RoR: Forum

This reminds me of another quote:

"Great nations don't fall from outside forces until their internal institutions have been thoroughly corrupted."

I paraphrased this to hell, but the point remains. (I can't remember who originally said this quote).

And, I think, we can all agree that the U.S. has been sufficiently paralyzed and corrupted by its predominant ideas.

Post 1

Sunday, November 4, 2012 - 5:55pm

One of the things wrong nowadays is corrupt, post-modern thinking (CPMT).

Dinesh D'Souza explains how it is that Barack Obama wants to "downsize" America. Obama suffers from CPMT. Instead of seeing America for what it is -- the first truly-moral country on Earth -- post-modern leftists see America as some kind of a "Great Satan." America-haters hate the idea of America, saying that our founders were terrible, rich, white folks writing rules to stay on top and to keep others down. People suffering from CPMT often cite the fact that slavery didn't disappear overnight after we declared our independence and our natural rights -- saying that the founding documents were just pieces of paper to serve as some kind of an opium for the enslaved masses.

But history tells a different story. Many, many countries practiced slavery, well before and well after we did it here in this country. And no other country, besides the US, has been built upon such a solid, bedrock philosophical principle over which the old justifications of slavery could be held suspect and then eventually disgarded with absolute moral rectitude. We thrust upon the world a new and different idea: individual rights (of life, liberty, property, etc). Take the following verdict, given in 1781 by Chief Justice William Cushing of Massachusetts [italics mine]:

[Slavery] has been a usage--a usage with took its origins from the practice of some of the European nations, and the regulations of the British government respecting the then Colonies, for the benefit of trade and wealth. But whatever sentiments have formerly prevailed in this particular or slid in upon us by the example of others, a different idea has taken place with the people of America, more favorable to the natural rights of mankind, and to that natural, innate desire of Liberty, with which heaven (without regard to color, complexion, or shape of noses ... ) has inspired all the human race. And upon the ground our Constitution of Government, by which the people of this Commonwealth have solemnly bound themselves, sets out with declaring that all men are born free and equal--and that every subject is entitled to liberty and to have it guarded by the laws, as well as life and property--and in short is totally repugnant to the idea of being born slaves. This being the case, I think the idea of slavery is inconsistent with our own conduct and Constitution; and there can be no such thing as perpetual servitude of a rational creature, unless his liberty is forfeited by some criminal conduct or given up by personal consent or contract.

--Source: These United States (book), by Irwin Unger, p. 20-1

That's how cool we are here in the good ole' US of A. That's how cool our founding was. It's called American exceptionalism, and it's something to fight for.

Ed

(Edited by Ed Thompson on 11/04, 6:12pm)

Post 2

Sunday, November 4, 2012 - 8:54pm

Ed,

Those who fear slavery will, sometimes, walk back into it in the attempt to escape it.

Take for example the current view of the Founding Fathers as being slaveholders. Some were indeed slaveholders, others weren't.

Progressives like to use this trick to scare people away from the Constitution (and its authors). They say "Those people, who founded this country, were slave masters, abandon them (and their ideas) and come with us, we'll see that you get everything you need for a happy life".

And, thus, begins the descent into slavery.

Post 3

Sunday, November 4, 2012 - 9:22pm

Kyle,

It's definitely a Saul Alinsky, community-agitator, sadistic tactic of distract-&-enslave. Check out this quote from Heather MacDonald in her book: The Burden of Bad Ideas: How modern intellectuals misshape our society (p. 9):

Militancy became the mark of merit for federal funders, according to Senator Moynihan. In Newark, the director of the local CAP [Community Action Program] urged blacks to arm themselves before the 1967 riots; leaflets calling for a demonstration were run off of the CAP's mimeograph machine. The federal government funneled community action money to Chicago gangs--posing as neighborhood organizers--who then continued to terrorize their neighbors. The Syracuse, New York, CAP published a remedial reading manual that declared: "No ends are accomplished without the use of force. ... Squeamishness about force is the mark not of idealistic, but moonstruck morals." Syracuse CAP employees applied $7 million of their $8 million federal grant to their own salaries.

