# News Philosophy of taxes

1. Jul 29, 2004

### Njorl

I contend that there is no fairness in taxation. I'm not saying that taxes are unfair. On the contrary, I am saying fairness does not enter into the matter.

There is a theory that all wealth is fortuitous, or "lucky". There is the extreme case of the people who win the lottery, or inherit wealth, but that is a small fraction. There are also gifted people, luck in one's genetics is also luck.

However, most wealthy people became rich through a lifetime of hard work. Then you must ask why people work hard. Is it their character, their psyche, their upbringing? All of these are determined by circumstance. Nobody filled out a form before they were born and checked the "hard-working" box instead of the "lazy" box. So, even wealth earned through a lifetime of hard work is "lucky" wealth.

This, I believe, eliminates any premise that the tax system should be fair.

This is not to say that anything goes. There is a moral imperitive for the tax system. It should benefit the society as much as possible, as far as that benefit can be perceived. At first glance, this may look like a justification for Marxism. It isn't, unless you can make the case that Marxism is best for society. I don't think that is so. Clearly, society benefits from hard work and from talents used well. If society wants those benefits, it should monetarily reward those who practice them.

In a fictional, purely capitalist society, those rewards would only be handed out through the marketplace. You would wind up with a small number of extremely wealthy individuals, and a large mass of extremely unhappy people. The result would likely be the violent destruction of society, or enormous resources devoted to preventing it.

Graduated taxation serves an amelioritive function in our society. Those who benefit most from a free and ordered society pay most for the maintenance of it. Those who have the least "lucky" wealth are actually reimbursed to give them more of a stake in society. The majority of us pay for the maintenance of our society, but not as much as the wealthiest do.

Sorry if this seems pedantic. I have found that debates about taxes usually devolve into "the wealthy can afford it" or "it is unfair to be taxed so harshly". Neither argument has merit. Tax the wealthy too harshly, and they willl stop creating wealth. Tax them too leniently, and either society will be unable to govern itself, or the rest of society will be so harshly taxed that it will rebel. It is entirely a matter of practicality. Fairness never enters into it. A 99% tax rate is not unfair. Stupid, it is, but not unfair.

Njorl

2. Jul 29, 2004

### loseyourname

Staff Emeritus
What's wrong with user fees?

3. Jul 29, 2004

### JohnDubYa

So Lance Armstrong was just lucky to win six Tours de France. And Martin Luther King, Jr. was just lucky when he established the civil rights movement. Audie Murphy was just lucky when he won the Medal of Honor. Saddam Hussein was just unlucky when he slaughtered hundreds of thousands of people. Adolf Hitler was just unlucky when he deported the Jews to concentration camps. There is no achievement. There is no barbarity. We are all just pawns being played by the hand of fortune.

You cannot deny achievement on one hand, and then assign blame and responsibility on the other.

4. Jul 29, 2004

### Staff: Mentor

Sounds like your opinion - philosophically anyway - matches mine reasonably well (though I'm a bit less pessimistic abou hard work being luck).

The question, however, is: graduated how much? Not an easy question.

5. Jul 29, 2004

### JohnDubYa

I can think of no better excuse to fail than Njorl's argument. Care to contradict?

6. Jul 29, 2004

Staff Emeritus
I think this "most wealthy people get that way through a lifetime of hard work" is phoney. Many more people work hard for a lifetime and don't get rich. What's the difference? Well you already pointed out that genes are a matter of luck, and with it an unknowable but probably large proportion of cleverness and drive. And for the rest it's strictly luck, one entrepreneur succeeds while six others fail.

The people who have large amounts of money all want to believe that they deserve it and that any taxes that take part of it away are unjust. But I deny their premise.

7. Jul 29, 2004

### aeroegnr

The problem with taxes is the incredible waste that goes along with it.

I did my own tax research and found that the average US taxpayer paid 37% of their income in taxes, based on data from the CIA World Factbook.

The average taxpayer could work until sometime around may 7th (starting in january) and never keep a penny if they had to pay their taxes before keeping it. Not only is 1/3 of their working life taken from their hands, but the average person has no control over what's done with it. Politicians have become experts at squandering tax dollars on whatever will get them votes, whether that's free prescription medicine or building an indoor rainforest somewhere I'll never care to visit. I for one think the US government has overstepped its constitutional powers and its time to fall back some.

