News Discussing Socialism: Harnessing Self-Interest & Avoiding Mediocrity

[X-43D]

Why should the poor and those who have no money pay taxes? The rich (especially the millionaires and billionaires) should pay the taxes, not the poor and those without money. Otherwise it's simply not fair for the poor. People also have to pay for electricity, running water, food & drink, toilet papers, insurance, taxes etc. Those who do not earn enough money to cover all these costs, remain poor and miserable.

 

[drankin]

Why should the poor and those who have no money pay taxes? The rich (especially the millionaires and billionaires) should pay the taxes, not the poor and those without money. Otherwise it's simply not fair for the poor. People also have to pay for electricity, running water, food & drink, toilet papers, insurance, taxes etc. Those who do not earn enough money to cover all these costs, remain poor and miserable.

The poor should have to pay taxes as well as the middle class. I'm not going to argue that the rich shouldn't, of course they should. Ideally there would be a flat tax that is a percentage of your income. If you are poor you pay the same percentage as someone who is rich. That is fair for the poor. To not tax them would be to encourage them to remain in their condition. Which, in this country, is more of a choice than anything else. Most anyone can work their way out of poverty here.

 

[Archon]

You might be asking the wrong question, or at least hinting towards the wrong reason of why slavery was ended. American Civil War

The fight to stop slavery had literally nothing to do with racism or equal rights. It had everything to do with living wage and working conditions for white people. Why make a factory in the north and pay white people when you could make a factory in the south and not-pay black people? It's very comparable to Mexicans and "they took'er jobs!"
The north won the war, slavery ended, and white people got to keep their jobs and get paid a (somewhat) reasonable wage.

Try not to throw the civil war and slavery into a debate about civil rights. They're not as closely related as you'd like to think.

That was exactly my point. I was being a bit sarcastic with that whole paragraph. :)

But anyway...that's a little bit off topic, so...back to Socialism (kind of):

Why should the poor and those who have no money pay taxes? The rich (especially the millionaires and billionaires) should pay the taxes, not the poor and those without money. Otherwise it's simply not fair for the poor. People also have to pay for electricity, running water, food & drink, toilet papers, insurance, taxes etc. Those who do not earn enough money to cover all these costs, remain poor and miserable.

I don't see a valid argument for why the poor shouldn't pay taxes in here. Why isn't it "fair" that the poor have to pay taxes? If anything, it seems more fair to demand that the poor pay taxes in addition to the rich, if you demand that the latter group pays taxes (which you do). Otherwise, there's an asymmetry in taxation that, even if it always exists in terms of revenue, will at least disappear in terms of the proportion of income demanded of each group.

Then again, I can see how you could argue that the individual burdens suffered by each group differ. Imposing a flat tax rate on a rich person will have relatively little effect on his lifestyle, etc, even though the amount of money he pays is much higher. The poor person paying the same rate loses the same proportion of his income, but this has a significantly higher impact on his quality of life. So...I guess it depends on your definition of "fair."

EDIT: And then of course, as drankin argues, there are other considerations. Will taxing the poor impel them to work harder to get out of their situations? Will it just make their situation more hopeless? Will not taxing them have the opposite effects? I don't know...I guess it depends heavily on the individual (person and situation). But either way...something to consider.

 

[randomness]

Try not to throw the civil war and slavery into a debate about civil rights. They're not as closely related as you'd like to think.

Good point Great Britain was able to abolish slavery in 1807, 54 years before the US civil war and without a war.

free education for children (a socialist policy)

I think people should reread Adam Smith's 'Wealth of Nations', considered the foundation of modern capitalism. In it you will find that he promotes the ideas of free public education.

 

[ShawnD]

flat tax

In order for a flat tax to work, the tax rate would need to be incredibly high. Right now the top tax bracket is something like 40% in the US, correct? And that's for the richest of the rich. Currently, the rich people in the US, I think it's the top 5%, pay something like 50% of the total taxes. If you dropped the tax rates on the rich to accommodate a flat tax, you would need to significantly increase the taxes on poor people. The flat tax might be around 30% or so. Given that I currently pay about 20% of my gross income towards taxes (includes all the different tax levels and tax cuts), 30% would be a major tax hike.

