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Time For Tax Hikes
I never expected to say this. Pelosi's right, Obama's wrong.
Do keep in mind that we are talking about higher taxes on the richest members of society, the very richest. So, unless you're among that elite group, don't panic for personal reasons.
Keep in mind, also, that we are speaking only of income taxes.
You have certainly heard, several thousand times, that tax cuts lead to economic growth.
That's not true.
Moderate tax cuts lead to a flat economy. (The Johnson tax cuts, usually misnamed the Kennedy tax cuts, lead to 16 years of virtually no growth.)
Large tax cuts are followed by a boom in the financial sector, a bubble, and a crash. Then a recession or depression with massive bank failures. This has happened three times, in the 1920s, under Reagan, and under George W. Bush.
During a depression or recession, the point where taxes are increased marks the point when the economy begins its recovery: 1932 under Hoover, Roosevelt's second round of tax hikes in 1940, the first president Bush's tax hike, followed by the Clinton tax hike. (There's one exception. Roosevelt's tax hike of 1936, which was accompanied by cuts in government spending.)
US economic growth has been strongest when our taxes have been high. During World War II, then under Truman, Eisenhower, and Kennedy, our upper marginal tax rates were between 88-92%. Read those numbers again. They are astonishingly high. Those were our strongest growth years.
The next time we experienced strong growth - not just in the fiscal sector, across the entire economy - was after the Clinton tax hikes.
Why do tax hikes lead to strong economic growth?
Tax hikes usually correspond to higher government spending.
Government spends money on things that the private sector does not spend money on: physical infrastructure, social infrastructure, market infrastructure, and defense. These are the things that create a world in which doing business is possible. The worse those things are, the worse business is. The better they are, the better business is.
Rich people can't be trusted with too much money. If they have too much easy cash around, they get conned into Ponzi schemes, they go for quick money deals, they get suckered into bubbles, and then the whole economy crashes.
Can we have increased government spending without tax hikes? No.
We can spend more than the government takes in - if, and only if - the following is true.
If the government is spending more than it takes in order to create an environment where more productive business is possible, then, at some point, the investment will begin to pay off and revenues will rise. If, at the same time, government spending declines (as a percentage of GDP), increased revenue will catch up with spending and the debt will be paid off.
Or - since this is the real world, in which there are always new needs and new problems, and therefore new things to pay for - the old debts will be caught up with and paid down, while new ones are taken on, hopefully to build new things that will pay off in turn.
In order for that to work, the tax rate has to be high enough so that the first set of deficits could actually be paid off (if life, government and business suddenly stopped there). If the tax rate is not high enough to do that - even if only in theory - then debt piles upon debt and the country's currency becomes worthless.
Debts at some point must be paid. Even if new debts are being taken on. The fact that government goes on and on, and there are constant new debts, disguises that. It makes us think of the debt as a condition, something special to government, that is actually different from regular economics. But it's not.
So the set-up has to be like that of a real business. We take on debt to get things done. We need a revenue stream that will pay for that debt. In this case, it's called taxes. If the set-up is such that the revenue stream will never pay for that debt, we must go bankrupt. Or mortgage and then sell off our assets, and then go bankrupt. Which is what we tried under George Bush.
There is a theory that tax cuts - even without spending cuts - will pay for themselves out of increased revenues. This has the laughable name, The Laffer Curve. It apparently works very well in Republican minds but has never worked in reality. It produces huge deficits that eventually require tax hikes to pay down the debt.
We are now taking on two huge new sets of debts. The first is to pay for the Laffer Curve idiocy of the Bush years. The second is to rebuild the economy from the devastation of those policies and the ones like them in preceding administrations.
Somehow, those debts will have to be paid for. The question is how?
We know that even if the economy is relatively active, as it was during the fiscal bubble of the Bush years, that it cannot pay the cost of government with the tax rates that we currently have. There was lots of taxable money being generated, yet it never came close to catching up with spending. That's not even counting those costs - like the wars - that were kept off the books.
Even if we were not going to invest in rebuilding the economy, we would have to raise taxes just to get even. Then raise them again to pay down the debt. But unless we rebuild the economy it will not generate enough money to create the revenue stream (taxes) to pay the debts. So that has to be done too.
Why are we so resistant to raising taxes?
It's our nature. Nobody likes to give up their personal money for the common good.
People with a lot of money have, over the past fifty years, spent a fortune on exploiting that instinct and pandering to that feeling. Eventually, with nobody willing to say publicly that taxes are good, they took over the dialogue. It is now routine to hear tax cuts refereed to as "pro-growth" policies, even though, in fact, that's not true. It is routine to hear tax hikes called "anti-growth" policies, when that's not true.
