He Gets a Little Crazy

Our riveting dialog continues. Surprisingly, my deft analysis hasn't yet converted him. He has deep faith in trickle-down economics. Is it better to worship Reagan or God?

Jeremy,

Thanks for responding. I agree that we have income redistribution right now, and some level of income redistribution is required for this country to operate. But a promise to take money from 5% of the people and give it to 95% of the people is pandering to the greed and entitlement mentality of the masses. (BTW, its also a lie. Some independent reporting agency says that Obama's plan will raise taxes on the top 19% of wage earners.)

I agree that we as a country need to provide a safety net that provides the basic necessities - which are food, shelter, and medical care - to poor people. That exists today. But if Obama wanted to help the very poor, his proposal would be to increase taxes on 95% of the people so that he could give the money to the poorest 5%! I don't agree at all that we need to steal from the rich to redistribute money to the middle class; I don't think my money should be confiscated by the government so that the plumber who charges me $75 per hour can get free healthcare. Obama's tax proposal is essentially buying votes from the masses by promising to confiscate the money from the rich. Frankly, I find it disgusting. His proposal to tax US businesses is also stupid - this is a global economy, the businesses and jobs will just move overseas - or our businesses will find it impossible to compete with businesses from overseas (See: US Automobile Business) This is another message meant to appeal to the gullible masses, it is not intellectually honest at all.

I totally disagree with your premise that the rich get rich by oppressing or standing upon the shoulders of the poor. I am well off because I have provided a service to my employer that helps my employer make money. Basically, I make much more money for my employer than my employer pays me. I have never walked over a poor person to get my money, nor does my money depend upon lower class people to suffer. I know a lot of rich people, and I don't know of anyone who has gotten rich by oppressing the poor. People get rich by using their talents and efforts to provide a service that someone else values enough to pay them well.

You wrote: "There certainly isn't anywhere near equal opportunity for all in this country, when children don't have access to health care or legitimate education and many families can't afford to send their children to college."

All children and all PEOPLE, even illegal immigrants have access to healthcare. Hospital emergency rooms are not allowed to turn away people who are in need of treatment. Every child in this country is provided with 13 years of free education. Don't tell me that the inner-city public education isn't "legitimate" - many people come out of these schools very well educated because they WORKED at school rather than acting cool. I totally disagree with your assertion that everyone is entitled to a college education. However, you know from experience that a child who performs well in his 13 years of free education also gets a free college education. You EARNED your scholarship, you were not ENTITLED to it.

When you graduate from Wash U, you will likely become wealthy yourself. You will have EARNED your wealth through your talents, efforts, and proper decision making. But what if that dreadful decision that you made a while back had resulted in your scholarship being revoked, jail time, depression, drug addiction, and a life of poverty? Should the top 5% of earners be forced to support you just because you made a stupid decision?

Doesn't the success of Obama himself refute the very concept that the poor or the minorities do not have sufficient opportunities in America?

Mike

Poor black man gonna be President? Guess that's enough for the poor and minorities combined! Welfare? Reparations? Fuck that, we're letting a Po' black man be president.

I digress. Here's my response:

Hey Mike,

First, I wanted to clarify what I meant by the rich being supported by the poor. I am not talking about anything direct. Of course you haven't directly stood upon the shoulders of the poor, that's not what I'm suggesting. I'm saying that capitalism, as a system, requires there to be different income classes. If everyone were earning what you earn, that would be communism. In order for a capitalist system to function, there is a pyramid distribution of wealth. For every executive earning 200K, there have to be managers below him earning 100K, sales people earning 50K, and janitors earning 30K. Do you see what I am getting at? This system in which a business exists that you can give services to requires capitalism, which requires there to be a great deal of low-income wage earners. So, you rely on capitalism, and thus rely on low-income wage earners. I'm not saying you rely on the poor to be oppressed or anything, I'm just saying, you can't be in the top 5% of wage earners unless there's 95% below you.