Let me give you an idea on how this works:
A guy makes 1 million dollars, suppose he pays 30% of his total income towards taxes; that means $300,000 in taxes. To give him a 1% tax break means he now pays 29%, which would be $290,000. The tax revenue just dropped by $10,000.
Now suppose you had to get that money back from 10 poor people who make $20,000 per year. In Canada the first 8k is tax free and the lowest bracket is something like 17%, so (20000-8000)(0.17) = ~$2,000 in taxes per year. That is their tax rate before the flat tax. Now you need to get an extra $1,000 from each of them because $10,000 divided by 10 poor people is $1,000 per poor person. Divide the new tax rate by the old tax rate and multiply by 100. (2000+1000)/(2000) * 100 = 150% more taxes than before

I'll repeat that conclusion again. To give a small tax break to the rich, you need to give a huge tax increase to the poor. Thank god we do not have a flat tax.

It's always been my personal belief that taxes should be based on how much money you make relative to the official poverty line rather than how much you make relative to zero. For example, rent in a crap part of Saskatchewan is maybe $500/month while rent in Edmonton or Calgary or Vancouver is easily $900/month. Car insurance in Alberta is more than twice as expensive as car insurance in Saskatchewan. Poverty in Edmonton is maybe $25,000 per year while poverty in some Saskatchewan town is more like $20,000. Should the guy in Edmonton pay more taxes even though he has the same living conditions?
The only problem is that this is not feasible. It would be way too complicated and filing your taxes would be that much more impossible.

Sort of a derail but do cities have much higher poverty rates than rural areas? I would imagine a place like New York City has insanely expensive rent, and you would need to make $10/h just to stay alive, barely. Can anybody confirm/deny?

 

[Skyhunter]

I'm frankly amazed that Clinton wasn't drummed out of the party for his welfare reform because it is so specifically against the core ideals of his party.

I think that perhaps source of your amazement may be erroneous assumptions about the "core ideals" of the Democratic party.

What Clinton did was not abolish welfare, or violate any socialist value held dear by democrats. Clinton used the government to implement social reforms to better "promote the general welfare." Clinton is a superb example in my opinion of an effective leader who knew how to make government quasi-functional. Which is better than most and 1000% better than Bush.

Social evolution is as real as biological evolution. A society is at it's peak when every individual is realizing her full potential. Each individual will more fully realize his potential when his/her basic self maintenance needs are met. Just like in the military. Each individual is provided food, shelter, clothing, health care, education, and employment.

What is wrong with a civilian government providing these most basic needs to all it's citizens?

How can a government claim sovereignty if it cannot provide these most basic needs?

All governments should strive to meet this most basic threshold.

Profit motive is very strong. But it is not the only motivation. As your anecdotal story demonstrates; when you show people a better way, and offer them assistance to get there, you introduce a new paradigm into their experience that has the power to break a generational cycle of poverty.

And Clinton's motivation to do so was not profit.

Some things are just not best done by a private contractor for profit.

Like health care, prisons, and war!

 

[randomness]

In order for a flat tax to work, the tax rate would need to be incredibly high. Right now the top tax bracket is something like 40% in the US, correct? And that's for the richest of the rich. Currently, the rich people in the US, I think it's the top 5%, pay something like 50% of the total taxes.

actually the top 1% pay over a third, 34.27% of all income taxes and the top 50% pay 96.54% of all Income Tax

 

[X-43D]

The goal of communism was to make goods and services free for all so that everyone could afford them, including the poor and those who have no money. Unfortunately a a system such as this is not possible when goods and resources are finite and where some occupations are harder to train for and others are physically harder. Another problem with this system is that a moneyless society does not encourage hard work. As was demonstrated on the communal farms of Russia, when each worker has little reward for working harder than a minimal amount there is little reason to work harder. If harder work doesn't mean more reward what is the point?

Everything comes with a price whether it be money or not. Resources are finite so something must be given up to earn those resources or products. If someone does not have money, all they have to do is make money! Unfortunately this is not always possible. Without a high school qualification certificate and other educational qualifications and authorizations it's not easy to get an adequately paying job, only low paying jobs.

People have always had disproportionate goods and services. A carpenter in ancient Egypt had to eat so exchanged his services for the necessities of life. A miner exchanged gold or copper while a farmer traded olives or barley. Everyone can't be a miner and everyone can't use more wealth than they create.

