The Flawed Concept of "Wealth Redistribution"

[boedicca]

It's not the epidemic he's insinuating. The vast majority of people receive their paychecks on time.

Never said it was an epidemic, just that it's far more frequent that you would have everyone believe.

Could it possibly occur to you that perhaps those businesses would not be as prone to failure if we didn't have the government interference in the capital markets which has diverted vast amounts of money to government spending?

 

[The Rabbi]

No question on that.
But it isn't a privileged position of labor over capital. If I lend money to a business, which is a contractual arrangement, and they dont pay I have to sue them just like if I worked for them and they didnt pay. In fact I am usually better off because i can take a secured position on their assets when I lend but can seldom do that as labor (mechanic's lien being the exception).

But so what?

The germane question is: what would be the condition of Labor without Capital?

Trying to equate the two is an apple and oranges comparison.

Labor w/o capital would be in a better position than capital w/o labor.

Not at all. Because you can always find someone to do some kind of work for a high enough wage. But without capital that work remains bare subsistance. Like dirt farming with your hands.

 

[beowolfe]

I often wonder what would happen if there were no wealthy, you know, the top 5% of Americans available to tax??

Wonder who whould be paying the lions share of taxes then??

Here's a little fable about that:

Suppose that everyday 10 men go to PJ's for lunch. The bill for all ten comes to $100. If it were paid the way we pay our taxes, the first four men would pay nothing; the fifth would pay $1; the sixth would pay $3; the seventh $7; the eighth $12; the ninth $18. The tenth man (the richest) would pay $59. The 10 men ate lunch in the restaurant every day and seemed quite happy with the arrangement until the owner threw them a curve.

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." Now lunch for the 10 would costs only $80. The first four are unaffected. They still eat for free. Can you figure out how to divvy up the $20 savings between the remaining six so that everyone gets his fair share?

The men realize that $20 divided by 6 is $3.33, but if they subtract that from everybody's share, then the fifth and the sixth man would end up being paid to eat their meal. The restaurant owner suggested that it would be only fair to reduce each man's bill by roughly the same amount that each paid and he started to work out the amounts each should pay.

And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of $59. Outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man pointing to the tenth, "and he got $7!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got seven times more than me!"

"That's true," shouted the seventh man. "Why should he get $7 back when I got only $2? The wealthy get all the breaks."

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor."

The nine men surrounded the tenth man and beat him up. The next day he didn't show up for lunch, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important: They were $52 short!

And that, boys and girls and college instructors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are lots of good restaurants in Switzerland and the Caribbean.

A Tax Fable

Wow... a very nice way of pointing out the stupidity of the liberal tax mindset.

Where do rich people come from?

 

[boedicca]

Except that the discussion is about Federal Tax Rates not Federal and State and sales tax and FICA tax etc. etc. etc.

Immie

Obfuscation. The total tax burden is weighing down the country. Raising Federal Rates without considering the rest of the burden is extremely ignorant.

 

[boedicca]

Where do rich people come from?

Most work hard and save/invest part of their income.

 

[Immanuel]

Except that the discussion is about Federal Tax Rates not Federal and State and sales tax and FICA tax etc. etc. etc.

Immie

Obfuscation. The total tax burden is weighing down the country. Raising Federal Rates without considering the rest of the burden is extremely ignorant.

But the fact is that TDI was quoting his Federal Tax Rate not his total tax burden. You are adding in additional taxes that he did not include.

My comment had nothing to do with raising the federal rate. My comments were simply stating that no one pays more than 35% in Federal Income Taxes.

Immie

 

[boedicca]

That is a term limited claim. The Bush tax cuts expire in 2010, and Obama plans to raise rates further.

 

[Foxfyre]

It's not the epidemic he's insinuating. The vast majority of people receive their paychecks on time.

Yes, and even on the rare occasion when somebody doesn't get paid--it has happened to me--because the employer could not pay and filed bankruptcy or simply fled the scene, the employee has not risked any material investment. The most he is likely to lose is maybe the value of one or two weeks of his time. It is unlikely that he will lose enough to change his life in any significant way. That isn't much different than the business owner with a deadbeat customer.

 

[The Rabbi]

Where do rich people come from?

Most work hard and save/invest part of their income.

