The Flawed Concept of "Wealth Redistribution"

[antagon]

if i remember, rob jacked the rich in ivanhoe. the rich and the government are about the same thing in medieval england, however.

 

[mascale]

My own clan name of Gregg, like the Senator's heritage, (with the big, floppy ears), is of the line of Sir Walter Scott's, "Rob Boy," McGregor. This represents the more liberal wing of the Highland name, understanding even the Chicago concept, "Protection." The names both of MacGregor and Gregg would go on, in history, to be among the more famous of the outlaw names. Many of the line became Tejanos. Many had to flee when the Republicans won. Others thought that Lincoln was right to kill off so many White people, and so one even became a U. S. Senator(?), representing that part of the heritage.

Likely the Senator's influence in the Bush Administration even helped with the concept of invading Afghanistan, and invading Iraq, in the name of "Protection." In the Bush Administration, clearly: Federal Contracts were at stake. The Corporate Industrialists had to be, "protected(?)"

Rob Roy MacGregor and History of Clan MacGregor

Highland Scots were, and are, aware of the ancient custom. See especially at the bottom of the link.

There has been redistributive "Proetection," throughout history, and there has also been redistributive "Protection," throught history.

"Crow, James Crow: Shaken, Not Stirred!
(Many nations have new concept of protection! Squaws now welcome at resort casinos, where they are a "protected" part of the species!)

 

[Foxfyre]

My intent was only to say that those in the government, the nobility, were rich, thus when it was said that Robin Hood stole from the government, not the rich, he was, in fact, stealing from the rich.

Those taxes were not collected FOR the government. They were collected to make the nobility rich(er).

At least that is how I understood the story.

Immie

I guess we just understood it differently. I am unaware that the taxes were given to the rich, but then I may not have read all the Robin Hood legends and lore either. That certainly was not the case when the kings and queens of England were on the throne.

The Robin Hood legend

So Robin took to the greenwood of Sherwood Forest, making a living by stealing from rich travellers and distributing the loot among the poor of the area. In the process he gained a band of followers and a spouse, Maid Marian. Despite the best efforts of the evil Sherrif of Nottingham he avoided capture until the return of King Richard from the Crusades brought about a full pardon and the restoration of Robin's lands. In other versions he dies at the hands of a kinswoman, the abbess of Kirklees Priory. That, in a very small nutshell, is the legend, but is there truth behind it?

See!!!!

I'm not the only one that says he stole from the rich.

Hehe, semantics? Yeah, we're arguing over semantics here.

Immie

Touche' I'll concede that at least one source has him stealing from the rich. Well done. (Even if it does make him less noble.)

 

[Immanuel]

I guess we just understood it differently. I am unaware that the taxes were given to the rich, but then I may not have read all the Robin Hood legends and lore either. That certainly was not the case when the kings and queens of England were on the throne.

The Robin Hood legend

So Robin took to the greenwood of Sherwood Forest, making a living by stealing from rich travellers and distributing the loot among the poor of the area. In the process he gained a band of followers and a spouse, Maid Marian. Despite the best efforts of the evil Sherrif of Nottingham he avoided capture until the return of King Richard from the Crusades brought about a full pardon and the restoration of Robin's lands. In other versions he dies at the hands of a kinswoman, the abbess of Kirklees Priory. That, in a very small nutshell, is the legend, but is there truth behind it?

See!!!!

I'm not the only one that says he stole from the rich.

Hehe, semantics? Yeah, we're arguing over semantics here.

Immie

Touche' I'll concede that at least one source has him stealing from the rich. Well done. (Even if it does make him less noble.)

I still believe he was... er the legend of Robin Hood, was noble.

The fact is that when I found that link, I was not even looking for that information. I was actually wondering if Robin Hood was "fact" or fiction. It appears that there may be some fact, be it ever so small, that the legend got its start from a real person. I have no idea if any other links said rich or government because I didn't look.

And also, I don't see him as being any less noble because he targeted the rich. It is not like the nobility got their wealth by honest means, now is it?

Immie

 

[Foxfyre]

The Robin Hood legend



See!!!!

I'm not the only one that says he stole from the rich.

Hehe, semantics? Yeah, we're arguing over semantics here.

Immie

Touche' I'll concede that at least one source has him stealing from the rich. Well done. (Even if it does make him less noble.)

I still believe he was... er the legend of Robin Hood, was noble.

The fact is that when I found that link, I was not even looking for that information. I was actually wondering if Robin Hood was "fact" or fiction. It appears that there may be some fact, be it ever so small, that the legend got its start from a real person. I have no idea if any other links said rich or government because I didn't look.