The rich, the Republicans, and the Right, have lost this last election, but they still own the mythology.
High taxes make for a sound economy. High taxes make us all better off. High taxes will make you richer. Even after taxes.
- Posted in
57 Comments so far
Show AllCQ from Maine.
In a 2006 article on health care in "The New Yorker" Malcolm Gladwell offhandedly provides the following relevant statistic:
"A year later [1950], the same issue came up in Detroit. The president of General Motors at the time was Charles E. Wilson, known as Engine Charlie. Wilson was one of the highest-paid corporate executives in America, earning $586,100 (and paying, incidentally, $430,350 in taxes). He was in contract talks with Walter Reuther, the national president of the U.A.W. The two men had already agreed on a cost-of-living allowance. Now Wilson went one step further, and, for the first time, offered every G.M. employee health-care benefits and a pension."
My guess is that old Engine Charlie lived a pretty nice life on the 156K he had left over after he paid 73% of his income in takes for the privilege of doing business in the safest country on earth. But as a true conservative I only want to pay for that portion of the road which is under my tires and only when I'm driving on it.
>>But as a true conservative I only want to pay for that portion of the road which is under my tires and only when I'm driving on it.
Hey, do you really mean that? If you can convince enough people to think that way, you know, you could actually save the environment. Just as the 'polluters pay' principle could. While you are at it, read up on "pay as you drive insurance" and see if it makes sense to you. Also, how about making the oil companies pay for their own "protection"? If they need a military to 'safeguard' their oil supplies in faraway lands, then let them pay for it, and pass it on to the consumer. So those who really need to drive, would demand more fuel efficient vehicles. And public transportation may appear to be a better idea in some cases. And, I'm sad to say this, those who die trying to protect an 'empire' would know what they are dying for. And if you have to pay for your own healthcare and retirement, I guess, people will be more responsible with their eating habits, lifestyle, savings, etc. All of this will be fair, and will work, only if those who think of themselves as 'conservatives' refuse to be fooled by neocons, evangelicals, warmongers and just plain-old profiteers - all invoking the 'conservative' 'philosophy'. And, as a 'true conservative', I suppose you would have no objection to helping out those in need, and not be scared by any "spreading the wealth" scare tactics? 'Helping out' could sometimes mean paying taxes, AND staying alert to make sure it is spent wisely (for the simple reason that there are certain things that are best done by a government-type agency - believe me, competition is NOT a good thing in all situations - for example, you wouldn't want two highways or toll bridges for the same destination, 'competing' for customers, would you?).
Highintel: Can we do better?
Speaking of oil companies, instead of drilling in all the wrong places and mugging the Middle East for oil, we can grow algae for oil aka renewable petroleum and this works from Alaska to Florida. I'll even support the idea of hemp and switchgrass over corn any day. :)
CQ from Maine
I was being sarcastic. How you gonna pay for only the road under your tires while you're driving on it?
I knew you were being sarcastic. But at the same time, it reminded me of this concept of 'users pay' or 'polluters pay'. What is generally happening is that many times, those who drive less end up subsidizing those who drive a whole lot - either out of necessity or out of choice - roads are generally built with tax money, and insurance rates do not generally consider how much you drive - except in the recent concept of 'pay-as-you-drive' model. Taxes also pay for the military - which is sought to be used for purposes other than defending the nation. Of course, those who drive a lot would want the present system to continue.
Highintel: Can we do better?
WWII was amongst our "strongest growth years"??? Shoot, this is easy, just start another global war and our economy will be strong.
What an idiot...
My father doesn't agree. The war spending back then pretty much postponed the return of the Great Depression. We got one coming and yet are in the middle of useless wars. This cowboy's tired of war spending and is trying to get his house rep and senators to listen. Yeah, that's tough.
War spending no longer pumps up the economy. Too much technology & not enough labor for your billion dollars. Here are the figures:
"Investing public dollars in health care, education, mass transit, and construction for home weatherization and infrastructure all create more jobs than investing an equivalent amount in either the military or personal consumption. According to our just-released study, each billion dollars of government spending allocated to tax cuts for personal consumption generates approximately 10,800 jobs. Investing the same amount in the military creates 8,500 jobs. Investing it in health care yields 12,900 jobs; in education, 17,700 jobs; in mass transit, 19,800 jobs; and in construction for home weatherization and infrastructure, 12,800 jobs."
Take a look at http://www.fpif.org/fpiftxt/4634 (Foreign Policy in Focus) for details and easy to read charts and graphs.