Absolutely. The idea that there are hordes of idle rich inheriting their money generation to generation is simply a class warfare fiction.

 

[rdean]

No group of people understand "wealth redistribution" better than Republicans.

In spite of two wars, Republicans, using the process of "reconciliation" passed a 1.8 TRILLION DOLLAR tax cut package to the American people. On the surface, it doesn't look like "redistribution" until it's clear how the "wealth" was divided up.

More than half of those "tax cuts" went to the top 5%. But that's the top 5% of people who actually pay taxes. The number of people actually receiving the money might be as little as 3 or 2% of the population or even less. Imagine, 2% of the tax paying part of the American population receiving nearly a TRILLION DOLLARS.

This is called, "Republicans managing the economy using the process of reconciliation".

Now, to those Republicans on this board, if this isn't what happened, please explain what did. Try to show some self control, leave aside the name calling, just explain the facts. It would be greatly appreciated.

Oh, and who pays for those two wars?

No one answered. No surprise there.

In the 50s and 60s, the tax rate for the wealthiest Americans was 75 to 90% and I don't remember the country in a depression. I don't remember the wealthy complaining of "starving". They still lived in mansions. Still drove Rolls. Why does the Republican base, not rich, most not even educated, fight so hard for the rich?

 

[DiamondDave]

No group of people understand "wealth redistribution" better than Republicans.

In spite of two wars, Republicans, using the process of "reconciliation" passed a 1.8 TRILLION DOLLAR tax cut package to the American people. On the surface, it doesn't look like "redistribution" until it's clear how the "wealth" was divided up.

More than half of those "tax cuts" went to the top 5%. But that's the top 5% of people who actually pay taxes. The number of people actually receiving the money might be as little as 3 or 2% of the population or even less. Imagine, 2% of the tax paying part of the American population receiving nearly a TRILLION DOLLARS.

This is called, "Republicans managing the economy using the process of reconciliation".

Now, to those Republicans on this board, if this isn't what happened, please explain what did. Try to show some self control, leave aside the name calling, just explain the facts. It would be greatly appreciated.

Oh, and who pays for those two wars?

No one answered. No surprise there.

In the 50s and 60s, the tax rate for the wealthiest Americans was 75 to 90% and I don't remember the country in a depression. I don't remember the wealthy complaining of "starving". They still lived in mansions. Still drove Rolls. Why does the Republican base, not rich, most not even educated, fight so hard for the rich?

Lest you forget, even though you have been told numerous times, that the inclusion of what was income and the deduction systems were much different back then as well....

But it does not matter to the likes of you who supports a system of selective equality.. when equality benefits you it is great, when inequality towards someone benefits you, that is OK then too

 

[boedicca]

Lest you forget, even though you have been told numerous times, that the inclusion of what was income and the deduction systems were much different back then as well....

But it does not matter to the likes of you who supports a system of selective equality.. when equality benefits you it is great, when inequality towards someone benefits you, that is OK then too

Indeed. Federal tax receipts as a % of GDP were 14.4% in the 1950s - the tax code was set up so that the exclusions and deductions resulted in a lower tax burden than today.

Fiscal Facts & Figures

 

[rightwinger]

What groups pay the highest tax rates and the vast majority of the tax burden?? What % of people pay no income tax whatsoever and benefit greatly from entitlements at the expense of those who pay taxes?

Thats a tough one.....

Let me think a minute...........................Oh!....I got it

The group that comprises 1% of the population and monopolizes 34% of the wealth pays that most taxes
While the group that comprises 40% of the population and controls .2% of the wealth pays relatively little

The solution of conservatives is that we need to target the portion of the population that controls .2% of the wealth

Rocket science....pure rocket science

Wealth and income are not the same thing. I wish people would get it right.

And if you look at the top 5% of income earners over the years you quickly discover they aren't the same people year after year.

Wealth is sheltered and income isn't. We still have a disproportionate distribution that is growing yearly. Income earners are different than the truly wealthy because they have a harder time hiding it

 

[Some Guy]

No group of people understand "wealth redistribution" better than Republicans.

In spite of two wars, Republicans, using the process of "reconciliation" passed a 1.8 TRILLION DOLLAR tax cut package to the American people. On the surface, it doesn't look like "redistribution" until it's clear how the "wealth" was divided up.