And also, I don't see him as being any less noble because he targeted the rich. It is not like the nobility got their wealth by honest means, now is it?

Immie

Stealing back what was unlawfully taken from you is not stealing. Stealing what was never yours to begin with is stealing no matter how the other acquired it. And that is not a nobility anybody should aspire to. What a rotten world this would be to live in if everyone decided to just take what they wanted regardless of who owned it.

And why would you say that the nobility or any of the wealthy got their wealth by dishonest means? Did the legend address that other than regarding the activities of the Sheriff of Nottingham and his assistant? Do you feel that way about all the wealthy?

 

[boedicca]

Robin Hood is a ideological Rorschach test.

 

[Immanuel]

Touche' I'll concede that at least one source has him stealing from the rich. Well done. (Even if it does make him less noble.)

I still believe he was... er the legend of Robin Hood, was noble.

The fact is that when I found that link, I was not even looking for that information. I was actually wondering if Robin Hood was "fact" or fiction. It appears that there may be some fact, be it ever so small, that the legend got its start from a real person. I have no idea if any other links said rich or government because I didn't look.

And also, I don't see him as being any less noble because he targeted the rich. It is not like the nobility got their wealth by honest means, now is it?

Immie

Stealing back what was unlawfully taken from you is not stealing. Stealing what was never yours to begin with is stealing no matter how the other acquired it. And that is not a nobility anybody should aspire to. What a rotten world this would be to live in if everyone decided to just take what they wanted regardless of who owned it.

And why would you say that the nobility or any of the wealthy got their wealth by dishonest means? Did the legend address that other than regarding the activities of the Sheriff of Nottingham and his assistant? Do you feel that way about all the wealthy?

Okay, first off we need to clear some things up.

When I entered this conversation, I said that Robin Hood taking from the government was the same as Robin Hood taking from the rich. In those times, from the legend, the rich were the nobility and the nobility was the government.

That was the entire point that I was trying to make. Nothing more, nothing less. I was not attacking the government nor the Legend of Robin Hood. I was simply stating that in those days, the country was ruled by rich nobles i.e. kings, dukes, earls and what have you.

Why do I say they got their wealth by dishonest means? Again, based only upon the legend of Robin Hood, the nobles basically stole from the people. They strong-armed them into paying "taxes"... at the point of a lance or many lances. That is not honest by anyone's stretch of the imagination.

Do I feel that way about everyone who is wealthy? Heck no, we don't live in the days of Robin Hood. I'm sure there are some people who are very wealthy who got there by dishonest means, but there are also many people who worked damned hard to get what they have.

Immie

 

[Foxfyre]

I still believe he was... er the legend of Robin Hood, was noble.

The fact is that when I found that link, I was not even looking for that information. I was actually wondering if Robin Hood was "fact" or fiction. It appears that there may be some fact, be it ever so small, that the legend got its start from a real person. I have no idea if any other links said rich or government because I didn't look.

And also, I don't see him as being any less noble because he targeted the rich. It is not like the nobility got their wealth by honest means, now is it?

Immie

Stealing back what was unlawfully taken from you is not stealing. Stealing what was never yours to begin with is stealing no matter how the other acquired it. And that is not a nobility anybody should aspire to. What a rotten world this would be to live in if everyone decided to just take what they wanted regardless of who owned it.

And why would you say that the nobility or any of the wealthy got their wealth by dishonest means? Did the legend address that other than regarding the activities of the Sheriff of Nottingham and his assistant? Do you feel that way about all the wealthy?

Okay, first off we need to clear some things up.

When I entered this conversation, I said that Robin Hood taking from the government was the same as Robin Hood taking from the rich. In those times, from the legend, the rich were the nobility and the nobility was the government.

That was the entire point that I was trying to make. Nothing more, nothing less. I was not attacking the government nor the Legend of Robin Hood. I was simply stating that in those days, the country was ruled by rich nobles i.e. kings, dukes, earls and what have you.

Why do I say they got their wealth by dishonest means? Again, based only upon the legend of Robin Hood, the nobles basically stole from the people. They strong-armed them into paying "taxes"... at the point of a lance or many lances. That is not honest by anyone's stretch of the imagination.

Do I feel that way about everyone who is wealthy? Heck no, we don't live in the days of Robin Hood. I'm sure there are some people who are very wealthy who got there by dishonest means, but there are also many people who worked damned hard to get what they have.

