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View Full Version : How many Americans are hoping Obama will redistribute some of the wealth?


a_unique_person
29th October 2008, 01:00 AM
Despite the interviews that have the interviewer seriously asking Obama if he is a follower of Karl Marx (something that would never happen in Australia or Europe, it's just accepted Social Democrat policy with Progressive Taxation), I'm wondering what percentage of Americans are hoping he will do some redistribution, even if they won't say so publicly.

leftysergeant
29th October 2008, 02:31 AM
I just want him to stop the redistribution that started when we installed that jelly-brain from California in 1980.

Of course, re-instating the inheritance tax would be a good start. Without it, we would be on the fast track to feudal Europe.

Meadmaker
29th October 2008, 03:05 AM
I just want him to pay the bills, and the only way to do that is to raise taxes, especially on the rich. This will result in the rich being not quite so rich. If that's redistributing wealth, then I am one of those Americans who hopes he does it.

Obama has been hurt a bit by his "spread the wealth around" comments because redistribution of wealth suggests, to many people, welfare. That's wildly unpopular. Obama hasn't done enough to counter that perception.

T.A.M.
29th October 2008, 04:13 AM
Easy answer...

Take the number of people in the USA who make less than 250K per year. Then ask them how many of them would like to see no tax increase, or a tax cut.

You then have your answer, as that is the heart of Obama's plan.

I suspect, though McCain has made it into a dirty word, that the vast majority of American's would like to see "Wealth Redistribution" as defined by Obama's Tax Plan.

TAM:)

T.A.M.
29th October 2008, 04:15 AM
I just want him to pay the bills, and the only way to do that is to raise taxes, especially on the rich. This will result in the rich being not quite so rich. If that's redistributing wealth, then I am one of those Americans who hopes he does it.

Obama has been hurt a bit by his "spread the wealth around" comments because redistribution of wealth suggests, to many people, welfare. That's wildly unpopular. Obama hasn't done enough to counter that perception.

dead on. Unfortunately, despite the rhetoric, The Obama campaign is coasting, hoping there is not enough time for it to gain any traction. I hope they are right.

TAM:)

mhaze
29th October 2008, 05:26 AM
I just want him to pay the bills, and the only way to do that is to raise taxes, especially on the rich. This will result in the rich being not quite so rich. If that's redistributing wealth, then I am one of those Americans who hopes he does it.

Obama has been hurt a bit by his "spread the wealth around" comments because redistribution of wealth suggests, to many people, welfare. That's wildly unpopular. Obama hasn't done enough to counter that perception.Right. The fact that Obama's plan does include a large component of increased welfare payouts should in your view be countered by the Obama campaign ....

Lying.

"Paying the bills" and "increasing welfare" are not synonomous.

Cain
29th October 2008, 05:38 AM
Redistribution is inescapable in virtually any sort of tax system. Bush and idiotic Republican tax cuts largely redistribute the burden of current government spending onto future generations (so much for no taxation without representation).

Who says that however the market (with rules laid down by government) distributes income and wealth in a way we should accept without question? Redistribution is necessary to make sure people, particularly children, have access to primary goods; I mean, that's just necessary to maintain any semblance of meritocracy.

KoihimeNakamura
29th October 2008, 05:38 AM
Hmm. Increasing welfare payouts..

Obama proposes to grant a number of refundable tax credits to low- and middle-income workers. For example, he would give a $500 tax credit ($1,000 for a couple) for workers,

THIS IS NOT WELFARE. :|

Tricky
29th October 2008, 05:41 AM
Right. The fact that Obama's plan does include a large component of increased welfare payouts should in your view be countered by the Obama campaign ....

Lying.

"Paying the bills" and "increasing welfare" are not synonomous.

Only one problem. That is incorrect, at least according to FactCheck.org (http://www.factcheck.org/elections-2008/obamas_welfare.html)

A new McCain-Palin Web ad characterizes Obama's proposed refundable tax credits as "welfare." But McCain himself proposes refundable tax credits, too, as part of his health care plan, and calls them "reform."

andyandy
29th October 2008, 06:04 AM
The entire debate over "redistribution" is almost incomprehensible to (I imagine) most Europeans. The idea that a party can stand up and actually say "we don't want to spread any of the wealth around", and for that to be popular is incredible. The very basic role of government should be provision of support to the most vulnerable in society, and for which that necessitates redistributing some of the wealth from those lucky enough to be the most prosperous in society. To turn the argument on its head, and present right wing rich man economics as "altruistic" is an impressive piece of spin but fundamentally disingenuous. McCain attempts to make the argument in two ways:
(1) "I'm not going to redistribute the wealth, I'm going to make sure everyone has the same opportunity to be rich"
(2) "any redistribution of wealth would harm the trickle-down benefits for the poor"

1 is almost embarrassing in its idealistic naivete, and I don't believe that McCain or anyone else in the Republican Party seriously thinks it is even remotely possible. 2 relies on the assumption that "trickle-down" benefits accrued would be superior to any redistribution benefits, which is somewhat dubious (and even suggested by the term "trickle-down"). 2 also actively seeks to increase social inequality as a means of tackling social problems. This perverse logic is followed even though social inequality in itself has long been pinpointed as a fundamental driver in social unrest/unhappiness/depression in society.

Everyone expects politicians to favour the rich, after all politicians themselves will either be rich or will become rich after cashing in on a previous political career. But to have politicians sticking up for the rich man at the expense of the poor man, and being cheered for it by those who could benefit the most, is a truly remarkable political feat. Only in America? :)

Gnu World Order
29th October 2008, 06:13 AM
Can someone please explain to me the difference between a "refundable tax credit" and a "tax credit"?

Tricky
29th October 2008, 06:25 AM
Can someone please explain to me the difference between a "refundable tax credit" and a "tax credit"?
I'm not a tax expert, but I'm just guessing that a tax credit is a deduction you take off when you do your taxes, so you never send it in, whereas a refundable tax credit is one where they send you back some money you've already paid in taxes.

At least, that's how I'd interpret it.

