by Debbie of Right Truth
John Edwards is running for president of the United States on his same old theme, "two Americas." He hopes to get votes by pitting the "haves" against the "have nots." He even chose New Orleans to make his announcement, with the unspoken message that the government failed the poor people and he has stepped in to be their savior.
Edwards is promising universal health care, pulling out of Iraq, taxing oil company profits and eliminating President Bush's tax cuts to pay for his priorities. Edwards is not alone in his thinking about the evil rich (of which he happens to BE ONE). Yesterday Thomas Sowell had a wonderful article that relates to this, titled "A Dangerous Obsession."
Mr. Sowell picked up on the media, the left, and academia's continuous obsession with "gaps" and "disparities" in income.
"As one talk-show host put it, 'It makes no sense that a corporate executive makes over $50 million a year.' Sowell says, 'Ninety-nine percent of all the things that happen in this world make no sense to any given individual.
If you cannot understand something as simple as making a lead pencil, why should you be surprised that you don't understand why someone is making a lot more money than somebody else?
Moreover, if this obsession with income disparities is to be something more than mere hand-wringing or gnashing of teeth, obviously the point is that somebody ought to 'do something' to change what you don't understand."
That's what the left, liberals, and Edwards want to do. They want to correct what they perceive as something wrong ...some people having more money than others. And how would one go about correcting such an atrocity? That's easy. Take away the excess from one, and give it to another. Or, as Mr. Sowell puts it, "Usually that means that the government (politicians) should impose policies based on your ignorance of what is going on."
"Of course, such political control of incomes is usually advocated only to deal with the rich.' But, when income taxes were imposed in the early 20th century, they applied only to 'the rich' and they took a very small percentage of their income.
Once the floodgates are opened to this kind of political power, however, we have seen with the income taxes that they not only spread far beyond 'the rich,' they took a serious share of even middle class incomes.
Moreover, the income tax has spawned an intrusive bureaucracy, creating so much complexity and red tape that millions of ordinary citizens have to go get some accountant to fill out the forms for them -- and then sign under penalty of perjury that it was done right.
If you knew how to do it right, you wouldn't have to go to somebody else to have it done, would you? ...
It is also worth noting that the people who are said to be earning 'obscene' amounts of money are usually corporate executives. There is no such outrage whipped up when Hollywood movie stars make some multiple of what most corporate executives make.
In short, Mr. Sowell is asking, "Whose wealth is it anyway?" Did the government earn this wealth? No, they didn't. Why should they be the ones to decide who is worthy to spend that wealth? Did the government produce any product, any widgets, any business that will employ others? Unless you count the bureaucracies needed to collect and redistribute this wealth, the answer is no.
In reading Mr. Sowell's article, I thought directly of the United States, but Tom at Libertarian Leanings looks at this from a world view.
"Israel has nowhere near the natural resources of the Arab states, yet they are wealthier by far. According to the CIA World Factbook, Israel produces a measely 2,740 barrels of oil per day. At the same time Saudi Arabia puts out 9,475,000, and Iran 3,979,000. Yet Israel enjoys a per capita GDP of $25,000, while Saudi Arabia and Iran come in at $13,100 and $8,400 respectively. The income gap is not a crisis in Israel because Israelis have the freedom to produce wealth. Arab state citizens have less freedom, less wealth, and less hope for getting it.
Unfortunately, leftists (and Democrats) can't bring themselves to support the spread of freedom. Their antidote to the growing gap between the rich and the poor is to prevent the creation of wealth. Taxation discourages an activity, so the lefty solution to their contrived crisis is to tax wealth (income) at ever higher rates as a person demonstrates ever higher success in creating it. The Arab solution is to wipe Israel off the map. Actually, there are Democrats who seem to be coming around to that view.
This brings me back to the United States, to the Fair Tax, which would replace the federal income tax system with a progressive national retail sales tax. It provides a "prebate" to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue replacement and, through companion legislation, repeal of the 16th Amendment.
"This nonpartisan legislation (HR 25/S 25) abolishes all federal personal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes and replaces them all with one simple, visible, federal retail sales tax -- collected by existing state sales tax authorities.
The FairTax taxes us only on what we choose to spend, not on what we earn. It does not raise any more or less revenue; it is designed to be revenue neutral." (more)
Why should people be punished because they took the risks to build a business, to produce a product, to creat a new widget? Why should they be punished by having the government take away a large portion of their profits, profits that could be used to produce MORE jobs, more widgets, more wealth? Why should the creators of wealth, who give much of that wealth away to worthy and needy organizations, be punished? They shouldn't.
On the world scene, Brad leaves a comment at Thought Streaming:
"One can never force a productive, ambitious, disciplined spirit to subsidize weak mindsets girded by overactive libidos, they will always rebel...".
Graeme also leaves a comment, "...if you give people a 'voice' at work, they will produce more. They have incentive to work."
If you let people produce wealth, reinvest wealth, and use it as they see fit without government intrusion, you will actually see more help being given to those in need, more opportunities for those in need of better jobs, higher salaries, more education. Don't punish people for using the gifts and opportunities God gave them.
That my dear friends is what folks like Edwards (and Hillary Clinton) want to do.
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Click here to enjoy a free animated FairTax cartoon!
Comments
You would think that they were trying to incite the "final revolution" Marx described.
Brilliant thread. You always remind us to keep our eyes wide open.
I only take exception to, what I think is a misconception from the right (gop) of the left (dem).
The way I see it, the left (dem), are not saying tax the rich and leave the middle guy alone. Not at all.
