16 members, or so (So Far...) voted "no" to Issue #4 on the "6 Issues" Thread

[jorgelito]

Host,

Thank you for sharing your background with us in such detail. It's nice to "get to know the man behind the posts" a bit.

I will try and answer your question (op) when I have a bit more time. I would like to give it more attention and detail. By the way, I really like the way you framed this thread as a spin-off of the context of the 6-questions thread.

I actually think football players are underpaid. The Bears running back woes start with the offensive line. Cedric Benson and Adrian Peterson would probably do better if the O-line offered better protection and opened up lanes better. Rex Grossman's struggles are also related to poor O-line protection. Football players have to possess some measure of intelligence as it is a very cerebral game requiring mental and physical discipline. The play books alone are hundreds of pages of memorizations. When I used to play, I often struggled and missed a few assignments myself.

[loquitur]

Host, here is my issue with your OP: question #4 of the 'six issues' post asked whether the function of taxes is to redistribute income. I answered no, the function of taxes is to raise money to enable the government to operate. Here is my reasoning:

1) Taxes have been around a very, very long time, since the very first governments, and it's only relatively recently that redistribution had anything to do with taxation. That's because (among other things) we are now rich enough as a society to worry about things like that. Redistribution is a luxury of rich societies. If everyone is poor there isn't much to redistribute. (Rich societies are dynamic societies, which means that the rich guy isn't just the son of the local lord of hte manor, who inherited his estate in a line from the original duke who was granted the land by William the Conqueror and didn't work a day in his life. The rich guy more likely than not is highly productive and creative, which is how he got rich.) When there wasn't much to redistribute there still were taxes. Why? Because the government had to run. And also because potentates had power and were greedy, and used taxes to enrich themselves. But even the benevolent ones taxed their populace. After all, someone has to pay for defense of the realm. So when you ask whether the purpose of taxation is redistribution, the answer has to be no.

2) The premise of your OP is that wealth inequality and income inequality in and of themselves are bad things. My answer to that is, "it depends." In France in 1788 there was an indolent, lazy, landed aristocracy that spent its days idly and hadn't done a thing to earn its position. That sort of inequality is a bad thing. And that sort of inequality arises from closed economic systems of the sort that had existed for a few previous millenia. In a closed economic system there is little growth, which means that for all intents and purposes an extra penny in a rich man's pocket comes out of the poor man's pocket. That is the sort of economy that the bible had in mind when it adjured charity. The redistributionist impulse traces to Christian teachings, and is based on an economic formula that simply no longer exists in Western countries. This isn't a knock on charity but it is a knock on redistribution. Inequality in and of itself is not a problem, if the inequality came about honestly. Unless a person is a horrendously envious type (which is very very ugly), it does not hurt him one bit if someone else has more than he does.

I'll go out on a limb here: by historical standards we have no poverty in America. None, zero, zip, nada. If you go back to 1600 and consider what poverty meant then, we have NOTHING like that. The biggest health problem for poor people in this country is obesity.

The premise for your OP, that inequality by itself is bad, reminds me of the story about the two Russian peasants, Pavel and Ivan. They were equally poor and miserable for years, friends and neighbors. Then one day Pavel was walking past Ivan's hut and noticed that, instead of the one chicken Pavel always had, Pavel had TWO chickens in his yard. Ivan was struck by the injustice of it all. Why should Pavel have two chickens and he, Ivan, only have one? So every night he would pray that this horrendous injustice should be rectified. One evening when he was praying, he heard an angel speaking to him: "Ivan, your prayers have been heard. We will fix the injustice." Ivan looked up, overjoyed, and said "you mean you're really going to kill Pavel's chicken?"

That is what complaining about inequality is.

[roachboy]

uh...i dont think the digressions about the aristocracy work too well, loquitor:

donning my workhat, then, and compressing stuff shamelessly at the same time (historians like to blab, you see):

the aristocratic "revolt" that triggered the french revolution (1787) happened because the crown defaulted on the bonds it had floated to pay for intervening in the american revolution. that is how the estates general came to be convened--and it was around this that things started to fall apart.

the problems that faced the aristocracy by that point had nothing to do with the fact that they were an aristocracy and everything with the particulars of the situation the aristocracy was in by 1787--much of it had to do with the actions of louis 14 in centralizing the court, forcing the aristocracy to attend court, which put a huge strain on their resources, most of which were generated by land holdings, the revenue from which was static for a long long time. this strain was part of the point of the court--to subordinate the aristocracy, make them dependent on the crown for patronage, support, military commissions, etc.

you're wrong about the chaos of the french taxation systems before the revolution as well--they WERE about redistributing wealth.
the problem was not that, but rather that there were lots of such systems and no co-ordination between them...it's a confusing mess to read about even. if you're interested, read tocqueville's "ancien regime" on this, the best analysis of the financial problems this created, the link between this chaotic non-system and large-scale undertakings like war--the crown paid for wars by floating bonds--which were also a way to redistribute wealth.....

the main changes the revolution brought about really was the centralization of taxation, the rationalization of the processes and of the wealth redistribution functions they served. these functions are the central occupations of the modern bureaucratic state. that is what it does, at its core. tocqueville sees the main consequence of the french revolution as the rise of the modern state--and that this had nothing to do with what the revolutionaries thought they were doing.

the points:

1. the modern state is fundamentally different from what preceded it, and it makes no sense to jump around it as if this wasn't the case and make comparative arguments as if nothing changed after bonaparte.

2. wealth redistribution works in a lot of directions. if you think of it that way, it is absurd to argue that taxation is not about this.