BTW, welcome to the boards. You might be (or become) aware that there is a poster here by the name of "Gnu Ordure". You might be confused with him.

GStan
29th October 2008, 06:36 AM
Cutting someone's tax liability to zero dollars is a tax cut.
Giving someone a refund check for having a negative tax liability is welfare.
You can characterize it as a tax cut, but its still welfare.

"Hey buddy, how much did you have to pay in taxes last year?"

"Nothing"

"Well, that's too much. Vote for me and I'll cut your taxes even lower"

"WTF?"

I agree that some form of welfare is necessary to maintain social stability. However, as intellectually dishonest as it may be on one side to use welfare as a scare word in a campaign, it is just as intellectually dishonest for the other side to claim that it is only a tax cut.

In answer to the OP, I do not hope for redistributed wealth, even though I would certainly qualify for some under Obama's tax plan.

Jaggy Bunnet
29th October 2008, 06:39 AM
I'm not a tax expert, but I'm just guessing that a tax credit is a deduction you take off when you do your taxes, so you never send it in, whereas a refundable tax credit is one where they send you back some money you've already paid in taxes.

At least, that's how I'd interpret it.

Could be, or it may be that a tax credit is something that reduces your tax bills whereas a refundable tax credit is effectively having a negative tax bill.

For example:

Income 100
Tax 30
Tax credits (10)
Balance to pay 20

Is a tax credit.

Income 20
Tax 0
Refundable credit (10)
Balance to receive (10)

Is a refundable credit?

GStan
29th October 2008, 06:41 AM
I'm not a tax expert, but I'm just guessing that a tax credit is a deduction you take off when you do your taxes, so you never send it in, whereas a refundable tax credit is one where they send you back some money you've already paid in taxes.

At least, that's how I'd interpret it.

BTW, welcome to the boards. You might be (or become) aware that there is a poster here by the name of "Gnu Ordure". You might be confused with him.

I'm also not an expert, but I think the distinction is that a tax credit is something that can reduce the amount of taxes that you owe, but cannot reduce it below zero. A refundable tax credit can effectively reduce it to below zero. In effect, you can receive a refund check for more than the total amount that you paid in.

Tricky
29th October 2008, 06:50 AM
Cutting someone's tax liability to zero dollars is a tax cut.
Giving someone a refund check for having a negative tax liability is welfare.

No, it's not. FactCheck (http://www.factcheck.org/elections-2008/obamas_welfare.html)explains:
Furthermore, the Journal's editorial misstated a key fact in its "welfare" argument. It said that anyone who doesn't pay federal income taxes is not a "taxpayer," which is simply incorrect. Here's what the editorial said:

Wall Street Journal editorial, Oct. 13: [Refundable credits] are an income transfer – a federal check – from taxpayers to nontaxpayers. Once upon a time we called this "welfare." ... Mr. Obama's genius is to call it a tax cut.
The fact is, a worker can be a "taxpayer" whether or not they owe any income tax. Just about every worker is subject to federal Social Security and Medicare taxes totaling 7.65 percent on every dollar of earnings, up to $102,000 per year. (For earnings over $102,000, only the 1.45 percent Medicare tax applies.) Low-income workers, and retired and jobless persons as well, also pay federal excise taxes whenever they buy gasoline or pay a telephone bill, for example. Obama and other Democrats argue that for low-income workers, refundable tax credits are not “welfare” but, in effect, a reduction in their overall federal tax burden, counting payroll taxes.

Congressional Budget Office figure show that even those in the lowest-earning fifth of households pay an effective federal tax rate, on average, of 4.3 percent of their income, despite benefiting from existing federal refundable tax credits to a major degree. This group had average income of $15,900 in 2005, the most recent year for which CBO has done the calculations. But despite receiving "a federal check" through the income tax system that boosted income by an average of 6.5 percent (this shows up as a negative tax rate in the CBO tables), they still paid an average of $600 in federal taxes. That's true even after subtracting the effects of refundable tax credit "welfare."

ZenFountain
29th October 2008, 06:53 AM
That is exactly the difference GStan. For reference in 2004 the highest percentage of Americans ever reported zero tax liability, almost 1 in 3. I kinda understand the Republican grievance with Obama proposing new refundable tax credits that could be going to those that already pay no federal income taxes, but at the same time I cynically don't believe Obama is going to do much about middle class tax relief.

Cain
29th October 2008, 07:26 AM
That is exactly the difference GStan. For reference in 2004 the highest percentage of Americans ever reported zero tax liability, almost 1 in 3. I kinda understand the Republican grievance with Obama proposing new refundable tax credits that could be going to those that already pay no federal income taxes, but at the same time I cynically don't believe Obama is going to do much about middle class tax relief.

It's crazy how these debates focus almost solely on federal income taxes -- the main progressive instrument against a system that has become more or less flat once all other taxes are taken into account. Also, whatever happened to Milton Friedman and the negative income tax (what a socialist!), or Ronald Reagan's love for the "earned income tax credit" (EITC)?

Jesus Christ, I get the sense from these Republican loons that they'd like to send an envelope to everyone in the lower-middle class containing a note. Open the note and it reads "**** YOU." (Those asterisks should be capitalized.)

Malerin
29th October 2008, 08:36 AM
I posted on a similar thread about this. Normally, I would object to sending checks out to people, but the middle class has been stagnant for 30 years now and the top 1%'s share of the income has gone from 10% to 20%. These are disturbing trends, and a concentration of so much wealth in the hands of so few is not good for society.

GStan
29th October 2008, 09:08 AM
It's crazy how these debates focus almost solely on federal income taxes -- <snip>

Jesus Christ, I get the sense from these Republican loons that they'd like to send an envelope to everyone in the lower-middle class containing a note. Open the note and it reads "**** YOU." (Those asterisks should be capitalized.)

It all depends on your perspective and your own beliefs. I get the sense from some of these Democrat loons that they'd like to send an envelope to everyone in the upper class containing a bill. Open the bill and addition to the amount due to the politicians that promised your money to someone else, it also reads "**** YOU!" (Those asterisks should also be capitalized.)