Immie

Well, we have a somewhat different perspective on the English form of government, and to assume that all those 'wealthy merchants' were nobility flies in the face of British history. Also all the nobility were not rich. Some country knights were little better off than the peasantry though their title afforded them a degree of social advantage and courtesy.

But at the end of the day, we're probably on the same side of the fence here and simply tilting at different windmills.

 

[Immanuel]

Stealing back what was unlawfully taken from you is not stealing. Stealing what was never yours to begin with is stealing no matter how the other acquired it. And that is not a nobility anybody should aspire to. What a rotten world this would be to live in if everyone decided to just take what they wanted regardless of who owned it.

And why would you say that the nobility or any of the wealthy got their wealth by dishonest means? Did the legend address that other than regarding the activities of the Sheriff of Nottingham and his assistant? Do you feel that way about all the wealthy?

Okay, first off we need to clear some things up.

When I entered this conversation, I said that Robin Hood taking from the government was the same as Robin Hood taking from the rich. In those times, from the legend, the rich were the nobility and the nobility was the government.

That was the entire point that I was trying to make. Nothing more, nothing less. I was not attacking the government nor the Legend of Robin Hood. I was simply stating that in those days, the country was ruled by rich nobles i.e. kings, dukes, earls and what have you.

Why do I say they got their wealth by dishonest means? Again, based only upon the legend of Robin Hood, the nobles basically stole from the people. They strong-armed them into paying "taxes"... at the point of a lance or many lances. That is not honest by anyone's stretch of the imagination.

Do I feel that way about everyone who is wealthy? Heck no, we don't live in the days of Robin Hood. I'm sure there are some people who are very wealthy who got there by dishonest means, but there are also many people who worked damned hard to get what they have.

Immie

Well, we have a somewhat different perspective on the English form of government, and to assume that all those 'wealthy merchants' were nobility flies in the face of British history. Also all the nobility were not rich. Some country knights were little better off than the peasantry though their title afforded them a degree of social advantage and courtesy.

But at the end of the day, we're probably on the same side of the fence here and simply tilting at different windmills.

You must understand... I'm only going off the legend. After all, the real Robin of Loxley was probably one of those country knights you mention.

Immie

 

[FA_Q2]

But 'barely getting by' for most folks is a strong incentive to improve one's lot ...

the primary function of taxes is to raise government revenue. other rational considerations are taken to reduce the impact on the population and the economy. progressive tax systems function with this in mind.

your idea that taxes that hold those near my 15k poverty line will incentivize them to raise out of their situation is not fitting with reality. its not comfortable down there, and these people already have a clear idea that wealthy folks have it better off. all that is going on in that model, is that a middle class person, albeit lower-middle class is not able to save or invest in anything to change his plight. upward mobility and consumption volume in the economy is strangled by focusing the burden of taxes disproportionately to the detriment of the middle-class.

progressive taxes, and other efforts to redistribute wealth are capitalist objectives aimed at re-introducing liquidity to the sweet-spot in the economy where profits are made and money is multiplied. this to avoid hoarding whereby the economy is suffocated by its top-heavy, comparatively stagnant wealth distribution.

have a look. find an economy which exports cheap goods or factors to the US, and you will see this setup. find a modern economy targeted by such nations and you will see progressive tax.

the incentive concept is a grade-school look at what nations are faced with, and uses logic to suit. first you'd say high taxes will incentivize the poor, then you'd say they'll punish the rich. whatever fits, huh?

theres plenty of room to strike conservative application of a progressive tax, but flat taxes simply dont take the health of the economy under consideration AT ALL.

That does make certain since and I do believe in a progressive taxation system but I have to admit I am one of those ‘kooks’ as you call it that does not believe in tax deductions. Taxes should be levied evenly with a basic tired system for the reasons stated by edit that I quote later in this post. I would also like to add that at some point you should not pay taxes because you do not have the ability to do so. Under those circumstances, a flat tax would be prohibitive and there is no reason for it. People that have wealth are certainly capable of providing a slightly higher share then those without. On that same token, the tax code today has gone to far over the edge. I would disagree that the idea of motivating the poor out of their poverty is a ‘grade school’ approach. The part that you miss is that being poor may not look good and nobody likes to live paycheck to paycheck but the fact of the matter is that getting wealthy (or at least well off) is a LOT harder than being poor. This is particularly true with today’s standards where you receive REWARDS for being poor. Many people receive MORE money back from their taxes than they actually paid in when all deductions and credits are counted up, I know I did for a while! That is a reward as such, free money that I nether disserved OR worked for. That is a ridiculous concept.