Education spending yields 106.7% more jobs than "defense," and mass transit 131.4% more.
We CAN repair this country, but we have go beyond the old cliches, and the economic and power elites that feed them to us.
Bottom Line? Taxing the rich yields more jobs and more economic stimulus if we spend the money where society needs it most.
PS. "The truth is out there" now translates to "You can find almost anything on Google."
Asking some one to pay 4/5th of their income to taxes is fundamentally unfair.
Property, money, ownership, and earnings are just social constructs, developed by humans long ago to more efficiently run a human economy and society, generally accepted, by those with any choice in the matter, when they are based on some utilitarian goals -- the greatest good for the greatest number. So a system is set up, some call it a game, with rules developed to purportedly achieve utilitarian goals, where citizens have some choice in the matter (in monarchies the rules were developed to achieve the monarch's goals, and forced on the citizens). But what happens when the system does not achieve utilitarian goals, e.g. when some "earn" so much that the marginal utility of the income is minimal while others "earn" so little that they go without basic necessities, even when what they do to "earn" this piddling amount is essential? Some would say it is time to change the rules of the game. Those who have benefited greatly from the current rules would fight against changing the rules, aided by the "muscle" (intellectual or physical) that they hire (with their accumulated fortunes) and the dupes, rubes, suckers, and fools that they can con into fighting on their side.
Unless we can change the rules in the whole world, those super high income taxes will no longer work. The money simply moves elsewhere in the world. We need slightly higher taxes on the rich and reduced or eliminated taxes on the first 50k. Make up lost revenue with energy taxes.
Sioux Rose
KIVALS: A tale of a time-share, if I might. Back in l985 I visited the Florida Keys for the first time and since it was a romantic honeymoon style trip, I was good bait, easily seduced by a timeshare salesman. I loved the idea of returning to that place once a year, and I chose the least expensive unit, a studio apartment with its own garden entrance, a murphy bed, and other amenities. The cost was $4400 and I put down maybe $600, but the finance rate was abysmal. In any case, the annual maintenance fee was $180 and there was fine print inside a VERY long document to the tune it could go up 10% a year. (Mind you it didn't say if the 10% was on the initial $180, for $18 a year, nominal; or compounded as interest).
I loved flying over the 2nd year, and then the fee went to $225. Then it jumped to somewhere like $275, and the next year was well into the $300's. When it finally got to $500 (this is maintenance, on an entity I have already in theory paid for, added to property taxes, etc) I said enough is enough. Being interested in fair outcomes, I wrote to the board of directors. They told me I had agreed to this, and here's where it fits in with your description of THE GAME... I said I had agreed to $180, and that it was pretty clear to me that moving from $180 tgo $500 in less than 10 years was hardly indicative of 10% interest. They would not budge. And they also let me know there were more 2-bedroom units who would thus outvote my interests.
This is a useful tale because it shows under the rubric of "fairness," that is, everybody pays an "EQUAL" share, this is deceptive and punitive. My unit would rent for $110 a night if I didn't use it. That $770 would meet my expenses IF the resort was not ALSO double-dipping, and by that I mean, they took at least 30% when it was rented, and over time began to add fees for bicycle rentals, etc. Things that had initially come with the timeshare week. The 2 bedroom units, which no doubt would require more ACTUAL maintenance to be kept up, could rent for $250 a night, so that such an "owner" could still make well over $1000 for his week's rental. Therefore it was at the point where the low-tiered owner (me) was subsidizing both the tourist sleeping in the bed of the little item I thought I was purchasing as an asset to pass to my children... as were the owners of the units that cost perhaps double what mine did.
Some people love the time share concept, and if the pie was divided in a way that TRULY was fair, it could make sense. And not all resorts were as punitive and double-dealing as the one I got involved with. I let the thing go... there was no cap on the maintenance fees. A studio apartment could easily be rented for $500 a week... the decisions of the upper tier effectively negated the worth of this investment. I believe this capitalistic sleight of hand is a form of theft. The island became a base for wealth at the turn of the 19th-20th century due to the "wreckers." These individuals purposely lured ships to crash into rocks so they could, as pirates, confiscate cargo. That type of pirate mentality is very much a part of that island, and the resort I just described.
