896 thoughts on “Presidential election 2008: candidates, campaigns, issues”

  1. Jane- I didn’t mean to infer that your comments were “mean spirited”. I just detect an attitude that the rich are somehow a scourge on society and they need to be separated from their riches for justice to prevail. I pick up this same attitude from some of my relatives who live in a depressed part of the country. Their attitude comes across this way- if someone is “rich”, then they must have gotten that way by some illegal or greed-motivated means. I like to differentiate between “equality” and “sameness.” I believe there can be equality within a society where there are different levels of wealth. In my opinion, the most just tax would be a flat tax, where everyone contributes the same percentage of their income. As we are set up with the progressive tax system we have now, a very small portion of the society carries a very large portion of the expense of government. This does provide a motivation for this portion to try to buy influence in government through lobbying, which they can afford, to provide shelters from taxes wherever they can. This is something the lower income portion of society cannot accomplish.

  2. John: The real conservatives are not in the GOP. The real conservatives have endorsed Obama. The GOP gives lip-service to being conservative, but have proven themselves out of control. Your best bet is the Democrats.

    Peter, you may think that the Bush tax cuts led to high tax revenues, but there is no cause-effect correlation. However, there is a direct correlation between the Bush spending agenda and the GOP–if you want lower spending, don’t vote for the same group that gave us 8 years of wasteful spending.

    The proof is in the pudding–the Republicans stink. Vote for change.

  3. Jane- Thanks for the betting suggestion, but I’m sorry, I don’t gamble like that. If I thought there was any hope in the Democrats, I would have said so before. Like the old saying, when the chips are down, watch your step.

    As far as wasteful spending, I think I am with Peter here in suggesting that most, but not all, government spending is wasteful. If it doesn’t relate to infrastructure, defense, or law enforcement, I question its importance.

  4. John, would you really limit spending to infrastructure, law enforcement, and defense? If so, wouldn’t you like your defense dollars actually defending your country, as opposed to meddling in area conveniently on top of lots of oil? Does education qualify as a reasonable expense to you (i’m not talking about wasteful education spending)?

  5. John: You just cannot imagine how fond I am of rich people. They are absolutely my best clients. I in no way believe that they have come by their riches unscrupulously. (Well, except for maybe Tom Petters–and that is only alleged, and he is not a client.) In no way do I think they are a scourge on society. I would like it much better if everyone were rich. You really cannot have too many rich people.

    But that is not how it works–today in our society, it is very difficult for the middle class or poor to improve their level of income. Affording a decent education is difficult if not imporssible for many young people. Our society is becoming ever-more stratified with the rich getting richer and the middle class sliding off into poor. This is not good for anyone–especially the rich, as they will not have a capable work force to create wealth. We know from history that it is especially dangerous to a country to have such a wide gap between rich and poor. We need to narrow that gap and make sure there are opportunities for those that are willing to work hard and seek them. It is impossible to have an impact without government intervention. So we have a conundrum.

    I just think that the Republicans have had their chance and mucked it all up pretty good–time to try something different.

  6. Nick- I include public education as part of the infrastructure. I realize I did not make that clear in my previous statement. In my simplistic approach, the government should be taking responsibility for those services that cannot be feasibly handled on the individual level, such as building and maintaining roads, utilities, etc. Education can be and is successfully done on the individual level, but I’m not sure this is possible for every family to do this. That is why I lump it into this catagory. As far as spending our taxes wisely, though, that is another area of opinion open for much discussion. I think this is what necessitates election of public officials.

  7. Real conservatives vote for Obama? Not even close.

    I agree the Republicans stink because they left their base in order to appeal to the middle and they will pay the price in this election.
    I am all for change, but Obama doesn’t offer change, he offers old 70’s idea repackaged. Sorry, but I have seen the same ideas 30 years ago in Germany when the SPD came in to power. You wanna know what the US will look like thirty years from now? Take a look at Germany today.

    I still don’t know why you continue to call me a right wing radical???I am far from that.

  8. Jane,

    Yes I am against progressive taxes because they are unfair. What makes us believe that we can “punish” people for being high achievers. By taking more of their hard earn money? We wouldn’t apply the same rules in an educational setting, there we award high achievers.

  9. Jane – your position in 805 is very hard to support historically, as government has gotten bigger, the gap between the rich and poor has also gotten bigger. Business pays a fortune to government in special interest money (like Obama’s 125,000 from Fannie)to insure that their market is tilted unfairly in their favor. Smaller government and a more decentralized industrial space evens the playing field and favors innovation and marketing over what is in effect sophisticated public bribery toward monopolistic purposes.