Meadmaker
29th October 2008, 09:38 AM
Right. The fact that Obama's plan does include a large component of increased welfare payouts

Do tell. What do you mean? Have I been duped again? What are you referring to by "increased welfare payouts"?

ZenFountain
29th October 2008, 09:55 AM
Jesus Christ, I get the sense from these Republican loons that they'd like to send an envelope to everyone in the lower-middle class containing a note. Open the note and it reads "**** YOU." (Those asterisks should be capitalized.)

If that was directed at me I wasn't implying that Obama's ideas are necessarily bad. Look at what Clinton did in 1993. The economy was floundering, the federal deficit was huge and he raised taxes. Republicans warned of an apocalypse if Clinton raised taxes on the wealthy and yet five years later, the economy was booming and the federal budget was balanced.

My point was there is a huge mental hurdle for Americans when it comes to taxation and how those taxes are spent. If 0.5% of federal spending went into wasteful social programs and 5% went to wasteful defense spending, to many people the 0.5% wasted on social programs is far more appalling because it's perceived as going to lazy bastards, where as the wasteful defense spending is never seen. Growing up in rural Nebraska I saw a lot of this where poor people on welfare, food stamps and Medicaid were regularly mocked, often by the very same people who were receiving massive agricultural subsidies when corn and soybean prices were in the tank.

If Obama actually does something about trimming wasteful spending, no matter how insignificant it would certainly help alive the acute misgivings Americans have about federal taxes also.

Kestrel
29th October 2008, 09:57 AM
Everyone expects politicians to favour the rich, after all politicians themselves will either be rich or will become rich after cashing in on a previous political career. But to have politicians sticking up for the rich man at the expense of the poor man, and being cheered for it by those who could benefit the most, is a truly remarkable political feat. Only in America? :)

America has several well funded "think tanks" like the Heritage Society that are dedicated to reversing all the social changes of the 20th Century and making the world safe for an inherited aristocracy.

These propaganda mills have managed to reframe a lot of political debate. For example, the estate tax became the "death tax" and people were told it was destroying family farms and the middle class. This is pure fiction, but the lie was repeated often enough that many believed it was true.

andyandy
29th October 2008, 10:44 AM
America has several well funded "think tanks" like the Heritage Society that are dedicated to reversing all the social changes of the 20th Century and making the world safe for an inherited aristocracy.

These propaganda mills have managed to reframe a lot of political debate. For example, the estate tax became the "death tax" and people were told it was destroying family farms and the middle class. This is pure fiction, but the lie was repeated often enough that many believed it was true.

In the same way that taxes have become "job killing taxes" :)

there is an excellent article in today's financial Times about how "trickle down" economics has been largely a myth:

In the closing stages of the US presidential campaign, John McCain has been pushing hard on the idea that Barack Obama would “spread the wealth around” – as the Democratic candidate this month reportedly told the voter who came to be known as Joe the Plumber. “That is what change means for Barack the Redistributor,” said Mr McCain on Monday. “It means taking your money and giving it to someone else.”

The Republican nominee’s sounding of the alarm resonates with portions of the US electorate, although it has probably come too late to be a game changer. But much larger sections of voters – those living in the bottom 80 per cent – have been experiencing a means of wealth redistribution in the past few years that has led many of them to different conclusions.

kind of redistribution is of a different complexion to the progressive taxation that Mr Obama supports and which Mr McCain apparently no longer does. It has come via the mechanism of the market and has shifted wealth in the opposite direction – from the middle classes to the wealthy. It long predates the collapse of the subprime mortgage market last year that lit the fuse for today’s global financial crisis.

Economists call it median wage stagnation. Others dub it the “silent recession”. Mr Obama, who has struggled since the start of his campaign to speak in an economic language that strikes a chord with blue-collar voters, recently put it this way: “We are now being battered by a very serious economic storm and for many Americans it has only deepened the quiet storms they have been struggling through for years.” The data are stark and go some way towards explaining why so many Americans felt so disaffected even during the most robust years of economic growth under the Bush administration. Between 2000 and 2006, the US economy expanded by 18 per cent, whereas real income for the median working household dropped by 1.1 per cent in real terms, or about $2,000 (£1,280, €1,600). Meanwhile, the top tenth saw an improvement of 32 per cent in their incomes, the top 1 per cent a rise of 203 per cent and the top 0.1 per cent a gain of 425 per cent.

Part of this was because the latest period of economic growth failed to create jobs at nearly the same rate as in previous business cycles and even led to a decline in the number of hours worked for most employees. Unusually for a time of expansion, the number of participants in the labour force also fell. But mostly it was because the fruits of economic growth and soaring productivity rates went to the highest income earners.


http://www.ft.com/cms/s/0/62cfa31e-a528-11dd-b4f5-000077b07658.html

taken from 1980, real incomes of the lowest fifth of the population have risen by 10%, for the third fifth (ie 40% to 60% of the population) they have risen by 14%, for the highest fifth they have risen by 50%, and for the top 5% they have risen 75%. And buried within this evidence of massive widening social inequality, we can see that in real terms the bottom fifth are barely better off than they were in 1989, and that the bottom 60% have seen a real wage decline in the last eight years. America is now as unequal as it was preceding the great Depression, with the top 1% taking home 24% of the share of total income.

Whichever way you analyse the figures, "trickle down" economics has turned out to be a convenient ruse for the rich to get richer, whilst pretending that they are actually acting with altruistic good intent.

gtc
29th October 2008, 02:46 PM
The entire debate over "redistribution" is almost incomprehensible to (I imagine) most Europeans. The idea that a party can stand up and actually say "we don't want to spread any of the wealth around", and for that to be popular is incredible. The very basic role of government should be provision of support to the most vulnerable in society, and for which that necessitates redistributing some of the wealth from those lucky enough to be the most prosperous in society.

I think that if you don't percieve the prosperous as being merely lucky but as either having earnt or deserved their prosperity then you are much less likely to support higher tax/higher welfare policies.

geni
29th October 2008, 02:54 PM
Everyone outside the farming sector is hopeing. Everyone in the farming sector pretty much knows.

People will use various words for their redistribution of course.