Thanks for sharing that story, Sioux Rose. As an attorney, it makes me think of the legal issues and reminds me of the inevitable consequences of lawyering in a capitalist society. Because of my pre-legal background (spending four years in a Ph.D. program in Artificial Intelligence where I had to think a bit about epistemology and operative finite models of a world unbounded in complexity), I have always had a different perspective from most of my fellow attorneys. I see the legal world, and legal issues generally, as potentially infinitely complicated. You can always slice any legal situation into constituent parts, perform a deeper level of analysis, and repeat the process, ad infinitum. At some point the complexity becomes unmanageable, but it always seems more manageable by a team of well-paid attorneys at an elite law firm than by any single attorney that any middle class person could possibly hire. The existing case law, the statutory law, and the constitution may limit the possibilities, but they only limit them to a subset of possibilities, an infinite subset. So big money virtually always wins in the rigged game (just ask those who have opposed Microsoft in court).
The law is a blessing and a curse -- a method to settle disputes and promote harmony among the innocent, the well-meaning, and public-spirited, and a weapon to wield by the predators in a capitalist society to rob the innocent, the well-meaning, and the public-spirited.
Sioux Rose
Hello Kivals: I wondered what your profession was given your mind's deft capacity to navigate through many levels of nuance! I was seeing a lawyer when this debacle was underway and read up on how to represent myself in Small Claims Court. The attorney told me not to worry, he'd handle it; but he never did. In life as we all know there are some gains and some losses, so I let this one go. I shared the experience because it elucidates how EQUAL is not always the same thing as FAIR.
ALCYON: Thank you for caring. I have the intention to write a romantic short story entitled, "The Time Share," but it's not at the top of my list of priorities. The sale of such an item would probably help balance the scales, so to speak. Ultimately through the "ownership" of that timeshare I was drawn to Key West which led to MANY other blessings. Things do have a way of balancing out.
I went to a time share sales pitch once and was amazed by the power of their well-honed tactics. I went for free amusement tickets (so I suppose I was actually ripping them off), but they kept us there longer than they said they would and tag-teamed us with salesmen. For me, it was well worth the time, as I learned a lot about salesmanship and how to hang onto my wallet (barely).
Sioux Rose, that's a nightmare of a story. More than the money, I personally hate being cheated. That said, one way to deal with this is to not take it so personally, and use your experience to warn other potential victims of such scam. There was no internet in 1985 or for the next several years. If you write using the actual name of this company - may be in your blog or something, perhaps someone will catch it on a Google search. Don't know if that company still operates under the same name. I know some companies can harass a blogger even for such things - but that may be a rare case. The internet is full of such scam stories. Until there are better ways for the consumer to fight back, this is one small option. It shouldn't have to be this way - if parents and teachers do their basic duty (assuming the said parents and teachers have the basic morals :)
Highintel: Can we do better?
Dear Steelgray,
NOBODY in this society makes any money at all without standing on the back of society and government. Could you run a business without police protection, without public streets, without corporate law to define property (a worldwide corporation of hundreds of thousands of employees is not a "natural" event)? Could you sell anything without radio and TV? The air waves do not only BELONG to the public, they are CREATED by it. Without the FCC and police to drag my ham radio off CBS's frequency, there is no channel. The list goes on and on. Wealth and property are artificial social creations.
This is not to say, necessarily, that there should be no wealth and property. But the wealthy are the ones who have gained the most from the social organism which we have all created. For our benefit and for theirs, they need to give back enough so that the organism can continue to function.
Dear Steelgray,
NOBODY in this society makes any money at all without standing on the back of society and government. Could you run a business without police protection, without public streets, without corporate law to define property (a worldwide corporation of hundreds of thousands of employees is not a "natural" event)? Could you sell anything without radio and TV? The air waves do not only BELONG to the public, they are CREATED by it. Without the FCC and police to drag my ham radio off CBS's frequency, there is no channel. The list goes on and on. Wealth and property are artificial social creations.
This is not to say, necessarily, that there should be no wealth and property. But the wealthy are the ones who have gained the most from the social organism which we have all created. For our benefit and for theirs, they need to give back enough so that the organism can continue to function.
I do not deny the need of an income tax but i do challenge the idea of an income tax rate of 80-90%!
Of course taxes must be collected for maintaining the public works, roads, schools, fire and police departments, hospitals, and numerous other causes. But the mindset of just tax the rich b/c they can afford it is deeply flawed. There are people who simply don't work for the common good, if you say that a wealthy business man must pay a vast majority of this income to the state for the purpose of the common good than you must in the interest of fairness ask some sort of contribution from the poor-they can't give money of course but how about require them to spend so many hours a week doing public works?
One cannot place all the responsibility of common good on those who are successful at making money.
Also, when a state relies so heavenly on a small portion of the population for its income that state opens itself up to financial crisis-New York City is endanger of going bankrupt again b/c the financial district funds such a large portion of the cities budget.
I will agree a higher income rate is needed but i cannot agree to return to the days of 80% or more...to do so would be an injustice.
