lessen that build up of reserve, and borrowing from the trust eliminates that reserve entirely if congress doesn't actually pay it back at some point.

I'm not opposed to changing social security, but the idea that it's simply not a workable idea doesn't seem to be true to me.  Things like changing the amount we think is necessary for a safety net, changing the retirement age, etc., are all on the table as far as I'm concerned, but getting rid of it entirely seems like a bad idea to me.  And Bush's idea of replacing it with personal investment accounts was an even worse idea, in my opinion; social security isn't supposed to be retirement fund, but a safety net.  If you want to play the stock market, that's great, but social security should be as close to zero-risk as possible.  Treating it like an investment, rather than a form of insurance, misses the point entirely, in my opinion.

Since Social Security relies on tax dollars coming from a worker's paycheck, I do think it should work on a basis of "Those who pay are the ones who get paid later".  I'm not entirely sure whether it would work, but seemings how every paycheck we pay the government SS taxes, they should be able to record the amount of time we were employed pretty efficiently.

EDIT: Well, how about instead of an investment fund, Treasury Bonds?
This message was last edited by the player at 14:17, Mon 20 Apr 2009.

To a degree, I think that is how it works.  At least SS benefits are based on the amount you've contributed to the system over your life time (that's the whole point of the social security number).  That does seem 'fair' in some sense, and I don't have a strong objection to it, I do tend to think that it might be better to just give everyone over age X, a monthly pay check of Y.  Making it related to your income and/or years works gives people the idea that it's a retirement account, rather than a safety net.  I think social security isn't necessary as a reward for working, per se, but rather as a method of keeping the elderly from being destitute, even if some of them might deserve to be destitute in some people's opinion.  I don't want to see 70 year old homeless people asking for change, even if they haven't worked their whole life.  If you make it to 65, or whatever it is, without having done much work during your life, fine, you beat the system, I guess.  I still don't want to see you out on the street at that age.  I guess I see it as more an issue of basic responsibility to provide for those who make it to that age, rather than rewarding them for what they've done getting there.  It's less a "hey, thanks for all the work you've done, here's some money," and more of a "hey, we don't want to see you on the street and starving, here's some money," thing for me.

Both, really. The current system takes money from the young to pay for the old. As long as you have two or three or four young people to every old person, that works fine, but it's very short-sighted.

On the most basic level, I don't think it's well defined. Is it meant to keep old people from starving? If so, wouldn't it make more sense for it to be paid in food stamps, or in government-run housing, rather than cash payouts? Food stamps 'cost' less because it's the government buying bulk surplus effectively, and it prevents people from using it so much as a 'free money because I'm old' program.

Is it a forced retirement plan? If so, how can any retirement plan work on a 0-year investment plan? If the goal is to force retirement, then we need to actually give the power to invest to the individual, with no maximum, and no setting as to where you put it (such as Bush's suggested redo of the system where you do precisely that).

Regardless, putting the money into the hands of people who can use it for short-term gain without any restrictions, depending on constant, baby-boom levels of child-bearing is GUARANTEED to fail. Even our current system could have worked if we didn't have our elected officials blowing the money every chance they got.



That is true, if you extend the age social security starts paying out until say 75, it significantly reduces the number of children required to support the aging population. Currently you're dividing up the living expenses of each old person among several young, working people. Most people cannot afford the cost of supporting themselves plus one other person, so this cost needs to be chopped up. Even assuming people will work for three times as long as they retire for, having your cost of living increased by 33% is pretty significant. Therefore, we can either reduce social security benefits (or allow them to become defrayed by inflation), push back the age of payback or otherwise limit who gets money, increase the taxes paid to make up the deficit, or increase the number of new people entering the system. When the system was created, as a temporary stop-gap, people didn't live long past retirement and on average were supported by very many working children, so the math was nice. That isn't the case any longer.

How did anyone ever survive prior to the welfare acts? Oh, right... reliance on family and neighbors. Heaven forfend we ever do that again.

Basic human nature has not changed over the past 200 years. We are social animals. I've taken in the homeless and, should it ever come down to it, I suspect that someone would do the same for me. Sometimes those guys clean up nice and you've got yourself a pretty serviceable human being.

So that's housing down.

Medical care is trickier. Do we socialize medicine? I don't think that's the answer. The problem is that you have an altruistic for-profit organization, and if you remove either service suffers, and there are some people that need the services and can't pay.

Got an idea... bare with me:
Make people uncomfortable about their bodies, maybe by calling 80% of America fat. Elective surgeries will become more frequent.

Require, when someone wants elective surgery, that they sign on help someone else.

Some federal funds are used to assist in those areas where it doesn't work all that well (rural and amongst the urban poor).



10-15%

I do think we should raise the SS collection age, but not by too much, since the life expectancy for Americans is 77.8 years, which is only about a 10.8 year difference at the current retirement age of 67.

Why do you think that's short sighted?  You can achieve a surplus of young to old even without population growth (because we each spend more time in the "young" category than the "old" category).


I would largely agree on that.  Though, I might say it's less an issue of it being well-defined, and more an issue of people not realizing how it's defined, but that's not a huge difference.


In my view, yes.  Or, at very least, it should be.  Though I'm using "starving" in the broad sense of "being financially destitute," not just the literal sense of having no food.


I wouldn't necessarily be opposed to such a change.  It would be hard to get pushed through, I think, precisely because so many people view it as a retirement plan, rather than a safety net, but that doesn't mean it wouldn't be a change for the better, or that it's not something that should be on the table.  The housing aspect is a bit trickier, as I think most would prefer a system that helps retired people keep whatever home they have to one that moves them elsewhere (especially if the cost of each of those options is more or less the same), but the basic principle you're suggesting (payment in benefits instead of just cash) I think is fine.


In my opinion it should not be viewed this way.  One could argue that there should be a forced retirement plan, but even in that case, I think it should be separate from the social security safety net.  I'd probably not support a forced retirement plan, for what that's worth.


Okay, so it sounds like the critical flaw, in your view, is that congress can 'borrow' from the SS trust, since you don't trust them to pay it back (or perhaps not be able to pay it back)?


But 33% assumes the system gives out the same amount of money to retired people as the working people are earning themselves, which I don't think is necessary for a safety net system.  Still, I do see your point, that it's not an easy price to pay.  Can we agree, though, that there is some price at which it becomes worth it?