BenBurch
29th October 2008, 03:06 PM
You know there is a not very nice word for a nationalist government that gives welfare mostly to major corporations and which effectively makes them part of the government.

gtc
29th October 2008, 03:10 PM
You know there is a not very nice word for a nationalist government that gives welfare mostly to major corporations and which effectively makes them part of the government.

If you want to call the US Government fascist, then you need to prove the three bolded claims you made. However, even then, I don't think you have the correct definition of the word.

andyandy
29th October 2008, 03:30 PM
I think that if you don't percieve the prosperous as being merely lucky but as either having earnt or deserved their prosperity then you are much less likely to support higher tax/higher welfare policies.

I was hoping someone would pick up that point, I left it in deliberately to be provocative. :)

everyone who is rich is lucky to be rich regardless of how much " effort" or "hard work" went into earning that wealth. That's because for every hard working rich person there will be someone equally hard-working who by dint of circumstances (whether education, skills, parental upbringing, bad luck, disability, carer responsibilities etc etc) who will be poor. So "deserved" is a very poor dividing line to draw when considering wealth. This fundamental self-centred attitude seems to be at the heart of much of the selfish right-wing economics. People say "I'm rich, I worked hard, so I deserve to be rich. People who aren't rich obviously didn't work hard enough".

Everyone who is rich should recognize how lucky they are regardless of how "deserving" they think they are. Just, to extend, we in the West should recognize how lucky we are to have fresh drinking water, proper sanitation, electricity and universal education, because just those simple provisions put us ahead of about one billion people. If we factor in all the various advantages that are conferred upon people simply by being born in a rich country, then "luck" is indeed the correct metric to use. Without too much difficulty I think I could say I was in the top 10% globally in terms of wealth and opportunity, though I'm certainly not rich from a UK perspective. :)

If people were a little less self-centred, they might realise that luck is indeed crucial to success however it is achieved, and as a result might be a little less selfish when it comes to "spreading the wealth around".

BenBurch
29th October 2008, 03:40 PM
If you want to call the US Government fascist, then you need to prove the three bolded claims you made. However, even then, I don't think you have the correct definition of the word.

If we are going to be calling people names without any justification, I want to join the game.

IchabodPlain
29th October 2008, 03:41 PM
The entire debate over "redistribution" is almost incomprehensible to (I imagine) most Europeans.

Quite possibly true. I offer this (http://patriotpost.us/histdocs/crockett_not_yours_to_give.asp), not as an argument for or against Obama's proposal, but merely as background for what many Americans grew up believing and the culture that has spawned those beliefs.

It's a conversation between David (Davey) Crockett and a supporter from around 1828, in which Crockett is being antagonized for having voted in support of a piece of legislation that gave "charity" to a woman whose husband had died. The title, and the message of the conversation being "Not Yours To Give". The rationale is that what you have earned is rightfully yours, and not the government's to use as a vehicle to transfer wealth.

Maybe it was one-to-many Horatio Alger stories, but most Americans do not look at a rich person and think "lucky". Instead, it is replaced with a combination of A)intelligence B)born into wealth and C) learned work ethic. Lucky is winning the lottery, not working your way through school and the business world on your way to becoming prosperous. Luck may play a part, but not the overriding factor (in most American's eyes anyway). There is still the idea that if you work hard and "do the right thing" you too could be a rich man/woman.



(1) "I'm not going to redistribute the wealth, I'm going to make sure everyone has the same opportunity to be rich"
(2) "any redistribution of wealth would harm the trickle-down benefits for the poor"

1 is almost embarrassing in its idealistic naivete, and I don't believe that McCain or anyone else in the Republican Party seriously thinks it is even remotely possible.

You aren't even addressing this position. Assertion does not truth make.

andyandy
29th October 2008, 05:16 PM
You aren't even addressing this position. Assertion does not truth make.

Have you read the subsequent financial Times article? The data on the failure of "trickle down" economics is pretty incontrovertible. And the financial Times is certainly not a left wing rag. ;)

Economists call it median wage stagnation. Others dub it the “silent recession”. Mr Obama, who has struggled since the start of his campaign to speak in an economic language that strikes a chord with blue-collar voters, recently put it this way: “We are now being battered by a very serious economic storm and for many Americans it has only deepened the quiet storms they have been struggling through for years.” The data are stark and go some way towards explaining why so many Americans felt so disaffected even during the most robust years of economic growth under the Bush administration. Between 2000 and 2006, the US economy expanded by 18 per cent, whereas real income for the median working household dropped by 1.1 per cent in real terms, or about $2,000 (£1,280, €1,600). Meanwhile, the top tenth saw an improvement of 32 per cent in their incomes, the top 1 per cent a rise of 203 per cent and the top 0.1 per cent a gain of 425 per cent.

If you have evidence that "trickle down" economics does benefit the non-rich more than a redistribution of wealth, I would be interested in seeing it.

moon1969
29th October 2008, 05:39 PM
Oh and Reaganomics worked so well? Where is that prosperity that should have trickle down to poor people and middle class? If Sarah Palin wins USA will become a theocracy.

gtc
29th October 2008, 05:58 PM
If we are going to be calling people names without any justification, I want to join the game.

That doesn't make sense.

You need to provide the evidence same as they do.

Malerin
29th October 2008, 06:02 PM
10 yr old article, but the stats probably haven't changed much:

""Born on Third Base," a new study by the Boston-based United for a Fair Economy, shows that a majority of the Forbes 400 inherited their way onto the list, inherited already substantial and profitable companies, or received key start-up capital from a family member.


42 percent were born on home plate. These include older dynasties like the Rockefellers and du Ponts, and newer family fortunes from companies like Walmart and Gap. The Waltons of Wal-Mart are ranked nine through thirteen on the Forbes 400, with a combined $32 billion. Forbes thinks some of those born on home plate hit a home run. For example, it calls Philip Anschutz "self-made" even though he would have made the 400 cut just from the mineral wealth he inherited from his father.