3. (more to the side of the above) the effects/meanings of social inequality are ALWAYS contextual--you treat inequality as some metaphysical construct in your post, and the end of it simply runs to its conclusion the problems with thinking in this way about social inequality.

by contextual in the modern context, i mean political.
you cant wish the political away by thinking in terms of essence.

i decided along the way that i'm not going to do anything with the first point in your post----in the period of william the conqueror, the entire social system was so differently organized that it makes no sense to draw on it for a point about the functions of taxation in the modern period. it's comparing wombats to toaster ovens or some such.

[loquitur]

roachboy, you're missing the point. of course society was different if you go back more than 200 or 300 years - but there were still taxes. That's my point. Whether taxes can be used for other purposes, too, is a different issue. Of course they can. You can use a book for purposes other than reading, too, such as to hold up a table leg, but that doesn't mean the purpose of a book is to hold up a table leg.

Robin Hood redistributed wealth, too. He did it honestly - he used a gun, openly. Well, not a gun, but its medieval equivalent.

[roachboy]

i'm sorry, comrade, but i dont understand what you are saying.

seems to me that you're now doing the same thing to taxes that you did to inequality in the earlier post.

taxation is not a table--it is a process.

it is simply the case taxation after the french revolution has nothing to do with pre-french revolution taxation. totally different organization, totally different functions, totally different states.
there's no way around this.

the possible confusion lay in that we use the word "taxes" to talk about wealth transfer mechanisms that in an abstract sense are similar across contexts.

it seems that is all you are talking about... that the same word gets applied.

why is that interesting?

[Baraka_Guru]

Being that I live in a socialist country, I'll throw out my tax-free two cents:

Wealth inequality and redistribution cannot (and should not) be remedied by adjusting taxation alone. If America wants to continue with prosperity and avoid going to hell in a handbasked, she should consider further mixing her economy à la style Canadien.

1. Adopt a national healthcare system modelled after Tommy Douglas' revolutionary vision;
2. Fix, revitalize, or bloody well completely rebuild the labour laws (use Ontario's as a model if you must);
3. Use more government intervention to protect certain industries of lower-income, skills-based earners (i.e. manufacturing, agriculture, certain services, etc.);
4. Penalize (or increase penalties for) corporations who violate labour standards, or who use unsavoury practices to bust unions or plans for establishing unions;
5. Rewrite immigration policies to help with the decriminalization of hard-working immigrants.

This is just a few ideas. I would also like to point out that although the wealthiest of people pay the majority of tax, I believe that this is essential because of how that wealth is created: generated by the hard work of low-income workers. But paying less tax should not mean receiving fewer services. Government services should be equalized to ensure a basic health and well-being of all citizens.

America needs to rethink her budget to stop an increasing wealth disparity. Her military budget is simply ridiculous. Her education budget, ludicrous. Now don't get me wrong; I'm not saying Canada is perfect, nor would I say she is the best nation in the world, but there is a reason why it has been said that Canada is one of the best places in the world to live. The socialists have had a hand in that. A mixed economy and a mixed political system encourages stability and prosperity. America could use a healthy dose of that to help improve the quality of life overall.

[loquitur]

roachboy, taxation is the process of taking from the populace to pay for the government. it's been around for thousands of years. its purpose isn't to redistribute wealth to the needy, it's to pay for the govt. its use for redistribution is a recent phenomenon.

Not that complicated, really, and I have to wonder why you are complexifying something so simple.

[Baraka_Guru]

Then what would you call social security? This is just one example of redistribution of wealth.

Wealth distribution has been an issue of taxation for a long time. Do you mean recent as in last decade, or last century?

[waltert]

Originally Posted by Ustwo

The top 25% pay 84.5% of the taxes.

The top 1% pay 36.89% of all taxes.


.

I just wanted to point out that I see this as the redistribution of wealth, which is why I voted yes to #4

[roachboy]

loquitor:
i took the steps as an inferential chain.
so if the steps are wrong, the inference collapses.

it seems to me that you are simply fooled by nouns/names, that you think if you drag a name from one context to another that you designate the same thing in the same way in each context.

the redistribution of wealth in the direction of the poor in the modern context is a political function, one of the ways in which the state legitimates itself. you can see infrastructure development and maintenance in the same way.

the pre-revolutionary french state did not act in anything like these ways to legitimate itself--it operated with a fundamentally different ideology of the state.

the modern state is primarily a bureacuracy that allocates resources.
all functions--including military functions--involve wealth redistribution and can be understood as linked to creating conditions of equality within a capitalist context that tends the other way.

(the military, for example, is as much a mechanism for social mobility as it is anything else--it then can be seen as a mechanism that IN ADDITION TO ITS OTHER FUNCTIONS enables folk who are socially or educationally from difficult situations to access different, maybe better situations by providing training and other forms of cultural capital--this is obvious is you remember that militaries persist beyond wartime periods--it is a side-effect of having a standing army etc.)

so to say that taxation allows "the government to work" is a very limited viewpoint--simply because it treats government as separate from the social context it administers, as if it floats in space, referring to itself, generating itself, legitimating itself.

it ain't like that, except insofar as it is framed as a neoliberal phantasm.

btw: the underlying issue is that i find the entire trajectory in this thread that tries to define taxation as something other than the redistribution of wealth (which goes in a variety of directions) to be ridiculous, and decided to go after your post because at least you had the courtesy to say something interesting to back it up.

[loquitur]

the purpose of an army is to fight wars. It has other effects as a result, but that's its purpose.