The way I see it is that the left are saying, "the ultra wealthy" (key word ultra) have within the tax code many more "credits" than do the middle class or upper middle class.
A prime example of my "point" is the "Alternative Minimum Tax." That tax was established in 1959?? The sole purpose for the tax back in 59 was to bridge the gap between the "ULTRA" wealthy and the middle class.
The problem today with the AMT is that the AMT has NOT moved with inflation. Therefore, what was "Ultra" wealthy in 1959 is simply middle to upper middle class today.
As a consequence of the AMT not adjusting for inflation more and more of the middle class are being socked with the AMT - which by the way is a tax that most Americans don't know about until the IRS writes them and tells them to file the AMT. OUCH
The AMT has a threshold of income dictating who should file AMT. It is a somewhat confusing threshold. To simplify it, if a person earns between $75,000 - $500,000 you have to fill out the AMT tax.
If you earn OVER $500,000 you are not obligated to file the AMT. That's a problem to my left side.
The AMT is also confusing because one thinks off the cuff that the "Alternative" has the same definition as Webster. Alternative from what you already owe. However, that is NOT the definition.
To make it real simple, the AMT works like this. If you make $75,000 - $100,000 you most like get deductions from Schedule A. You take that number from Schedule A and that is your Adjusted Gross Income that you are taxed on ... Usually bet. 25% - 33%.
Now, with the AMT, You take your GROSS INCOME and ADD that with the deductions that you used on Schedule A and ADD THEM ALL UP TOGETHER on the Form AMT. (Form 6251) - So you have just added back what you had just deducted. Basically, Gross Income + All deduction = Sum (times) 26% -33%. YEOUCH.
Once you add all your Sch. A deductions up on AMT and multiple that sum by 26% - 30%. The total value is ADDED to your AGI on Form 1040.
In short, the deductions you just thought you had from Sch. A, you JUST PAID TAXES ON! How about that?
So, due to the lack of the AMT following inflation, the middle class are now paying the AMT and the "Ultra" rich are not because they make over $500,000.00.
My point of my view, the ultra rich should not have to give me or the poor anything that they don't want to give. However, the tax code needs to be reworked so that the "pain" of writing the check to Uncle Sam is the same "sting" for all.
Now as a democrat I feel that I can say this with no slant intended. If Clinton, Edwards, Kennedy, JONATHAN MILLER, want to be taken serious when they talk about taxing the rich - Then: they should fill out the line on Form 1040 that allows an individual to ADD MORE $$$ THAN WHAT THEY OWE. huh, and ADD an additional payment for what THEY want ALL rich people to pay.
If they are not willing to ADD money to the tax system because of the deductions they got, then they are hypocrites. I mean, they get the deductions they complain about but do they ADD additional money that they "claim" they want the rich to pay?
Plus, when at least one of the above mentioned politicians started a blog that doesn't pay ANY taxes because of false information given to the SOS, I say, PALEEZE give it up on the complaint because you clearly don't "walk the walk."
For me it is NOT the "notion" of equal "sting" that is nauseating, to me their words are so full of hot air because I don't think a single of them "walk the walk."
For instance, I make 2 million a year and I pay my taxes but I add $100,000. to the tax system because I believe in the premise behind - People will believe me when I say, make the same "sting" for all. Otherwise, if I dig deep and pay some accountant $10,000 to find all my deductions then that makes me a hypocrite.
Ok, that today's epic. Sorry Dawn I can't write as well as you.
PS. There is a lot of good information out in the WWW on the AMT and at irs.gov. I bet you could write an awesome thread on that tax. Not many people have heard of it.
There are tons of great articles from economists online here is one.
Smart Money on AMT:
http://www.smartmoney.com/tax/filing/index.cfm?story=amt
Fedup, I think you're falling for some of the rhetoric behind the taxation of income. I can see why but I also think that we need to take a different approach to thinking about how we fund our federal government.
Here's how I see it: Currently, we tax people on their productivity (i.e., income is a sign that you are contributing to your own well-being and the economy at large). Here's the scoop -- when tax people on their productivity, you are punishing them for being productive members of society. That's the middle-class in this country right now. It makes no sense to me to penalize anyone for being producers.
The dirty secret in all of this is that the people who produce none of their own income -- people like Paris Hilton, for example, who is simply an heiress and is living off of a trust fund or gifts of money from her family will never pay tax on it because it's not considered an "income." The AMT will not even apply to her!
The FairTax is a consumption-based tax. It takes people who buy NEW goods. Think of the difference in what you or I might do when it comes to buying a car. We would probably (being smart consumers) purchase a used vehicle that gets good gas mileage to save money. A wealthy heiress like Paris would be more likely to buy a NEW expensive car. In this case, you and I would pay NO tax on the used car but Paris would pay a 23% federal FairTax on her expensive NEW car. That seems more fair to me. Responsible consumers would not pay tax on buying responsibly AND we'd not be penalized for earning a middle-class income either. People like Paris who pay no income tax to begin with would pay taxes commensurate with the price of the new items they buy. She would finally be paying taxes!
We would all be taxed more fairly via the FairTax and that was the point of the article. Instead of waging some sort of income tax class warfare, we'd finally equalize the burden by granting everyone an exemption or "prebate" equal to poverty level and then only tax everyone after that on the purchase of NEW goods only. Tax attorneys, tax preparers, and the IRS will all be looking for new jobs because there will be no income tax loopholes to exploit.
I'm jazzed about it and would love to see this tax reform passed!
Excellent points. I agree completely. I wish I knew the answer but I don't.