The notion that tax breaks are "gifts"

[Giant Saguaro]

I think this represents a fundamental difference between the left and right. I repeatedly see the Bush tax breaks referred to as "gifts," usually for the wealthy. It's like what the wealthy pay in goes to a collective or a pool of some kind and therefore belongs to everyone. Again, this seems to me to be a very fundamental idea that maybe goes back to Marx, I don't know. I don't see it that way. I think the wealthy get more back because they're entitled to it - they've earned it, so they get more back, they don't pay even more in. Why should they? Is what you work for yours or does it belong to everyone else? I mean after a while where the lines are gets confusing. If someone wants something in your house maybe they can come in just help themselves?

Is what you work for a gift? If so, from whom?

[John Dibble]

As long as the breaks are proportional to the breaks others get(the more you put in, the more you get back) I have no problem with them. When tax breaks occur everyone should get back a certain % of what they put in. It should neither be biased towards the rich no the poor.

[Giant Saguaro]

As long as the breaks are proportional to the breaks others get(the more you put in, the more you get back) I have no problem with them. When tax breaks occur everyone should get back a certain % of what they put in. It should neither be biased towards the rich no the poor.

That's what I'm for - the more you pay in the more you get back. Based on a percentage. Now we just may disagree on the % but that's what I'm for!

[Gabu]

Well, the justification most give is probably that the wealthiest people already have more money than they could ever use and when a tax break comes along they get even more money in the mail while impoverished people get very little.  People that tend towards the left in economic issues think that there should be more equality than that: that impoverished people should get more money than the wealthy because they need it a lot more.

Note however that I'm not advocating this stance.  I'm mostly neutral on this issue because I don't really know.  It is certainly true that the wealthiest people also pay loads more money in taxes than impoverished people do (unless, of course, Bush knows what he's talking about when he says that "most rich people are able to avoid taxes").  And it's certainly true that most of them did earn that money and most likely don't want to involuntarily donate it to charity.

[John Dibble]

Think of it this way - most of the wealthiest individuals do indeed have more money than they can spend. However, the money they don't spend often are used for stocks, investment capital in new ventures, banks, and other such things(Most of Bill Gates assets are in stocks, his worth is in the tens of billions, but I garauntee you he doesn't have that much cash immediately available to him). This will likely make the rich richer, but it will also stimulate economic growth and new jobs to go along with that growth. So, the tax breaks to them will likely go into the above mentioned things, hopefully having the desired effects for all around.

[Gabu]

Think of it this way - most of the wealthiest individuals do indeed have more money than they can spend. However, the money they don't spend often are used for stocks, investment capital in new ventures, banks, and other such things(Most of Bill Gates assets are in stocks, his worth is in the tens of billions, but I garauntee you he doesn't have that much cash immediately available to him). This will likely make the rich richer, but it will also stimulate economic growth and new jobs to go along with that growth. So, the tax breaks to them will likely go into the above mentioned things, hopefully having the desired effects for all around.

Well, yeah.  That basically is the fundamental difference between those on the left and those on the right, economically speaking.  Those on the left feel that it's best to invest in the bottom: for example, poor, working people.  Those on the right feel that it's best to invest in the top: for example, rich CEOs.

I will readily admit that I have not done nearly enough research on the matter to say anything beyond that, however.

[John Dibble]

Think of it this way - most of the wealthiest individuals do indeed have more money than they can spend. However, the money they don't spend often are used for stocks, investment capital in new ventures, banks, and other such things(Most of Bill Gates assets are in stocks, his worth is in the tens of billions, but I garauntee you he doesn't have that much cash immediately available to him). This will likely make the rich richer, but it will also stimulate economic growth and new jobs to go along with that growth. So, the tax breaks to them will likely go into the above mentioned things, hopefully having the desired effects for all around.

Well, yeah.  That basically is the fundamental difference between those on the left and those on the right, economically speaking.  Those on the left feel that it's best to invest in the bottom: for example, poor, working people.  Those on the right feel that it's best to invest in the top: for example, rich CEOs.