8. Jul 30, 2004

### Njorl

Failure is not to society's benefit, and so will not be rewarded. Blame is irrelevant.

Njorl

9. Jul 30, 2004

### amp

Njorl, thats an insightful summary of a spiritual concept of civil-societal administration and it is a wise policy because many times those with the least 'luck' turn out to be the ones with the most to give.

10. Jul 30, 2004

Staff Emeritus
Njorl and Amp - I agree with what you said!

11. Jul 30, 2004

### JohnDubYa

Not only do you have to work hard, you also have to work smart.

However you slice it, this is the No Free Will philosophy.

As long as people are driven by their own self-esteem, "blame" (as you call it) will always be relevant. People don't work hard just to get ahead, but also to establish their own self-worth. You are taking self-worth away from them when you declare their accomplishments a matter of luck.

Pride comes not only from possessing something, but being involved in obtaining the possession, whether it be athletic skill, education, or material objects (such as custom hot rods). You cannot take away that pride without adversely affecting productivity.

Last edited: Jul 30, 2004
12. Jul 30, 2004

Consider a 25% flat tax. A man who makes $1 million per year pays$250,000 to the government. A man who makes $100,000 per year pays$25,000 to the government, $225,000 less than the richer man. Sounds like a fair system that satisfies your criteria. 13. Jul 30, 2004 ### russ_watters ### Staff: Mentor I agree with that too, but I'm not sure its pertinent. However: How can you say that? Failure (big failures) in the U.S. is rewarded with cash: welfare, unemployment, bankrupcy. The counter-argument though, is that no one else deserves it either. 14. Jul 30, 2004 ### BobG I'd have to go with John on this one. Money is important when it's the difference between having necessities and not having them, being able to weather misfortune or having every misfortune turn into a major disaster. Once a person makes somewhere around$50,000 a year, they have enough money to buy as much happiness as money can buy. After that, money becomes more of a validation that you've done well than a real difference maker in your life.

Which is precisely why Njorl's basic premise, that fairness has little relevance to how much you can tax a person, is still correct. It's easier to trade civil stability for money with someone who can cough it up than with someone who's more concerned about HOW to pay a hospital bill than whether the hospital's actually any good.

15. Jul 30, 2004

### Njorl

Welfare and unemployment are at best consolation prizes. Bankruptcy is certainly no reward. Can you seriously contend that any of these are remotely as satisfying as living a secure, middle-class life?

Njorl

16. Jul 30, 2004

Believe me, $50,000 a year is not all of the happiness money can buy. In many parts of the country, it is not even buying much in the way of a house, let alone happiness. In my county, a family of 4 can expect to pay about$1700 for mortgage that is purchased through low-income housing, property taxes and property insurance, $600/mo for food,$300/mo car payment, insurance and gas, $200 electric and heat,$30 water, $20 phone. That's about$2850 per month. That's about all the take home pay there is for $50k/yr. And that's just Montgomery county Maryland. New York and San Francisco have much higher costs of living. Njorl 17. Jul 30, 2004 ### Njorl I wouldn't call it unfair. My point is fairness is moot. The only question is how well does it work? Does it cause the economy to grow? Does it keep the people happy? I would argue that even a regressive tax (everyone pays their first$15,000 as tax) was acceptable if it worked. Of course, no regressive tax is going to work any time in the near future. For such to be true, we would all need to be wealthy.

Njorl

18. Jul 30, 2004

### BobG

Uh, yeah. Putting dollar amounts out there probably doesn't tell much since cost of living can vary so much. Maryland's a lot more expensive than Colorado (although I'd sure love the thought of a \$30 water bill).

But it does bring up a problem with federal tax rates. People are effectively pushed to a higher tax bracket in some areas than others with the same equivalent income. I.e. - a person in Omaha making 30 or 35K is being taxed at lower rate than someone making 50K in the DC area, in spite of the two incomes being roughly equivalent in buying power.

19. Jul 30, 2004

### Staff: Mentor

Certainly living a secure middle class life is a better "prize" but a "consolation prize" is still a "prize." And those consolation prizes have alternatives too: the alternative to bankrupcy, for example, is having the bank take your house.