Taxes pay for government. Some people decided to extend the functions of government, so taxes followed that too. But that doesn't change the basic function of taxes. We can argue about whether govt should be in the redistribution business, and that would be a worthwhile discussion, but you're getting hung up on unnecessary overconceptualization. The purpose of taxes is to pay for the government to operate.

[roachboy]

well, this isn't getting us anywhere.

call it a differend, then.

[host]

Originally Posted by loquitur

the purpose of an army is to fight wars. It has other effects as a result, but that's its purpose.

Taxes pay for government. Some people decided to extend the functions of government, so taxes followed that too. But that doesn't change the basic function of taxes. We can argue about whether govt should be in the redistribution business, and that would be a worthwhile discussion, but you're getting hung up on unnecessary overconceptualization. The purpose of taxes is to pay for the government to operate.

C'mon loquitur,

you post like someone in deep denial, or under the spell of Ayn Rand. US income and inheritance taxes are a direct response to the excesses of a few, intended as reform to benefit the many.

I've asked repeatedly, if 70 percent of total US wealth in the hands of just ten percent of us is not a problem, what greater percentage would be a problem? What mechanism, aside from government, is in a position, and authorized by the majority to lessen the extreme concentration of wealth?

We never even get to the second question, do we? Extreme concentration of wealth is "never a problem". Unchecked, it inevitably provokes violence, after it breaks the self esteem, and then the hope of the vast majority. But that's a problem for another day, another generation, like....the $9.3 trillion federal treasury debt....correct?

"When I say 'capitalism', I mean a full, pure uncontrolled, unregulated laissez-faire capitalism--<h3>with a separation of state and economics</h3>, in the same way and for the same reasons as the separation of state and church." --Ayn Rand: "The Objectivist Ethics," The Virtue of Selfishness

"If one wishes to advocate a free society--that is capitalism--one must realize that its indispensable foundation is the principle of individual rights, <h3>one must realize that capitalism is the only system that can uphold and protect them."</h3> --Ayn Rand: The Virtue of Selfishness

"Those who advocate laissez-faire capitalism are the only advocates of man's rights." --Ayn Rand: The Virtue of Selfishness

"Since time immemorial and pre-industrial, 'greed' has been the accusation hurled at the rich by the concrete-bound illiterates who were unable to conceive of the source of wealth or of the motivation of those who produce it." --Ayn Rand.

"A pure system of capitalism has never yet existed, not even in America; <h3>various degrees of government control had been undercutting and distorting it from the start."</h3> --Ayn Rand

"I have so much confidence in the good sense of man, and his qualifications for self-government, that I am never afraid of the issue where reason is left free to exert her force." --Thomas Jefferson to Comte Diodati, 1789.


"I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom." --Thomas Jefferson to Samuel Kercheval, 1816.

"No other depositories of power [but the people themselves] have ever yet been found, which did not end in converting to their own profit the earnings of those committed to their charge." --Thomas Jefferson to Samuel Kercheval, 1816.

"The mass of the citizens is the safest depository of their own rights." --Thomas Jefferson to John Taylor, 1816.

"That liberty [is pure] which is to go to all, and not to the few or the rich alone." --Thomas Jefferson to Horatio Gates, 1798.

"Experience declares that man is the only animal which devours his own kind, for I can apply no milder term to the governments of Europe, and to the general prey of the rich on the poor." --Thomas Jefferson to Edward Carrington, 1787.

Who was correct, loquitur? Ayn Rand. born in Russia, and in adulthood, believing that capitalism is the "only protector of rights", and that the government was "distorting capitalism", or was Jefferson, believing the only authority and protector of rights to be "the people"?

"The people" are not seperate of a government "by and for them", and an economic "system" should be as the people deem it to be, not Ayn Rand's
"with a separation of state and economics".

When an accused is charged with a crime, the court conducts a hearing to determine if there is justification to hold in custody or to grant bail to the defendant. The judge asks for the opinion of a representative of "the people", from the DA's office present in the courtroom.

The economic system and the distribution of money and wealth are as unfettered or regulated as "the people", through their vote and input given to their representatives in the legislature, determine that they should be.

It is an orderly, slow, and deliberative process, and it's a hell of a lot better than violent disruption to achieve similar ends, isn't it?

If you don't admit that there is a problem, or if you do, but don't have a plan that is fairer and more democratic than what I've described to deal with it, it's either government attempt redistribution of wealth via progressive taxation and inheritance tax on the top tier....or ???????????

http://www.quotedb.com/speeches/man-with-the-muck-rake
The Man with the Muck Rake

By Theodore Roosevelt

April 15th, 1906

Over a century ago Washington laid the corner stone of the Capitol in what was then little more than a tract of wooded wilderness here beside the Potomac. We now find it necessary to provide by great additional buildings for the business of the government.

This growth in the need for the housing of the government is but a proof and example of the way in which the nation has grown and the sphere of action of the national government has grown. We now administer the affairs of a nation in which the extraordinary growth of population has been outstripped by the growth of wealth in complex interests.....

<h3>.....At this moment we are passing through a period of great unrest—social, political, and industrial unrest. It is of the utmost importance for our future that this should prove to be not the unrest of mere rebelliousness against life, of mere dissatisfaction with the inevitable inequality of conditions, but the unrest of a resolute and eager ambition to secure the betterment of the individual and the nation.</h3>

So far as this movement of agitation throughout the country takes the form of a fierce discontent with evil, of a determination to punish the authors of evil, whether in industry or politics, the feeling is to be heartily welcomed as a sign of healthy life.