Like I said, I'm not opposed to changing the details of the system.  Pushing back the retirement age isn't the best option, in my opinion, but leaving it as an option on the table is fine by me, though.  How 'not nice' do you consider the math to be at this point?  I've heard a lot of vastly different views on this.  I've heard people who say the system will be broke in 15 years, and others who say that it's fine for at least the next 70 years (though that's based on the assumption that congress will actually pay back the money it's borrowed from the trust), and others that say there will be a shortfall soon, but that offsetting it would require a tax increase smaller than tax increase set to come when Bush's tax break for the top 10% ends.  So, to be honest, I'm not entirely sure just how dire the situation for social security.  I'm also not sure how much is a perpetual problem, and how much is a temporary (though long in duration) problem due to the baby boomers being an unusually large generation.  Everyone seems to agree that right now SS takes in more money than it gives out, but that "soon" that's going to change ("soon" seeming to mean something between 5 years and 25).  Then there's the time when it can eat up the "reserves" it's built up over the years (which congress has borrowed, spent, and has said it will pay back), which will last for some number of years, and then after that it actually starts going into debt.  At some point the boomers will be gone, and we won't be quite as top-heavy age wise, which will reduce the problem somewhat (though, to what extent I'm not sure).  Some people seem to view it as an entirely lost cause, with absolutely no hope of being fixed, while others seem to think it just needs some adjustments.  Am I right that you're closer the former camp?  For me, I guess, the basic idea seems sound, so while adjustments to the current system may well be necessary, it doesn't seem like it should be entirely impossible to make it work in some form.

Because it assumes we will always have enough young people making enough money to support our old people while maintaining an acceptable tax rate. Looking at the social security bubble expected in a few years, that's clearly not the case. You can fool with it a little, adjusting the age or payout up and down, but there's a limit to how far that goes, and ultimately, it degrades the ability of the act to achieve its designed ends.



Then why is it paying out to middle-class people with good retirement funds? And why is it paid in cash instead of useful things that reduce abuse of the system? The fact that my father, who certainly is not in dire straights, expects in a few years to get checks of 'free money' (free only insofar that he already paid it, except now administrative fees and interest on loans has chopped down its value to a fraction of what it had been initially) would seem to defeat the argument that it's meant to keep him from being financially destitute.




I think that is A critical flaw, perhaps the greatest one. If I took all my SS money and put it in an FDIC-insured bank account, I would have more of a safety net, even at interest rates barely above inflation, than I get entrusting it to the government who uses it as leverage on massive loans. First American Bank gives me a 5% interest rate, the US Gov't seems to give it a -10% interest rate.



I think there are merits to the system, and if it were free, or near-free, I wouldn't complain. The problem is that the system was designed wrong from the ground up, and has gotten worse with age.



When I was struggling to feed my child and wife and working off school debts, social security was one of the single greatest costs I had to shoulder (my rent was something like $500/mo., food was much less). My wife now runs an at-home business, and her SS (percentage wise) is double mine. And unfortunately, this was when the boomers were paying in most of the money into the system. The boomers are retiring, with an empty pot waiting for them. I am hoping very eagerly they axe the system soon. I don't mind telling that money goodbye, seeing the budget estimates for 2012 and 2020, I don't think we can survive any other way. It's projected to be something like four times our defense budget. Can you imagine that? It's insane.



Funny enough, perhaps the single greatest cure is illegal immigration. Illegal immigrants are still required to pay into the system, and oftentimes do, but don't get a payout. They're also one of the single largest sources of new young workers available.




The boomers are expected to be the longest-living generation ever in the US, and they've begun retiring last year. What makes it tough though is that people aren't reproducing like they should (damn slackers). Only recently have birth levels been up, and they're expected to drop again if the recession lasts much longer.




I think it could be fixed, but it won't be, so it's better just to kill it. If I believed congresspeople could see beyond the next term, and groups like the AARP could accept that sometimes they have to take cuts so their children can survive and prosper, I'd have a little more faith in it, but I don't see that being the case.

But in the case of 4+ children per Baby Boomer, wouldn't that compound the problem?

If people have tons of children in order to sustain the Socially Secured, it's only going to make the problem four or more times bigger when those children become Socially Secured.

The fact that the birth rates are low may hurt us right now, but it's going to make the sustainability of the SS program in the future much easier. (assuming it survives the Baby Boomers)

No, because birth rates are percentages of the last generation. So if boomers' parents had a 500% birth rate, those parents are in a good place with SS. If the boomers have only a 20)% birth rate, their spot isn't so secure, and if those kids have only a 100% birth rate, they are even worse off.

In short, invest in your future, either by popping out lots of kids, or socking money away.

But is it the current version of SS that you feel not viable, or is it the idea of the working people keeping the retired from starving that you feel is "short sighted?"  I don't mean to keep asking the same thing, I'm just trying to get a handle on if you'd really prefer no system at all, or a fixed version of what we've got?


Probably because people value "fairness," and don't like to support things that benefit others and not themselves.  Personally, I don't have an objection to changing it so that only people who need it get it, or making it so that your benefits are based more on your needs than the amount you've paid in.  I think most people would have a problem with that sort of thing, but again, I'm not saying that's a reason to take the option off the table, or anything like that.  Just giving it as a reason for why it is the way it is, not saying that it's necessarily a good thing that it is the way it is.


To be honest, I'd much rather my tax money go to pay for social programs than the military.  Yes, it is a big cost, but it's one for which at least I support the goal its being spent to achieve.  But it seems like you're in the "it can't be fixed so better to get rid of it completely" point of view, and I'm more in the "let's fix it" camp.


The population is still growing, though.  Like I said, it seems like a program can be put in place that doesn't require continuous population growth, so long as we work significantly more years than we spend retired on average.


But won't these same people you don't feel are willing to fix it also stand in the way to killing it?  If you're just saying you think that's the easier option, not the preferable one, that's fair enough, I guess, though I'm not sure that I think it's actually the easier option.

I am amiamble to a social-welfare program meant to keep people from starving. I do think it would be best implemented at the state level, not at the federal, however. It's not the federal government's job to provide this service, it is outside of their charter.

Regardless as to the level, the current program is definitely broken. It's open to thievery, it gains no interest over time, it's not guaranteed, and, for a needs-based program, it covers an awful lot of people without need.




I'm not arguing that. Our defense budget is already far too bloated. Simply saying, take the ridiculous bloat and multiply it by four. I don't think I could shoulder that amount of tax responsibility, and I don't think it's fair to put it on my children in the form of government deficits.



True, but costs are defined by rates of growth. It doesn't just have to be positive, it has to be very positive, in order to make up the shortfall. It also, again, depends on politicians not being politicians, which seems like a silly idea (again, the reason I liked Bush's retirement plan is because it took the hands out of irresponsible politicians, and put it in the hands of less-irresponsible bankers).



They'll stand in the way either way, so in that regard we can't win. But there are a lot more people who would like to see that $200 or whatnot charge disappear off their paychecks than there are people who are seriously expecting to get rewarded by it in 40 years. Plus, frankly, if the other side is unwilling to compromise, neither am I. The retirees and AARP are simply going to have to give ground, or they will kill the country in debt. I'm sorry that the people they voted into office spent their money, but that isn't a problem they should be handing off.

Retirement isn't a big issue that what children are for. My parents raised four children and when the time comes and they need help we are the ones that should provide for them not the state. Aided by savings and other funds they have in their name. Thats the way it used to be and the states and charity often provided for seniors with no such safety net.

Remember that scene in the Grapes of Wrath film where the man was going tractor over that one family and they asked the man why. He had a wife, and children and his wifes mother to take care of and they had to eat. (roughly stated from the scene) Funny they had such a good idea and the government decided to interfere.