I agree with the article in principle--however, as a middle-class wage earner I feel I pay ENOUGH! I pay fully 20% of my income in federal taxes. If taxes MUST be raised, tax the rich, tax the corporations. They're the ones who need to pay more, and have weaseled out of it for years. Let's make our progressive tax system progressive once again, so that EVERYBODY pays their share, no more, no less. Spread the pain around--we're all in this together!
Tax anybody and everybody except ME!!!!
This is what is done in California, where 1% of the population pays over half the State income tax. Look at California...
HEHEHEHEHE, and we Wyomingites as well as the rest of us in the Interior west are laughing our asses off at you folks on the West Coast reelecting both parties who can't quit their spending on the wrong note. There's so much corporate abuse in your state that us interiors could never dream of. Why don't you just run for governor and push for a change in the tax system? The money never gets put to proper use so you might as well do it like Wyoming. Check it out !
http://revenue.state.wy.us
Better yet, if you rich folks in CA don't like it out there, then why not move into the interior states and build your own foundations and help us poor folks out here? We won't bite. Come on out and enjoy the scenic beauty in my state or if you want warmer weather but don't want to pay those state income taxes, head on over to the Lone Star state and do the same for them poor folks out there who need your help.
The sophists hired by the economic elites know there is no firm basis on which to argue that tax cuts lead to economic growth over the long term, but they are hired to created believable arguments, at least believable by the unsophisticated and the gullible, that such is true so as to break the resistance against such policies. The economic elites constitute a small proportion of the electorate and candidates supporting the interests of the elites could never win an election without a large number of gullible fools going along with such policies. The economic elites benefit in the short term from the tax cuts (which they can turn into long-term benefits in this country or elsewhere) regardless of whether the whole population benefits, so most of them could not care less whether the economy and the welfare of the whole benefit in the long term.
The objective non-elites, such as Beinhart, recognize a pattern over history in the US and elsewhere that tax increases are more likely to lead to economic growth over the long term. Though they have the common good and public welfare in mind, they find it tough sledding getting their message out as the well-financed sophists and political hacks of the right fight the truth at every opportunity.
Steelgray you are an ideologue. The article is clear in discussing the "income tax," which does not include Capital Gains, stock options, deferred compensation, etc., etc. You have missed the entire point of the article. Part of which is that without the infrastructure created by government programs (such as means of transport), the rich cannot get rich except through utter and total corruption.
People like Warren Buffet and Bill Gates, very rich men, have as much as admitted this and said they would not mine paying higher taxes.
You would vote against your own interests---every time.
-30-
OleManRiver speaks uncommon wisdom. To which I would like to add the following:
The greatest problem with this discusion are the assumptions of "what is income" that we bring to it. The greatest areas of untaxed wealth for the purposes of balancing the federal debt come from the following:
Corporate Income--This is not just the quarterly profits of organizations like General Mills, Proctor and Gamble, or the Hospital Corporation of America. It also includes lots of individuals hiding behind what are called "closely held corporations" which are nothing more than a fiction to enable those individuals who have them, to hide their wealth as corporate instead of personal income.
Capital Gains on Real Estate--The greater bulk of the growth in the net worth of the United States has been in the appreciation of value for non-residential real estate. This has been largely driven by the depreciation allowance which effectively shields hundreds of billions in net worth from ever being considered as taxable. It's another slick trick by which the wealthy seek to avoid paying thier fair share of support for the cost of government from which they disproportionatly benefit.
Stock, Comodity, and Futures Transactions--This is the very heart of how wealthy people make lotsa lotsa money on the stock market. If I go and buy a car, or a lawn mower, or sports equipment, or just about any other tangible good other than food, or medicine I pay tax on the transaction.
Why should stock, comodity, and futures traders be any different. If we just taxed those transactions at one percent it would realize potentially huundreds of billions of dollars every year. (It would probably also restrain the kind of speculative manipulation designed to drive up prices of everything thereby making the price of everything more affordable!)
Now if you are talking seriously about those sources of wealth then we should definately raise taxes on (or begin taxing) the wealthiest among us. By controlling the definitions of the term "income" (not unlike newspeak in Orwell's 1984) we reduce the meaning of "income" to mean only that which is paid to wage earners on salary. This term income must be redefined before the dsicussion of who gets taxed how much can commence.
Poet
Sioux Rose
POET: Excellent post!
Yes, I second that :)
It's high time people started talking about the nuts and bolts, rather than just generalities. I wish there'd be a TV series that takes an honest look at the economic and financial system. Nothing should be off limits. PBS tries to make a show of it, from time to time. But they don't even scratch the surface, either out of ignorance or out of other compulsions.