Before money barter was the means of distributing wealth. No doubt there were regional or local refinements everywhere it was used.

In no society that has or will ever exist are people simply handed the needs of life. Everyone can't be a king or a politician.

 

[Jimmy Snyder]

actually the top 1% pay over a third, 34.27% of all income taxes and the top 50% pay 96.54% of all Income Tax

What are the percentages when you figure in social security and medicare tax?

 

[Jimmy Snyder]

A guy makes 1 million dollars, suppose he pays 30% of his total income towards taxes; that means $300,000 in taxes. To give him a 1% tax break means he now pays 29%, which would be $290,000. The tax revenue just dropped by $10,000.
Now suppose you had to get that money back from 10 poor people who make $20,000 per year. In Canada the first 8k is tax free and the lowest bracket is something like 17%, so (20000-8000)(0.17) = ~$2,000 in taxes per year. That is their tax rate before the flat tax. Now you need to get an extra $1,000 from each of them because $10,000 divided by 10 poor people is $1,000 per poor person. Divide the new tax rate by the old tax rate and multiply by 100. (2000+1000)/(2000) * 100 = 150% more taxes than before

That should be 50% more taxes than before, not 150%. If you want to compare that to the $million guy, then his reduction was 3%, not 1%.

My guess is that your figure of 10 tax payers with $20000 income for each tax payer reporting a $million in income is shy of the actual number.

I'm against the flat tax too, but not for this reason. There is a point you are missing here. Under the flat tax, there would be no deductions. Therefor, the individual who is now reporting a $million would be reporting a larger figure under the flat tax. So the rate could easily go down and yet my tax bill go up.

My objection to the flat tax is that you could achieve the exact same thing by merely declaring that a dollar is now worth $0.83. That's what inflation does.

 

[ray b]

flat tax is UNFAIR
the real RICH DONOT PAY 40%
most of their gain is CAPITAL GAINS TAXED AT 15%
or about equal to the real SS tax rate!
but the real RICH don't pay much SS tax at all as it is both capped
and not applied to CAPITAL GAINS
WORKERS PAY both SS and income tax a real double hit

the old first income tax was ONLY ON THE RICH
IT WAS NEVER MENT TO BE AN EVERYBODY PAYS TAX
like it is now
a flat tax on the RICH AND ONLY THE RICH OF 30% would be fair
with no capital gain tax cut!

 

[ray b]

I wish a buck was worth 83 cents

I am old enuff to remember nickel cokes and candy bars
useing that standerd and current prices 75 cent cokes and 69 cent candy bars

A BUCK IS WORTH ABOUT 0.08 OR 10% OF YOUR NUMBER

 

[Jimmy Snyder]

A BUCK IS WORTH ABOUT 0.08 OR 10% OF YOUR NUMBER

The reason a buck is worth 8 cents now compared to half a century ago is that the dollar was declared to be worth 97 cents EVERY YEAR for that entire period. Imagine what declaring it to be worth 83 cents every year would do.

I'm almost as old, I remember the nickel candy bars, but soda was a dime. But don't be too upset, when candy bars were a nickel, you didn't have a nickel. Now they are 69 cents, but you've got the scratch.

 

[ShawnD]

There is a point you are missing here. Under the flat tax, there would be no deductions.

My god, really? What kind of idiot would want that system?

Education:
My education in Canada was about $3,200 per year for 2 years, so that's $6,400 in tax deductions. On top of that I got a tax deduction for cost of living since students generally cannot hold full time jobs, I believe it was $400/month, and 2 years of school is 16 months (4 month semesters).
6400 + (16)(400) = $12,800 tax write off. Basically that means I paid absolutely no taxes for 2 years, and this is done so people can afford to go to school. Take away the tax deduction and the cost of going to school soars.
Flat tax is bad for students

Parents:
Although your kids are huge liabilities, you can save lots of tax money thorughincome splitting. Basically the way it works is that money given to the kid (in trust) is tax free because the kid's gross income for the year is less than $8,000. The GDP per capita in my province is somewhere around $60,000 which puts the average person's highest taxable rate at 32%. If you wanted to send your kid to a 4-year university, the cost of that is about $30,000 (if you include books and supplies); so think of that as $30,000 that was not taxed at 32%. Since the income splitting was done over several years, the entire education cost can be thought of as being at the highest taxable rate. 32% tax means 68% take home pay:
(0.68)(X) = 30000
X = $44,117
If you had paid for 4-year university with after-tax dollars, you would need to make $44,117. If you pay for it for tax-free dollars, you only need $30,000.
[1 - (30000)/(44117)] * 100 = School is 32% cheaper with tax deductions