What is wrong with you folks who raided children to expect them to help you, you helped them grow up and hopefully be productive. They should be tapped before any government funds in my opinion and if support must be forced then do so.

I never saw Grapes of Wrath, so maybe I'm confusing what you said; you're criticizing the government...for stopping people from running families over with tractors because they're hungry?  I'm going to assume I'm reading it the wrong way, but how I read it was some guy killing neighbors and eating their dead bodies O_o.

Fair enough.  Which would you consider a bigger problem:  the service not being available to people who actually need/"deserve" to get it, or it being provided at the wrong level?


I guess I'd say all those thing, with the possible exception of it not being guaranteed, are true, but wouldn't necessarily agree that means's the systems broken.  I can handle people getting stuff they probably shouldn't get.  It's unfortunately, but I don't see it as nearly as big as a flaw as being who should get it not being able to would be.  Collecting no interest isn't a huge problem for me.  It's sub-optimal, sure, but I wouldn't say that means it's broken.  As for guaranteed, I'd argue it is guaranteed in the sense that anything is guaranteed.  I agree that the people who've guaranteed it might go back on their word and not cough up, but I think that's also true of any thing that involves someone handing over money at a future date.  In short, yeah, it has a number of flaws, no argument there, but I don't see those flaws as bad as the very large flaw of letting old people starve if we do away with the system.


That's fair.  How much tax responsibility do you feel you could shoulder?  What would you feel would be fair to put on your children in terms of tax burden?


Are you sure?  Social security is one of the more popular programs of the federal government, I had thought?  Bush couldn't get it changed when he had a republican congress, in large part because there was a large public backlash to the idea.  It may be that it's popular, but people don't seriously expect to get any money out of it, but I tend to doubt that.

Heh.  A rather self-service view on children, but fair enough, I guess.


Yes, and many old people starved (again, in the broad sense of being financially destitute).  The reason that social security came into being was because there was no safety net provided by the states, and the children and charities weren't keeping the elderly provided for.  As I said before, SS doesn't stop children from providing for their parents.  If you've got kids to support you, that's great for you.  But not everyone does, and not all of those who have kids have kids that can or will support them.  I don't want those people to starve.  I don't want to look at 80 year old lady in the face and say "well, I'm sorry you have to sleep on the street, but you simply should have had more kids.  I mean, that's what kids are for, afterall!  What were you thinking, anyway?"  I have no problem with children helping their parents, and certainly intend to help provided for mine when they're older (though, fortunately, they've planned well and will likely be able to provide for themselves for quite a long time).  I am certainly not advocating that children shouldn't help their parents.  I'm simply saying that we shouldn't let old people starve simply because their kids are either non-existent or incapable of helping.


Isn't SS more or less forcing the "kids" to pay for the "parents?"  Isn't it just enforcing the very idea that you're espousing, of the young paying for the old, before tapping government funds (remember, SS is a separate set of money from the rest of government spending)?  It loses the "you each pay for your own parents," but it seems close enough to me to what you're saying that I'm somewhat confused by why you'd be so opposed to it?

I saw this
http://www.nytimes.com/2009/04...itics/21cabinet.html
in the news today, and it reminded me of when we were talking about this:



Is looking for ways to save $100 million in a $3.6 trillion budget showing respect for 'our' money, or is it a pointless gesture that does nothing to affect our taxes?  Is this a good thing for the president and his cabinet to be spending their time on, or should they be worried about bigger things?

I have to admit, looking for savings that amount to less than one part in ten thousand of the budget seems to me like a poor use of time/effort for people charged with running the country.

re: Obama - I think it's a strong gesture. It doesn't change much on its own, but at least it shows some level of commitment, and is hopefully just the first step in that direction.



I don't know that that's really an easy question to answer, because it's addressing two different issues which are difficult to compare. Not sure why it's relevant either, because there's no reason this has to operate at the federal rather than state level.



I was referring to politicians stealing from it, not private individuals. If 10% of SS goes to individuals who don't need it, the system can work. If 100% goes to political pet projects, the system cannot hope to survive.




It means the system is actually COUNTER-productive. If we made a government-sponsored bank account and put the money in there, it would be more effective. It's stupid. It may not kill the system, but it's like installing a boat anchor on a car. Seriously, that just has to go. There's no reason for it, it's poor stewardship of our money, and therefore it's unethical.



Social security was said to be a temporary measure when it was established. I've not seen anything said saying it'll be a permanent fixture. Would you give me $20 if I said I may or may not ever pay it back?




I perhaps could have gone 5 or 10% more than I did, but that's also because I had no medical emergencies and cut a lot of corners - and that's for everything, state, local and federal tax, so it's not a cut they can monopolize on. In four years, never buying a TV, never getting cable and eating out maybe twice a year, we managed to save up about $5,000. If they raise taxes, the downside is it significantly increases the risk that *I* will starve, and unlike the old people, I haven't had an opportunity to save up against it.



I'm not concerned abotu their suffering a tax burden as much as a deficit. The current deficit is ridiculous, and unacceptable. The deficit should not be so high that they can't pay it back in 10 years with a reasonable tax rate, and it shouldn't be for things they don't benefit by.



It is popular, and it's pretty divisive. The boomers want it, and old people want it, and unfortunately, both have higher voting rates than younger generations. Most people I've talked with 40 or younger don't think it'll be there and don't want it. Certainly that shock of the first paycheck with 15% gone just to SS is a painful experience for all of us.

In reply to Tycho (msg #112):

And whose fault was the no state safety net, the voters in those states. I would always prefer no government interference and let charity help or at least if it must happen local governments run such programs. And that be there to fill gaps not take over for children. Must I remind you SS had a simple premise to supplement other sources of income and savings elderly people and fewer people lived to reach their 60's to get it at the time.

As for children there is for me a huge difference in my having a parent live with me and caring for them, and the government picking my pocket to give this benefit to strangers. The first is a moral and should be a legal duty if need be that is pass alaw demanding parental support of each child, just like supoort for custodial and non-custodial parents. But I never said not to care for those with no children I could see a needs based program run at the county and state level to do that. I would rather give to a local aid society however and help elderly that need it with direct aid and support when I can make the choice to help or not.

Might I pose an arguement if the Great Depression never happened would elderly have had proper support I see little evidence to the contrary. Elderly citizens in good times and even recessions somewhow managed to get support. It took the gravest of economic events to break that. I see no reason to have started a government social program like SS when short term care for special needs would have been enough.

I'm not particularly worried about fault.  If I see a starving woman in the streets, and say
"well, it's your own fault for not getting enough votes to support this program that would help you!" I'm being inhumane, in my opinion.  You seem much more worried about fault, whereas I'm more concerned about our moral obligation to help those who can't help themselves.  Your view seems to be one designed to makes sure you don't help anyone who you don't have to, mine is more concerned with making sure no one goes without help.  You're looking for reasons to avoid helping, I'm looking to get more people to help so that each person that's helping has to give up less to do it.  Seems like a pretty stark difference in world views to me.