Highintel: Can we do better?
I think you are a little off here OleManRiver,
My comment was a retort aimed at the comments that were trumping the virtues of Socialism. The discussion had evolved beyond mere taxes.
I am well aware of the remarks and intended direction of the article.
As for the article, i agree that i higher income tax is called for but i protest the idea that we ought to return to the 80% to 90% range. This article glosses over the known fact that at a certain point taxation will lead to diminished return. A rate too high will cause people to either work less-as has happened in France-or to move to a more friendly environment.
I know Buffet and Gates have said that they ought to pay more but they didn't say they should pay 90% of what they make! The wealthy shouldn't be viewed as a simple piggy bank that we ought to raid whenever we feel like it but rather we need a set budget and then we set the tax rate-progressively-to fund said budget. Lets have a little due process in taxation!!
I see people here asking for higher corporate tax rates as well. This is a half right approach in that we need not to increase the tax rate but rather just apply it more equally-too many loopholes have been made by Congress i.e. Randall! I know he isn't the only one but any company can get a tax break if they just donate some money to his fund raising!!
Don't forget that the US has one of the highest corp. tax rates in the world...Ireland has greatly improved their standard of living by lowering their tax rate.
This country has the most skewed distribution of wealth of any developed country. According to the Economic Policy Institute:
http://www.epi.org/
in 2004, the distribution of wealth was:
- The richest 1% had 34.3%
- The next 9% had 36.9%
- The next 10% had 13.4%
- The poorest 80% had 15.3%.
If you want to see a pie chart of most of these numbers, go to:
http://www.inequality.org/
click on "By the Numbers" and page down to the pie charts.
Moreover, most of the Bush tax cuts benefitted the wealthiest.
http://www.commondreams.org/cgi-bin/print.cgi?file=/headlines06/0405-12.htm
Tax hikes for the wealthiest would, over time, allow a fairer distribution of wealth. At the very least, we should get rid of the tax breaks for them. Also, since 70% of the economy depends on consumers, it it unrealistic to expect us to consume without the money to do it.
Using tax policy to allow the rich to get richer and the poor to sink further is one very good way to destroy America. Keep reasonable taxes (40%?) on the rich and eliminate income tax on the poor. Use new energy taxes to keep government revenue reasonable, fight global warming and petroleum dependence.
Over-taxing the wealthy will only ensure that they take their money to Europe or elsewhere. We will be left running a third world country. It's basic economics.
We want them to leave, and then we will nationalize their assets here. We will then be running a first world country. If we keep things going as they are, we will be soon running a third world country.
You want corporations to leave? Are you insane?
Did you somehow miss the break-up of the USSR? Or failed to notice that even countries like China, Cuba, and Vietnam are now embracing aspects of capitalism?
You know what country that did kick the West out, nationalize everything, and then practiced the kind of Stalinist economy you advocate? North Korea.
How's that working out for them?
The USSR during its existence, and the Chinese before the last few years, were shut out of the trade and technology of the West, which had developed a tremendous lead. The Chinese in the 1980s realized they could never catch up without trade and increased interaction with the West, with which they would be able to learn and incorporate Western technologies. The USSR collapsed under the weight of the arms race they could not win against an alliance of all advanced Western nations. The Chinese knew they would again be dominated and enslaved by the West as they had been in the 19th Century unless they made drastic changes to catch up and become competitive.
There are innumerable different types of socialism that are possible. Stalinism, Maoism, and what Kim Jong Il has concocted in North Korea are all very primitive versions. Think of it like the development of heaver-than-air aircraft (with capitalism being more like lighter-than-air aircraft -- easy to get off the ground, but difficult to control). The first attempts at building heavier-than-air flying machines met with failure and an army of naysayers said it could not be done. There were many technical hurdles to overcome, as there are with socialism, but eventually through trial and error the technical problems were solved. And we had better get started addressing the obstacles facing socialism, because it is becoming more clear by the year that capitalism, especially corporate capitalism, will likely lead to human extinction, if not from climatic disaster directly, then from the competition for dwindling resources in a degraded environment where too many competitors have access to nightmare weapons.
Corporatism almost certainly leads to death, and I refuse to give up on the future of the human race.
Hello kivals,
The USSR, China, North Korea et al were/are not primitive versions of socialism. They are not socialist at all. They are state capitalist, which definitely doesn't work. Socialism is decentralized, independent worker and community co-ops, which is only now BEGINNING to be worked out in Venezuela. The state capitalist elements of Venezuela (oil company) are almost as antagonistic to worker control as are the private capitalist firms. Read around in venezuelanalysis.com
It is deadly for socialists to be identified in any way with stalinism which, among its other crimes, stole the name of socialism.