  10. Jane- Concerning the shrinking middle class, there is a very good article on this site- http://www.time.com/time/magazine/article/0,9171,962753,00.html. This is not just a new phenominum.
    there has been an awareness of this for close to 30 years. This spans both Republican and Democratic admimnistrations. If your asertion , “…It is impossible to have an impact without government intervention…” were actually correct, I think we would have seen some change in this by now. I just don’t believe this is something that can be legislated. Unless there is a fundamental change of heart in the American public as a whole, I do not believe there will be any change in this shift. This change can only come about by individual changes in what we embrace as our moral base, IMHO. I know many here do not agree with that, but when I look at history, in societies where there has been true revival, there has been economic change accompanying it. Look at the turn around in Scotland after William Wallace’s leading. Check out England and Wales after the great revivals there. Even look at this country after the revivals of the thirties and forties. We had a couple decades of economic prosperity after that. It has been since the rebellion of the 70’s against moral teachings that there has been a moral slide that has affected the economic slide we are experiencing today. That is why I do not have any hope in any political party that is not open to the things of God. I’m not looking for perfection. I’m looking for honesty in a person’s recognition of their need for God.

  11. John G, Spot on again with the commentary!

    Everyone should read Mises and understand Austrian economics if they want to understand macroeconomics.

    My idea of “FAIR” tax is the same as when everyone at the office chips in on a gift 10 people divde the cost 10 ways!

    So, Federal Gov expeditures=$3 trillion. US population=300Million (men ,women, children)
    3 Tril/300Mil = $10,000/person!

    Has your family of 4 paid their “FAIR” share of $40,000 this year to the FED IRS?

    By the way the 16th amendment(Income Tax) to the Constitution was Ratified (although it could be disputed since 3/4 of the States did not officially ratify it) in 1913, the same year that the Federal Reserve(US Central PRIVATE Bank) was created. Coincidence, Maybe! This was also the beginning of Monetary Inflation, the hidden TAX!

    Also, it’s disputed that Income is NOT the same as Wages!

  12. Peter: Taxes are not punishment.

    David Henson–Yes Yes Yes–the most important reform is probably in government access. We should not be electing officials so that they can be bribed by big business. I agree wholeheartedly. My historical ranting was that we may be looking at a New Deal–hopefully some of those working at the WPA will be lobbyists who have lost their jobs.

  13. Jane,

    You said, “My historical ranting was that we may be looking at a New Deal–hopefully some of those working at the WPA will be lobbyists who have lost their jobs.”

    I sure hope not. What the new WPA will need will be Wealth builders and creators, not more government parasites!

  14. John G: Regarding the party that promises smaller government, I don’t see either party doing so … ever. One thing I appreciate from author Ayn Rand is her cynicism about federal government, that their design is for job security and hiring others to do their work. In that formula, government only gets larger. I am not as cynical, but I don’t see either party having the motivation for reduction beyond the promises made to voters.

    Some government growth is well intended even if it’s not necessary. For example, here in Northfield we have a new rental ordinance that comes with an appeals board for homeowners who want to exceed the 20% density rule. In a city our size, we won’t need to hire staff to manage the appeals board. In larger jurisdictions, adding new laws may compel the city to hire staff to manage the consequences.

    I recall several years ago, San Francisco purged 50 laws from its books that were no longer relevant. It’s a rare example of government working toward simplicity. I have heard the rhetoric, but I have not seen evidence that either candidate will follow San Francisco’s lead.

    Incidentally, I recall that in Beverly Hills, CA, it’s illegal to have more than three tennis balls on the court at the same time. In Charlotte, NC, it’s illegal for a mortician to use profanity in the presence of a corpse. I am constantly amused by some of the laws out there… really out there.

  15. Yes, Mike, I was kidding–but I really hope we can come up with a great government program to remove lobbyists from the DC scene. If people want to testify before congress, make them be real people who work in an industry or are speaking on their own behalf–not hired guns. (Lobbying used to work–it helped educate lawmakers–now it is weilding undue influence for corporations.)

    Jerold–I am all for the no swearing–no excuses if you are keeping company with the dead–but it should extend to live people, too. They went too far with the tennis balls, though.