Nothing new here. Gang creates propaganda telling average people to ignore their rising standard of living and to focus on how they are helpless victims of terrible predators (usually capitalists), gang tells average person to join them and by sheer force to make the capitalists pay dearly for the transgressions and social injustice, force replaces reason as the organizing principle of society, the nation collapses while a few "community organizers" get rich quick without creating any wealth (by being ultimately destructive). This kind of thing has happened in at least half a dozen countries recently.

Ed

Post 4

Friday, November 9, 2012 - 4:08pm

The growth of taxation and government control destroyed the Roman economy and caused the collapse of Rome ...

The tax rate in Denmark is 60%. The tax rate in Mexico is 17%.

I understand the aesthetic sense of the quote, but this is simplistic. It ignores important causal factors. In ancient Rome - as most cultures until ours - enterprise and business were held in low regard. As soon as a Roman merchant became wealthy enough, he often bought land, retired to his estate, and left his business to his slaves and freedmen.

Generally, until the late Empire, taxes were the duty of Roman citizens. Conquered cities were looted and continually plundered for the benefit of the local Roman general. Only when Romans were finally bankrupted, was taxation extended by extending citizenship across the empire. But those taxes were not imposed by tyrants or dictators or kings, but passed as laws by the Senate, who were themselves the first to be affected - after all, they were the richest men.

Why they did this is a deeper problem. I point, again, to conquest, which made it seem like vast wealth could be brought into Rome to make it rich. In fact, conquest was an economic loss.

And this was not an overnight event. (Rome was not destroyed in a day.) For centuries - whole lifetimes upon lifetimes, generations gone by - this played out. Before 212 BCE, the Roman "as" was a bronze bar of one pound, after conquering Sicily, the "as" was reduced to bronze coin of about an ounce. The standard silver coins shrank by 40%. That was after a tremendous victory.

The influx of slaves from Greece after 188 BCE was another example of how apparent wealth - free labor - took a tremendous toll. Again, from 212 to 188 was 24 years. People lived, loved, and died... and still it went on... By 180 AD - 360 years later, as long as from the Massachusetts Pine Tree Shillings of 1652 to our own day - the Emperor was camped on the northern frontier to fight the barbarians. Marcus Aurelius was the last emperor of the Pax Romana, but Pax Romana it still was. Britain continued to be the most prosperous Roman province and would be so for another 200 years.

Even if we look to the so-called "Dark Ages" after the Sack of Rome, we find new villas with new aqueducts filling new baths at Ostia, the port of Rome. The barbarians, in fact, assumed and absorbed Roman culture. The Germanic Lombardi (Longobardi = long beards) kings wrote in Latin - or had Latin written for them...

Barbarians had invaded Rome often. We call it "money" because it was struck at the temple of Juno Moneta, but "moneta" means "warning." The geese in her temple cackled when Gauls crept passed them -- in 390 BCE. Hannibal was a barbarian invader. And barbarians were the least of Rome's problem. The Social Wars, the civil wars, any of all of them could be cited as evidence of Rome's decay and decline.

The influx of new religions is another consideration. Roman virtues -- gravitas, civitas, pietas, dignitas -- were literally tied to re-lig-ion. When Rome's native religion competed against imports, people still practiced those virtues. (Certainly, emperors celebrated them on their coins.) But those virtues no longer held a monopoly in the discourse of the good life. Greek ideas had come in. ... then Persian, then Jewish ... Each new conquest brought a "wealth" of new ideas, along with the "wealth" of looted plunder.

Could anything have made a difference? Speculation is science fiction -- and Asimov's Foundation Trilogy was one such attempt. But the fact is that Rome did not "fall." It was not sudden. It was not cataclysmic.

China offers the same lessons in her 3000-year history: good times; bad times; prosperity; conquest...

For an overview history of trade and commerce in several societies, I recommend The Invention of Enterprise, edited by By David S. Landes, Joel Mokyr, and William J. Baumol, which I reviewed a couple of years ago for The Libertarian Papers.

Post 5

Saturday, November 10, 2012 - 7:50am

MEM,

The tax rate in Denmark is 60%. The tax rate in Mexico is 17%.

I know from the OECD that Total Tax Revenue in Mexico was 17% of GDP in 1985, but by 2006 it was 20.6% of GDP. We have to untangle the issue between rates/revenue. Here's a great quote:

Revenues from the individual income tax averaged only 7.7% of GDP from 1951 to 1963 with tax rates of 20% to 91%, but rose to 8.1% from 1988 to 1990 with tax rates of 15% to 28%. This did not happen because of "closing loopholes."