At least 6 percent were born on third base. They inherited wealth in excess of $50 million or a large and prosperous company, and grew this initial fortune into Forbes 400 size. For example, Edward Johnson III inherited Fidelity from his father and led it the mutual fund world series."

http://www.phenomenologycenter.org/course/rich.htm

Hard work will get you far (hopefully). Having a mom or dad named "Walton" certainly doesn't hurt ;)

a_unique_person
29th October 2008, 06:22 PM
That doesn't make sense.

You need to provide the evidence same as they do.

The evidence he gave looked just as good as the evidence they give. :)

BenBurch
29th October 2008, 06:30 PM
The evidence he gave looked just as good as the evidence they give. :)

You get the point.

kallsop
29th October 2008, 06:44 PM
A flat tax is the best way out of this stupid situation where the politicians use the tax code to reward and punish. Obama is on record as saying higher taxes on the "rich" harm the economy, but he thinks it's "fair" to raise their taxes. How dumb is that. The whole tax code is an abomination.

I also believe it's a huge problem that more and more taxpayers have zero federal income tax liability, or are in reality on "tax rebate welfare" e.g. EITC. Freeloaders are not welcome anywhere in polite society.

rdaneel
29th October 2008, 07:14 PM
Come on guys, lets all just admit that Obama is following in the footsteps of these Socialists (http://images.salon.com/comics/boll/2008/10/30/boll/story.gif).
:D

Gregoire
29th October 2008, 07:20 PM
I just want him to stop the redistribution that started when we installed that jelly-brain from California in 1980.

Of course, re-instating the inheritance tax would be a good start. Without it, we would be on the fast track to feudal Europe.


By any chance, are you re you refering to this President, the one Obama was attacked for praising?:)

http://blog.washingtonpost.com/the-trail/2008/01/17/obamas_reagan_comparison_spark_1.html

Meadmaker
29th October 2008, 07:32 PM
So, the "welfare payments" are the refundable tax credits.

For the record, I think Obama's tax plan is utterly stupid. I think he's pandering for votes by promising tax cuts. However there are two points about it. First, regardless of the wisdom of his plan, giving back, via the income tax, payments made through other taxes, is not a "welfare payment". Criticize it if you wish, but it isn't a welfare payment. Second, although I hate Obama's tax plan, I would say there is only one presidential contender from a major party that has a worse plan.

I'm a deficit hawk. If either of these guys could convince me that they have a plan that balanced the budget, I would vote for him, but neither one does. Meanwhile, the GOP has a clear track record of borrow and spend, so I'm not voting for them.

Malerin
29th October 2008, 07:34 PM
A flat tax is the best way out of this stupid situation where the politicians use the tax code to reward and punish. Obama is on record as saying higher taxes on the "rich" harm the economy, but he thinks it's "fair" to raise their taxes. How dumb is that. The whole tax code is an abomination.

I also believe it's a huge problem that more and more taxpayers have zero federal income tax liability, or are in reality on "tax rebate welfare" e.g. EITC. Freeloaders are not welcome anywhere in polite society.

Right! Take your stagnant incomes, lack of health care, foreclosed houses, longer work hours and quit bothering me. I'm trying to count money here!

Malerin
29th October 2008, 07:36 PM
So, the "welfare payments" are the refundable tax credits.

For the record, I think Obama's tax plan is utterly stupid. I think he's pandering for votes by promising tax cuts. However there are two points about it. First, regardless of the wisdom of his plan, giving back, via the income tax, payments made through other taxes, is not a "welfare payment". Criticize it if you wish, but it isn't a welfare payment. Second, although I hate Obama's tax plan, I would say there is only one presidential contender from a major party that has a worse plan.

I'm a deficit hawk. If either of these guys could convince me that they have a plan that balanced the budget, I would vote for him, but neither one does. Meanwhile, the GOP has a clear track record of borrow and spend, so I'm not voting for them.

Oh man, you think it's bad now? Wait till Medicare and S.S start cashing in their IOU's.

kallsop
29th October 2008, 08:26 PM
Right! Take your stagnant incomes, lack of health care, foreclosed houses, longer work hours and quit bothering me. I'm trying to count money here!


Try to stay on topic. The subject is taxes and wealth (re)distribution, not DNC talking points. Cheers.

BenBurch
30th October 2008, 05:21 AM
Try to stay on topic. The subject is taxes and wealth (re)distribution, not DNC talking points. Cheers.

Which is a Nazi Repub talking point...

GStan
30th October 2008, 08:50 AM
No, it's not. FactCheck (http://www.factcheck.org/elections-2008/obamas_welfare.html)explains:

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First, my opinion of the overall US federal tax code is such, that debating the merits between the Democrat and Republican arguments and positions feels a little like arguing the preferred flavor choice between a sandwich filled with dog-poop and one filled with cat-poop.

I acknowledge that, as it was worded, my claim (and WSJ’s claim) of tax cut vs. welfare is not as clear cut as I made it out to be. But I also wanted to point out that the argument is also not as clear cut as the FactCheck.org weblink you referenced makes it out to be either. FactCheck refers to a Congressional Budget Office report showing that the bottom quintile of income earners, even when factoring in existing refundable tax credits, still would pay about 4.3% of their income in total federal tax burden. I was intrigued by the FactCheck report, only because I’ve earned considerably more than the average income of the bottom quintile for a number of years and still got back a lot more than the total I put in for federal taxes.

I took a look at the CBO report; the quotes/stats referenced in my post below can all be found here:
http://www.cbo.gov/ftpdocs/88xx/doc8885/EffectiveTaxRates.shtml#1011535

For the tax year 2005, Summary Table 1 shows that for the bottom quintile of households, average pretax income was $15,900 with an effective federal tax rate of 4.3%. That 4.3% comes from combining the following: -6.5% income taxes, 8.3% social insurance taxes, 0.4% corporate income taxes and 2.1% excise taxes. The first thing that stuck out to me was, how could those with such low incomes have an 8.3% liability for social insurance (ie, Social Security and Medicare), when existing refundable tax credits substantially reduce that liability, sometimes to zero. Well, here’s why:

Who Pays Taxes?
CBO’s analysis of effective tax rates assumes that households bear the burden of the taxes that they pay directly, such as individual income taxes (including taxes on interest, dividends and capital gains) and employees’ share of payroll taxes. The analysis assumes—as do most economists—that employers’ share of payroll taxes is passed on to employees in the form of lower wages than would otherwise be paid. Therefore, the amount of those taxes is included in employees’ income, and the taxes are counted as part of employees’ tax burden. CBO estimates payroll taxes and individual income taxes, including refundable tax credits, with a tax “calculator” that applies the tax law for the relevant year to the tax return data from the SOI.