  16. Jerold- I know there are strange laws on the books, but I really don’t see these as being the problem. Your example of the rental density enforcement is better. What we are facing is too many government employees. They are just doing their job, but there work does not produce any increase in real wealth. That is what needs to be changed in our government. Just observing the last couple administrations, I would have to agree with you as far as any hope in either party decreasing the size of the government. I will still cast my lot in with the GOP just because their history is to try to decrease government size. I don’t see that pattern in the Democratic party.

  17. John G: The strange laws on the books were in my “incidentally” paragraph, which is incidental to the subject of discussion. I wish that I kept the news article about San Francisco’s purge. They had some dooseys.

    If neither party actually reduces government size, you still favor the Republicans on this issue? It seems to me that if the Democrats don’t promise anything, but the Republicans promise smaller government and don’t deliver, I would rather not vote for the party who’s lying to me.

  18. Well, Jerold, it appears to me the choice is between a party that has actually reduced the size of government in the past and a party that has always increased the size of government in the past, and seems to be heading down that road yet. It doesn’t seem like rocket science to me. I just heard a comment by Groucho Marx the other day, and I think it went something like this: A politician is one who looks for problems, finds them everywhere, proposes the wrong solutions to them, and gets the wrong results. If I can find it somewhere, I will try to link it. I thought it was pretty funny and appropose.

  19. Jane,

    Maybe taxes aren’t punishment in themselves, but to take more money from people that happen to be successful doesn’t sit right with me.
    I guess I don’t agree with Karl Marx on “From each according to his ability, to each according to his need (or needs) “

  20. Peter: Obviously you prefer a flat-tax that would favor the wealthy. The progressive tax system was working great until the Republicans tinkered with it–the United States has used a progressive system since the inception of income taxation.

    People who do not make enough income do not pay ANY tax. People who make a moderate amount of income pay a moderate tax, and people who make a whole bunch of lots of money pay –less (as a percentage of income) tax–this is still a lot of tax, but I really don’t feel sorry for them.

    I think we should consider suspension of the beneficial capital gains rate tax if your income exceeds, say a million.

    Currently, our tax system taxes many high income individuals at a lower rate than what the middle-class taxpayer is paying. That is not fair. They should at least pay an equal percentage.

  21. Not sure if I like the flat tax I would be more in favor of a consumption based tax.

    Jane,
    On this issue we have to agree to disagree.

  22. Jane: I don’t see how a flat tax is unfair. A flat tax can be equal but not the same. As was mentioned above, equal and the same are 2 different things. Saying everyone needs to pay a fixed amount is unrealistic (and you didn’t say that) but saying that everyone pays 25% is equal, a flat tax, and fair.

    Furthermore, folks that earn little, or nothing actually get paid by the government through EIC and other tax credits. You should never get back more than you paid in at return time, it just baffles my mind.

    I’ve had about enough with both the GOP and the DFL, I’ll be voting the Constitution party this year.

  23. Peter, or anyone else, I was wondering if you took a look at that tax calculator of McCain and Obama’s tax plans I posted a while back (electiontaxes.com) would really love to hear your opinion about the differences at various income levels and household situations.

  24. Concerning the “fairness” of flat taxes, head taxes, sales taxes, etc., and the McCain campaign’s efforts to convert the coming election to a referendum on socialism … here are quotes from two (by McCain campaign’s standards) dangerously seditious redistributionists.

    Try guessing the authors before peeking.

    The first one’s a bit dated by its language:

    1. The necessaries of life occasion the great expense of the poor. . . . The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. . . . It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.

    The second sounds more modern:

    YOUNG WOMAN: Are we getting closer and closer to, like, socialism and stuff?. . .

    MYSTERY MAN: Here’s what I really believe: That when you reach a certain level of comfort, there’s nothing wrong with paying somewhat more.

    Dangerous socialists, no?

    Well, not exactly … the answers are (i) Adam Smith; (ii) John McCain.

    Snoop around on http://www.newyorker.com for more in this vein.

  25. Paul (Z.), why do you bring up such ancient history? It’s quite clear that John McCain is simply not the same man who ran against (as opposed to away from) Bush 8 years ago….

  26. Nick- I went to your taxes site and ran through the calculator. Under Obama’s plan, I would pay more taxes. This is no surprise to me, and it just confirms my suspicions. There was not a significant increase in the amount, but it was more. Sometimes, these little increases are a little like getting nibbled to death by ducks. Thanks for the link.

  27. Still no comments from Peter (or Guy?) on Bob Barr. No thoughts?

    Barry: Regarding the rich paying a lower percent in taxes than the middle class, this relates to state taxes in MN, based on MN tax incidence studies. The federal situation is a different picture, and I should have specified MN state taxes.