20. Jul 30, 2004

### Dissident Dan

So, if poor people can't afford the user fees, they get no police protection?

How would user fees work for an issue such as clean air? "Step right up, fill your air tanks".

21. Jul 31, 2004

### loseyourname

Staff Emeritus
Relax, Dan. I didn't say to implement user fees for everything. It works very well in terms of developing city infrastructure, in particular roads, parks, and bridges. Look into the history of New York City and what Robert Moses was able to achieve, almost entirely through the use of tolls. Further, I greatly support the creation of public authorities, as was also done beautifully by Moses. Their funding is not automatic, and as such, they are far more accountable. The Port Authority of New York and New Jersey is even able to maintain a decent police force, one that was integral in the rescue and cleanup efforts after 9/11, while depending on funding from sources largely other than tax money.

It would be foolish to get rid of all taxes, but prudent to get rid of them everywhere that we can.

22. Jul 31, 2004

### ray b

we have a unflat federal tax rate of about 25% NOW!!! on the poor workers!!!
remember SS tax but you only pay 1/2 the real rate if you work for someone
so real SS is allmost 15% plus minimum income tax rate that starts at 10%
together thats 25%
note SS drops to ZERO over 88K so that never troubles the real rich at all
BUT INCOME TAX was only to be a RICHMANs's TAX when it started

now lets take billionair BILL GATES most of his wealth is from STOCKS
"W" wants to have NO TAX on DIVIDENDS at all
and DROP the CAPITAL GAINS TAX RATES on STOCKS allready below 20% and FALLING.
but thats only part of the story, as the real wealth in stocks is ONLY taxed at sale.
AND "W" wants to cut the death TAX
SO MOST OF Bill's BILLIONS will NEVER EVER BE TAXED
and his REAL tax rate vs his wealth[total income] is less than 1% NOW
unlike the worker who pays 25% total on his very small wealth

AND REPUBLICAN's CLAIM the RICH are over TAXED
thats just another BIG LIE

NOTE please DONOT belive MY #s pick any BIG CEO/CORP owner
and try to figure his tax rate vs his REAL WEALTH INCREASE thru
STOCKS and OPTIONS, perks[ free stuff he gets that workers DONOT] like
golden parachutes, free life insurance, retirement pay, travel, meals, and sports boxes ect all untaxed to him but a tax write off
on the CORPs taxes

23. Jul 31, 2004

### JohnDubYa

My ears are ringing.

24. Jul 31, 2004

### ray b

they should for beliveing neo-con lies
and parroting them WITHOUT CHECKING THE FACTS

25. Jul 31, 2004

### plover

He was lucky to have the genetic predisposition for a physique that facilitated this goal. Presumably also lucky that his passion turned out to be cycling -- suppose he had preferred swimming, he would probably still be considered a gifted athlete, but there's no reason to believe he would necessarily be world class.
Suppose his parents had moved to Milwaukee when he was 8. He would probably still be a gifted orator, but probably would not have been as central to a movement centered in Southern states.
If you go out on patrol every night but never encounter the enemy, nobody knows whether or not you could be a hero.
This is pretty silly. Those Kurds/Iraqis/Jews/Rom/gays who lived under these guys were unlucky (to put it mildly). The world was unlucky (to put it mildly) that no one in a position to affect the outcome saw through them as they rose to power, (or if they did, took them seriously enough to act against them when it was possible). I suppose one can argue that they were "unlucky" to be severely mentally imbalanced. But if success is being able to reach your goals, they both enjoyed pretty long runs of success. If one's goals (or means) include genocide, you don't get to be surprised if the world takes against you...
Who was saying this?
I don't think that people are 'just' anything. But, one contributing factor to the fabric of human life is that we are all pawns of fortune. No?
What in Njorl's statement could be considered an overall denial of achievement, or prescription for assigning blame?

The statement obviously accords a greater place than you would like to factors other than 'free will' (however you're defining it, which might not accord with how other people here define it). But so far nothing you've said supports taking Njorl's statement as some kind of categorical denial of 'free will' (even--to the degree I can guess it--under your definition of the term, let alone anyone else's).

Last edited: Jul 31, 2004