The 1986 Tax Reform Act (TRA) eliminated some itemized deductions but all the savings were used to increase standard deductions. The result? Total deductions averaged 22.8% of adjusted gross income (AGI) from 1988 to 2010 � exactly the same as they did from 1970 to 1986.

The reason individual tax revenues remained above 8% of GDP as top tax rates fell from 91% to 28% is that high-income taxpayers earn and report more income when marginal tax rates come down. Economists call this the "elasticity of taxable income," and the response is powerful in high tax brackets.

Read More At IBD: http://news.investors.com/ibd-editorials-perspective/110512-632204-romney-tax-cuts-would-expand-economy.htm#ixzz2BplF32te

So, you can talk until you are blue-in-the-face about high taxes in Denmark, but I guarantee you that rich folks there "report" less income. Total tax revenue there is still below half of the GDP. Also, the "black market" in Mexico -- or black/gray markets, if you will -- i.e., the corruption of political officials, makes up for the low taxes there. In other words, government in Denmark does not cost even twice as much as does government in Mexico (even though collective benefits, the "spoils" of a welfare state, in Denmark are higher). The bottom line is what government costs. If government costs more than, say, 5-15% of producible wealth -- then economic collapse, sometimes after the pillage/plunder associated with intentional warfare, is on the horizon.

You just can't have a government that costs more than, say, 15% of producible wealth. It's just not sustainable for our species.

Ed

Further:
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205

https://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

Post 6

Saturday, November 10, 2012 - 12:03pm

Note: The "Good Guys" lost this recent Intelligence Squared Debate because Robert Reich pulled a fast one and utilized the fallacy of equivocation in order to purposefully conflate tax rate with tax revenue.

The issue, as I said before, is the cost of government. That is the thing that has to come down (if we are to survive as a species).

Ed

Post 7

Saturday, November 10, 2012 - 5:42pm

If you go to the link above you will note that the debate was framed like this:

President Obama says we should raise taxes on those making more than $250,000 to reduce the deficit. Others say that the richest 1% already pay more than a quarter of all federal taxes and higher taxes for job creators would slow economic growth. Are the nation's wealthiest not paying their "fair share," ...?

Now, if you stick to that frame of reference, the argument -- in my own words -- is this:

The the top 1% already pay over 25% of all federal taxes. Should they pay even more than that, or not?

Post 8

Wednesday, November 14, 2012 - 9:24am

The the top 1% already pay over 25% of all federal taxes. Should they pay even more than that, or not?

If one is looking at this from the perspective of a proportional income tax and arguing that everyone should pay the same proportion of their income in taxes, then it would depend on what percentage of their income is taxed, which is to say on their tax rate. Of course, we already know that the top 1% pay a progressive tax -- that their tax rate is proportionally higher than the rate paid by the majority of taxpayers -- so the point is moot.

Post 9

Friday, November 16, 2012 - 2:52am

If one is looking at this from the perspective of a proportional income tax and arguing that everyone should pay the same proportion of their income in taxes, then it would depend on what percentage of their income is taxed, which is to say on their tax rate. Of course, we already know that the top 1% pay a progressive tax -- that their tax rate is proportionally higher than the rate paid by the majority of taxpayers -- so the point is moot.

There are studies like here�that show shares�of income�and average tax rates for various income level percentile brackets. See Figures D & F for the latter. D is for income taxes only, and F includes Social Security and Medicare�taxes as well. The progressiveness of taxes is clear. The graphs are averages, and some individuals in a higher income bracket pay a lower tax rate than other individuals in a lower income bracket. This is due to different sorts of income being taxed at different rates. A prime example is Warren Buffett, who pays a low rate because most of his income is capital gains (maximum rate 15% now)�rather than wages (maximum rate 35% now). He also doesn't pay the capital gains tax on appreciated stock donated to a charity. There is also the case of carried interest, whereby hedge fund managers get taxed at capital gains rates for compensation (based on other people's capital gains, not their own) which is in essence wages.

(Edited by Merlin Jetton on 11/16, 5:41am)

Post 10

Saturday, November 17, 2012 - 7:53am

Merlin,

Thanks for the insightful document. Here are my personal notes lifted just from the visuals presented in that document:

The bottom 80% paid 35% of all income tax in 1981, while the top 0.1% paid 6% of all income tax. By 2004, after implementation of the Bush Tax Cuts, the bottom 80% paid just 20% of all income tax, while the top 0.1% ended up paying 17% of all income tax.