Business
Let's take a scenario here. A business has a gross income of $1,000,000 and $900,000 of expenses - you got to spend money to make money. Let's just say tax rate is 30% in order to keep the numbers simple.
With tax deductions:
(1000000 - 900000)(0.30) = $30,000 paid in taxes; net income is $70,000
Without tax deductions:
(1000000)(0.30) = $300,000 paid in taxes; net income is -$200,000; company just went bankrupt.Who exactly benefits by removing tax deductions?edit: The reason inflation is kept fairly low is so people can keep money in bank accounts. At 3% inflation, keeping $10,000 in your chequing account (which pays 0% interest) costs $300 per year. If inflation were 13%, it would cost $1,300. That's per year, to do absolutely nothing. People would be in a frenzy to get money in bonds and index funds just so their savings don't vanish into nothing over the course of 10 years.
Money that you invest isn't exact liquid. You can't just buy and sell bonds whenever the hell you want; there's usually some kind of holding period you agree to, measured in years. I'm not an economist but I don't think tying up the country's money in the form of bonds would help the economy.

 

[Jimmy Snyder]

What kind of idiot would want that system?

Good question. Even Steve "Flat Tax" Forbes wants a cutoff at the lowest incomes. Your example from business is pure nonsense. Business taxes are on profits, not on sales.

 

[ShawnD]

Your example from business is pure nonsense. Business taxes are on profits, not on sales.

The way companies do their taxes is exactly how you do your taxes. First you show how much money you took in: gross income (sales). Then you figure out your tax write offs: business expenses, kids, education, etc. Take your gross income (sales) and subtract all of your tax write offs (expenses) in order to figure out how much money you will pay tax on (profit). Going by definitions alone, removing "tax write offs" means businesses would pay taxes on sales rather than profits, just like you.

 

[drankin]

OK, I did not mean to bring up a the subject of flat tax. My point is that everyone should pay taxes, including the poor. Because, in this country you don't have to be poor if you don't want to be. Unless you are mentally disabled, or in some circumstances physically disabled, you don't have to live in poverty. If I wanted it bad enough, there is no reason I could not become a millionaire. I work hard enough to not be in poverty but I'm too lazy to make the sacrifices in order to be a millionaire. But I could become rich if I wanted to, the opportunity is there.

 

[Jimmy Snyder]

ShawnD, You are right, it really comes down to definitions. The phrase "flat tax" could be defined all kinds of ways. If they define it as a tax on the sales of a company at the same rate as the personal income tax rate, then it would put all companies out of business as you describe. I expect that in all the definitions proposed, wide ranging as those definitions may be, none of them define it that way. Just guessing.

Here is one of many possible definitions:
A flat tax (short for flat rate tax) taxes all household income, and possibly corporate profits as well, at the same marginal rate.

It comes from wiki:
http://en.wikipedia.org/wiki/Flat_tax
As I implied above, I wouldn't take anyone definition as THE definition, especially coming from wiki. I just present it as an example of the fact that flat taxers may be crazy, but they certainly aren't insane.

 

[ShawnD]

My point is that everyone should pay taxes, including the poor. Because, in this country you don't have to be poor if you don't want to be.

You can only get out of poverty if you have options available. Some of them are fairly obvious, too:
-get a better job
-work more hours
-get a second job
-get an education

The problem is that not everybody has these options. I'll go as far as saying many poor people have kids, and kids destroy your money situation because they require time and money. You can't get another job or work more hours because the kid takes up your extra time. You can't save any money because the kid needs to be fed and clothed. You can't get a loan because banks tend not to trust poor people.
You're stuck renting rather than mortgaging, so you have no equity.
You live paycheck to paycheck, so you have no savings or assets.
You can't get a loan, so you can't go to school.
Your kid takes up your free time, so you can't get another job.
It's over, you lose. Then some guy thinks you should also pay more taxes.