I very much appreciate your sentiments about not wanting your money redistributed to a plumber who is already well off and charging you $75. However, everyone in this country does not have the access to health care that they deserve. People CAN show up at emergency rooms and get helped if their leg breaks or they're having a heart attack. But, what about surgeries and treatment for cancer? Medicine and antibiotics for people with long-term illnesses? Long-term treatment for people with chronic illnesses? Preventative care? Many of these needs go unaddressed by the current health care system. To assert that a child has proper access to healthcare because they won't get kicked out of the emergency room if they're bleeding to death is superficial. Proper access to healthcare involves much more than this. Further, after a number of days, hospitals can and do kick people out who don't have insurance. We have programs in place to provide medical care, shelter, and food, but they are largely mismanaged, corrupt, underfunded, or plagued by other problems. Our social system needs drastic reform.

From what I have read about Obama's tax proposals, analysts suggest that his taxes on businesses will not be enough to have any significant productivity effect. Further, recent studies have been released that show that through tax breaks, loopholes, and globalization, almost all multinational corporations avoid paying alot of US taxes already. This is from the nonpartisan Tax Policy Center, about McCain's tax proposals. It shows that the drastic costs of his tax cuts essentially outweigh the advantages of lower tax rates.

The consequences of Senator McCain's proposals for economic efficiency and the distribution of economic burdens depend critically on how the measures are financed. To the extent that individual and corporate marginal tax rate reductions are deficit financed (that is, the government simply borrows more), the positive effects of lower tax rates will be offset by the costs of increased government debt. More government debt eventually translates into higher interest rates, which discourage business investment and consumers’ demand for homes and such durable goods as automobiles, or into increased debt owed to foreigners, which mortgages the nation’s long-term economic future. And if swelling deficits are closed by future tax increases rather than spending cuts, we impose much greater economic costs of taxation on our children and grandchildren than they would face if we do not enact tax cuts today.

If growing deficits eventually require draconian spending cuts—a stated goal of those who adhere to the “starve the beast” theory of government—then vulnerable populations may lack essential services; critical infrastructure investments for roads, bridges, and dams may be deferred; and the national defense may suffer.

The expanded version of Senator McCain’s plan would magnify the advantages and
disadvantages of the basic proposal. Expanding the scope of expensing would move the tax system in the direction of a tax on consumption, rather than income. The biggest drawback of this version of the proposal is that it would add enormously to the public debt. By 2018, tax revenues would be 16.3 percent of GDP, a level not seen since the early 1950s, before enactment of Medicaid, Medicare, or the national highway system. It seems clear that the promises Senator McCain makes (or implies) in his speeches could not be sustained without a radical and unprecedented downsizing of government.

And, this is a general comparison of their two plans. By the way, the full analysis does suggest taxes will only be raised on around 5% of earners. I think where you're drawing your 19% from is that when they do a quintile study, the top quintile (20%) see after-tax income go down slightly. However, taxes decrease for 15% of those people, but they are offset by an increase on the 5%.

If enacted, the Obama and McCain tax plans would have radically different effects on the distribution of tax burdens in the United States. The Obama tax plan would make the tax system significantly more progressive by providing large tax breaks to those at the bottom of the income scale and raising taxes significantly on upper-income earners. The McCain tax plan would make the tax system more regressive, even compared with a system in which the 2001–06 tax cuts are made permanent. It would do so by providing relatively little tax relief to those at the bottom of the income scale while providing huge tax cuts to households at the very top of the income distribution.

Senator McCain has proposed substantial tax cuts, offset only very partially by proposals to broaden the tax base. Some of these tax cuts would have positive economic benefits, but adverse effects of the resulting increased deficits may make the net effect of the plan economically harmful.