More than half of those "tax cuts" went to the top 5%. But that's the top 5% of people who actually pay taxes. The number of people actually receiving the money might be as little as 3 or 2% of the population or even less. Imagine, 2% of the tax paying part of the American population receiving nearly a TRILLION DOLLARS.

This is called, "Republicans managing the economy using the process of reconciliation".

Now, to those Republicans on this board, if this isn't what happened, please explain what did. Try to show some self control, leave aside the name calling, just explain the facts. It would be greatly appreciated.

Oh, and who pays for those two wars?

No one answered. No surprise there.

In the 50s and 60s, the tax rate for the wealthiest Americans was 75 to 90% and I don't remember the country in a depression. I don't remember the wealthy complaining of "starving". They still lived in mansions. Still drove Rolls. Why does the Republican base, not rich, most not even educated, fight so hard for the rich?

Your question was answered with the fable that boedicca posted. You're right; the top 5% control most of the wealth in the country and thus pay the majority of the nation's taxes. If you're going to issue a straight refund to tax payers, naturally the ones who have paid more will get a bigger refund.

Let's see if you can understand this analogy. Let's say that through some act, all cars, no matter the make or model, are 10% off.

Someone with the money to buy a $1,000,000 Bugatti Veyron will thus get $100,000 off their purchase, while someone else buying a $30,000 Nissan Maxima will only get $3,000 off.

Would you complain about how unfair it is that the guy buying the Veyron is getting a $100,000 discount while the guy buying the Maxima is only getting a $3,000 discount?

 

[The Rabbi]

No group of people understand "wealth redistribution" better than Republicans.

In spite of two wars, Republicans, using the process of "reconciliation" passed a 1.8 TRILLION DOLLAR tax cut package to the American people. On the surface, it doesn't look like "redistribution" until it's clear how the "wealth" was divided up.

More than half of those "tax cuts" went to the top 5%. But that's the top 5% of people who actually pay taxes. The number of people actually receiving the money might be as little as 3 or 2% of the population or even less. Imagine, 2% of the tax paying part of the American population receiving nearly a TRILLION DOLLARS.

This is called, "Republicans managing the economy using the process of reconciliation".

Now, to those Republicans on this board, if this isn't what happened, please explain what did. Try to show some self control, leave aside the name calling, just explain the facts. It would be greatly appreciated.

Oh, and who pays for those two wars?

No one answered. No surprise there.

In the 50s and 60s, the tax rate for the wealthiest Americans was 75 to 90% and I don't remember the country in a depression. I don't remember the wealthy complaining of "starving". They still lived in mansions. Still drove Rolls. Why does the Republican base, not rich, most not even educated, fight so hard for the rich?

Didn't Kennedy cut rates in 1960 precisely because there was a recession? Didnt the economy recover after that?
And again you confuse wealth with income. And the average millionaire does not live in a mansion nor drive a Rolls. Your stereotypes are interfering with your arguments. Again.

 

[The Rabbi]

Thats a tough one.....

Let me think a minute...........................Oh!....I got it

The group that comprises 1% of the population and monopolizes 34% of the wealth pays that most taxes
While the group that comprises 40% of the population and controls .2% of the wealth pays relatively little

The solution of conservatives is that we need to target the portion of the population that controls .2% of the wealth

Rocket science....pure rocket science

Wealth and income are not the same thing. I wish people would get it right.

And if you look at the top 5% of income earners over the years you quickly discover they aren't the same people year after year.

Wealth is sheltered and income isn't. We still have a disproportionate distribution that is growing yearly. Income earners are different than the truly wealthy because they have a harder time hiding it

OK.
And?
I mean, so what? People become wealthy because they work hard, save and invest. There is no barrier to other people doing just that. People become rich all the time here. That's what makes America a great country. Why would you want to punish people for trying to be rich? It would be better if we punished people for being poor, giving them an incentive to do better.

 

[Nonelitist]

Here's a little fable about that:

Suppose that everyday 10 men go to PJ's for lunch. The bill for all ten comes to $100. If it were paid the way we pay our taxes, the first four men would pay nothing; the fifth would pay $1; the sixth would pay $3; the seventh $7; the eighth $12; the ninth $18. The tenth man (the richest) would pay $59. The 10 men ate lunch in the restaurant every day and seemed quite happy with the arrangement until the owner threw them a curve.