    At the federal level, do your figures include social security withholding — which is still treated like a slush-fund? While Republicans have been pushing (and getting) tax breaks for years, social security withholding has been going up for the middle class, and the rich have been benefitting from tax breaks, without having increases in their SS withholding. Depending on which taxes you include (the MN studies include real estate, sales tax, etc.), you may get a different picture.

  28. Paul- You do bring up an interesting point on SS tax liability. I think that the max contribution is around $62,000. If the tax was collected equally across the income spectrum, then those making $2 million+ could be contributing much more into the system. Perhaps there is another support for a flat tax.

  29. “Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters.”
    -Benjamin Franklin

    which “Master” are we going to pick next week?

  30. Pardon a newcomer to the discussion, but here are my two cents – take them at face value.

    Jerold: I love the Ayn Rand reference – she is no doubt rolling in her grave now. (insert mortician vulgarity joke here) We can apply so much of what she predicted to our current financial crisis, it is quite eerie. Her philosophy of Objectivism is what we badly need now to curtail the downward spiral towards a socialist state.

    John G: I agree completely that the scope-of-government debate favors the Republicans. You’re right, there is no basis for an argument that either party would reduce government power, but Obama’s goals of socialized health-care, education, and banking certainly promise an drastic increase in the size of the federal government.

    Jane: Saying that a “flat-tax would favor the wealthy” is inherently contradictory. A flat-tax by definition favors no-one by taxing everyone’s income at the same rate. I fail to follow the liberal logic that taking something that belongs to me (my wages) and giving it to someone else – regardless of the circumstances – can be justified. Obama’s proposal of spreading the wealth and his tax policy that rich should pay more taxes “because they can afford it” doesn’t just border on communism – it is straight from Marx’s manifesto. I find it comical that the McCain campaign has been questioned by the media for applying the term socialism to Obama’s views. Anyone with a dictionary can clearly make that assessment for themselves.

    Paul: The “Father of Capitalism” would be disappointed with the misrepresentation of his quotation. Smith (taken from book 5, Ch 2 – p.907 in my version) is referring to property taxes and NOT income taxes. Directly preceding the third part of your quote (your ellipses) states “A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be any thing very unreasonable.” I also agree with Barry that the McCain quote is outdated and quite possibly out of context.

    Sincerely,
    A Staunch Libertarian

  31. drew said:

    Obama’s proposal of spreading the wealth and his tax policy that rich should pay more taxes “because they can afford it” doesn’t just border on communism – it is straight from Marx’s manifesto.

    ———————————————–

    from wikipedia

    For 2008, the Federal tax brackets for a single (unmarried) person are:[1]

    * 10%: from $0 to $8,025
    * 15%: from $8,026 to $32,550
    * 25%: from $32,551 to $78,850
    * 28%: from $78,851 to $164,550
    * 33%: from $164,551 to $357,700
    * 35%: $357,701 and above

    http://en.wikipedia.org/wiki/Tax_bracket

    does that make us a marxist country?

  32. I ran the election taxes calculator with several different incomes (using H of Household and 10 K in mortgage interest), first using my own income
    45,000
    then
    35,000, and in 10,000 increments. This is what I found:
    up til 85,000, things were about $500 lower per year under Obama’s plan. At 85,000, though, they became exactly the same under McCain and Obama’s plan, same at:
    85,000
    85,000
    110,000

    So I finally ran 220,000 to see if I could change anything, and at that point I got:
    taxes under McCain: 58,040
    taxes under Obama 58,616

    Then i entered 220,000 (who are these people!?) and got:
    taxes under McCain: 570,007
    taxes under Obama 71, 975

    I’d be interested to hear the results of others running different variables.

  33. Sorry, I should have swallowed the rest of my coffee before posting that, two errors:
    1. At 85,000, though, they became exactly the same under McCain and Obama’s plan, same at:
    85,000
    *95,000*
    110,000

    and 2)
    So I finally ran *110,000* to see if I could change anything, and at that point I got:
    taxes under McCain: 58,040
    taxes under Obama 58,616

  34. JohnG: Social security withholding in 2008 is “6.2% of your wages up to $102,000,” which means that if you earn 10 million, you only pay SS on the first $102,000 of that, and on none of the rest, while a person earning only (only?) $102K pays 6.2% on 100% of it.

    Anthony: The figures for tax brackets are correct, but there are many creative ways in which the very wealthy shelter their income from taxes. Some of this was revealed in relation to the sub-prime scandal and folks trading derivatives. Instead of claiming the income as income, like the rest of us, many claimed it as capital gains, or in other ways that are taxed at a lower rate. You can also take wealth offshore and shelter even interest elsewhere.

