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...because government spends our money more wisely than the one who earns it? As if the rich just sit on their money. Quit quoting economic idiots.
I think one thing is abundantly clear: The rich, generally speaking, spend their money in such a way as to make themselves, and other rich people, even richer.
A relatively conservative study of wealth distribution shows that the rich keep getting richer at an increasing rate:
...a new paper from the Brookings Institution [argues that] while wealth and income inequality are indeed increasing (nobody disputes that), they haven’t done so at the magnitude that Piketty and his colleagues have found. ...found that from 1992 to 2012, the top 1 percent’s share of wealth rose by 6 percentage points to 33 percent. This is substantially lower than estimates by Saez and his colleagues, which estimate that the share of wealth held by the 1 percent is 42 percent.
So there is a consensus that the wealth-gap keeps increasing (the top 1 percent keep getting control of more and more of the wealth), even if there is some disagreement over how fast their control is increasing. Does this gap keep increasing because the wealthy are working 6% harder in comparison to the average working class citizen who, in many cases, is working two or three jobs just to keep the bills paid? Obviously many of the wealthiest people are smarter in terms of their ability to accumulate wealth than the average person, but are they really wiser in some broad sense than the average citizen? Is the types of smartness demonstrated by the wealthy really the type of smartness that human beings should value above all other types of wisdom? I'm not saying the American government is profoundly wise; I'm just saying that we should not simply assume that rich people won't literally poison the planet and allow billions to suffer and die in their pursuit of personal wealth and privilege.
Of course conservatives keep pushing the trickle-down idea: When the rich get richer, the poor and middle class benefit too. I'm highly skeptical of that idea.
In any case, I find it deeply annoying that Republicans have historically ranted and raved about the need to bring down the deficit, but now that they have control of congress and the White House, they pass a tax bill that virtually every notable economist says will almost certainly increase the deficit. AND the carried interest deduction - which Trump himself said is unfair and promised to eliminate - is a notable part of the deficit (at least 18 billion, and some estimates are a lot higher).
As for the wisdom of the rich insofar as the spending of their money, are they going to invest their excess wealth in upgrading or maintaining infrastructure (Trump called investment in infrastructure a major priority)? Maybe, if they can make even more money for themselves by doing it. Are they going to invest in renewable/clean energy? A few probably will, insofar as there is money to be made in doing it. Do the rich really care all that much about what happens to the Earth and future generations 50 or 100 years from now? Some do - philanthropists like Bill Gates and Warren Buffett might care - but, on average, one thing we can know for certain is that the rich are willing and able to make themselves richer while the poor get poorer and the environment gets increasingly polluted. History has proven this beyond any reasonable doubt, and I see nothing, in principle, to stop the wealthy from valuing their short-term personal interests ahead of absolutely everything else.
Last edited by Gaylenwoof; 01-05-2018 at 08:51 AM..
First, they would have to understand the issue, although that hasn't stopped them in the past....if you really wanna know just find out what Fox News says.
First, they would have to understand the issue, although that hasn't stopped them in the past....if you really wanna know just find out what Fox News says.
We have a winner.
If Fox News says it’s good, then most trump supporters will agree.
"Loophole" (n): A small piece of people's freedom that the government hasn't taken away yet.
This brings us to the on-going philosophical debate over the moral right of the government to collect taxes, and the moral implications of using taxes for the purposes of wealth redistribution.
The basic Constitutional/legal right of the American government to collect taxes is well-established, but there are always folks who argue that taxation is, ultimately, just a form of "theft at gunpoint", plain and simple. So I think it is worth our time to think about the moral justification for this particular form of robbery.
When dealing with philosophical principles, it is often helpful to distinguish between the existence of a principle, on the one hand, and the domain of application on the other. On close examination, most people, it turns out, ultimately see principles as "relative" or "graded" as opposed to pure/absolute. Killing is wrong, except in the case of self-defense, war, or capital punishment. Lying is wrong, except when Nazi's are asking if you are hiding any Jews in your basement. Etc.