If, on the other hand, it turns into a mere crusade of appetite against appetite, of a contest between the brutal greed of the “have nots” and the brutal greed of the “haves,” then it has no significance for good, but only for evil. If it seeks to establish a line of cleavage, not along the line which divides good men from bad, but along that other line, running at right angles thereto, which divides those who are well off from those who are less well off, then it will be fraught with immeasurable harm to the body politic.

We can no more and no less afford to condone evil in the man of capital than evil in the man of no capital. The wealthy man who exults because there is a failure of justice in the effort to bring some trust magnate to account for his misdeeds is as bad as, and no worse than, the so-called labor leader who clamorously strives to excite a foul class feeling on behalf of some other labor leader who is implicated in murder. One attitude is as bad as the other, and no worse; in each case the accused is entitled to exact justice; and in neither case is there need of action by others which can be construed into an expression of sympathy for crime.

It is a prime necessity that if the present unrest is to result in permanent good the emotion shall be translated into action, and that the action shall be marked by honesty, sanity, and self-restraint. There is mighty little good in a mere spasm of reform. The reform that counts is that which comes through steady, continuous growth; violent emotionalism leads to exhaustion.

It is important to this people to grapple with the problems connected with the amassing of enormous fortunes, and the use of those fortunes, both corporate and individual, in business. We should discriminate in the sharpest way between fortunes well won and fortunes ill won; between those gained as an incident to performing great services to the community as a whole and those gained in evil fashion by keeping just within the limits of mere law honesty. Of course, no amount of charity in spending such fortunes in any way compensates for misconduct in making them.

As a matter of personal conviction, and without pretending to discuss the details or formulate the system, I feel that we shall ultimately have to consider the adoption of some such scheme as that of a progressive tax on all fortunes, beyond a certain amount, either given in life or devised or bequeathed upon death to any individual—a tax so framed as to put it out of the power of the owner of one of these enormous fortunes to hand on more than a certain amount to any one individual; the tax of course, to be imposed by the national and not the state government. <h3>Such taxation should, of course, be aimed merely at the inheritance or transmission in their entirety of those fortunes swollen beyond all healthy limits.</h3> Again, the national government must in some form exercise supervision over corporations engaged in interstate business—and all large corporations engaged in interstate business—whether by license or otherwise, so as to permit us to deal with the far reaching evils of overcapitalization.....

<h3>...The men of wealth who today are trying to prevent the regulation and control of their business in the interest of the public by the proper government authorities will not succeed, in my judgment, in checking the progress of the movement.</h3> But if they did succeed they would find that they had sown the wind and would surely reap the whirlwind, for they would ultimately provoke the violent excesses which accompany a reform coming by convulsion instead of by steady and natural growth.

On the other hand, the wild preachers of unrest and discontent, the wild agitators against the entire existing order, the men who act crookedly, whether because of sinister design or from mere puzzle headedness, the men who preach destruction without proposing any substitute for what they intend to destroy, or who propose a substitute which would be far worse than the existing evils—all these men are the most dangerous opponents of real reform....

...More important than aught else is the development of the broadest sympathy of man for man. The welfare of the wage worker, the welfare of the tiller of the soil, upon these depend the welfare of the entire country; their good is not to be sought in pulling down others; but their good must be the prime object of all our statesmanship.

Materially we must strive to secure a broader economic opportunity for all men, so that each shall have a better chance to show the stuff of which he is made.....

http://www.infoplease.com/t/hist/sta...union/119.html
Theodore Roosevelt (December 3, 1907)

To the Senate and House of Representatives:

....No small part of the trouble that we have comes from carrying to an extreme the national virtue of self-reliance, of independence in initiative and action. It is wise to conserve this virtue and to provide for its fullest exercise, compatible with seeing that liberty does not become a liberty to wrong others....

....This represents an approximation between income and outgo which it would be hard to improve. The satisfactory working of the present tariff law has been chiefly responsible for this excellent showing. Nevertheless, there is an evident and constantly growing feeling among our people that the time is rapidly approaching when our system of revenue legislation must be revised.

This country is definitely committed to the protective system and any effort to uproot it could not but cause widespread industrial disaster. In other words, the principle of the present tariff law could not with wisdom be changed. But in a country of such phenomenal growth as ours it is probably well that every dozen years or so the tariff laws should be carefully scrutinized so as to see that no excessive or improper benefits are conferred thereby, that proper revenue is provided, and that our foreign trade is encouraged. There must always be as a minimum a tariff which will not only allow for the collection of an ample revenue but which will at least make good the difference in cost of production here and abroad; that is, the difference in the labor cost here and abroad, for the well-being of the wage-worker must ever be a cardinal point of American policy. The question should be approached purely from a business standpoint; both the time and the manner of the change being such as to arouse the minimum of agitation and disturbance in the business world, and to give the least play for selfish and factional motives. The sole consideration should be to see that the sum total of changes represents the public good. This means that the subject can not with wisdom be dealt with in the year preceding a Presidential election, because as a matter of fact experience has conclusively shown that at such a time it is impossible to get men to treat it from the standpoint of the public good. In my judgment the wise time to deal with the matter is immediately after such election.