    So income tax brackets only tell one hypothetical story, but not the real story. What the rich actually pay (by way of what deductions or shelters they use) may tell a very different story.

  35. Warren Buffet says he pays less in taxes (as a percent? overall? I don’t recall) than his secretary (executive assistant?) — I forgot to add this to my previous comment.

    http://www.timesonline.co.uk/tol/money/tax/article1996735.ece

    Article title:
    Buffett blasts system that lets him pay less tax than secretary

    “Warren Buffett, the third-richest man in the world, has criticised the US tax system for allowing him to pay a lower rate than his secretary and his cleaner.

    Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (£26 billion), said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

    Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the US branch of Apax Partners, that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.

    The comments are among the most signficant yet in a debate raging on both sides of the Atlantic about growing income inequality and how the super-wealthy are taxed. ” [….]

  36. All: I suppose I also should apologize for jumping into the conversation late.

    Paul: From Libertarian Party site
    “Only one party has consistently stood up for the Constitution and against expansive executive power: the Libertarian Party. Only one party has consistently demanded a quick and full withdrawal from Iraq: the Libertarian Party. Only one party has demanded that all administration officials, legislators, and bureaucrats be held accountable for violating the law or the Constitution: the Libertarian Party. ”

    as opposed to from the Constitution Party website –
    “Baldwin has distinguished himself as the only candidate running who is for secure borders, ending the wars in Iraq and Afghanistan, for overturning Roe v Wade and abolishing the IRS and the Federal Reserve. Baldwin has received an A rating from Gun Owners of America (www.gunownersofamerica.org) and Numbers USA, (www.numbersusa.org the pro-secure borders, anti- illegal immigration group in contrast to McCain and Obama’s F- ratings. ”

    I find that the Constitution Party resonates with me better; and if I’m going to vote 3rd party, I may as well vote my conscience.

    As far as Warren Buffet goes, my belief is that given his vast resources, he is able to ‘hide’ his money by hiring financial lawyers and accountants – which is his right, and (as long as it is legal) is exactly what his 46mil per annum is supposed to do for him. It’s my fondest dream that I get rich enough that I can hire people to hide my income from the government.

    Nick: Ran my numbers under the tax site, I get to pay more under Obama. But I guess that’s what I expect when comparing a liberal to a Marxist.

  37. Anthony,

    This is about principle not amount. Why should somebody pay more taxes just because he makes more money?
    Why pick the $250000 number, which btw has now been lowered by Biden to $150000.

    I think it’s a slippery slope when government decides on who has enough money and who hasn’t.
    This is not the America I know.

    The America I know gives everybody the chance to be the best they can be, without government interference.
    The current gospel according to Obama is nothing more then class warfare a concept tried and failed in the UDSSR and China.

  38. Venting: I am entirely disappointed in Wellstone Action http://www.wellstone.com

    Here’s what http://www.wellstone.org website says about themselves: Wellstone Action is a national center for training and leadership development for the progressive movement.

    I called to find out what the word “progressive” means.

    The guy who answered the phone at Wellstone Action! told me Progressive can mean whatever I want it to mean. I told him the radical right would start to define that negatively unless someone got on the ball, and he said maybe we’re not understanding each other.

    I asked what Wellstone Action was for? He answered something to the tune of: It doesn’t matter what group you’re from, we teach people how to get the results they want.

    I asked if Wellstone’s Action camps could be used to train the radical right? He said yes.

    And so, it is with disappointment I see Wellstone’s legacy being used to elect the radical right, if they want to participate in the camps.

    Apparently Wellstone’s political views aren’t a factor. I feel his name is being incorrectly used.

    Correct me if I’m wrong, and I have misunderstood this whole deal.

    Here’s what I learned from my conversations: Do not use that word in place of “liberal.”

    If you google “what does progressive mean?” you’ll find many people guess but aren’t sure..

  39. Peter asks, “This is about principle not amount. Why should somebody pay more taxes just because he makes more money?”

    Warren Buffett says he pays a lower percent on the millions he makes a year than his secretary, who makes $60,000. Why should she pay a higher percent?

    Another way to put the question: “Why should the person who makes more per hour pay a lower percent in taxes?”

    Or this: “Why should we expect that the person who makes minimum wage, can’t afford health insurance, and needs to go to the food shelf to feed the family, should pay the same amount in (flat? head?) taxes as Warren Buffett (say, if everyone was required to pay a thousand bucks in taxes, whether you’re rich or poor)?