I will readily admit that I have not done nearly enough research on the matter to say anything beyond that, however.

Well, I do believe the effect would be limited to be honest. My actual preference is to neither give welfare to the poor or welfare to businesses - let the natural market forces sort things out and you should get the most efficient outcome. Corporate welfare disgusts me because it's still a form of redistribution.

[Nym90]

Think of it this way - most of the wealthiest individuals do indeed have more money than they can spend. However, the money they don't spend often are used for stocks, investment capital in new ventures, banks, and other such things(Most of Bill Gates assets are in stocks, his worth is in the tens of billions, but I garauntee you he doesn't have that much cash immediately available to him). This will likely make the rich richer, but it will also stimulate economic growth and new jobs to go along with that growth. So, the tax breaks to them will likely go into the above mentioned things, hopefully having the desired effects for all around.

Well, yeah.  That basically is the fundamental difference between those on the left and those on the right, economically speaking.  Those on the left feel that it's best to invest in the bottom: for example, poor, working people.  Those on the right feel that it's best to invest in the top: for example, rich CEOs.

I will readily admit that I have not done nearly enough research on the matter to say anything beyond that, however.

Another fundamental difference is that those on the left realize that government does not just take away money in taxes, it provides services that help everyone to earn more money. If there were no public schools, no public roadways, no public police protection, no public military, etc. everyone would make a lot LESS money, because society would be much less productive and less efficient. Thus, this argument that "It's my money, I earned it, I should be able to keep it" is not completely factually accurate. You didn't earn it completely on your own; you had help from other people, and from the services that government provides. Thus,  you have some responsibility to give some of the money back, because you wouldn't have earned as much as you did without government helping you, which wouldn't exist without taxes. Even after paying taxes, the great majority of Americans have more money than they would if there were no government at all. Most people end up getting more back than they put in.

[Nym90]

Think of it this way - most of the wealthiest individuals do indeed have more money than they can spend. However, the money they don't spend often are used for stocks, investment capital in new ventures, banks, and other such things(Most of Bill Gates assets are in stocks, his worth is in the tens of billions, but I garauntee you he doesn't have that much cash immediately available to him). This will likely make the rich richer, but it will also stimulate economic growth and new jobs to go along with that growth. So, the tax breaks to them will likely go into the above mentioned things, hopefully having the desired effects for all around.

Good point; the best thing for the economy is for people to pump their money back into the economy rather than to keep it sitting idle in cash. We want everyone to use their money somehow; what makes the economy poor is when people are afraid to spend or invest, and instead sit on their money because they don't think it would be in their own personal best interest to spend. That's why we need government intervention in the economy, because the government can help level off the economy in these times; when private individuals are too afraid to invest and spend because it won't be in their own best interest to do so, it creates a domino effect making the economy worse, thus making things worse for everyone. Government can step in and spend money to stimulate the economy, realizing it is in society's best interest to have money spent to get things going again, even if it isn't in any one person's best interest to spend money.

However, the reason I believe that some degree of economic redistribution is good is because the poor spend a much higher percentage of their money than the wealthy do; the wealthy are much more likely to let their money sit idle because they don't have as much of a need to spend it as the poor do. Yes, they do invest in stocks and such, which help, but still, the overall percentage of their income that is saved and not used to help the economy is higher than that of a poor or middle-class person. So it's better for everyone to take some of that money from the wealthy that would be sitting idle and give it to people on the lower end who will use it more productively.

[John Dibble]

Think of it this way - most of the wealthiest individuals do indeed have more money than they can spend. However, the money they don't spend often are used for stocks, investment capital in new ventures, banks, and other such things(Most of Bill Gates assets are in stocks, his worth is in the tens of billions, but I garauntee you he doesn't have that much cash immediately available to him). This will likely make the rich richer, but it will also stimulate economic growth and new jobs to go along with that growth. So, the tax breaks to them will likely go into the above mentioned things, hopefully having the desired effects for all around.