So because economists agree that you would have received another 7.65% in salary/ wages if the law hadn’t demanded that your employer pay it to the government, we’re just going to pretend that your employer gave it to you and you paid it to the government. If that theoretical federal tax payment is removed from the equation, both my statements about tax credits vs welfare and the WSJ’s, are accurate. The CBO report may represent sound financial/economic theory, but it does not fairly represent the reality that those wage earners did not actually receive that 7.65% in salary, nor did they pay it in taxes.

Personally, I don’t really have a problem with the statistics being generated in this fashion. But if most economists agree that this income would have otherwise been paid to employees if the employer was not required to pay the amount to the government, why not eliminate the expensive and inefficient middle-man? If you’re just going to give it back to the employee anyway, stop requiring employer contributions and just let the employees have the money directly. Well, aside from the fact that such a decision would quickly bankrupt Medicare and Social Security, it also allows policymakers to have control over who will actually get that income back. At what level are you needy enough to be entitled to it? It is no more inappropriate to characterize such a policy as welfare as it is to characterize it as a tax credit.

The report also estimates excise taxes paid per household. I find it amusing that the CBO report says this about excise taxes:
Excise taxes are assumed to fall on households according to their consumption of taxed goods (such as tobacco and alcohol).
but that FactCheck.org chose the more politically correct examples:
Low-income workers, and retired and jobless persons as well, also pay federal excise taxes whenever they buy gasoline or pay a telephone bill, for example.

I see no problem with making the argument that those in the lower income brackets can get a tax credit to help pay for gasoline or a telephone, as it would be very tough for those individuals to improve their economic status (if they so desire), without those things. However, I don’t care to give a refundable tax credit to help people pay the taxes on their cigarette and alcohol purchases.

The estimated excise taxes paid per household are based on the results of a consumer survey (100,000 households), with averages applied across all households by quintile. I could not readily identify how the 2.1% average excise tax was distributed among different taxable items such as gas, phone, cigarettes and alcohol; only that the reported dollar amounts spent per household for gas and phone considerably exceeded the reported amounts spent on cigarettes and alcohol. I have no real reason to claim the survey in not accurate, or not accurate enough to be useful for what it is being applied to, but IMHO, a self-reported amount spent on cigarettes and alcohol would likely be an under-reported amount, particularly if you are someone who spends to excess on either of those items.

One other item of note in this area is that it is again, more of a generic theory-based argument than reality-based. Income amounts, withholding taxes, exemptions, deductions and tax credits are all real numbers that are tracked for each individual’s tax returns. Your return is unique to you, and you give what you give or get what you get based on the numbers you put into it. It reflects the reality, (hopefully), of your situation. Arguing that its justifiable to give everyone in a particular income bracket an additional refundable tax credit because they are still indebted to the government for other taxes like excise taxes does not reflect anyone’s individual reality. Everybody gets the credit whether they paid zero excise taxes, or if they paid a disproportionate percentage of their income in gasoline taxes. Even someone who has no car or phone, but spends a huge chunk of his or her income on cigarettes and alcohol, still gets it.

Finally, on a more general level, even if you accept that the 4.3% net federal tax burden on the bottom quintile is a reality, (which I don’t), but if you do, I still don’t think the argument ends there. The CBO report and FactCheck are only looking at an average individual’s net deficit or benefit as it relates to federal tax policy, exclusive of other entitlements. I don’t fault FactCheck for it, as they were simply addressing the claim as it was worded.

Republicans, or the WSJ, or whoever is making this general argument should be more specific in their claim. For households in the lowest income quintile, average benefits received from Medicaid, CHIP, Welfare, Food Stamps, housing assistance or any other federally funded or subsidized program, far surpasses the 4.3% net deficit that is specific to tax policy. The lowest quintile is getting a much greater benefit from federal policy than they are putting into it. (I’m not saying that this is not how it should be). Adding to that net benefit, whether it is done through the tax code or through an entitlement program, can be fairly characterized as a form of welfare.

My original argument was oversimplified. But I don’t think the counter to it was as simple as “No it’s not. FactCheck explains:” as you responded.

In any case, thanks for the link, Tricky

GStan
30th October 2008, 09:10 AM
<SNIP>
America is now as unequal as it was preceding the great Depression, with the top 1% taking home 24% of the share of total income.
<SNIP>


So you agree that 75 years of New Deal and Great Society programs have failed to achieve their intended results? :p;)

IchabodPlain
30th October 2008, 09:48 AM
Have you read the subsequent financial Times article? The data on the failure of "trickle down" economics is pretty incontrovertible. And the financial Times is certainly not a left wing rag. ;)



If you have evidence that "trickle down" economics does benefit the non-rich more than a redistribution of wealth, I would be interested in seeing it.

I was referring to the first argument of opportunity, not trickle-down economics.

My apologies if I wasn't clear.:)

andyandy
30th October 2008, 10:07 AM
So you agree that 75 years of New Deal and Great Society programs have failed to achieve their intended results? :p;)

Well, between 1940 and 1984 the top 1%'s share of wealth never exceeded 15% and it was in single digits for most of the 1960s and 1970s. In terms of social inequality that is a reasonable success. It's only since the "greed is good" Reagan economics of the 1980s that social inequality has ballooned.

GStan
30th October 2008, 10:41 AM
Well, between 1940 and 1984 the top 1%'s share of wealth never exceeded 15% and it was in single digits for most of the 1960s and 1970s. In terms of social inequality that is a reasonable success. It's only since the "greed is good" Reagan economics of the 1980s that social inequality has ballooned.