Further, since 2001, inequality in distribution of income after-tax has grown faster than inequality of income distribution pretax. This means that tax policy since 2001 has been regressive, through taxes, the inequality of income is exacerbated by taxes that are disproportionately preferential to high income earners. Why is it better to choose McCain, whose tax cuts disproportionately cut rates for those at the top? You complain about Obama's tax policies being unfair because they burden the top 5%. Why, instead, is burdening the bottom 80 or 90% with no tax relief while providing huge cuts to households at the top a better policy? Also, it has been said that Obama's closing of the corporate tax loopholes will actually increase productivity and efficiency, both in how firms invest their money, and in spending less resources trying to avoid tax liability.

Okay, now about education. An article on CNN.com and Foxnews.com recently indicated that in America's biggest cities, the highschool graduation rate was below 50% Many people do not come out of inner-city schools very well educated. Very few people from inner city schools make it into college. An anecdote about a hard-working student persevering through an inner-city school and going to college is a story of survival, not proof of the legitimacy of his K-12 education. Many inner-city schools are plagued by budgetary issues, violence, and a lack of necessary supplies and qualified teachers. These are real problems concerning real schools, largely ones in big-cities. These problems need to be addressed with something besides Bush's unfunded mandate: No Child Left Behind. Children who must attend these second rate public schools are not receiving a proper education. I have volunteered, here in Saint Louis, in some of these schools. They are in terrible shape, and they are not a constructive place for children to learn. Just because the public schools in Leawood and Sioux Falls are safe, clean, and well-funded, does not mean every school is. You are right, every student isn't entitled to a college education. However, I think that if a person works hard in high school, scores well and gets a good GPA, and is motivated to go to college, there should be a system in place allowing him/her to do that. This includes private scholarships, continued funding for Pell grants, and continued funding for the Stafford and Perkins subsidized loan programs.

It seems that you are suggesting that if I had gotten my scholarship revoked, I would have been a homeless bum addict all my life. I find that to be ridiculous. I've never had an addiction, and I don't think that my terrible mistake should've cast me to a life of poverty. Isn't our system supposed to be about rehabilitating people into productive citizens? First, I think that marijuana should be decriminalized. Many recent scientific reports have indicated that it is less harmful than alcohol or tobacco. This is not saying that I didn't make a stupid decision. I chose to take a huge risk, knowing what the laws were. This was incredibly stupid, and I risked my education. However, if hundreds of thousands of non-violent people weren't being thrown in jail for marijuana possession, and were instead given fines, we wouldn't be spending $18,000 per person per year to keep them in jail. I, personally, think that it is an incredible waste of money, and an incredible waste of someone who could potentially be productive in society. If I had been thrown into jail because of my stupid decision, I would be on your tax bill because of LAWS, not just personal irresponsibility. Take someone who works, pays taxes, and smokes marijuana at night. Sure, that may not be a healthy lifestyle, but they are not leeching off the system. However, if they get caught and thrown into jail because of the law, now you have to support them.

In general, I think you were bringing up my bad decision to highlight whether or not irresponsible people should be supported on your money. This is why social programs, especially unemployment and welfare, need to emphasize reintegration into the work force. They need to have specific time limits, and force people to retrain for new jobs. That way, no one lives off welfare forever, and instead becomes a productive, tax-paying member of society. This, however, has little to do with either Obama or McCain, as neither of them have laid out much detail as to social program reform. I think that unemployment should be in place, though. Many hard-working people lose their jobs, especially when the economy is as it is now. Unemployment allows them to survive and support a family while they look for another job or retrain for another career.

Also, I do not think that Obama being successful says there is equal opportunity for all. He is one person, who came from a middle-class family. Anecdotal evidence is never reliable. Even if Obama came from a very poor family, and went to an inner-city school, how many of his friends would have died on the streets from gang-violence? How many would've endured a violent, unstable childhood and found themselves working for 10 dollars an hour for the rest of their lives? The story of one person making it doesn't speak to equal opportunity.


-Jeremy