I think we can all agree that theft, in principle, is clearly wrong but - like violence and lying - it is not clear that there are never any exceptions to the general rule. If, by some crazy set of circumstances, it turns out that the only way we can save a child's life is by stealing from someone who has the resources to save her life (but is refusing to do so), then I suspect most of us would say we are morally obliged to engage in the theft. (Most of us tend to agree that preventing death and great suffering is a higher moral obligation that protecting personal property. In other words, our moral right to protect our property is limited, relative to certain other moral obligations.)
Another variation: Suppose a mobster acquires great wealth by immoral means and uses this wealth to spew toxic chemicals throughout a city, causing millions of people to die. If you had the opportunity to steal this guy's wealth by some magical means without putting yourself in any danger, would you do so? Would you be morally obliged to do so?
I know some people will insist that, in reality, there are always other options, but for the moment I'm simply arguing that the morality or immorality of theft can be relative to circumstances, and that other moral obligations can sometimes out-rank the moral obligation to protect a certain person's personal property rights.
What I'm basically trying to say is that, under certain circumstances, robbery my be morally justified. Indeed, it might even be a moral obligation. So, to make a long story slightly shorter, the deep question should not be so much whether the government might, in some cases, be morally obliged to commit robbery, via taxation. The question is under what circumstance should it do so?
The libertarian/extreme conservative view is "practically never" - making some exceptions for national defense, law-enforcement, etc. - partly because the people being taxed share in the benefits of these things, so it's ok to make them pay, whether they like it or not.
The modern liberal view is that people will literally suffer and die without government help so we are, in effect, in the situation where, to save lives, we are morally obliged to steal from the rich to protect the poor. Most American liberals agree that, in general, market forces naturally provide the best means for distributing wealth (in contrast to something like the Soviet-style "planned economy" that proved to be a historical failure), but they will say that there is some need for some reflection of the public long-term (multi-generational) interests in the distribution of wealth because individuals - left to pursue nothing but their own personal self-interests - will have little reason to care about the suffering of others (in this generation, or in future generations).
History and anthropology have proven, beyond any reasonable doubt, that if people are allowed to own slaves, then they will do so. If they are allowed to exploit human labor (e.g., 16-hour work days to the point of death), they will do so. If they are allowed to pollute the environment to the point at which rivers literally catch on fire, plants and animals go extinct, forest become deserts, millions of people die from toxic chemicals, etc., then they will do so. There is simply no question that power corrupts, and that with great wealth comes great power. It is not very unusual for a sufficiently powerful person, or small group of people, to literally cause the suffering and deaths of millions of people (either intentionally or as "collateral damage") in pursuit of their own personal interests or ideals.
Government, in general, is a looooooooooong ways from perfect as a means for mitigating the suffering and destruction that can come from powerful/wealthy people pursuing their own selfish interests. In many cases governments are simply tools of the wealthy - a way to make themselves even more power via control of the military, burdensome taxation, unfair laws, etc.
But stable democratic governments - as bad as they are - have offered an incredible leap forward in the grand scale efforts to reduce the utter inhumanity that has historically been associated with great wealth/power. Government corruption and all sorts of stupidity happens, but when all is said and done, the distributions of power built into the American Constitution (for a prime example) helps - at least a little bit - to curb the scale and severity of the tyranny of personal greed. We are lucky that we have some examples of wealthy people who are philanthropists, but history has clearly shown that we can't rely purely on the good will of the rich to prevent the wide-scale human suffering and rampant environmental damage that can come directly or indirectly from the richest of rich people pursuing their own personal agendas. The American government is aggravating, to say the least, but with the distribution of at least some political power among people who are not among the super-rich, there are at least some avenues by which something roughly resembling public interests can play a role in the power politics of humanity. Thanks to constitutional forms of democratic government we can end slavery and make some progress toward overcoming the oppression of women and other oppressed classes. We can make at least some progress toward cleaning up the environment so that not every river in the nation catches on fire. And so on. And this progress takes money. And this money is not money that we can count on the rich to happily give away.