I was making a joke, thus, the smileys. But since you generously took the time to respond seriously, I have a question about your statistics. Is there an optimum level at which the top 1%'s share of the wealth is acceptable? You mentioned that never exceeding 15% and sometimes being in single digits as "reasonable success", as if there is an objective standard by which this particular success is defined? Do we need to push it down to 5%, and strive to always keep it in single digits?

The only reason I ask is to make the point that a single statistic is not a great yardstick by which to measure social/economic inequality in an economy that has millions of moving parts and decision-makers, and hundreds, if not thousands, of other statistics on which such inequalities can be measured. (And some of those will likely be showing evidence contrary to your position, regardless of what that position may be.) Would you agree?

I guess that's my long-winded way of saying, "I sure there are some statistics that can be found that say you're not entirely correct. I just don't feel like finding them right now.":D

Suddenly
30th October 2008, 11:00 AM
I'm not a tax expert, but I'm just guessing that a tax credit is a deduction you take off when you do your taxes, so you never send it in, whereas a refundable tax credit is one where they send you back some money you've already paid in taxes.

At least, that's how I'd interpret it.

BTW, welcome to the boards. You might be (or become) aware that there is a poster here by the name of "Gnu Ordure". You might be confused with him.

A deduction and credit are two different things.

A deduction is subtracted from the amount of gross income before the tax due is calculated. The real benefit is thus affected by tax bracket, someone in a higher bracket gets more benefit in total dollars than someone in a lower bracket.

A credit is subtracted from the total tax due, so everyone gets the same dollar for dollar benefit no matter the tax bracket.

A refundable tax credit allows for the "amount to be paid" to become negative. Non-refundable only allows the amount to be reduced to zero.

(Once the "amount to be paid" is calculated, it is subtracted from the amount withheld (or paid via quarterly installments) and the net is the refund or tax bill)

fuelair
30th October 2008, 11:06 AM
Quite possibly true. I offer this (http://patriotpost.us/histdocs/crockett_not_yours_to_give.asp), not as an argument for or against Obama's proposal, but merely as background for what many Americans grew up believing and the culture that has spawned those beliefs.

It's a conversation between David (Davey) Crockett and a supporter from around 1828, in which Crockett is being antagonized for having voted in support of a piece of legislation that gave "charity" to a woman whose husband had died. The title, and the message of the conversation being "Not Yours To Give". The rationale is that what you have earned is rightfully yours, and not the government's to use as a vehicle to transfer wealth.

.
Actually, it is an explanation of why Crockett voted against the legislation (and convinced others to do so also) - the legislation that bought about the "antagonizing" was for the people around the fire in Georgetown.

mhaze
30th October 2008, 11:54 AM
Originally Posted by andyandy http://forums.randi.org/helloworld2/buttons/viewpost.gif (http://forums.randi.org/showthread.php?p=4165154#post4165154)
Well, between 1940 and 1984 the top 1%'s share of wealth never exceeded 15% and it was in single digits for most of the 1960s and 1970s. In terms of social inequality that is a reasonable success. It's only since the "greed is good" Reagan economics of the 1980s that social inequality has ballooned.

These types of numbers must bevery skewed due to the 20M+ illegals here, who often operate on a cash basis thus their true income is "off the books" . From what I recall from Simon's essay late 1980s illegals were at that time more than an order of magnitude less.

A continued influx of illegals would stabilize the lower percentile. Say you have 1.3M new arrivals each year. The bottom 1% of wage earners is "self replenished"each year.

andyandy
30th October 2008, 12:12 PM
I was making a joke, thus, the smileys. But since you generously took the time to respond seriously, I have a question about your statistics. Is there an optimum level at which the top 1%'s share of the wealth is acceptable? You mentioned that never exceeding 15% and sometimes being in single digits as "reasonable success", as if there is an objective standard by which this particular success is defined? Do we need to push it down to 5%, and strive to always keep it in single digits?

The only reason I ask is to make the point that a single statistic is not a great yardstick by which to measure social/economic inequality in an economy that has millions of moving parts and decision-makers, and hundreds, if not thousands, of other statistics on which such inequalities can be measured. (And some of those will likely be showing evidence contrary to your position, regardless of what that position may be.) Would you agree?

I guess that's my long-winded way of saying, "I sure there are some statistics that can be found that say you're not entirely correct. I just don't feel like finding them right now.":D

You're right, there's not a single statistic that should be held as a simplistic absolute measure of social inequality, but the proportion of income taken by the top x% is a pretty useful indicator. The GINI coefficient is used by the UN to rank social inequality:

http://en.wikipedia.org/wiki/Gini_coefficient#US_income_Gini_indices_over_time

this also shows that social inequality has increased in the US:

1967: 39.7 (first year reported)
1968: 38.6 (lowest index reported)
1970: 39.4
1980: 40.3
1990: 42.8
2000: 46.2
2005: 46.9
2006: 47.0 (highest index reported)
2007: 46.3 [3]

The current (http://en.wikipedia.org/wiki/List_of_countries_by_income_equality)coefficient rating puts America as the most unequal western society, languishing with the likes of Cambodia and Turkmenistan.

Indeed, only last week there was a report in the financial Times analysing this year's figures:

The gap between rich and poor has widened in most developed countries over the past two decades as economic growth has benefited the wealthy more than the poor, according to the Organisation for Economic Cooperation and Development.

Midway through this decade, Mexico and Turkey had the highest inequality in incomes, followed by Portugal and the US. Denmark and Sweden were the most equal societies in terms of income disparity in the 30-nation study.

The UK was seventh in terms of inequality of disposable income - 8 per cent above the OECD average - using the Gini index, the most widely used measure of income inequality.

A few countries bucked the trend with France, Greece and Spain all enjoying a narrowing of the gap between rich and poor over the past 20 years. For the latter two, this period coincided with rapid growth of employment after their accession to the European Union in the mid-1980s.

"Rich households in America have been leaving both middle and poorer income groups behind. This has happened in many countries but nowhere has this trend been so stark as in the United States," said the OECD.