When our tax laws are revised the question of an income tax and an inheritance tax should receive the careful attention of our legislators. In my judgment both of these taxes should be part of our system of Federal taxation. I speak diffidently about the income tax because one scheme for an income tax was declared unconstitutional by the Supreme Court; while in addition it is a difficult tax to administer in its practical working, and great care would have to be exercised to see that it was not evaded by the very men whom it was most desirable to have taxed, for if so evaded it would, of course, be worse than no tax at all; as the least desirable of all taxes is the tax which bears heavily upon the honest as compared with the dishonest man. Nevertheless, a graduated income tax of the proper type would be a desirable feature of Federal taxation, and it is to be hoped that one may be devised which the Supreme Court will declare constitutional. The inheritance tax, however, is both a far better method of taxation, and far more important for the purpose of having the fortunes of the country bear in proportion to their increase in size a corresponding increase and burden of taxation. The Government has the absolute right to decide as to the terms upon which a man shall receive a bequest or devise from another, and this point in the devolution of property is especially appropriate for the imposition of a tax. Laws imposing such taxes have repeatedly been placed upon the National statute books and as repeatedly declared constitutional by the courts; and these laws contained the progressive principle, that is, after a certain amount is reached the bequest or gift, in life or death, is increasingly burdened and the rate of taxation is increased in proportion to the remoteness of blood of the man receiving the bequest. These principles are recognized already in the leading civilized nations of the world. In Great Britain all the estates worth $5,000 or less are practically exempt from death duties, while the increase is such that when an estate exceeds five millions of dollars in value and passes to a distant kinsman or stranger in blood the Government receives all told an amount equivalent to nearly a fifth of the whole estate. In France so much of an inheritance as exceeds $10,000,000 pays over a fifth to the State if it passes to a distant relative. The German law is especially interesting to us because it makes the inheritance tax an imperial measure while allotting to the individual States of the Empire a portion of the proceeds and permitting them to impose taxes in addition to those imposed by the Imperial Government. Small inheritances are exempt, but the tax is so sharply progressive that when the inheritance is still not very large, provided it is not an agricultural or a forest land, it is taxed at the rate of 25 per cent if it goes to distant relatives. There is no reason why in the United States the National Government should not impose inheritance taxes in addition to those imposed by the States, and when we last had an inheritance tax about one-half of the States levied such taxes concurrently with the National Government, making a combined maximum rate, in some cases as high as 25 per cent. The French law has one feature which is to be heartily commended. The progressive principle is so applied that each higher rate is imposed only on the excess above the amount subject to the next lower rate; so that each increase of rate will apply only to a certain amount above a certain maximum. The tax should if possible be made to bear more heavily upon those residing without the country than within it. A heavy progressive tax upon a very large fortune is in no way such a tax upon thrift or industry as a like would be on a small fortune. No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood. We have not the slightest sympathy with that socialistic idea which would try to put laziness, thriftlessness and inefficiency on a par with industry, thrift and efficiency; which would strive to break up not merely private property, but what is far more important, the home, the chief prop upon which our whole civilization stands. Such a theory, if ever adopted, would mean the ruin of the entire country--a ruin which would bear heaviest upon the weakest, upon those least able to shift for themselves. But proposals for legislation such as this herein advocated are directly opposed to this class of socialistic theories. Our aim is to recognize what Lincoln pointed out: The fact that there are some respects in which men are obviously not equal; but also to insist that there should be an equality of self-respect and of mutual respect, an equality of rights before the law, and at least an approximate equality in the conditions under which each man obtains the chance to show the stuff that is in him when compared to his fellows.

A few years ago there was loud complaint that the law could not be invoked against wealthy offenders. There is no such complaint now. The course of the Department of Justice during the last few years has been such as to make it evident that no man stands above the law, that no corporation is so wealthy that it can not be held to account. The Department of Justice has been as prompt to proceed against the wealthiest malefactor whose crime was one of greed and cunning as to proceed against the agitator who incites to brutal violence. Everything that can be done under the existing law, and with the existing state of public opinion, which so profoundly influences both the courts and juries, has been done. But the laws themselves need strengthening in more than one important point; they should be made more definite, so that no honest man can be led unwittingly to break them, and so that the real wrongdoer can be readily punished.

Moreover, there must be the public opinion back of the laws or the laws themselves will be of no avail. At present, while the average juryman undoubtedly wishes to see trusts broken up, and is quite ready to fine the corporation itself, he is very reluctant to find the facts proven beyond a reasonable doubt when it comes to sending to jail a member of the business community for indulging in practices which are profoundly unhealthy, but which, unfortunately, the business community has grown to recognize as well-nigh normal. Both the present condition of the law and the present temper of juries render it a task of extreme difficulty to get at the real wrongdoer in any such case, especially by imprisonment. Yet it is from every standpoint far preferable to punish the prime offender by imprisonment rather than to fine the corporation, with the attendant damage to stockholders.

The two great evils in the execution of our criminal laws to-day are sentimentality and technicality. For the latter the remedy must come from the hands of the legislatures, the courts, and the lawyers. The other must depend for its cure upon the gradual growth of a sound public opinion which shall insist that regard for the law and the demands of reason shall control all other influences and emotions in the jury box. Both of these evils must be removed or public discontent with the criminal law will continue......

http://www.taxhistory.org/thp/readin...b?OpenDocument
Full Text Published by Tax AnalystsTM

The income tax just turned 90, having become law on October 3, 1913, as part of the Underwood-Simmons Tariff Act.

....The law established a "normal" rate of 1 percent on both individual and corporate incomes. Lawmakers set the personal exemption at a lofty $3,000, leaving the vast majority of Americans completely exempt; according to historian Elliot Brownlee, only 2 percent of American households paid the tax during its early years.

The tax also included a graduated surtax. With rates ranging from 1 percent to 6 percent, it added a new, distinctly progressive element to the federal revenue system. Because most revenue still came from tariff duties and a handful of excise taxes, the income tax provided a symbolic counterweight to those regressive revenue tools.

