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Originally Posted by Villages Kahuna
That was the point that I was trying to make...our government frequently changed both tax rates and the income thresholds to which they applied to pay for costly situations as they occurred, wars, public works projects like the New Deal and the interstate highway system and other situations that caused reduced income from taxes like depressions. They did that regularly from 1913 when taxes began until about the early 1990's. In the early '90's we changed our "MO" and began to pay for things by borrowing the money, not taxing the citizens. This made dramatically increased spending very popular with taxpayers--it was "free". I might also argue that that change made elected officials more popular--more electable--because they were providing more and more to the citizenry with no additional out-of-pocket cost in the form of increased taxes.
So, by continuing to borrow to fund our spending our legislators continue to feather the nest of their popularity and re-electability, even though our national debt is reaching the point that our ability to continue to borrow will be threatened. The costs of profligate spending and the funding of "stimulii" will be passed on to future generations who won't have the ability to vote for those elected officials who will have caused them the pain of crushing national debt that for them will almost certainly require an increase in their tax burden to pay it off.
On your comment on taxing the rich to pay the poor, I find that opinion valid only if the income distribution in the country is close to a "normal" six sigma distribution. But right now the distribution of income in the U.S. is bi-modal, with a huge bulge of citizens at the low end of the scale and another bulge at the high end. As an example, we currently have more than 20% of the families in the country with income less than the poverty level established by the Census Bureau. At the same time there are more than 13% making more than $100,000 per year. See the following chart...
Source: U.S. Census Bureau
Another chart shows that for a couple of decades the incomes of the "rich" have been increasing at a rate far exceeding that of those at the lower end of the income ladder...
Source: U.S. Census Bureau
In my opinion, sooner or later these trends will have to change. If democracy works, they almost certainly will as those at the lower end of the scale assert their political power. You have consistently been afraid of the methods of Saul Alinsky, who organized the downtrodden stockyard workers in Chicago back in the 1930's. I don't believe that President Obama is applying those tactics now, but there is clearly a growing opportunity for a current generation of Alinsky's to activate the lower income classes. It seems to me that taking a long, hard look at both our spending and the way we pay for it before that happens might be a good idea. If our legislators refuse, and we permit them their luxuries, the social upheaval in the U.S. really might approximate the socialism you have so consistently feared. |
Very well constructed and interesting post. Bear with me as I am going to take the scatter gun approach !!!
1. While you say "Another chart shows that for a couple of decades the incomes of the "rich" have been increasing at a rate far exceeding that of those at the lower end of the income ladder..."
The census bureau also says (and they only have info up to 2006) that folks living below the poverty level in 2006 was significantly lower that for example in 1994 (12.3 in 2006 and 14.5 in 1194)..actually there has been a continuing down trend in this number.
2. To your point about income inequality, it is also a fact that those in those upper levels have a much much more financially stable home life...example...of those in what is considered that upper echelon 76% came from TWO earner households, while only 42% is the national average of TWO earner incomes.
I am not going to dispute what you say and there are stats that can be read a number of ways to make whatever point you want.
I would be very happy if money were spent to give MORE OPPORTUNITY for folks to increase their income by education, etc. But to simply say we are going to take it away from one group who is successful and give it away to another group because they are statistically in some catagory bothers me.
I think you agreed when you began this post that the government has increased the revenue with tax rates to fund special situations such as 9/11, Iraq, WW2, etc. The statistics you cite, IN MY OPINION, do not fall in the same catagory, ie., we have too many folks who make money. THAT is not something I believe should make this action necessary !
When the dust settles on the stimulus program and we see where it actually goes and what it is used for then we can talk. I am also taken back by all the "strings" attached to this money to the states and the companies. Some of it disguised as "accountability" !
Your statement on Alinsky...yep scared straight about what is happening because unlike you, I see MUCH of Alinsky's tactics in this Presidency. Example that comes to mind now.....the President has been so very very negative and was called on it...Alinsky taught you gotta make them feel like they are near the bottom so they will "allow" you to rescue them !! Now, the President has changed his tune a bit in the last few days after getting heat, but notice how he is now saying what McCain was totally blistered for in the campaign...that the basic economy is strong !!!!!