I would like to hear your reasoning for deductions though. I personally believe there should be NO deductions whatsoever. Taxes have a purpose, to fund the government. For what purpose is deductions to that end. I believe that people should be left to their own devises and that the government has no business attempting to influence people through the tax code. A good side benefit to a flat tiered tax system without deductions would be the massive savings in the IRS!

Chirs
That's it in a nutshell.

The Reagan and Bush tax cuts for the rich, and the derivative bubble have stolen the wealth of ordinary Americans and given it to the rich.

It's a disgrace.

This is such a disingenuous comment it is laughable. A tax cut does not give more money to anybody at all, it takes less. Did you not understand the fable earlier in this thread? It really was quite simple and very well stated. Maybe you should try and think about your comments (or at least back them up) before spout useless partisan crap.

editec
It's actually based on the reconition of the power of compounding interest, and the theory that in a capitalist society, those with excess capital have such an advantage over those without it, that the game is wildly to their advantage, and that advantage compounds over time, too.

+1 for pointing this out, although I disagree on the outcome of the practice. This is defiantly a reasonable basis for the theory as it is quite true that the have’s are in an infinitely better position for continuing their position then the have not’s are of getting there.

 

[antagon]

the primary function of taxes is to raise government revenue. other rational considerations are taken to reduce the impact on the population and the economy. progressive tax systems function with this in mind.

I would like to hear your reasoning for deductions though. I personally believe there should be NO deductions whatsoever. Taxes have a purpose, to fund the government. For what purpose is deductions to that end. I believe that people should be left to their own devises and that the government has no business attempting to influence people through the tax code. A good side benefit to a flat tiered tax system without deductions would be the massive savings in the IRS!

my thoughts on deductions roll out of the premise behind progressive taxes as i'd put it above. -- While the goal remains the same, tax systems can be configured to stimulate the economy rather than just take the wind out of it.

flat taxers' logic is based entirely on concepts of motivation and even gratitude to the bigger contributors in the economy. (i reject the concept of any fairness) we seem to both agree that these principles come at too great an expense to the bigger picture to stand alone. deductions incorporate these ideas back into a progressive tax code among other functions..

1. deductions motivate businesses and individuals to make decisions which the economy and society can benefit from. charity, capital acquisition and business development , etc. provide tax shelter.

2. premium tax rates on the wealthy are pretty high. if the idea is that these are the folks who contribute to society the most, deductions knock the sting out of these top rates. if not, you could cough up a third of your income or more for merely profit-taking from the land of opportunity. this stretches well down the tax curve to middle-class homeowners making improvements to their home, saving for retirement or donating to charity, etc.

3. rather than burden every dollar earned, deductions offer a freedom to the taxpayer to pay an income tax, or pass the buck to another tax payer. in this way, income tax can work like consumption tax, (taxing only the last dollar earned) at the option of the tax payer. ill expound...

if i do well this year, ill buy a shiny new work truck. some of the beaters i run are getting out of hand. next april ill be faced with, say, $60k in goddamn taxes. if i bought a $37k peterbilt bobtail stakeside with an aluminum maxon gate and the alcoa rim package, plus another $3k in signage and goodies for it.. in a simplified system, i'll only owe $20k, goddamnit. i passed $37k to valley truck center.

when valley truck center faces their half million $ tax liability, they'll back out their facility upgrades, the overstock of alcoas they have laying around, some new hires, etc.. and pay 100k. they'll pass those bux around to GM or alcoa or whatever.

when one considers that economic activity - transactions - are the point where wealth in the economy is created, this system is the only way taxes could stimulate the economy.

for economic stimulus, i say rather than across the deck tax reductions, extending deductions or exemptions to businesses hiring new workers (like a break on goddamn payroll taxes) or buying equipment is the way to go.

to keep it real, if i get a straight tax break, im going on vacation or something, rater than contributing more meaningfully to a sustainable cycle like the other scenario with the pretty truck.

 

[FA_Q2]

the primary function of taxes is to raise government revenue. other rational considerations are taken to reduce the impact on the population and the economy. progressive tax systems function with this in mind.

I would like to hear your reasoning for deductions though. I personally believe there should be NO deductions whatsoever. Taxes have a purpose, to fund the government. For what purpose is deductions to that end. I believe that people should be left to their own devises and that the government has no business attempting to influence people through the tax code. A good side benefit to a flat tiered tax system without deductions would be the massive savings in the IRS!

my thoughts on deductions roll out of the premise behind progressive taxes as i'd put it above. -- While the goal remains the same, tax systems can be configured to stimulate the economy rather than just take the wind out of it.

flat taxers' logic is based entirely on concepts of motivation and even gratitude to the bigger contributors in the economy. (i reject the concept of any fairness) we seem to both agree that these principles come at too great an expense to the bigger picture to stand alone. deductions incorporate these ideas back into a progressive tax code among other functions..