And I would always prefer that we don't let people starve, that we don't force people to live on the street, when they have no realistic chance of improving their situation.  I'm not particularly fussed what level the protection comes from, just as long as it's there.  You seem most concerned about not having to help anyone you don't know.


Is there?  Do strangers not deserve to be helped simply because you don't know them?  Is someone who's children died at an early age deserve less help than one who's didn't?  Is someone who's parents die before they retire less obligated to contribute something to help others?  Again, your concern seems to be about you not having to pay for helping people you don't know, whereas mine is making sure nobody goes without help, regardless of whether or not you, or I know them.


Perhaps, but seeing as how the great depression did happen, I don't see how it's particularly relevant.  It's sort of like saying "well, if I had never punched you in the nose, you wouldn't be in pain right now.  So why should I do anything to make you feel better?"  Whether or not things would be different if we went back and changed the past, the fact is that some elderly people aren't supported by anyone, and can't support themselves.  I don't want them to starve.

I have no problem helping at the local and state level. I lived in Milwaukee for much of my early life and they had a public medical facility that took everyone. Paid with tax dollars locally on property owners and from state funds, I'm sure the Federal Government as well. One could get care free if destitute and I didn't mind that at all becuase everyone paid into it locally. I also worked at and donated funds to a homeless shelter project privately that helped people so didn't mind doing that either on my own. What matters is the government doing so with a light hand and as needed when the others that should be there can't.

I for example would have elderly support laws just like we do with minor children in custody cases, any child housing and caring for the parent gets the benefit and all other children must pay money to help the parent live. This if done at the state level would be fine with me. Then if there was no such support or the government needed to assist they could do so at the local or state levels minimally to plug the gaps. Have state run elderly housing complexes or nursing homes or even financial aid as decide at that more local levels of government.

As for Social Security why not just make it needs based and be honest about it its welfare. People earning say $30k a year a person or $50k per couple would just not get any if they had savings and pensions to cover them. And the people without children supporting them could get help and likely be comfortable. So the number of people accessing the system would likely be a low number.

That's fine by me too, just so long as long as it's at some level.


That's fine by me too.  I think the reason we don't have that (and I stress that I'm not saying I agree with the reason) is that people prefer to see it as a "I put X in, so I want to get Y out!" thing.  They don't want to think of it as welfare.  Too many people are concerned with what they get out of it, rather than it's real purpose, in my opinion.

Here's something interesting that I've learned from my Economics textbook that I thought might be something to post here.

In percentiles of population ordered by income, (2006)

The Bottom Percentile collects 3.4% of all Income
The Top Percentile collects 50.5% of all Income
--- The Top Percentile pays the highest income tax rate --

Corporations make up 20% of all businesses, and produce 84% of Domestic Output
Partnerships make up 8% of all businesses, and produce 11% of Domestic Output
Sole Proprietorships make up 72% of all businesses, and produces 5% of Domestic Output.
--- Corporations in America fall under double-taxation rules --

The primary source of funding for Municipalities is Property Tax, the largest expenditure of which is on Education.
Primary source of funding for States is Sales tax, largest expenditure is also on Education.
Primary source of funding for Federal is Income tax, and the largest expenditure is on transfer payments (GI Bill, Medicare, Welfare, etc)
________________________________________________

On observation, the taxing strategy for funding the country appears to be "More Taxes where there's more money".

Sales Tax
If you spend more, you give more. The primary use of these funds being towards things that the majority benefits from equally, Sales Tax is a Flat Tax.

Income Tax
If you earn more, you give more. The primary use of these funds is towards transfer payments, the purpose of which is to lessen inequalities of income.  As such, a Progressive tax is applied.

Property Tax
If you own more, you give more.  For much the same reasons as Sales Tax, Property Tax is a flat tax.
____________________________________

Unrelated but Interesting

At the cost of eighty dollars a barrel, we can turn discarded animal bits, refuse, and sewer water into oil.

This part is not so surprising. My wife runs a sole proprietorship. We've made it clear, if her business breaks a certain threshold of productivity, there are very good legal reasons to invest in incorporating. Incorporation is a form of protection. It costs more, but if you're producing more, it basically becomes a requirement. In general I hope all sole proprietors are wise enough (or have a good enough accountant) to incorporate once their productivity (and therefore legal liability) passes certain thresholds.




Not *precisely* true (yet) for several reasons. People have tried to make plants to do precisely this. But the calculations generally assume a 0 value for this waste (which isn't true) and proper sorting of most refuse (which isn't true).

However, my plan for 2010 is to start a biodiesel generator in my garage. From my research, I'll be getting a gallon of diesel for about $.50-$1. This makes my diesel truck comparable in fuel costs to the best Toyota Prius - with a lower vehicle cost, more space and more engine power. (The downside is the risk of a terrible fire burning down my house and destroying all of my possessions.)

Though on further reflection, I'm actually going to have to revise what I said about Sales tax after asking my Economics professor about it.

Sales tax would be regressive because the higher the income you make, the larger amount is usually saved.  So people making more will have more money left over to save than people who are living at subsistence levels, and thus will pay less taxes.



I suppose that's true, but perhaps they can kill birds with both stones by paying people a small amount to sort their garbage properly (at the moment there's no real incentive other than good vibes).

I'm not sure if this method of oil production would acquire economies of scale, but I'm guessing it should.



Not sure where you live, but perhaps a free-standing garage would be best.  And -once again, just making assumptions- it would save money on garbage disposal fees, eh?

I do have a free-standing garage. And I can't use general garbage. It would take too much processing. I can only use waste vegetable and animal oils (which otherwise require special disposal).

Sounds pretty awesome, though if my book is correct about the turkey parts-to-Oil ratio, a gallon of gas is going to require about 51 pounds of lawn clippings. (half a ton of whatever per barrel of oil, and 19.6 gallons of gasoline after refinement)

Not sure about those other ones. But I can say that a gallon of cooking oil renders only slightly less than a gallon of biodiesel, and biodiesel has only about 90% the fuel efficiency of normal diesel.

Making something into gasoline is a lot harder (because of the nature of gasoline) and a lot more dangerous. I'm guessing we'll get useable biodiesel well before we get a real replacement for gas.

I've been thinking about taxes today, finding myself a bit frustrated with the way politicians routinely tell us they can lower our taxes, keep our valued government programs untouched, and still lower the deficit, and we keep routinely believing them, even after they fail (unsurprisingly) to make this happen.  I've come up with a new system that I want to run by you guys, to see if I've made any obvious errors in reasoning, and to get an idea if it'd be at all sellable to the US public.


Basically the idea is that instead of letting politicians come up with ways to pay for the money they spend, we set up a system that automatically sets the tax rates where it needs to be to pay for them.