In 1979, the top 0.1% had an average tax rate of 32%, while the bottom 80% had an average tax rate ranging from 1-12% (depending on quintile) -- the median of which would be 6.5%, less than one-fourth of the rates paid by the top 0 .1%. In 2004, the top 0.1% had an average tax rate of 22.5% (the rich were finding ways to mitigate loss, which is an ordinary or "normal" response from them, since they are by definition utility-maximizers), while the bottom 80% paid an average tax rate of 1-8% (depending on quintile) -- also entailing a median that is less than one-fourth (perhaps even less than a fifth now) of the top rates.

In 1996, the top 20% of income earners paid 66.21% of all taxes, while the bottom 80% paid 33.79 (100-66.21). In 2003, during and after implementation of the Bush Tax Cuts, the top 20% paid 68.03% -- they paid a greater share of all taxes DURING and AFTER the implementation of the Bush Tax Cuts -- while the bottom 80% paid 31.97% of all taxes (100-68.03).

The interesting point is that even the Bush Tax Cuts did not "favor the rich" but, instead, increased their share of taxes (while decreasing the share paid by those with lower income). This calls into question all the redistribution-rhetoric from our supreme leader.

Ed

Post 11

Saturday, November 17, 2012 - 9:16am

Here is some more recent data on income tax shares and average income tax rates from the Tax Foundation.

This calls into question all the redistribution-rhetoric from our supreme leader.

What do you expect from a charlatan/demagogue with initials BO? The Bush tax cuts did lower tax rates for the wealthy, but also for the much less wealthy that BO ignores.

(Edited by Merlin Jetton on 11/17, 9:19am)

Post 12

Saturday, November 17, 2012 - 10:51am

Thanks again, Merlin.

And here are my personal notes taken from a visual inspection of this new link you provided:

In 1980, the share of all federal income tax paid by the bottom 50% was 7.05%, while the share of all federal income tax paid by the top 1% was 19.05% -- over twice the share covered by the bottom 50%. In 2009, the share of all federal income tax paid by the bottom 50% was 2.25%, while the share of all federal income tax paid by the top 1% was 17.11% -- over 7 times the share paid for by the bottom 50%.

The average tax rate of the bottom 50% in 1980 was 6.10%, while the average tax rate of the top 1% was 34.47% -- over 5 times as great of a proportion of their income as the bottom 50% paid. The average tax rate of the bottom 50% in 2009 was 1.85%, while the average tax rate of the top 1% was 24.01% -- over 12 times as great of a proportion of their income as the bottom 50% paid.

Oh, my God, do the rich ever pay "enough" in taxes (already)! The proportion of their income taken for taxes is over 12 times larger than the proportion of income taken from the bottom 50%! Holy crap, is that ever a progressive tax!

Talk about already paying your "fair share"!

:-)

I mean, you'd have to live in some kind of an upside-down world to look at these rates and proportions and to come away thinking that the rich don't pay their "fair share."

Ed

(Edited by Ed Thompson on 11/17, 10:53am)

Post 13

Saturday, November 17, 2012 - 11:19am

The tax brackets shown here show that the Bush tax cuts didn't lower rates only for the wealthy:

year	2001		year	2006
		BRACKETS
income over	rate		income over	rate
0	0.15		0	0.1
27050	0.275		7550	0.15
65550	0.305		30650	0.25
136750	0.355		74200	0.28
297350	0.391		154800	0.33
			336550	0.35

The calculator on the same page gives the following results (ratios by me):

		RESULTS
single inc	tax%		single inc	tax%	ratio
30000	16.23%		30000	13.74%	84.66%
1000000	36.81%		1000000	33.00%	89.65%

married filing jointly			married filing jointly
30000	15.00%		30000	12.48%	83.20%
1000000	36.30%		1000000	32.33%	89.06%

So the Bush tax cuts reduced taxes for lower income folks more than higher income folks.