Would slavery have ended just because rich people wanted it to? Would child labor and the oppression of workers have ended just because rich people were basically bunch of nice guys? Would rich men have ended the oppression of women, just because they were a bunch of nice guys? Some rich people might have become horrified by the environmental destruction that we began to see in the early 1900s, but these folks probably could not have successfully competed, in a free market, with the ones who would have freely produced as much toxic crap as they wanted and dumped this crap whenever and wherever they wanted. Short-term share-holder gains weigh heavily in a free market, but long-term, multi-generational public well-being barely tips the scales in the rough-n-tumble of day-to-day business.
So, as I see it, it is not a question of should the government tax the rich; it is a question of how much is in the public interest because, ultimately, the public interest is (or should be) the government's ultimate concern, and it takes money to keep private interests from running rampant over human lives and the natural environment.
Yes, taxation is a form of robbery. But it is a morally justified form of robbery when used for protecting certain public interests because, without it, there is very little chance that there would have ever been significant progress toward the ending of slavery, the establishment of worker's rights, women's rights, minority rights, environmental protection, etc.
By curtailing, to some extent, the property-ownship liberties of the rich, a constitutional democratic government (despite it's aggravating corruption and incompetency) grants some of the other 99% of humanity the liberty to eke out a modest living in a not-quite-so-polluted, not-quite-so-sexist, not-quite-so-racist, not-quite-so-labor-exploitive world.
Last edited by Gaylenwoof; 01-05-2018 at 01:06 PM..
And I don't give a rat's azz about a tax break that benefits 2000 people. I also don't begrudge the many millions of people who benefit from the Earned Income Tax Credit.
Sounds like a job for congress. Trump cannot EO this, or he would have to keep on track.
Most of what Presidents want to happen(I would not call it a promise) is reliant on congress.
This is not a dictatorship like it was under 8 years of Obama and 8 years of Bush.
Carried interest "loophole" is the result of a "rule" not tax laws per se; and in case you've not noticed His Orangeness and various department heads have been rolling back rules by EO or whatever since they got into office.
"While Mr. Sommers was generally pleased with the outcome of the tax bill, he said it was still disappointing that the term “carried interest” is now being written in the tax code for the first time. This makes it more likely that future lawmakers will try to raise taxes on private equity funds. Also, while the three-year holding period will not affect many firms that hold onto assets longer, he said it could scuttle some deals that might have otherwise happened more quickly."
Key words there were "written into tax code for first time....". Meaning prior to this dog's breakfast of a GOP tax bill carried interest "loophole" merely was a result of what occurred (and is mentioned in above linked articles) as a result of previous GOP tax cuts where taxes on various types of income were decoupled.
Will give you that if a POTUS or the DofT on their own simply removed the carried interest "loophole" via rule making various concerned interests would kick; that and most surely file legal challenges. Sadly what has now happened is the thing is written into law. Thus does an end run around simple rule making and means any future changes must come out of the House via legislation.
There is NO SUCH THING AS a tax LOOPHOLE.
Thread fail.
Nobody of any significance in real life is arguing that this is not a loophole. Plenty of lawmakers call it a loophole - including Republicans. Most importantly, Trump considers it a loophole, and he made a campaign promise to close it.
“The president strongly believes, and he ran on this, that carried interest is a loophole,” Mr. Cohn said at an event sponsored by Axios. He said the president continues to believe that venture capitalists and hedge fund managers are getting a preferred rate of return on someone else’s capital. https://www.nytimes.com/2017/12/22/b...lobbyists.html
So call it whatever makes you happy, the bottom line is this: We have a "tax overhaul" that is expected to add to the national debt and we have a discrepancy in tax rates that will add over $18 billion more to this debt for no good reason, other than some powerful lobbiests want it to exist.
BTW: I have not noticed anyone in this thread, or in the general media, actually advocating for the carried interest deduction. Would anyone here like to step up to the plate and do that? Or, perhaps, give a link to some notable public figure who is doing so?
Trump himself - as a presidential candidate - said that the Carried Interest tax deduction is unfair to America workers. But the new tax plan passed by Republicans leaves the deduction in place.
It's such a minor issue that it doesn't deserve debate. If you weren't a Trump hater you wouldn't have even thought about it.
And by the way, it's not a loophole. It's a deduction.
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