I'm thinking of doing this as a VAT or national sales tax.  So if the tax rate is X%, then when you spend a dollar, you pay another X cents to the government in tax.  But the rate X is set each year in order to bring in revenue equal to the net government expenditures in the previous year.  This would take some degree of estimation, since we can't predict perfectly how much everyone will spend in total each year, but I think we can get close enough that it's not a huge problem.  Any short-falls or surpluses due to mis-estimation of the needed tax rate will be applied to the next years total expenditures, so that if we underestimate one year, we have to pay more the next, and vice versa.

Politicians can still institute other taxes, which will decrease net expenditures, and thus lower the VAT in the following year.  So taxing gasoline would bring in money, and thus reduce the VAT rate.  You could still have an income tax, which would also bring down the VAT, and which you could make progressive (since one possible objection to the VAT would be that it hurts lower-income people more).  You could cut those other taxes if they were in place, but doing so would lead to an increase in the VAT unless they were accompanied spending cuts.

The advantages of this are that:
1.  it would effictively balance the budget automatically.
2.  we would see the true cost of government spending very quickly (less than 12 months), so people in general would have a much better idea of how much they're giving up to get the government services.
3.  it'd be much harder for politicians to promise us the impossible, since they'd no longer have the ability to cut taxes while raising spending, so promising that they would do so would be easily seen through.  If they wanted to say they would lower the VAT, they'd have to tell us how, since they wouldn't have the power to just lower it by chosing to do so.

It'd be easy to have a website where you could go to see the previous years budget in terms of this years VAT rate.  for example you could go and see that you pay 3% tax due to military spending, 3% for social security and medicare, -1% because of other taxes collected, .01% for a particular ear mark, etc.  This would also be available to help predict next years tax rate, so people wouldn't be caught off guard by a large change in the tax rate.

What do you guys think?  Is it too simple or too inflexible?  Would the US public go for it?

Too simplistic. It sounds good on paper and sounds simple until you get to the point where expenitures, revenues, and the next year's economic performance have to be estimated.
Also I think it would wind up wth politicians spending more money as they would start to see this VAT as a perpetual source of revenue that they don't have to vote for, leading to massive taxes in the VAT and eventually an enormous black market to avoid it.

Why not go in reverse?

Set the VAT tax, and then have all government salaries and benefits adjusted annually to balance the budget.

They'll cry, no, that's terrible, that's unfair, that's cruel, that's...

that's...

exactly how the self-employed live.

Expenditures and revenue don't have to estimated--they're taken from the previous year's budget, so we know for certain.  It's just accounting, not estimating.  We do have to estimate the next years economy, but that can be done well enough, I think, to make it feasible.  And since any surpluses or short-falls are carried over to the next year, we don't have to be entirely precise.


Politicians already spend more money than they have.  This way just leads to people having to pay for it (nearly) immediately, instead of having it just tacked on to the debt.  If people didn't like the VAT rate, it'd give them real incentive to vote for politicians who were going to cut spending, rather than just voting for people who lower taxes by increasing the deficit.

The black market concern is a valid point, though other countries seem to manage a VAT okay, so it doesn't seem entirely infeasible.  And I suppose pretty much any tax can be avoided to some degree or another.

Budgets change more quickly than year to year and even a budget *is* an estimate. Corporations change tehir annual budget quarterly and also rview to see where tehy deviated from the budget they drew up the previous quarter.

Again, that's why it's based on the previous year's expenditures.  It's not what they plan to do, it's what they did do.  You might set out a budget at the start of the month, and you might change it a bunch of times, and you might not even stick to it after you change it, but at the end of the month, all I have to do is look at your bank statement to see how much you spent and how much you brought in.  Predicting how much things will cost is tough.  Adding up how much they did cost is fairly easy.
This message was last edited by the GM at 13:26, Fri 16 July 2010.

So we what, borow money each year and pay it back the next year? Better include interest in that calculation as well. Plus we still have estimations of how teh economy will perform included in the model.
Personally I think a much simpler model would be to work on a savings basis- taxes can be set wherever they want but aside from some minimum functions congress can't spend moeny until they have it saved and in the bank.
Of course getting tehre from a deficit situation could be a problem...

You can think of it that way if you like, but it's probably a bit better to think of it like a business--we earn money today for the goods we made yesterday.  We get paid each year, and we spend each year, even if the amounts are based on different years.


Yes, probably so.  I think I'd set it up so we'd have to pay all interest on debt, and 1% of principle on debt each year, though that's something that can be quibbled about by reasonable people.  But even if interest isn't explicity put into the system, it still gets paid.  When we pay back the loans we take out, with interest, that's an expenditure for that year, and thus changes the next years VAT rate.


True, but again, I don't think we're really horrible at that.  Maybe we misjudge the GDP by 10% some years, but I'd be surpized if we're off by that much very often.  And since surpluses and shortfalls are carried over, it just delays things a bit due to poor estimation.  If we're feeling risk-averse, we could set the VAT so it's expected to bring in slightly more money than necessary (again, with surpluses carried over to the next year), so if we over estimate the economy, we don't get hit too hard the next year.


Hmm...that's interesting.  My initial concerns would be:
1.  how to start it, since it seems like we'd have to spend at least a year not spending any money before we could have any in the bank, and that'd be pretty catastrophic.
2.  responding to emergencies would be hard.  I think there are many times when it's reasonable to spend money immediately, and collect taxes to pay for it later.  Disaster relief, wars, etc. come to mind.
3.  Politicians would benefit from their predecessor's savings, and/or be able to punish those that come after them.  I get elected in year X, save up half the money I need for a project before I get replaced, and now the next guy spends all the money on donuts for his staff.
4.  I think it might be harder to 'force' politicians to stick to this kind of rule.

I do like the idea, though, and will give it some more thought and try to come up with fixes to those problems.

Set the VAT tax, and then have all government salaries and benefits adjusted annually to balance the budget.

Government salaries and benefits, irregardless of what you've been led to believe, only take up a minuscule percentage of the overall budget of the government.

Sorry I missed this earlier.  Like Falkus says, government salaries and benefits don't really have an major impact on the budget.  As much as we might like to make politicians suffer by lower their salaries and cutting their health insurance policies, it wouldn't affect the deficit significantly.

If you mean just set the VAT, and then force the politicians to stay within a balanced budget, I'm all for it if you can find a way to do it, but it just doesnt seem to work.  We've got PAYGO now, and politicians always assume it's just for the other guys.  Dems say extending unemployment benefits is an emergency, so they don't need to find offsets.  Republicans say tax cuts just don't need to be offset at all.  Leaving it up to them to figure out how much money they can spend, and not going over that amount just doesn't seem to have worked well.

Also, letting them pick the VAT first doesn't hold individual law makers accountable.  They can vote for a really low VAT rate, and then vote for all manner of spending.  They won't get it, but they'll get all the political rewards for their votes.  They can tell people "I voted to cut taxes AND I voted to expand all programs.  If only they'd have listened to me, things wouldn't be so bad now!"  The poor shmo's who actually voted for a reasonable VAT, and voted down spending to balance the budget would get pummeled at the polls.