I know you are trying to disassociate Stalinism and Maoism from the label "socialist," and I agree that is a worthy goal, but there was to a significant degree state ownership of the means of production in those states, which is one meaning of the term "socialism," so I find it difficult to convince others that Stalinism and Maoism were in no way socialist. So I prefer describing those systems and the one in North Korea as "primitive" forms of socialism, with the modifier "primitive" connoting something rough, unsophisticated, and not fully formed. Also, with such a general descriptor the analysis can be opened to a wide variety of analogies that can be helpful in making the connections necessary to adjust attitudes.
However, I certainly do agree that it is "deadly for socialists to be identified in any way with stalinism," and that is a burden that must be addressed one way or another.
Isn't it ironic that Venezuela has to use the Capitalist United States to fund it's Socialistic programs?
So without Capitalism there would be no Socialist programs in Venezuela. Doesn't that prove that the best economic form incorporates both capitalism and socialism?
Just a though...
"You want corporations to leave? Are you insane? "
"Did you somehow miss the break-up of the USSR?"
It broke up long before Raygun came to office and robbed the taxpayers for his idiotically insane military spending to make the US look big at the public expense.
"You know what country that did kick the West out, nationalize everything, and then practiced the kind of Stalinist economy you advocate? North Korea."
Quit worrying about other countries. The reason the US is in a shit is because of the insane tax cuts for the wealthy and corporate elite and all the accompanying loopholes thanks to Raygun, Klinton, and Bush which you supported. Grow a brain.
"How's that working out for them?"
They have a different culture and a different system so it doesn't matter. In any case, our economy's bleeding but you seem to be for more Raygunomics. Tell you what. Your buddy boy Barry will keep it going. Happy now? Idiot !
to Europe? huh? the highest taxes in the world? and the highest quality of life outside Canada? Did you read this article?
We're already a third world country. Besides, in case you weren't paying attention, even half of the wealthy folks are for donating their tax cuts. It's just we need a real government, not a total sissy we're about to get.
The idea that high taxes equals capital flight is a myth. We have a dysfunctional tax system that actually encourages capital flight (off-shore corporate headquarters in the Cayman Islands, for example) because it's poorly written and needs revision. The tax code is too long, and it's manipulated by special interests who want loop-holes and tax shelters.
For example, you could have a national sales tax, or consumption tax, but give a tax credit to people earning under a certain income, and the higher their income (from actual wages, or from other means like investments), the lower their check, and if they made high enough above the poverty line, they get no check. This would help so that it would not be a regressive tax that would unfairly tax the poor. Tax luxury items at a higher rate.
If capital gains are taxed at a higher rate than most other countries, you'll have capital flight. So keep capital gains taxed low. But close loopholes whereby hedge fund managers and others get most of their income from capital gains or stock options so as to avoid taxes.
During the 1950's, you had some tax shelters and some capital flight, but the tax rates were, as Beinhart says, very high--he says 88%. The effective rate, or what the rich actually paid after tax shelters, etc., had many paying 40-50%, which is still a lot higher than many pay today.
The fact is that there are many rich people who do not want to move to a tropical island, or a European country where the tax rates are higher, or some other country. Many will continue to live and work here, and keep and spend their capital here.
But other factors may keep more capital here, unrelated to tax rates. For example, a conversion to a greener, more sustainable economy may change many things. Instead of paying money to coal companies and petrol companies, smaller cars and public transportation, powered by renewable energy, would keep more of the profits and monies local; the local wind-farm, or solar-panel provider, or the local retrofitter of homes for geothermal. If consumers spent more money on locally produced energy or conservation measures, more of the money would find its way back to them instead of being sucked into the pockets of big oil and big coal.
So instead of assuming that the conservative tax-mythology is the only way to frame the tax debate, change the mythology. Don't wait for the wind to change, and pander to the anti-tax assumption like the good little Democrats, too often, end up doing. Change the way the wind is blowing:
- Taxes and public spending strengthens the economy, just as the New Deal and WWII war spending did, because it strengthens the consumer base and consumer confidence; if unemployment is low, and people have homes and security, they are good consumers, contribute to a vibrant economy, and the rich get richer.
- It's patriotic to pay taxes, as long as we reduce spending on the Military-Industrial complex (a recent Pentagon advisory board recommended reducing military spending, which, they said, was at unsustainable rates). To this extent we DO spend too much in taxes, but we can spend less; we need not spend more than the rest of the world combined, on military spending (yet we do, when you count pentagon budget, and war spending, and the department of energy spending related to nuclear weapons maintenance, and other hidden costs).