Well, yeah.  That basically is the fundamental difference between those on the left and those on the right, economically speaking.  Those on the left feel that it's best to invest in the bottom: for example, poor, working people.  Those on the right feel that it's best to invest in the top: for example, rich CEOs.

I will readily admit that I have not done nearly enough research on the matter to say anything beyond that, however.

Another fundamental difference is that those on the left realize that government does not just take away money in taxes, it provides services that help everyone to earn more money. If there were no public schools, no public roadways, no public police protection, no public military, etc. everyone would make a lot LESS money, because society would be much less productive and less efficient. Thus, this argument that "It's my money, I earned it, I should be able to keep it" is not completely factually accurate. You didn't earn it completely on your own; you had help from other people, and from the services that government provides. Thus,  you have some responsibility to give some of the money back, because you wouldn't have earned as much as you did without government helping you, which wouldn't exist without taxes. Even after paying taxes, the great majority of Americans have more money than they would if there were no government at all. Most people end up getting more back than they put in.

You're wrong if you think that everyone on the right doesn't think that to some degree. Also, every service you just mentioned is available to everyone and is of benefit to everyone - not like welfare, which is only available to a few and benefits a few. Schools, roads, military, ect. are not exclusively given to one group or another. I don't have a problem paying for these things, so long as the money is used efficiently and effectively(this of course, is a structural issue, and I think you'll agree that we should be getting the most bang for our buck, which usually isn't the case). Redistribution is theft in my eyes, not taxation(though I think taxation should be kept to a minimum, only to pay for those services thare ARE neccessary), so long as the one taxed benefits from what his taxes are spent on(preferably proportionate to the amount put in, but this is sometimes impossible, there's no such thing as a perfect system). If you pay a tax for something, it should benefit you, plain and simple.

EDIT - A recently electected Libertarian thinks so too.

[Gabu]

Redistribution is theft in my eyes.

Well, I think the point that Nym is attempting to make is that if the people have no use for the money, why not give some of it to someone else who does have a use for it?

Consider the following example: Suppose there are two handymen working on a project.  One asks the other if the former can borrow the latter's screwdriver, since the latter is not using it in any way.  The latter says, "No, you can't.  This is my screwdriver.  If you don't have a screwdriver, that's your problem."  However, they're both working on the same project and it would really be in both of their interests if the former handyman could have borrowed the screwdriver because the project would have come along better that way instead of having each person have to come up with his own tools.

In the case that we're talking about right now, the project is the economy and the tools are money.  The economy works better if money is put into it, rather than set aside and left unspent.  If poor people are given more money to spend by redistributing some entirely unneeded money from the top, the economy will grow and everyone will benefit, including the people at the top from whom the money originally came from.  That's the basis of the left's economic theory.

[A18]

This isn't an exact response to what anyone has said so far, but I think one of the most important things to remember is that money doesn't have any real worth; it can't be used for anything (except maybe burning). It's accepted on the sole basis that someone else will take it.

I have an honest question.

Let's say eight hundred billion dollars are locked up in a bank. They've been locked up in there for 150 years.

If all that money was spent now, wouldn't that be the same as government printing it? (in other words, inflation?)

It's been cut off from the economy for so long...if that $800 billion was never to been spent, government could have actually printed that many bills and spent them without having any inflationary effect on the economy. In other words, it's just been relocated--the $800 billion might as well have been imaginary.

So anyway, just in case any one wants to fill me in...

[John Dibble]

Consider the following example: Suppose there are two handymen working on a project.  One asks the other if the former can borrow the latter's screwdriver, since the latter is not using it in any way.  The latter says, "No, you can't.  This is my screwdriver.  If you don't have a screwdriver, that's your problem."  However, they're both working on the same project and it would really be in both of their interests if the former handyman could have borrowed the screwdriver because the project would have come along better that way instead of having each person have to come up with his own tools.

Kind of a poor example. First off, the screwdriver would merely be borrowed - you'd get it returned to you, and the borrower's use of it doesn't detract from the owner's ability to use it. I know what you're saying, but it's a poor example, as I said - not really comparable to our economy.