If it were just up to one person to decide the whole budget it might work, but with politicians having vote on it, accountability gets lost.  People who know they're not going to win the vote can propose absurd things that will be popular, and never have to worry about the negative consequences their proposal would have.

With the "pay for last year" method I'm thinking of, everything gets paid for in the end.  It only takes into account the governments net expenditures, so politicians can't game it by saying "oh, this doesn't count, its an emergency" or whatever.  They can't promise us free lunches, and blame the bill on other politicians (well, they could, but it'd be very easy to check their claims and see definitively that they're full of it).

Corporate budgets get voted on approval all the time, the difference is there aren't 100 people elected by just anyone with an opinion in the vote. First thing we need to do is cut down the size in raw numbers of the Senate and Congress. 2 congressmen per state was fine with 13 states, now it should be more like 1 per state.

What possible difference could that make?

I would be more inclined to reduce the number of representatives than the number of senators. There are states with senators actively opposed to each other, and reducing it to 1 senator wouldn't permit that diversity of viewpoints. (Although if we returned senators to being appointed by the state governor, I think it might make more sense then.)

The current size of teh top level of administration in teh legislative branch is excessive to actually getting things done. Like I said, 26 congressmen were enough when the country was founded, 100 is excessive, and senators even more so.

The current size of teh top level of administration in teh legislative branch is excessive to actually getting things done. Like I said, 26 congressmen were enough when the country was founded, 100 is excessive, and senators even more so.

There were thirteen states when the country was first founded, and now there's fifty. How can possibly claim that a hundred is excessive? It's the exact same proportion.

Because porportion of an administrative body to it's constituent system is non-linear. A $30 million company has generaly has a Board of Directors of 3-12 members (depending on the industry and other factors) a $30 *billion* company has a 12-18 member board of directors, not a 3k-12k member board. Imagine trying to get anything done with a 3k member board...

That's a false comparison. People aren't money, and a board of directors works entirely different from the congress.

The general principle of non-linearity still applies. The $30 billion business employs similarly more people, has similarly more shareholders, but the fact is that large groups do not manage effectively regardless of the size of the organization. when the organization grows you add middle management, not top management.

One could argue, perhaps, that congress is a better analog of middle-management (with the executive being top-level management).  Congress isn't meant to "manage" per se, and is largely split up into smaller committees, working groups, etc.  I'm not sure if I'd agree that the inefficiency of congress is due to there being too many people there.  Rather, it's more due to it being a democratic system, with very partisan members.  To a degree, it's set up to be intentionally "inefficient" at making changes (ie, the system makes it very difficult for a group to get all their ideas put into law).  Is that a problem?  Possibly?  Should it be changed?  Possibly.  Would just cutting the number of people involved do that?  I'm not so sure.  It might help somewhat, but I don't think it's the biggest factor of any of the problems with congress.

Congress sets the budget and passes laws. that is very much a top tier role. In the constitution the legislative and executive branch are held to be equal. If you thin the congress is middle management you have failed civics. The democracy of teh legislative branch can be maintained with smaller numbers- this is after all a republic not a direct democracy and the diea that 'ineffecient is better' is pure absurdism. A 50 member congress and (to pick a number out of my, er, hat) 250 member senate would be no less democratic than the numbers we have today, but they would be more efective at getting things done when they need to get done.

I think you misunderstood what I was saying.  Congress is "middle management" not in terms of its 'power' or being 'below' the executive branch, but because it deals with the nitty-gritty of putting the big ideas into action.  It's not the "we need a health care plan that covers everyone and takes care of costs" place, it's the thousands of pages of legalese about how to try to actually do that place.  They're the 'worker bees' of the three branches, in some sense.  They actually have to get their hands dirty, and do the heavy lifting.  It's full of task-forces, committees, sub-committees, working groups, etc.  It's not a perfect analogy, but I think there's more in it than you're giving it credit for.  Boil it down to 10 members, and it still won't function like a board of executives, because it's task is different.  Top management doesn't make up every rule and procedure for their company.  They come up with the big picture, and delegate the details to people below them.  Congress has to actually come up with all the rules and details.

Yes, the democracy of the legislative branch would be maintained with fewer people in it, that's my point.  Part of the inefficiency is that it is a democracy, and that inefficiency won't go away by reducing the numbers.  I'm not saying we have to keep more members in order to keep it democratic, I'm saying keeping it democratic with almost any number of reps will keep it at least somewhat inefficient.  You tell me that 50 members would be just as democratic as 250, to which I agree, but then you say that it'd be better at getting things done, and on that I'm unconvinced.  The reason things take so long to get through congress isn't because no one thinks it's their job to write laws, and they're all just waiting for someone else to volunteer, it's because there are two factions that disagree with each other about a lot of things and try to stymie the other side in anyway they can.  Sure, it might take less time to actually count votes with less members, but the filibuster won't be affected by reducing the number of reps, nor will most of the other parliamentary procedures that hold things up.

As for inefficient being better, it depends.  The system was intentionally set up to make it difficult to make large changes.  It's inefficient at implementing large changes by design, because the framers didn't want the government changing laws too quickly or too easily.  A system that was extremely efficient at changing laws would lead to major government overhauls every two years, most likely, oftentimes swinging back and forth between competing sets of laws.  In many cases, we don't want that kind of "efficiency."  To a degree, the goal of democracy isn't efficiency at getting the best solutions, but rather simply avoiding the worst solutions.  It's a "hedge our bets" system, that we know isn't going to be the best, but we're also pretty confident that it won't be the worst.

To be clear, I'm not saying reducing the number of reps would necessarily be a bad thing (I'm not particularly fussed either way, really), I just don't think it would have as much impact as you think it would.

No, they aren't. They currently engage in micromanagement, which is itself a contributor to gridlock and ineffeciency, but the congress sets policy. It may *currently* produce thousand page documents for it's laws but that is not it's role. The individual agency heads would be the middle management that are engaged in the how to do it and the nitty gritty details. Even if you were to assume that congress *should* be producing massively over-detailed legislation it isn't the actual congressmen who come up with the legislation, it's their staff. We have too many chiefs in the legislative branch.

Okay, what do you think will change if we have less of them?  Do you think democrats and republicans will start agreeing about everything if there's less of them around?

I think it is easier to have an amicable working relationship with 49 people than with 99. I think that with a smaller group there would be more familiarity and less demonization.

I think less representatives are easier to bribe than more.  Moreover, the purpose of a representative is having your views represented.  With only 49 representatives, at least one state isn't going to be represented.  That's antithetical to a republic.
This message was last edited by the GM at 22:18, Tue 03 Aug 2010.

I said it is easier to have a relationship with 49- each of the 50 represenatives would have a relationship with 49 *other* represenatives. Fairly basic math...

I was assuming you meant the relationship with the people to their representatives, which is more important, in my opinion.

If a representative is elected because he says he's going to move for certain things, then he goes and does the opposite thing, that's a far greater concern than representatives disagreeing with each-other.