16th AmendmentThe 1913 law provided a capstone to the vigorous 1909 debate over income taxes. <h3>In that year, Democrats and progressive Republicans had mustered considerable support for a new income tax. However, Republican leaders in both the House and Senate remained steadfastly opposed to the idea.</h3> Eager to forestall a party rebellion, Republican President William Howard Taft proposed a compromise: Congress would enact a modest corporate income tax as a substitute for broader income taxation. Also, lawmakers would submit to the states a constitutional amendment explicitly authorizing the federal government to impose an income tax. The amendment was designed to eliminate any lingering doubts growing out of the Supreme Court's 1895 Pollock decision about the constitutionality of an income tax.

Taft's plan succeeded -- perhaps too well, from the perspective of many conservatives. <h3>Ratification of the 16th Amendment proved relatively easy, and on February 25, 1913, Secretary of State Philander Knox certified the amendment's adoption.</h3> With support from Taft's successor, Woodrow Wilson, lawmakers soon approved the 1913 income tax law, and the Bureau of Internal Revenue, as the IRS was then known, prepared the first Form 1040 soon after.


The income tax remained a very narrow tax until World War I, when revenue needs prompted lawmakers to modestly expand its breadth. Even then, it never reached far into the middle class. It would take another national crisis to finally transform the levy from a "class tax" to a "mass tax"; today's income tax was a product of World War II.....

[Skutch]

Inequal distribution of wealth has been a fact of life since men got together to form groups (networks). It has nothing to do with individual competence or lackthereof. It is a law of economics which naturally emerges as an organizational feature of a group (network).

[Charlatan]

Perhaps I am confused but the suggestion that a small percentage control nearly all of the wealth and this is a problem, seems to suggest that there is a limited amount of wealth (i.e. no further wealth can be generated).

Can I get some clarity on this please?

[host]

Originally Posted by Charlatan

Perhaps I am confused but the suggestion that a small percentage control nearly all of the wealth and this is a problem, seems to suggest that there is a limited amount of wealth (i.e. no further wealth can be generated).

Can I get some clarity on this please?

This is a recent study, and it is consistent with data covering all US age groups. I predict that the response will be that "they are young", and the fact will be ignored or downplayed,that the gains in income and wealth accumulation are confined to the top 20 percent, as every other set of data also indicates.

Why does it matter if total wealth is increasing? It is, and it mostly goes to where it is already concentrated, and none of the increase reaches the bottom 20 percent, at all.

http://209.85.165.104/search?q=cache...lnk&cd=3&gl=us

SAVINGS AND ASSET ACCUMULATION
AMONG AMERICANS 25-34
BY Christopher Thornberg and Jon Haveman
October 13, 2006
Prepared for:
The American Institute of Certified Public Accountants



BY Christopher Thornberg and Jon Haveman
October 13, 2006
Prepared for:
The American Institute of Certified Public Accountants



Page 2

The proportion of this population that possesses a savings account or other fi-
nancial assets has declined significantly, as has median net worth.
<h3>Between 1985 and 2004, net worth grew almost 20 percent for those in the top quintile of
the wealth distribution and fell for the other 80 percent. This decline was most pro-
nounced for those in the bottom 20 percent of the distribution.</h3>

Page 4

Not all Americans have bene-
fited equally from the current
gains in the economy. Income
inequality is at its highest level
since World War II. Those at the
top of the income distribution
have enjoyed a pace of growth
in incomes that is about 2.5
times that of those at the bot-
tom end.


Page 9

The forces of asset appreciation have had a significant impact on the bottom line for
Americans over the past decade despite low savings rates. In the late 1960s, net house-
hold wealth was about 5 times annual disposable income. It dropped slightly in the
1970s on the back of weaker-than-average economic performance and a slowdown in
productivity gains. However, the past decade has seen a sharp rise in net wealth, up to
5.5 times current disposable income.
This increase in wealth is due to a number of factors. One is the increase in the values in
U.S. equity markets; the other is the rapid run up of real estate prices. Unfortunately, the
rise in average wealth disguises the fact that the majority of new wealth is accruing to
older, higher income households. A numerical majority of Americans have not seen any
significant change in their net worth position over the past decade.
The current value of net wealth in the United States equals about $170,000 per person if
excess real estate values are excluded. In other words, it is only about 80 percent of the
current public shortfall, and this is without accounting for using asset withdrawal for
future current spending, which is the primary reason for asset accumulation!

The Geography of Asset Accumulation Page 16
Net worth in the United States is not evenly distributed (Figure 5). In 1985, nearly two-
thirds of Americans aged 25-34 owned one or another form of savings account (Figure
6). At that time, young Americans in New England had the highest ownership of such
accounts, with 80 percent reporting that they had them.
The least likely to hold such an account were those in the East South Central region.
7
In
the subsequent 19 years, however, ownership of savings instruments declined in all but
the West North Central region. The East South Central region not only had the lowest
ownership rate in 1985, but experienced a 15 percentage point decline between 1985 and
2004, the largest of any region.
Figure 5. Median Net Worth Among Americans 25-34, by U.S. Region
(Darker colors indicate greater n

Net worth in the United States is not evenly distributed (Figure 5). In 1985, nearly two-
thirds of Americans aged 25-34 owned one or another form of savings account (Figure
6). At that time, young Americans in New England had the highest ownership of such
accounts, with 80 percent reporting that they had them.
The least likely to hold such an account were those in the East South Central region.
7
In the subsequent 19 years, however, ownership of savings instruments declined in all but
the West North Central region. The East South Central region not only had the lowest
ownership rate in 1985, but experienced a 15 percentage point decline between 1985 and
2004, the largest of any region.