At $93,000 (€70,400, £54,700), the average annual income of the richest 10 per cent in the US was the highest in the OECD. But the poorest 10 per cent earned an average of only $5,800, "about 20 per cent lower than the average for OECD countries", it said
http://www.ft.com/cms/s/0/e808ac76-9fd1-11dd-a3fa-000077b07658.html

you say that you think you could find statistics which show that social inequality has not widened, I would be interested to see them. :)

andyandy
30th October 2008, 12:22 PM
Using the same coefficient:

Cities in the US are now among the most unequal in the world, rivalling developing-country cities such as Nairobi and Santiago in their disparities between rich and poor, the United Nations said on Wednesday.

In its State of the World's Cities report, the UN identified Atlanta, New Orleans, Washington DC, Miami and New York as the most unequal cities in the US, comparing them with Nairobi, Buenos Aires, Santiago, and Abidjan.

New York ranked 10th on the list of the world's most unequal cities, the only developed country city to appear in the top 10, trailing cities such as Johannesburg, Bogotá, São Paulo and Ho Chi Minh City.

The UN said income inequality was accompanied by serious differences in people's health, opportunities and access to public services. For instance, in the US the life expectancy of black people living in cities was about the same as that of city dwellers in China and in some states of India, despite the US's comparative wealth.http://www.ft.com/cms/s/0/10418c4a-a099-11dd-80a0-000077b07658.html

but God forbid anyone try to redistribute some wealth to reduce the inequality ;)

GStan
30th October 2008, 12:35 PM
America has several well funded "think tanks" like the Heritage Society that are dedicated to reversing all the social changes of the 20th Century and making the world safe for an inherited aristocracy.

These propaganda mills have managed to reframe a lot of political debate. For example, the estate tax became the "death tax" and people were told it was destroying family farms and the middle class. This is pure fiction, but the lie was repeated often enough that many believed it was true.

If you are going to mindlessly hurl unsubstantiated insults at those who disagree with you, please have the courtesy of actually hitting the intended target.

The Heritage Society is a Houston, TX organization that does historic preservation of old buildings.

http://www.heritagesociety.org/

I think you meant to mindlessly insult the Heritage Foundation, which is, indeed, a Washington-based public policy think tank.

http://www.heritage.org/

From their website, their mission is as follows:

Our Mission
Founded in 1973, The Heritage Foundation is a research and educational institute - a think tank - whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

I couldn't find the stuff about reversing all 20th century social change or inherited aristocracies. How did you manage to get it so wrong?

GStan
30th October 2008, 12:53 PM
You're right, there's not a single statistic that should be held as a simplistic absolute measure of social inequality, but the proportion of income taken by the top x% is a pretty useful indicator. The GINI coefficient is used by the UN to rank social inequality:

http://en.wikipedia.org/wiki/Gini_coefficient#US_income_Gini_indices_over_time

this also shows that social inequality has increased in the US:



The current (http://en.wikipedia.org/wiki/List_of_countries_by_income_equality)coefficient rating puts America as the most unequal western society, languishing with the likes of Cambodia and Turkmenistan.

Indeed, only last week there was a report in the financial Times analysing this year's figures:

http://www.ft.com/cms/s/0/e808ac76-9fd1-11dd-a3fa-000077b07658.html

you say that you think you could find statistics which show that social inequality has not widened, I would be interested to see them. :)

Andyandy,
(Are you a Cheers fan?, its one of my favorites)

Thanks for taking the time to provide that information. I will certainly take a look at it. And I'll let you know if find any info to the contrary.

a_unique_person
30th October 2008, 02:29 PM
Just as I suspected, this place is riddled with Marxists. :p

pgwenthold
30th October 2008, 02:43 PM
I just want him to pay the bills, and the only way to do that is to raise taxes, especially on the rich. This will result in the rich being not quite so rich. If that's redistributing wealth, then I am one of those Americans who hopes he does it.

Obama has been hurt a bit by his "spread the wealth around" comments because redistribution of wealth suggests, to many people, welfare. That's wildly unpopular. Obama hasn't done enough to counter that perception.

Very true. And the place to start is with John McCain himself. McCain has in the past expressed support for the progressive tax system.

I happened to stumble on a McCain adviser rambling on the Donnie Deutsch show last night (flipping channels, honestly!). He said something about Obama "redistributing wealth." Another guest asks him about John McCain's plan to bail out homeowners with failed mortgages. "Isn't that an example of redistributing wealth? Isn't it taking money from people who pay taxes and giving it to those who bought homes they can't afford?"

Zing

His answer? "What matter here is that Obama's approach is not the way to stimulate an economy in a recession." and then went on a rant about how bad Obama was without once addressing the question of whether bailing out homeowners as a way to protect housing prices is redestributing the wealth. Unfortunately, the other guest never got a chance to come back with, "So you don't deny that John McCain's plan is an example of spreading the wealth. Duly noted."

pgwenthold
30th October 2008, 02:51 PM
So, the "welfare payments" are the refundable tax credits.

For the record, I think Obama's tax plan is utterly stupid. I think he's pandering for votes by promising tax cuts. However there are two points about it. First, regardless of the wisdom of his plan, giving back, via the income tax, payments made through other taxes, is not a "welfare payment". Criticize it if you wish, but it isn't a welfare payment. Second, although I hate Obama's tax plan, I would say there is only one presidential contender from a major party that has a worse plan.

I'm a deficit hawk. If either of these guys could convince me that they have a plan that balanced the budget, I would vote for him, but neither one does. Meanwhile, the GOP has a clear track record of borrow and spend, so I'm not voting for them.

Wow, another agreement.

I figure, we are in the midst of two wars and have had the economy crash. Yet, there are still people clamoring for tax cuts?

Quit your bellyaching and take some responsibility. Yeah, we all like tax cuts, but it's not all about us. It's about everyone. Country first. And that means that we need to make some sacrifices to get our country back in shape.

It's funny how republicans are big on "Country First" and "Personal Responsibility" but seem to have no problem with massive borrow and spend policies from the government and a gimme, gimme, gimme attitude when it comes to tax cuts.