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." Now lunch for the 10 would costs only $80. The first four are unaffected. They still eat for free. Can you figure out how to divvy up the $20 savings between the remaining six so that everyone gets his fair share?

The men realize that $20 divided by 6 is $3.33, but if they subtract that from everybody's share, then the fifth and the sixth man would end up being paid to eat their meal. The restaurant owner suggested that it would be only fair to reduce each man's bill by roughly the same amount that each paid and he started to work out the amounts each should pay.

And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of $59. Outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man pointing to the tenth, "and he got $7!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got seven times more than me!"

"That's true," shouted the seventh man. "Why should he get $7 back when I got only $2? The wealthy get all the breaks."

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor."

The nine men surrounded the tenth man and beat him up. The next day he didn't show up for lunch, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important: They were $52 short!

And that, boys and girls and college instructors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are lots of good restaurants in Switzerland and the Caribbean.

A Tax Fable

Wow... a very nice way of pointing out the stupidity of the liberal tax mindset.

Where do rich people come from?

Most earn it. Why you ask?

 

[rightwinger]

Wealth and income are not the same thing. I wish people would get it right.

And if you look at the top 5% of income earners over the years you quickly discover they aren't the same people year after year.

Wealth is sheltered and income isn't. We still have a disproportionate distribution that is growing yearly. Income earners are different than the truly wealthy because they have a harder time hiding it

OK.
And?
I mean, so what? People become wealthy because they work hard, save and invest. There is no barrier to other people doing just that. People become rich all the time here. That's what makes America a great country. Why would you want to punish people for trying to be rich? It would be better if we punished people for being poor, giving them an incentive to do better.

Who is punishing them?

The Golden Rule states that "He who has the gold makes the rules"
The wealthy influence tax codes, labor laws, minimum wages, deductable investments, shelters ....
All goes towards funneling more of available wealth away from the working class towards the wealthy. American workers are more productive than any worker on earth...and have less to show for it

 

[Care4all]

Except that the discussion is about Federal Tax Rates not Federal and State and sales tax and FICA tax etc. etc. etc.

Immie

Obfuscation. The total tax burden is weighing down the country. Raising Federal Rates without considering the rest of the burden is extremely ignorant.

But the fact is that TDI was quoting his Federal Tax Rate not his total tax burden. You are adding in additional taxes that he did not include.

My comment had nothing to do with raising the federal rate. My comments were simply stating that no one pays more than 35% in Federal Income Taxes.

Immie

I'll up you on that....no individual pays the 35% income taxes either, because we are on a tiered, progressive income tax system....only the money over and above a certain amount is taxed at the 35%, after all deductions are made, the average income tax those in the upper 35% tax bracket pays is 20%....Buffet payed 20%, Heinz payed 19% in yearly income taxes.

Hope all is well with you immie!

care

 

[The Rabbi]

Wealth is sheltered and income isn't. We still have a disproportionate distribution that is growing yearly. Income earners are different than the truly wealthy because they have a harder time hiding it

OK.
And?
I mean, so what? People become wealthy because they work hard, save and invest. There is no barrier to other people doing just that. People become rich all the time here. That's what makes America a great country. Why would you want to punish people for trying to be rich? It would be better if we punished people for being poor, giving them an incentive to do better.

Who is punishing them?

The Golden Rule states that "He who has the gold makes the rules"
The wealthy influence tax codes, labor laws, minimum wages, deductable investments, shelters ....
All goes towards funneling more of available wealth away from the working class towards the wealthy. American workers are more productive than any worker on earth...and have less to show for it

I didnt claim anyone was. I said it wouldn't be a bad idea if they were.

But your class warfare claims aren't backed up by reality. Min wage is supported by unions, which supposedly represent labor. How have increasing min wage rates funnelled wealth away from workers?
Labor laws like OSHA have closed down more factories than the Chinese. The impetus for these did not come from big money interests. The opposite in fact. So how did OSHA regs, which are complicated and expensive,funnel wealth away from workers?
American workers have less to show for being productive? What does an auto worker earn? A steel worker? A guy making medical equipment? Probably mroe than 90% of workers in the world.