A tight-nit group of close friends might sound good, if this were an Oligarchy, but I desire my representative to place the interests of those who elect them before anything else.

Additionally, the larger the population gets, the more representatives the country needs.  What is the point of having a representative that barely represents the majority of the voters?

No, having less representatives would be as desirable as a Single-Party system.  Populations that are large enough need to have more than one representative, because the job of a representative is to represent the views of their constituents, and it is impossible for a single person to accurately represent the views of its people once the population reaches certain levels.

Thus, I find reducing the number of Representatives from 435 to 50 an extremely bad idea.

The importance of two senators per state is to protect the rights of states who are smaller and do not have as large of a population, in order to ensure that each state is represented.

The allotment of senators can be changed uniformly, according to the Constitution.  But again, given the power of the Senate to rebuke any other branch, I hardly think making them more familiar with eachother; better able to organize and conspire against the public for their own gain, less expensive to bribe en masse, etc, is a bad idea.

Instead, I'd recommend increasing the number of Senators to 4 for each state.  The larger the number of Senators there are, the larger the group intending to sabotage political procedure would have to be to cause slowdowns.

Decreasing the number by half would make it even easier for a close-knit group of stubborn idiots to grind things to a halt.

It doesn't need to be a close knit group of frineds, but teh fact that teh elections are held in seperate states with wildly varrying attitudes will already prevent that from happening. What *does* need to eb prevented is the development of ciques and infighting, which happens when the body of represenatives becomes overly large. The need is to find a middle ground and right now at this point in time the size of the governing body in the legislature is too large to govern effectively.

As to congress being only 50 you are right, I was writing too fast and the idea is for the Senate to be reduced to 50, the congress should probably be reduced to about 130 to 195, which is two to three times the size of the orriginal Congress.

Unfortunately this isn't the case, thanks to political parties.  Even if two people have radically different views, if they both serve party A they'll both tend to support the same things regardless; parties take away a politicians loyalty to their constituents and puts pressure on them to further their own party's hold on political power in the government.



This is not the United Nations, however, and a few Congressmen disagreeing with a bill does not stop it from passing in theory.  They'd need a certain percentage of the vote to stop a bill from passing, and even a certain percentage of the vote to filibuster.

Cliques will develop, and infighting will occur, regardless of the size.  However, the total size of the body does determine the relative affect cliques and infighting will cause.




Is a clique of 20 members determined to halt any legislature during the current administration more of a problem if there are 50 senators, or 200?  It seems pretty obvious to me that if you decrease the number of representatives people have, the really crazy ones will have stronger influence in legislature.  If Alaska elects an Anti-Miscegenation, Anti-Suffrage senator, I'd like to know that there's a chance for at least one other view to be represented in Alaska other than that one.

I don't see the troubles with congress to be due to "cliques and infighting" though.  The dem/rep divide isn't a personality clash, it's an ideology clash.  It comes from A) having very different (and frequently mutually exclusive) views on how the government should be run, and B) being rewarded at the polls for demonizing/attacking/no-working-with the other side.  I don't see that changing with fewer members of congress.  It's not that Mitch McConnell and Harry Reid just don't get along due to difference in working style, its that they have very different beliefs, and get rewarded for appearing to have even greater differences of beliefs.

Again, I'm not married to the current number of senators or reps, and I'm not necessarily opposed to changing the number, I'm just unconvinced it'll make all that much difference.

Right okay, scratch "clique" and substitute "cult" then; you know they're crazy when they actually refer to themselves in a Godwinesque fashion rather than having their more shameless opponents break the law.

Example: WLYM, or "Worldwide Larouche Youth Movement" (remember when Obama hugged the Queen?  Apparently that was a dead giveaway that he was a shil all along for the British New World Order!) _{Source: The little magazines they were passing out at my college, hilariously insane nutters}

What does that have to do with congress?

Here's an example of its relevance:

http://www.galvnews.com/story....wcd=2f86414adab095de

A majority vote in the House is required to begin the impeachment process; decreasing the size of congress would it make it easier for a majority vote to be made based on conspiracy theory rather than evidence.

There is a difference in ideaology currently in congress, those ideological issues tend to break down when you actually get to know people whose opinion is different from your own. Smaller legislative bodies tends to lead to more across the aisle familiarity, and actuial cooperation between the parties. The problem it solves is ideological isolationsim.

Again, though, I don't think the problem right now is the reps/dems aren't friends.  The supreme court only has 9 members, and by most accounts they all get along fairly well, but you still see a very clear ideological divide.  If you need 6 of the nine to agree in order to get any ruling out of them, they'd be as deadlocked as congress.  Also, the fact that congress is democratically elected compounds the problem, because the voters reward those who don't work across the aisle, and penalize those that do.  There are a good number of senators that used to be known as bi-partisan, but who have tacked very much away from that because they're worried about being re-elected.  At the end of the day, the problem is that american voters don't want the people they vote for to be bi-partisan--they want the people on the other side of the aisle to be bi-partisan.  They don't want people who compromise on their values, they want everyone to 'compromise' by accepting their values.  In my opinion, it's the political climate (ie, the voters) right now that is the problem, not the system or the number of reps.  You can see this in the types of campaigns being run right now.  There's not many (any?) politicians selling themselves as bi-partisan, or willing to work across the aisle.  The ideological isolationism in congress is an effect of the ideological isolationism of the voters, not the due to the number of reps.

*Some* division is good, it is the level of hostility and gamesmandhip being played with our country's future that is the problem.

In reply to silveroak (msg #158):

Can you give an example?  I can't think of any example in which decreasing the number of representatives in a Republic made things better; generally the "decreases" I can think of were a result of military coups by one of the parties, and they didn't stay a republic for much longer than that, except perhaps by name.
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(And note I'm asking for an argument for decrease in Size with a forward-looking time-line, since simply showing a inverse correlation between congress size and cooperation is not an example, even if it can be shown; Correlation does not equal causation.)
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Isolationism will happen even with a reduced size, since some ideologies require such isolationism and can't be reasoned with.

I say that this is inevitable regardless of size, and argue by percentages that increasing the size of the Assembly would lessen the effectiveness of gear-grinding tactics by the unreasonable representatives elected by unreasonable people.  By the very nature of the Cult, their numbers are small, and by increasing the number of possible representatives, the unreasonables will be more accurately represented in contrast to those who wish to make changes rather than just obstruct the legislative process.
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I must also put forward that, most importantly, the primary purpose of a representative is to represent the people of their given state.

Since 1911, which was the most recent time the number of representatives was changed, the population of America has gone from approximately Ninety-Four million to Three Hundred Eight million, I think we're long overdue for our congress to increase in size to better represent the country's diverse views.
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@ Tycho

Although, if you look at it from a purchasing point of view, with the increase in population not matching the increase in representatives for nearly a century now, I'd argue that this rising demand for representation from a static number of people able to represent them must be slightly influencing the choices.