The nationwide decline in median net worth represents an increasing concentration of
net worth among the wealthiest individuals rather than a decline in the aggregate net
worth of those aged 25 to 34. In 1985, the top half of the wealth distribution accounted
for 102 percent of all wealth held by this group. By 2004, this had increased to 113 per-
cent.
This trend holds true for each of the 9 regions discussed here. In 7 of the 9 regions, the
richest 50 percent are responsible for more than 112 percent of the net asset accumula-
tion in the region. On average, this leaves the bottom half of the wealth distribution
with negative net worth.
Only in the New England and Pacific regions do the top half of the wealth distribution
hold a smaller proportion; both are under 109 percent. This concentration was most ex-
treme in the East South Central region, with the top half holding 129 percent of the net
worth in the region compared with only 98 percent in 1985.
In general, the top half of the distribution held between 110 and 116 percent in 2004
while it held less than 106 percent in all regions in 1985.
As was the case nationally, changes in unsecured debt, home equity, and demographics
are an important part of the regional disparities. The concentration of unsecured debt
among low-wealth individuals increased in every region while their share of home eq-
uity fell in all but the West North Central Region (Table 5). The increase in unsecured
debt among low-wealth individuals was particularly strong in the East South Central
and New England regions. In the East South Central region, low-wealth individuals ac-
count for 86 percent of the unsecured debt. Shares of home equity did not change mark-
edly between 1985 and 2004, but the change was either 0 or negative in every region.

There is a heavy emphasis on declining numbers of savings accounts. Where would the money come from for the masses to deposit in the bank. The money is not reaching them and the costs of basics...housing, food, transportation have risen dramatically since 2001.

[Ustwo]

I suggest people go to the original link in hosts post and read it for themselves.

He cherry picked the hell out of it since the article was about how people are making more money but not properly saving and expecting the federal government to do it for them, even though, due to the CURRENT social programs each of them will need to pay 16k a year into said programs by the year 2025.

Yes the article if anything is anti-socialist. I was going to break it down and started to but frankly its a waste of time. The gist is that people need to manage their money better, not get hand outs.

One of the more interesting points is that today you spend over 8k just to pay for social programs a year, and by 2025 you will be paying 16+k a year due to less workers in the work force and more retired people. Its estimated that a worker today will pay 220k for social programs in their working time. Just think if they invested that properly instead.

Another one that made me chuckle was like I said in a thread in general it does NOT take 2 incomes these days, and the 'need' for it is a farce.

The many anecdotes about declines in living standards and the need for two incomes to keep up in a modern America simply do not represent reality. Quite the opposite; with all the investment in human capital, information infrastructure, and advances in technology, the average household income for Americans has risen faster over the past decade
than at anytime since the early 1960s.

I don't know if its misinterpretation, misrepresentation, or not reading the whole thing himself, but this is another one, off the mark and in this case 180 degrees off the mark.

[Charlatan]

So here is what I am getting from this, and please correct me if I am off on this:

Of the total wealth that has been generated, the majority of it is being held by a small percentage but over all the amount of wealth is up so that those who are holding less of the total are individually holding more overall.

Add to this the fact that people, throughout the spectrum of wealth, are not managing their money wisely and therefore have less savings than they should.

To me, while the percentages might be a bit off from what *I* might like to see but ultimately I am not going to advocate for a system that strives to impose equality in economic matters. That just seems counter-productive.

The struggle here is always between equality and freedom in these discussions and to my mind, the answer is somewhere along the spectrum between the two rather than either extreme.

[filtherton]

I don't think that the american system necessarily strives for equality. It seems to me like a matter of good policy to keep the worse off in your country just happy enough so that they don't start causing a lot of problems as a result of their dissatisfaction. This often involves "wealth redistribution", but not really in any kind of significant way (at least not in america).

[Charlatan]

Filth... my read is that the US favours freedom over equality.

Wealth redistribution occurs in the US more along the lines of charity than through taxation, at least in the minds of most.

Countries like Canada have a more pronounced social "safety net", universal health care, etc. which strive to bring about an equality of social services.

One can discuss the merits of this pro or con, but ultimately my point here is that it is closer (economically speaking) to the "equality" end of the spectrum than the US is currently.

[host]

"God", "Guns", and "race baiting", ain't Huckabee's style, and the "old guard" are concerned that their "evangelical faithful" are receptive to Huckabee's message.
"Horrors" if wealth inequity and the decline of the middle class earnings growth is actually discussed.

An amazingly revealing article touching on the scam that is the republican party manipulation of the mostly southern evangelical vote. Selfless christians, persuaded to vote against their own economic interests, election after election:

http://www.nytimes.com/2007/12/30/we...rkpatrick.html
December 30, 2007
The Nation
Shake, Rattle and Roil the Grand Ol’ Coalition
By DAVID D. KIRKPATRICK

AS a Republican presidential primary candidate, Mike Huckabee is a puzzle.

A Southern Baptist pastor and thoroughgoing social conservative, Mr. Huckabee has struck a distinctly populist chord when it comes to economics. He has criticized executive pay, sympathized with labor unions, denounced “plutocracy,” and mocked the antitax group the Club for Growth as “the Club for Greed.” And when it comes to foreign affairs he sometimes sounds almost liberal; for example, comparing the United States’ place in the world to “a top high school student, if it is modest about its abilities and achievements, if it is generous in helping others, it is loved.”

Yet he has surged to the head of the pack in polls of Iowa Republicans in the week before their caucus and moved close to the front in national polls as well. Now his success is setting off a debate in his party over whether his success marks the fading of the old Reaganite conservative coalition — social conservatives, antitax activists and advocates of a muscular defense — or, rather, offers a chance for its rejuvenation.