1. deductions motivate businesses and individuals to make decisions which the economy and society can benefit from. charity, capital acquisition and business development , etc. provide tax shelter.

2. premium tax rates on the wealthy are pretty high. if the idea is that these are the folks who contribute to society the most, deductions knock the sting out of these top rates. if not, you could cough up a third of your income or more for merely profit-taking from the land of opportunity. this stretches well down the tax curve to middle-class homeowners making improvements to their home, saving for retirement or donating to charity, etc.

3. rather than burden every dollar earned, deductions offer a freedom to the taxpayer to pay an income tax, or pass the buck to another tax payer. in this way, income tax can work like consumption tax, (taxing only the last dollar earned) at the option of the tax payer. ill expound...

if i do well this year, ill buy a shiny new work truck. some of the beaters i run are getting out of hand. next april ill be faced with, say, $60k in goddamn taxes. if i bought a $37k peterbilt bobtail stakeside with an aluminum maxon gate and the alcoa rim package, plus another $3k in signage and goodies for it.. in a simplified system, i'll only owe $20k, goddamnit. i passed $37k to valley truck center.

when valley truck center faces their half million $ tax liability, they'll back out their facility upgrades, the overstock of alcoas they have laying around, some new hires, etc.. and pay 100k. they'll pass those bux around to GM or alcoa or whatever.

when one considers that economic activity - transactions - are the point where wealth in the economy is created, this system is the only way taxes could stimulate the economy.

for economic stimulus, i say rather than across the deck tax reductions, extending deductions or exemptions to businesses hiring new workers (like a break on goddamn payroll taxes) or buying equipment is the way to go.

to keep it real, if i get a straight tax break, im going on vacation or something, rater than contributing more meaningfully to a sustainable cycle like the other scenario with the pretty truck.

I see your point about using that wealth to stimulate the economy but I do not see those as “deductions.’ I would not count purchasing assets for a company as a deduction but would rather count that against your profits. That money was never a profit to begin with as it is used for the continuing of the business itself. What I was referring to was more like EIC credit, deductions received for child care, deductions for adding a solar paneled roof, current deductions for purchasing energy star appliances and purchasing a home. All of these are used as incentives to goad you into making decisions that I don’t believe the government should be encouraging with taxes. If the government believes that there needs to be funding in a certain field then it can and does directly fund it and deductions are a poor way to supplement that. It causes what we have today where there are many people that are wealthy that can skirt the taxes they owe because they can afford the tax broker to find all the loopholes to a tax system that is impossible to understand. I would find it simpler if the actual taxes were reduced to a more manageable level but without deductions for people to hide their money in.
To put it short and to each point…

1. Government rarely knows what will benefit society and I feel that people in general are better suited to decide where their wealth should go than a bureaucrat that is creating law to suit his purposes.

2. Without deductions, premium tax rates could be reduced to a more reasonable level.

3. Addressed above in business. As a personal side I do not see this as a good thing. People should contribute when and if they can and there should not be a reason for the government to persuade you to make purchases. It is a much simpler thing to find an effective percentage to income ratio to provide for the funding of government then creating all these muddy provisions that try and achieve ‘good’ outcomes.

Sorry if this is a bit convoluted – it is late here and your writing makes mine look bad

 

[Foxfyre]

I see... (Antagon's)... point about using that wealth to stimulate the economy but I do not see those as “deductions.’ I would not count purchasing assets for a company as a deduction but would rather count that against your profits. That money was never a profit to begin with as it is used for the continuing of the business itself. What I was referring to was more like EIC credit, deductions received for child care, deductions for adding a solar paneled roof, current deductions for purchasing energy star appliances and purchasing a home. All of these are used as incentives to goad you into making decisions that I don’t believe the government should be encouraging with taxes. If the government believes that there needs to be funding in a certain field then it can and does directly fund it and deductions are a poor way to supplement that. It causes what we have today where there are many people that are wealthy that can skirt the taxes they owe because they can afford the tax broker to find all the loopholes to a tax system that is impossible to understand. I would find it simpler if the actual taxes were reduced to a more manageable level but without deductions for people to hide their money in.