Memes such as "don't throw your vote away", "a vote for X is a vote against Y",  and "Single-Issue Voting" would perhaps be lessened if this scarcity wasn't a problem, and there wasn't as much of a need to put all your money on either one extreme or the other.

No, examples are hard to come buy, as it cab be difficult to get a legislative body to effectively fire themselves. The best bet for getting it accomplished would be in stages, trying to garner enough votes from states which would not lose seats and postponing the effects to several election cycles in the future. I do wonder if we shouldn't subdivide our governemnt into regions and add a layer between state and national to affoard teh best of both worlds- closer representation and smaller governing bodies, but enacting that would require a massive overhaul and a new continental congress, which I doubt anyone would go for.

Some of the discussion in the politics thread got me thinking a bit about taxes.  There is a growing push for a flat tax, and some view a progressive tax as unfair.  I think a case can be made for such a view.  However, what do people think of the idea of including the diminishing marginal utility of a dollar as income increases?  In other words, a "flat utility" tax, which would be, in practice, a progressive tax, since to someone making $10k per year, losing 30% of their income means a much bigger change of life style than it does to someone making $100k per year.  Granted, figuring out how to quantify utility is no small trick.  And utility itself is an abstraction anyway, so doesn't perfectly match reality.  But in basic concept, what do people think?  Would a "flat utility" be a good idea?  Say, you pay taxes that would reduce the utility of your income by 20%?  (or whatever %--I have no idea what the actual amount should be, or would need to be to support our spending level.  For now I'm more interested in people's thoughts on the concept).  Setting aside practicalities of implementation for the second, is the idea one that people could agree to in concept at least?  Satisfy both those who want the wealthy to pull more weight, and those who want the tax rate to be fair?

Why does it matter? We have a parabola tax. The poor pay the little, the rich pay little, only the middle class pays a high percentage.

If you institute a flat tax and chop up those tax incentives, then, maybe, you'll start to have a fair tax system.

If your concern is you're taking food money, then only institute the flat tax on dollars above $20k (or whatever).

But one could make the argument that it's not fair; as the more money you have, the less valuable it becomes. A ten dollar bill is much, much more valuable to a man making ten thousand a year than it is to a man making ten million a year.

Taxation can only be based on objective value, not subjective. One could also make the argument that the man who gets paid $10,000 a year draws such a large sallary because he has put in effort to develop his marketability because money is important to him, and that accordingly teh $10 bill is worth more to him than the person who makes $10,00 a year, which s why he has collected so may more of them.
The point in this is that taxes have to be based on objective criteria, not how you presume someone else feels about something.

Yes, agreed.  Not talking so much about what we have now, but looking at alternatives which might be better.


I'm not necessarily opposed to that idea, though some in favor of a flat tax might be, I think.


Yeah, that's more or less what I'm talking about--diminishing marginal utility of a dollar as income increases.


True, we can only base it on objective criteria, but we can form a system which attempts to account for subjective differences, and acknowledge that it won't be perfect (but might still be better than not even trying).

Basically, what I'm aiming at here, is that for someone who makes $20k a year, doubling their salary to $40k will result in a major change of their lifestyle.  Someone making $2M getting a raise up to $4M probably wouldn't change their lifestyle as drastically (though it would certainly change), and Bill Gate's lifestyle probably isn't going to change much at all, no matter how much you increase his income.  Thus, just looking at the fraction of the income we pay misses hides the fact that for some people giving up X% of their income will be affect their lifestyle in a bigger way than it might affect someone else to give up the same percentage of their income.  Coming up with a system to quantify it all would be difficult, no doubt, but assuming for the moment we could come up with a decent approximation, is the basic idea one worth considering?

Silveroak, I'm not so sure he means subjective feelings. I think he means in terms of relative purchasing power.

Lets say a man earns $20k a year. That rounds off to about $1600 a month. Now, for whatever reason, he needs something that costs $500. 500/1600 = 31.25%. That $500 is nearly a third of his monthly income. That's a considerable amount for him.

Now, lets say someone who earns $1 million a year. That rounds off to about $83k a month. He needs that same $500 purchase. 500/83000 = ~0.6%. That same $500 doesn't even take up a percent of their earnings a month. Hardly a scratch in his purchasing power.

It would seem this would mean that $500 means much more in terms of one's relative spending power for the former than the latter. That $500 likely won't mean nearly as much when it only takes up less than a percent of one's monthly income than it would if it made up a third of one's monthly income. In that sense, taking the same from both really won't have the same effect. Each dollar taken from the poorer man affects their monthly budgets much more than each dollar taken from the wealthy man.

Would you disagree with that assessment? Is that fair?
This message was last edited by the player at 14:16, Sun 26 June 2011.

I understand that, however the fact that you are taxing a percentage of income means that regardless of relative purchasing power you are still taxing the same percentage (assuming flat % tax.
Now what I think he is saying is that what is being purchased is more critical and less luxurious at lower income levels, so 20% of 20,000/yr is likely to bite much deeper into necessities than 20% of $100,000 a year. There are two obviosu soplutions to this- the cost of living based index: each person is taxed based on (income-cost of living) rather than straight income so the same percentage exists but with a different zero point. The other alternative is to make the percentage logrithmic- you pay in taxes 3% times the base 10 log of your income in dollars per year, so someone making $1000 a year pays 9%, somoen making $100,000 a year pays 15% and someone making $10,000,000 a year pays 21%
Of course these are based on simple graduation by income, ignoring issues of trying to inspire reinvestment- unfortunately what we have now is a model which tries to do both in a very ineligant method- by taxing teh rich more heavilly then offering tax incentives to investment so that teh high end of the income scale gets a depressed actual taxation base, leaving the middle picking up te bulk of the taxes.
And then there is the problem that because investment incentive based tax breaks focus on capital gains instead of dividends in creates instability in the stock market.

here's a model that might work:
tax non-investment income at (actual income-$40000)*log10(actual income)*7.5%
if non-investment based income is under $40,000 then investment based income is considered non-investment income up to the $40,000 mark
investment based income is taxed at a flat 10%, capital gains at 60%
which should help stabilize the market so it is being driven by dividends rather than price speculation.
Money *invested* from non-investment income is deducted from non-investment income, as long as this does not bring it under $40,000 a year.

The $40,000 number can be adjustable for factors such as size of household, dependants, or changes in cost of living.

And minimum wage is lowered to $2 an hour.
This message was last edited by the player at 15:51, Sun 26 June 2011.

Why the log of income?

Other than that, it seems fair to me, as long as you do something to address all the tax loopholes and shelters.

because it then provides some serious incentive for those making lots of money to invest it basd on potential dividends without creating the futures- based investment schemes of today.
Which measn they are investing in actual production instead of financial schemes.
It also means that with capital agins having a potential taxation of 60% anyone making over $100,000,000 a year will be better off paying the capital gains tax than the income tax, since investing anything they make over $100,000,000 will lower the overall tax rate below 60%.

Warren Buffet writes on U.S. taxation of the super-rich:

http://www.nytimes.com/2011/08...super-rich.html?_r=1