“It’s gone,” said Ed Rollins, who once worked as President Reagan’s political director and recently became Mr. Huckabee’s national campaign chairman. “The breakup of what was the Reagan coalition — social conservatives, defense conservatives, antitax conservatives — it doesn’t mean a whole lot to people anymore.”

“It is a time for a whole new coalition — that is the key,” he said, adding that some part of the original triad might “go by the wayside.”

So far, the leadership of all three factions of the old coalition has shown little more than disdain for the idea of a President Huckabee. The Club for Growth has flooded Iowa with commercials mocking him as a compulsive spender when he was the governor of Arkansas who never met a tax he did not like. Some hawks complain that he is to the left of Senator Hillary Rodham Clinton on foreign policy.

Even among Christian conservatives — Mr. Huckabee’s natural constituency — most national leaders gave him the cold shoulder, complaining that he worked too hard to distance himself from them and their allies. “You can’t just say ‘respect life’ exclusively in the gestation period,” he often says, or, “I believe in the Bible but I am just not angry about it.”

In a sign of how intertwined the leadership of that old three-part Reaganite alliance has grown, some of the most prominent Christian conservative political leaders have even faulted Mr. Huckabee because his economic populism or slim defense credentials would irk their allies. “I think out of respect to the other members of the coalition, some evangelicals have held back because he is a challenge to some in the foreign policy ranks and even some fiscal conservative groups are opposed to him,” Tony Perkins, president of the Christian conservative Family Research Council recently told CNN.

Rich Lowry, editor of the conservative standard-bearer National Review, warned of “Huckacide” for the party if it gives him the nomination. Now Rush Limbaugh, the loudest voice of the conservative movement, has joined the chorus, accusing Huckabee of practicing “identity politics” (as an evangelical) and conservative apostasy. He told his listeners that Mr. Huckabee’s record is “not even anywhere near conservative.”

Mr. Rollins, for his part, traced Mr. Huckabee’s political lineage back to George Wallace in 1968 (without the segregationism). Mr. Wallace and, later, Pat Buchanan and Ross Perot appealed to the same blocs of working-class voters and socially conservative white Southerners that the Republican Party began trying to court in Senator Barry Goldwater’s 1964 campaign.

Reagan finally captured those voters for the Republican Party by rallying them against abortion and the Communist threat at a time when the Democrats had shifted to the left on cultural and defense issues. They became the so-called Reagan Democrats. But many never lost their ear for the old economic populist appeals, and over time many drifted into political independence — coming home for George W. Bush, but abandoning the party in droves in the 2006 midterms.

Mr. Huckabee, Mr. Rollins said, could win back those voters, but not with the same combination of issues. The rash of corruption scandals and pork-barrel projects that plagued the House of Representatives under Republican rule tarnished the old image of the party as the champion of limited government, while dismay at the Bush administration over the Iraq war was a blot on the party’s national security credentials.

“It is time to go get those independents back again,” Mr. Rollins argued. “Huckabee fits the bill.”

Some doubt Mr. Huckabee’s distinctive style will translate as well beyond Midwestern states like Iowa — the region where Christian populism was born in the person of William Jennings Bryan. “I see Huckabee as more of a Prairie populist than what I would consider a traditional conservative,” said former Senator Rick Santorum of Pennsylvania, a stalwart of the conservative movement once considered a 2008 presidential contender himself. “I don’t see how he takes that show across the East Coast or even the Midwest.”

Still, he acknowledged that in some ways Mr. Huckabee’s combination of social conservatism and sympathy for the working class also touched a fault line that ran further through the Republican Party, including in his home state of Pennsylvania.

“He would do very, very well in southwestern Pennsylvania, Reagan Democrat country,” where many socially conservative working-class voters “have a heart for the poor and, unfortunately, think of government as the answer,” Mr. Santorum said.

A few Christian conservative leaders applaud Mr. Huckabee for his independence of the other factions of the conservative movement. “We have been saying for years that you can’t build a winning coalition based on low taxes and limited government anymore, because you need to reach out to middle-class voters,” said Randy Brinson, founder of the evangelical youth voter-registration group Redeem the Vote and a friend of Mr. Huckabee’s. <h3>“The gulf between the haves and have-nots — that really is going on.”</h3>

Mr. Brinson argued that Mr. Huckabee had, in a sense, taught the established Christian conservative leadership a lesson about its own clout by talking directly to the people in the pews. “He showed you can have a much larger effect than by going to a self-appointed Christian conservative leader,” Mr. Brinson said. (Mr. Huckabee was the Redeem the Vote’s national advisory committee chairman before running for the nomination and his campaign has rented its e-mail lists of 414,000 voters in Iowa and 25 million around the country.)

Still, some veteran conservative organizers note that beneath the rhetoric Mr. Huckabee is still positioning himself in many ways as a Reaganite, including pledging not to raise taxes.

Many discount the possibility that he will win the nomination because he has too little money and there are tougher battles ahead after the heavily evangelical Iowa caucuses. But they contend that he can energize previously demoralized Christian conservatives and, at 52, is a relatively young politician with a future in the party who will probably do his best to turn them out for the nominee.

“My fantasy out of this race is that Huckabee will create another Christian Coalition,” said Grover Norquist, the president of Americans for Tax Reform, recalling the group that grew out of Pat Robertson’s 1988 campaign and became a political force for much of the next decade. “If you could have the equivalent of the Christian Coalition, it would be a bulwark for the Goldwater-Reagan wing of the party.”

The last thing Grover Norquist wants is a mass of disenchanted middle class voters putting economic issues ahead of religious ones.....