Michael Moore once said something to the effect of "raising minimum wage is in your best interest because it means fewer people will break into your house and steal things". He may have used the term minimum wage, but overall what he's talking about is poverty. Reduce poverty and we won't need to worry so much about crime. Increasing the taxes on poor people will only increase destitution, which would theoretically increase crime.

 

[Pythagorean]

Michael Moore once said something to the effect of "raising minimum wage is in your best interest because it means fewer people will break into your house and steal things". He may have used the term minimum wage, but overall what he's talking about is poverty. Reduce poverty and we won't need to worry so much about crime. Increasing the taxes on poor people will only increase destitution, which would theoretically increase crime.

On top of that they should legalize pot; that would keep me from going broke too!

 

[Smurf]

OK, I did not mean to bring up a the subject of flat tax. My point is that everyone should pay taxes, including the poor. Because, in this country you don't have to be poor if you don't want to be. Unless you are mentally disabled, or in some circumstances physically disabled, you don't have to live in poverty. If I wanted it bad enough, there is no reason I could not become a millionaire. I work hard enough to not be in poverty but I'm too lazy to make the sacrifices in order to be a millionaire. But I could become rich if I wanted to, the opportunity is there.

I think this statement has one main problem, wealth is not infinite. If you become a millionaire, someone else can't be.

 

[drankin]

I think this statement has one main problem, wealth is not infinite. If you become a millionaire, someone else can't be.

LOL, how do you figure?

 

[drankin]

You can only get out of poverty if you have options available. Some of them are fairly obvious, too:
-get a better job
-work more hours
-get a second job
-get an education

The problem is that not everybody has these options. I'll go as far as saying many poor people have kids, and kids destroy your money situation because they require time and money. You can't get another job or work more hours because the kid takes up your extra time. You can't save any money because the kid needs to be fed and clothed. You can't get a loan because banks tend not to trust poor people.
You're stuck renting rather than mortgaging, so you have no equity.
You live paycheck to paycheck, so you have no savings or assets.
You can't get a loan, so you can't go to school.
Your kid takes up your free time, so you can't get another job.
It's over, you lose. Then some guy thinks you should also pay more taxes.

Michael Moore once said something to the effect of "raising minimum wage is in your best interest because it means fewer people will break into your house and steal things". He may have used the term minimum wage, but overall what he's talking about is poverty. Reduce poverty and we won't need to worry so much about crime. Increasing the taxes on poor people will only increase destitution, which would theoretically increase crime.

I never said increase taxes. Everyone who benefits from roads, the fire department, schools, law enforcement, etc. should pay their share of taxes based on their income. Poor or rich. People should not have kids unless they can provide for them. But, people are dumb (I sure was). There are circumstances beyond ones control but that is the exception. We shouldn't make life any less difficult for those who make bad choices. When you do, you enable that behavior.

The bleeding heart routine will only make you frequent the blood bank. Because people will drain you dry if you let them and not even realize they are doing it.

 

[ShawnD]

I agree that people should learn from their mistakes, but accidental kids are not something you can learn from in the same sense as shocking yourself when you plug something into the wall. When you get shocked by the wall, no harm is done and you can just not do it again. When you have an accidental kid, that accident drags you down for the next 18 years. It's sort of like getting AIDS then saying "well don't get AIDS next time"; the problem is that there is no next time.

I also agree that we should not encourage irresponsible behavior, but at the same time we shouldn't just let people rot because of their mistakes. An example of enabling bad behavior would be to increase welfare to people who have kids they can't pay for. Why stop having kids if the government will keep paying for them? An example of helping people without encouraging stupidity would be something like free day care but have "right to work" style of welfare; that means you only get your welfare money if you actually do work for the state. The state is saying "we'll take care of these kids for you, but you still need to get off your ass and work for a living".
I'm not saying that idea should be done or anything, but it's food for thought.

 

[drankin]

I agree that people should learn from their mistakes, but accidental kids are not something you can learn from in the same sense as shocking yourself when you plug something into the wall. When you get shocked by the wall, no harm is done and you can just not do it again. When you have an accidental kid, that accident drags you down for the next 18 years. It's sort of like getting AIDS then saying "well don't get AIDS next time"; the problem is that there is no next time.