Post 14

Saturday, November 17, 2012 - 11:21am

Consider this too.
Let's say hypothetically that nothing changes when ObAmarx's tax increases are put in place(although it will, the economy will plummet even more). So, employment stays the same,and no one uses creative accounting and pay everything Obama wants..the net increase in taxation will at best be about 82 billion.. 7-8% of the yearly deficit of 1.1 trillion/year being racked up.

Only 2ways to kill the deficit.
1) reduce government spending
2) grow the economy
Unfortunately with the left every single move that could be made to grow the economy is blocked every single time.
and unfortunately option one is plainly off the table with the dems.

So basically your other options are let the country die orrrr repair to the constitution and remove the government, and reset it as is your right when the government becomes despotic and oppressive to the people it has been entrusted to protect. Push the reset button..
Restore your right to life, liberty and the pursuit of happiness.

Post 15

Saturday, November 17, 2012 - 12:54pm

It just hit me that the average tax rate of the bottom 50% is a tax rate of less than 2% (1.85%). How large is this group of people, of people making the average wage plus all people making less than the average wage? The intuitive answer is that it is half the population, which would mean that half of the population of this country pays less than 2%.

But is that correct?

Ed

Post 16

Saturday, November 17, 2012 - 1:50pm

It just hit me that the average tax rate of the bottom 50% is a tax rate of less than 2% (1.85%). How large is this group of people, of people making the average wage plus all people making less than the average wage? The intuitive answer is that it is half the population, which would mean that half of the population of this country pays less than 2%.

But is that correct?

Ed

It is exactly 50% of tax returns. The Tax Foundation link (post 11) says there were 68,991,000 returns in 2009 in each of the top and bottom 50%. That's more than 138 million people because many of those returns were married filing jointly. Clearly more than half the population pays less than 2% (income tax) because many pay zero.

Post 17

Sunday, November 18, 2012 - 10:00am

So the top 1%, on average, pay a proportion of their income that is 12 times the share of their own wealth as is the share taken from 79 million tax returns (~100 million individuals), and we still get this nonsense from N. Pelosi:

In an interview on �This Week,� House Democratic Leader Nancy Pelosi gave ABC�s Martha Raddatz a firm �no� when asked if a deal to avert the so-called �fiscal cliff� could exclude tax rate hikes on the wealthy. Pelosi, D-Calif., said that simply closing loopholes and capping tax deductions for the wealthy would not suffice.

�Well, no, I mean, the president made it very clear in his campaign that there is not enough � there are not enough resources. What you just described is a formula and a blueprint for hampering our future. You cannot go forward � you have to cut some investments. If you cut too many, you�re hampering growth, you�re hampering education, our investments for the future,� Pelosi said. � If it�s going to bring in revenue, the president has been very clear that the higher income people have to pay their fair share.�

http://abcnews.go.com/blogs/politics/2012/11/nancy-pelosi-no-fiscal-cliff-deal-without-tax-rate-hike-for-wealthy/

Recap:
A 12-fold increase in the share of your income is not enough for Pelosi, who wants the rich to pay more than 12 times a larger share of their income than 100 million people pay. What a morally-wrong stance that is! If you ask me, that expensive plastic surgery has gone to her head.

:-)

Ed

Post 18

Sunday, November 18, 2012 - 10:30am

Returning back to the Intelligence Squared debate linked to in post 6 above -- Robert Reich & Mark Zandy versus Art Laffer & Glenn Hubbard -- here is a quote from the transcript:

Consider, also, that that 1 percent pays more than a third, as of 2009, pays more than a third of all of the federal income tax that comes in to the federal government. Is that too much? Is that too little? Well, let's make a debate of it.

The framed question is that the top 1% already pays about 40% of all federal income, should they pay more than 40%?

Now, you may ask, how does this happen that this relatively small group of guys pays almost half of a "bill" dispersed among ~140 million "customers"? It's either because they make 40% of all income, or it's because they "contribute" a greater share of their income toward taxes. Now, note how, either way it turns out -- whether they earn 40% of all income, or pay a larger share of their income -- there is no justified moral imperative to raise their rates.

So what would morally justify a rate increase? What kind of thing must come out in this debate in order for the side arguing against the motion that "The Rich are Taxed Enough" to win? They'd have to show that the top 1% earns more than 40% of all income, because then the group in the top 1% could be seen as somehow being, at least in part, "Free Riders."

More later ...

Ed

Post 19

Sunday, November 18, 2012 - 2:01pm