- Paying taxes is in rich folks' best interests: Not only does it guarantee a strong consumer class, but if spent on infrastructure and education and health care, it guarantees an educated work force, it guarantees roads and internet and public transportation so employees can get to work, and it guarantees that, as in Canada, corporations will cut expenses because they won't have to pay health benefits.
I agree with Larry B. And as George Lackoff ("Don't think of an Elephant") would say, don't let conservatives frame the tax debate, and then simply wait for a favorable wind according to their assumptions, their framing, their tax mythology. Change the mythology. As Jim Wallis ("God's Politics: Why the Right is Wrong and the Left Doesn't Get It") would say, don't wait for the wind to change. Change the wind.
Could it be that Joehope Basic Economics doesn't know that income taxes on the rich in Europe are vastly more than they are in the US? 90% in Scandanavia, 45% in the UK (about the lowest in Europe). The only places with lower taxes on the rich than here are countries like the Bahamas where being a tax haven is the main industry. And that would be easily dealt with by an honest Congress. We don't recognize post office box incorporations, and we don't don't give them tax breaks and Federal contracts. But so far that has been too much to ask from our bought and paid for Congress.
I want my bailout money sweet green cash dripping with honey........
http://www.youtube.com/watch?v=Pduy96-kES4&NR=1
Being from Germany it was instantly visible to me that the American public, including the 'elites' are being brainwashed to believe they can have their cake and eat it, too.
Noam Chomsky, in a lecture in the late 90s at MIT recommended Australian historian Alex Carey. He shows how corporate America feared the socialist tendencies within an empowered workforce during the war economy, and how they reacted in fostering the pro-business, anti-government ideology with strategic long term campaigns. Take a look: Alex Carey:
Taking the Risk Out of Democracy: Corporate Propaganda versus Freedom and Liberty
It doesn't matter who we tax, well sort of. See, we're going to have to get down to the question "Well, what do we do with the revenue and how do we spend it?" If all government wants to do is waste our taxpayer money on social conservative programs, wars, sending Israel, Pakistan, Saudi Arabia, etc ... weapons of mass destruction, bailout out Wall Street, and just keeping Donald FUCKING Trump filthy rich, I say FORGET IT ! These kinds of wasteful spending ideas for the past 8 years is a reason I strongly recommend that the US does taxes like Wyoming. Replace the income tax which is unconstitutional to begin with with a national sales tax and levy higher taxes on foreign goods which will protect us from the damage from "free trade".
"Replace the income tax which is unconstitutional to begin with with a national sales tax and levy higher taxes on foreign goods which will protect us from the damage from "free trade"."
Take a look, everyone. Any comments?
http://www.apttax.com/index.htm
-- ekaton aka d.k.shaw
Wrong! Tax the livin' bejesus out of the rich. That is how you get them to reinvest in job creation and capital improvement (also a source of job creation). Special insentives should be directed toward manufacturing. Service jobs just move money around but manufacturing creates wealth.
You are however right to point out that what revinue is collected needs to be spent wisely. Once again the eye should be kept on job creation and infrastucture investment.
Pry the money away from the rich and get it really moving again. That is what a progressive income tax is for.
Progressive income tax still needs to be fair. "Tax the livin' bejesus out of the rich." There is no fairness in this statement but rather you just want to punish those who are successful.
Our nations tax code shouldn't be designed out of jealousy. A tax is intended to pay for the expenses of the state. The state shouldn't just take whatever it wants from those who have extra.
Where is your sense of fairness???
I want true universal health care.
I want substantial investment in replacing America's infrastructure.
I want substantial investment in building an entirely new transportation system.
I want substantial government investment in research and development that isn't used for killing people.
I want government investment in the form of low interest loans to new or old companies that actually make things.
What I want is going to cost a great deal of money. Which means I, a middle-class individual, am going to have my taxes raised. So what? TANSTAAFL
The question of taxation, without placing it in a class context doesn't mean anything. Under a capitalist state, taxes are just one major tool used to redistribute the wealth of a nation. Raising taxes on the rich and using that revenue for social programs for the majority of the population is the right thing to do. Simply "raising taxes" without this type of focus amounts to continuing to enrich the very wealthiest at the expense of the rest of us. Now the question of how one prevents the rich from escaping from progressive tax laws: Prevent the export of capital. Make it illegal for the multinational corporations to move their assets out of the country in which they are registered. Simple, simple, simple. But of course, it means challenging the ruling elites for the social good of the nation. That's what regulation is really like when it takes on a class perspective. :-)