There are some tightropes to walk here. For instance, running a business out of my home allows me to deduct a proportionate percentage of our mortgage payments, taxes, insurance, utilities, and home maintenance. (I don't do that so as not to reduce tax advantages of our home as a primary residence, but it gives me an ace in the hole to offset additional taxes if I should come out badly on a tax audit.) Those items I could deduct, though, add little or nothing to the cost of doing business and our home office does not take away enough of our living area to matter much at all. But the tax breaks probably allow some to make a living on a fairly low gross income.

I can see a reasonable tax credit for adding solar panels or an energy efficient furnace so long as the tax credit is available to ANYBODY, rich or poor, who takes advantage of it. There are valid behaviors that are in the interest of the general welfare that are not out of line for the government to encourage. Home ownership is certainly in that category. Ditto for tax free churches and charitable organizations. All add to stability, aesthetics, self reliance, and quality of life as well as increase property values, decrease crime, and stimulate prosperity.

Also in the interest of the general welfare, as much as I despise how the farm subsidy program is abused, there could be valid instances in which farmers could be encouraged or assisted in increasing a commodity that was in too short a supply; spur energy producers to step up productions, etc. etc. Again no individual or entity should ever be rewarded by the federal government unless the same reward is available to ALL regardless of race, creed, socioeconomic status, political affiliation, etc. etc. etc.

To put it short and to each point…

1. Government rarely knows what will benefit society and I feel that people in general are better suited to decide where their wealth should go than a bureaucrat that is creating law to suit his purposes.

2. Without deductions, premium tax rates could be reduced to a more reasonable level.

Agreed that government rarely knows what will benefit society, but it is sometimes in a position to see what is or is not benefitting society. So, no problem in stacking on taxes on say tobacco products that are known to be of little benefit while reducing taxes that help people conserve and save on energy. Such does not cost the tax payer anywhere near as much as the benefit to the taxpayer. And 'taxpayer' is the operative concept here.

There is always the downside to such practices though. Sometimes the subsidies and tax credits could encourage the unethical and/or corrupt to create shortages when none otherwise would exist. I'm still thinking about the stopgap necessary to plug that hole.

3. Addressed above in business. As a personal side I do not see this as a good thing. People should contribute when and if they can and there should not be a reason for the government to persuade you to make purchases. It is a much simpler thing to find an effective percentage to income ratio to provide for the funding of government then creating all these muddy provisions that try and achieve ‘good’ outcomes.

For me there is a distinction between promoting the general welfare and providing the general welfare. The first is a constitutional mandate. The second is a cancer in society that corrupts both the government and those governed. The difficulty sometimes comes in knowing the difference.

Sorry if this is a bit convoluted – it is late here and your writing makes mine look bad

You write just fine.

 

[The Rabbi]

I disagree. Taxes should never be used to engage in social engineering. The results are too ugly.
Remember the "millionaire's luxury tax" on yachts? Great idea, right? Stick it to those rich guys buying yachts and use the money to balance the budget.
Wrong. It's those unintended consequences again.
They tanked the boat building industry, throwing people out of work and on to unemployment, increasing gov't expense.
That is one small example.
Farm subsidies are another one. They are grossly inefficient at redistributing wealth.
In fact, I would go out on a limb and say there is not a tax enacted for social engineering reasons that has succeeded and has not had negative consequences that were unforeseen at the time.

 

[boedicca]

I disagree. Taxes should never be used to engage in social engineering. The results are too ugly.
Remember the "millionaire's luxury tax" on yachts? Great idea, right? Stick it to those rich guys buying yachts and use the money to balance the budget.
Wrong. It's those unintended consequences again.
They tanked the boat building industry, throwing people out of work and on to unemployment, increasing gov't expense.
That is one small example.
Farm subsidies are another one. They are grossly inefficient at redistributing wealth.
In fact, I would go out on a limb and say there is not a tax enacted for social engineering reasons that has succeeded and has not had negative consequences that were unforeseen at the time.

QFT.

Politicians are notoriously ignorant regarding the economy - often insisting that taxes do not influence behavior (i.e., economic growth will not be dampened by increasing taxes) while at the same time trying to socially engineer/micro-manage private behavior with taxes on products, etc.

They are cognitively dissonant most of the time.

 

[Foxfyre]

I disagree. Taxes should never be used to engage in social engineering. The results are too ugly.

When it comes to thought, values, personal preferences, I agree. Taxes should never be used to engage in social engineering, most particularly in the public schools.

Remember the "millionaire's luxury tax" on yachts? Great idea, right? Stick it to those rich guys buying yachts and use the money to balance the budget.
Wrong. It's those unintended consequences again. They tanked the boat building industry, throwing people out of work and on to unemployment, increasing gov't expense.
That is one small example.