    Why should we expect the secretary who makes $60k and has less disposable income to contribute a larger percent toward the general good of the society than Warren Buffett, who has more disposable income than the secretary has income?

    Because of greed. Because of short-sighted greed that hides behind the name of “conservatism,” but in the end, is not conservative in the usual sense of defending traditional values.

    Unless greed is the new traditional value. (It’s actually the dark side of history–been a tradition all along.)

  40. Paul,

    You call it greed I call it fairness. A lot of the people who are better off did get there by working hard. Many times a lot more then those that chose to hold a minimum wage job for the rest of their lives.

    Why should we punish the person that through his work has given other people a job and support the person who bags groceries for a living?

    A minimum wage job was never designed to be a “living wage” job, and never should be.
    Most of you don’t realize that every time we raise the minimum wage we either reduce the amount of them or pay for them through higher prices. Because companies have to find a way to make up for the increased cost.

    No person should pay a lower or higher tax rate it should be the same tax rate for everybody…period. Anything else is social engineering and redistribution of wealth. Both concepts have failed so far to solve the intended goals of them.
    By your own admission the poor have gotten poorer and the rich have gotten richer. Despite the new deal which so far has cost us $7 Trillion dollars. It seems to me that the program is not working and it’s time to rethink the whole system.

    So I am greedy? When all I want is to feed my family and make a better life for them then i had?
    I chose to work hard and expect that by working hard I get to reap the benefits of my work. Without having somebody reach in to my back pocket and take it out to support those who want to take it easy.

    The great thing about this country is, that you have all the opportunity and freedom you ever want. Unless you are sick or disabled there is absolutely no excuse for anybody not to work or get an education.

  41. Drew,

    In your posting # 831 your wrote:

    Paul: The “Father of Capitalism” would be disappointed with the misrepresentation of his quotation. Smith (taken from book 5, Ch 2 – p.907 in my version) is referring to property taxes and NOT income taxes. Directly preceding the third part of your quote (your ellipses) states “A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be any thing very unreasonable.”

    Indeed, Smith was referring to property taxes. Income taxes weren’t “invented” until a few years after Smith’s death. But Smith’s point about the OK-ness of progressive taxation, whether of income or of other assets, is what (I think) counts in this discussion. Or do you see some reason why one tax should be progressive but not another?

    You continued:

    I also agree with Barry that the McCain quote is outdated and quite possibly out of context.

    Re context … indeed, I didn’t provide any, but the comment seems clear enough. Does it seem ambiguous to you? Re outdatedness … I believe McCain said this only 8 years ago, in the context of another political campaign? What’s the statute of limitations on political/philosophical opinions?

  42. The question of taxation boils down to a simple moral principle. By assuming that one person should be taxed at a different rate than another, we are judging that person inversely based on the merits of their income. We don’t apply this principle to property tax, sales tax, or any other tax, so why income?

    The argument about income tax isn’t really about how much we have to pay the government, it boils down to how much the government allows us to keep.
    I would like to propose that income be taxed at a flat rate of 0%. That is not a typo – zero percent was the income tax rate for 140 years, including during our most prosperous years in the late 1800’s when our government did not serve as a bureaucratic funnel for public works that were then private enterprises. By imposing an income tax, the federal government is asserting a right to the wages we work for, hence positing that we work to serve the government.

    I believe our government is supposed to be “of the people, by the people, and for the people,” not the other way around. We need a drastic shift in public opinion of the role of our federal government before any of the greed, waste, or corruption can be curtailed. If we continue to believe that our government needs to babysit us and ration our resources according to need then we are only going to see this economic crisis worsen.

  43. Paul: I think the distinction between property tax and income tax is important. Smith goes on to say later in that section that “If the [house-rent] tax was very high, the greater part of people would evade it, as much as they could, by contenting themselves with smaller houses, and by turning the greater part of their expence into some other channel.” He is saying that the result of a large proportional difference in tax will cause people to avoid that proportional increase. Apply that logic to income tax and the result will be people spending less of their energy on industrious production. We will see the “Atlas Shrugged” effect, where all the great industrious minds withdraw from productive society as a result of undue government restraints – in this case taxes.

    I concede that McCain may have been referring to progressive taxation with his comment, however I must end with a disclaimer that I am engaging in the wrong debate. We should not be deciding what rate is best to tax an individuals income, but rather whether or not to tax personal income at all.

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