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Putting my own moral feelings aside, part of the problem is you can only do so much with redistribution. Too much and it becomes bad. In another post(the one about Sweden vs. U.S. taxwise) a fellow Libertarian posted an interesting article relating taxes to investing returns and other things. High taxes normally imply more socialist policies. Now, in the countries with higher taxes, the article said that they were less productive than the nations with lower taxes. Whether the cause of the drop is a cause of the high taxes, the socialist services, or both is irrelevant, because high taxes are needed for socialism to work. Now, over the long term I think there's a chance that this drop in productivity could force these now socialist first world countries into becoming second or third world countries over the long term. In small doses, redistribution may very well be beneficial, but as I said, too much is a bad thing.

The poor people in our country are better off than the poor people in most other countries - some will say this is irrelevant because we are first world, but I say it is very relevant. Capitalism will inevitably lead to there being people with less than others, but so long as it grows I believe the quality of life of our people in poverty will increase. Old technology will become cheaper as new technology is developed, the very technology the middle class uses to be comfortable today will likely be accessible and affordable to the lower class in a matter of years or decades, dependent on what technology is in question - overall everyone's quality of life increases over time. The best way to speed up the process of innovation is through economic growth, which would be best done by decreasing the tax burden on everyone(It is my firm belief that the middle class is THE backbone of the American economy, so benefitting the middle class benefits everyone via economic growth) thus increasing their spending power.

With all systems, you must think long term, especially when it comes to economics. I don't think socialism does that unfortunately.

[Reignman]

a big tax break for the wealthy isn't a gift (maybe it is dumb though), but a loophole/legislation that is targeted to a corporation/industry that gave Bush lots of $$$$$ would be a gift.

[A18]

Corporate taxes are gay. They just get passed onto the consumer and/or employees.

It's basically a hidden national sales tax.

[Gustaf]

The screwdriver example is actually exactly how capitalism works...that's why they founded banks in mediaval Italy, you know.

We have a fundamental right to keep the mone we've earned, that's why it's important to keep taxes on a decent level. But we also have an obligation to help the society of which we're a part.

[John Dibble]

The screwdriver example is actually exactly how capitalism works...that's why they founded banks in mediaval Italy, you know.

No, it's not a good example. It's too small scale, and in the wrong context. By lending out the screwdriver temporarily, the project goes faster, saving time and being efficient. As a capitalist, time is money. If the project is finished faster, that means a new project can be taken up, meaning more money. True capitalists think about the optimum way to make money.

Now, to tweak the example to fit the context and be better - replace your co-worker, who is working on the same project, with your neighbor, who is working on something in his garage. The economy is not one project, the economy is the combined effects of many independent and co-dependent projects. Lending your screwdriver to your neighbor has no direct monetary benefit to you, lending it to your co-worker might. Of course, this still isn't accurate in it's reflection of capitalism(lending the screwdriver could benefit me in the long term in other ways, possibly even economically - smart capitalists think long term).

[True Federalist (진정한 연방 주의자)]

Corporate taxes are gay. They just get passed onto the consumer and/or employees.

It's basically a hidden national sales tax.

Corporate taxes can be justified as a tax on the benefits such as limited liability that a business gains by being a corporation instead of some other legal entity.  It is true that politicians often prefer corporate taxes because of their relatively hidden nature, but I don't find the notion of corporate taxes unpalatable.

[John Dibble]

Corporate taxes are gay. They just get passed onto the consumer and/or employees.

It's basically a hidden national sales tax.

Corporate taxes can be justified as a tax on the benefits such as limited liability that a business gains by being a corporation instead of some other legal entity.  It is true that politicians often prefer corporate taxes because of their relatively hidden nature, but I don't find the notion of corporate taxes unpalatable.

I think the issue is that the taxes cost the corporations money, and those costs are passed onto the consumers - basically the consumer pays the tax.

[cwelsch]

I find the notion of "taking without asking permission and arresting or fining all who refuse" unpalatable.  As long as taxes exist, they should be low and levied directly on people, so the voters remember taxes when they go to the polls.