Yep. And it doomed George H.W. Bush to a one-term presidency. But that was an imposed tax, not a tax credit. Had he offered a tax credit on luxury items to boost activity, our boat building and jewelry and light plane etc. industries would probably still be in the USA instead of much or most of it being driven offshore, and we wouldn't have lost the tens of thousands of middle class jobs that were lost.

But the luxury tax was a revenue raising gimmick--one that failed miserably for that purpose--and was not targeted at promoting the general welfare.

Farm subsidies are another one. They are grossly inefficient at redistributing wealth. In fact, I would go out on a limb and say there is not a tax enacted for social engineering reasons that has succeeded and has not had negative consequences that were unforeseen at the time.

Most farm subsidies I agree. There has been much abuse of that system.

But say the people are wanting bread and grain prices are too depressed to be profitable for the farmers to grow it. A tax break (preferred to a subsidy) until prices can recover could help promote the desired commodity and keep hundreds of thousands dependent on it being available on the job. Again, I could see that as a valid promotion of the general welfare.

It is important to know what promotes the general welfare as opposed to social engineering.

It is important to know the difference between promoting the general welfare and providing the general welfare.

And there is some wiggle room in there to debate it all which is what sometimes makes it difficult.

 

[The Rabbi]

I disagree. Taxes should never be used to engage in social engineering. The results are too ugly.

When it comes to thought, values, personal preferences, I agree. Taxes should never be used to engage in social engineering, most particularly in the public schools.

Remember the "millionaire's luxury tax" on yachts? Great idea, right? Stick it to those rich guys buying yachts and use the money to balance the budget.
Wrong. It's those unintended consequences again. They tanked the boat building industry, throwing people out of work and on to unemployment, increasing gov't expense.
That is one small example.

Yep. And it doomed George H.W. Bush to a one-term presidency. But that was an imposed tax, not a tax credit. Had he offered a tax credit on luxury items to boost activity, our boat building and jewelry and light plane etc. industries would probably still be in the USA instead of much or most of it being driven offshore, and we wouldn't have lost the tens of thousands of middle class jobs that were lost.

But the luxury tax was a revenue raising gimmick--one that failed miserably for that purpose--and was not targeted at promoting the general welfare.

Farm subsidies are another one. They are grossly inefficient at redistributing wealth. In fact, I would go out on a limb and say there is not a tax enacted for social engineering reasons that has succeeded and has not had negative consequences that were unforeseen at the time.

Most farm subsidies I agree. There has been much abuse of that system.

But say the people are wanting bread and grain prices are too depressed to be profitable for the farmers to grow it. A tax break (preferred to a subsidy) until prices can recover could help promote the desired commodity and keep hundreds of thousands dependent on it being available on the job. Again, I could see that as a valid promotion of the general welfare.

It is important to know what promotes the general welfare as opposed to social engineering.

It is important to know the difference between promoting the general welfare and providing the general welfare.

And there is some wiggle room in there to debate it all which is what sometimes makes it difficult.

No.
A tax and a tax credit are really the same thing, just put different ways. Jobs are going offshore for a variety of reasons. Tax policy is a small part of that.

As for farm subsidies, why would grain be too cheap for farmers to grow it? Unless you want to posit a development that makes grain worthless grain will always have a demand. The only way it would be too cheap would be from more efficiently produced imports. And what's wrong with that? I would love to pay half what I am paying now for bread.
In the old Soviet Union bread was subsidized but grain was not. The result was it was cheaper to feed baked bread to animals than grain. And that's what happened. Not very efficient.

 

[Foxfyre]

I disagree. Taxes should never be used to engage in social engineering. The results are too ugly.

When it comes to thought, values, personal preferences, I agree. Taxes should never be used to engage in social engineering, most particularly in the public schools.



Yep. And it doomed George H.W. Bush to a one-term presidency. But that was an imposed tax, not a tax credit. Had he offered a tax credit on luxury items to boost activity, our boat building and jewelry and light plane etc. industries would probably still be in the USA instead of much or most of it being driven offshore, and we wouldn't have lost the tens of thousands of middle class jobs that were lost.

But the luxury tax was a revenue raising gimmick--one that failed miserably for that purpose--and was not targeted at promoting the general welfare.

Farm subsidies are another one. They are grossly inefficient at redistributing wealth. In fact, I would go out on a limb and say there is not a tax enacted for social engineering reasons that has succeeded and has not had negative consequences that were unforeseen at the time.

Most farm subsidies I agree. There has been much abuse of that system.