I also agree that we should not encourage irresponsible behavior, but at the same time we shouldn't just let people rot because of their mistakes. An example of enabling bad behavior would be to increase welfare to people who have kids they can't pay for. Why stop having kids if the government will keep paying for them? An example of helping people without encouraging stupidity would be something like free day care but have "right to work" style of welfare; that means you only get your welfare money if you actually do work for the state. The state is saying "we'll take care of these kids for you, but you still need to get off your ass and work for a living".
I'm not saying that idea should be done or anything, but it's food for thought.

I think we pretty much agree, I just have a little less patience, having been destitute, married (miserably), with kids myself once upon a time and crawling out of the mess I had put myself in.

 

[X-43D]

You can only get out of poverty if you have options available. Some of them are fairly obvious, too:
-get a better job
-work more hours
-get a second job
-get an education

The problem is that not everybody has these options. I'll go as far as saying many poor people have kids, and kids destroy your money situation because they require time and money. You can't get another job or work more hours because the kid takes up your extra time. You can't save any money because the kid needs to be fed and clothed. You can't get a loan because banks tend not to trust poor people.
You're stuck renting rather than mortgaging, so you have no equity.
You live paycheck to paycheck, so you have no savings or assets.
You can't get a loan, so you can't go to school.
Your kid takes up your free time, so you can't get another job.
It's over, you lose. Then some guy thinks you should also pay more taxes.

Michael Moore once said something to the effect of "raising minimum wage is in your best interest because it means fewer people will break into your house and steal things". He may have used the term minimum wage, but overall what he's talking about is poverty. Reduce poverty and we won't need to worry so much about crime. Increasing the taxes on poor people will only increase destitution, which would theoretically increase crime.

Those without a high school diploma and other educational qualifications find it harder to find an adequately paying job, only low-paying jobs. There is always competition for high-paying jobs while the low-paying jobs are for those who are less educated and less skilled.

http://www.quintcareers.com/surviving_low-wage_jobs.html
http://en.wikipedia.org/wiki/Working_poor

 

[Pythagorean]

I'm torn on this one. Firstly, I'm pro-choice, and if you aren't in the state to support children, you shouldn't have them. Deferring gratification argument is partially valid here, too. I think practically any US citizen is capable of making a living for themselves if they sex responsibly and are raised aware of their options in a capitalist economy (even transport to where workforce is in demand can be done cheap or free). I live comfortably on about 12 grand a year, sharing expenses with a girlfriend as an undergrad (loans and grants).

That being said, I don't have a problem with poor people eating with my taxes either. Eventually, I'll get a degree and make more money and contribute more taxes, and I'd hope that I still feel the same way.

That being said, I don't know who's to blame for irresponsible people (besides themselves)

Some Possibilities:
(in order of perceived significance)

-bad parenting
-genetics
-social service programs
-the justice system (who defines criminal)
-things I haven't thought of

 

[ShawnD]

I'm torn on this one. Firstly, I'm pro-choice, and if you aren't in the state to support children, you shouldn't have them.

Ideally yes, but an episode of Frontline revealed how this isn't always possible. You can view the entire episode online
http://www.pbs.org/wgbh/pages/frontline/clinic/view/

Basically there are a bunch of laws that make abortion impossible for those who can't afford it. I think it was Mississippi in particular that has only 1 abortion clinic, and the law requires you to meet in person for a consultation and wait 1 full day. Not everybody has the transportation to do this, or the ability to miss 2 days of work.

 

[Pythagorean]

Ideally yes, but an episode of Frontline revealed how this isn't always possible. You can view the entire episode online
http://www.pbs.org/wgbh/pages/frontline/clinic/view/

Basically there are a bunch of laws that make abortion impossible for those who can't afford it. I think it was Mississippi in particular that has only 1 abortion clinic, and the law requires you to meet in person for a consultation and wait 1 full day. Not everybody has the transportation to do this, or the ability to miss 2 days of work.

Hrm... that's pretty lame policy-making and my gut says it's based in religion, but that's just conjecture.

I don't think I could afford an abortion, but I'm not planning on ever needing to. You can bump uglies responsibly in the first place.

I realize though, that not everyone is educated like this. Some people hide the word sex from their kids well into their teenage years, when they've already figured it out on their own, from their peers.

 

[ShawnD]

Hrm... that's pretty lame policy-making and my gut says it's based in religion, but that's just conjecture.

Indeed it is bad policies, and it is driven by religion.