But say the people are wanting bread and grain prices are too depressed to be profitable for the farmers to grow it. A tax break (preferred to a subsidy) until prices can recover could help promote the desired commodity and keep hundreds of thousands dependent on it being available on the job. Again, I could see that as a valid promotion of the general welfare.

It is important to know what promotes the general welfare as opposed to social engineering.

It is important to know the difference between promoting the general welfare and providing the general welfare.

And there is some wiggle room in there to debate it all which is what sometimes makes it difficult.

No.
A tax and a tax credit are really the same thing, just put different ways. Jobs are going offshore for a variety of reasons. Tax policy is a small part of that.

As for farm subsidies, why would grain be too cheap for farmers to grow it? Unless you want to posit a development that makes grain worthless grain will always have a demand. The only way it would be too cheap would be from more efficiently produced imports. And what's wrong with that? I would love to pay half what I am paying now for bread.
In the old Soviet Union bread was subsidized but grain was not. The result was it was cheaper to feed baked bread to animals than grain. And that's what happened. Not very efficient.

A tax and a credit are not at all the same thing. One confiscates property from the people. The other allows the people to keep their property and use it as they see fit. I see a huge difference between these two things.

In the 1960's, there were several years when wheat prices dropped to just about the cost of the seed, fuel, and labor necessary to grow it. If the government had not shored up the price so that the farmer could make enough profit to support their family AND pay back their loans to the bank, there would have been an enormous wheat shortage in the USA. It can happen, and when it is a commodity necessary for many other industries, there can be a justification to intervene in the interest of the general welfare. The price supports were not to benefit the farmer so much as to benefit all of society, and the revenues produced by the price supports more than paid for them.

The cost of the wheat in a loaf of bread is too small a percentage for wheat prices to significantly affect the cost of a loaf of bread.

Surely you see the difference between a shortage of a commodity necessary for many industries and a subsidy for a loaf of bread?

And jobs go offshore when it is far more profitable to send them off shore than it is to keep them in the USA. You are right that there are many factors involved in that equation, but I was specifically speaking of the Bush 41 administration luxury tax and the specific industries that it decimated and drove off shore. Citing one example of what can happen is not a blanket explanation of a whole dynamic however much some like using anecdotal evidence for proof of whatever.

 

[The Rabbi]

A tax takes money from one person to give to another. A credit gives money to one person by taking it from another.
It is a difference without a distinction.
There is no way the U.S. was going to run out of wheat. That is the whole idea of a market. If a bunch of farmers had stopped planting wheat the price would have risen dramatically, bringing in suppliers at higher prices.
You need more understanding of the free market.
In the case of the luxury tax on yachts, I would bet virtually no production moved off shore since the issue was domestic demand. It wouldnt matter whether the boat was produced in ME or Caracas since no demand is no demand.

 

[Foxfyre]

A tax takes money from one person to give to another. A credit gives money to one person by taking it from another.
It is a difference without a distinction.
There is no way the U.S. was going to run out of wheat. That is the whole idea of a market. If a bunch of farmers had stopped planting wheat the price would have risen dramatically, bringing in suppliers at higher prices.
You need more understanding of the free market.
In the case of the luxury tax on yachts, I would bet virtually no production moved off shore since the issue was domestic demand. It wouldnt matter whether the boat was produced in ME or Caracas since no demand is no demand.

That isn't necessarily so re taxes. A tax in and of itself can be for many purposes, some good, some bad. A tax is a good thing when it is assessed for the privilege of fishing in public waters as it pays for stocking, monitoring, and managing those waters for the enjoyment of all, rich and poor alike. A tax to pay for construction and maintenance of a road or bridge used by all, rich and poor alike, can also be a good thing. A tax is bad only when it collected for purposes that do not promote the general welfare but rather benefits only a targeted few which in turn increases the power, growth, and scope of government.

I'm not going to argue the economics of growing wheat further with you. I just know many farmers, some in my own family, who were having a really tough go of it there for awhile.

And you are woefully wrong on the issue of the yachts as well as domestic light planes and the fine jewelry industry. That luxury tax so decimated our boat building industry that more than 50,000 jobs were lost and it has never fully recovered. Ditto for several small airplane manufacturers. The jewelry industry picked up their stuff and moved to places like Grand Cayman where they still are. The rich continue to buy their toys. They just chose to buy them elsewhere rather than pay an exhorbitant tax to buy them here.

It was just one more of those deals that good intentions resulted in really bad consequences. And if the leftwing is successful in going after the rich in that way again, you can be sure that it will be the un-rich among us who is most hurt again.