Taxes

WSJ Invites Rangel In, Gleefully Stabs Him In the Back

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Today's WSJ gives Rep. Charlie Rangel (D-N.Y.) space to make the case for his plan to "stop the middle class tax raid" by eliminating the Alternative Minimum Tax (AMT)–and then one of WSJ's own writers cuts him to ribbons on the same page:

[Rangel] introduced an estimated $3.5 trillion tax increase that would raise the capital gains tax rate from to 19.6% from 15% and places a surtax of as much as 4.6% on people making more than $150,000 a year….Together with the end of the Bush tax cuts, Mr. Rangel's plan would increase the top income tax rate to 44% from 35% for individuals, small-business owners and farmers, who make up about three-fourths of taxpayers in the highest bracket.

While raising taxes on individuals, the Rangel bill would reduce corporate tax rates to 30.5% from 35% and eliminate the alternative minimum tax. That would be "paid for" by increasing taxes on hedge funds and buyout firms by about $48 billion….Federal tax revenues have been rising between 6.7% and 14.5% in each of the past three years, but the proposed tax increases, by slowing rather than stimulating the economy, would ensure that these percentages decline.

The piece also describes an interesting alternative proposal from Rep. Paul Ryan (R-Wisc.):

Elimination of the Alternative Minimum Tax, extension of the 15% capital gains and dividend rates that expire in 2010, and giving taxpayers a choice between filing under the current tax system or a new option with just two income tax brackets, 10% for joint filers with incomes less than $100,000 and 25% for those with higher incomes. It includes a $25,000 standard deduction plus a $3,500-a-person exemption, which comes to $39,000 for a family of four. The new option would be a flat-tax choice, with no other exemptions or loopholes, and the AMT would be gone.

More on the AMT here and here.

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  1. That’s what qualifies as being “cut to ribbons” these days?

    Rangel: We’re going to reduce taxes on the middle class and raise taxes on the wealthy.

    WSJ: He’s going to raise taxes on the wealthy!!

    Random person: Oh snap! Rangel got pwned!

  2. I never bought into the Hall/Rabushka argument that capital gains should not be taxed. This 15% rate has hedge fund managers laughing all the way to the bank. It’s BS.

    Ryan’s proposal looks better than Rangel’s, but they’re both on the right track.

  3. LAFFER CURVE!

  4. I saw Ron Paul addressing Iowa Republicans last night.

    One of the things I really admire about him is his refusal to try to mouth the Free Lunch platitudes of the supply siders.

    Raising taxes raises revenue. Cutting taxes cuts revenue. If you want to cut taxes, you have to cut spending, or there will be giant deficits which do, in fact, matter. Eat your vegetables.

    Dick Cheney thinks that “Reagan proved that deficits don’t matter,” and Ron Paul gets called a kook for his ideas about economics. Unbelievable.

  5. It’s fine to suggest high tax rates reduce revenues, but a reasonable argument also requires some nod towards an optimum rate, if only to avoid the absurdum argument. This old (1991) NCPA piece suggests that historical data place the optimum around 43% (with caveats discussed at the link).

    Also, since I read the WSJ editorial page almost never, can someone clarify if it is unusual for the WSJ to want to defend and increase government tax revenue — i.e., is the editorial page usually a bastion for “starve the beast” arguments?

    Anon

  6. Actually, my previous post is misleading. In 1991 NCPA suggested:

    * On the average, governments collect the highest possible revenue when they take about 43.2 percent of gross domestic product (GDP) in taxes.
    * If governments try to take a larger share of private sector income, the tax base will shrink so much that total tax collections will actually go down.
    * For specific taxes, governments collect the highest amount of revenue when tax rates equal 22.5 percent for the income tax, 12.5 percent for the sales tax and 13.2 percent for taxes on international trade.

    Anyone have more current statistics? It would have been nice if DuPont had mentioned some.

    Anon

  7. joe – “Raising taxes raises revenue. Cutting taxes cuts revenue. If you want to cut taxes, you have to cut spending, or there will be giant deficits which do, in fact, matter. Eat your vegetables.”

    Damn… there we go… agreeing again. You are SO close!

    Love ya’, man.

    CB

  8. I like Pete DuPont, but I’m so sick of that BS supply side madness, especially of the Wall Street Journal variety, wherein all tax cuts ever raise revenues.

  9. Federal tax revenues have been rising between 6.7% and 14.5% in each of the past three years…

    Damn, that’s not enough? If MY revenues had been rising at that rate the past three years, I would be making plans to spend Christmas in the Caribbean somewhere.

    I don’t think the problem is insufficient revenue.

  10. Do I have this right? The WSJ and Mangu-Ward support corporate taxes now?

  11. Wow, joe, I’ve seen some pretty good comments from you about RP. A stranger to this blog might think you’re a shill for him.

    So let me ask you this: In the dream world of Hillary vs. Paul, would you be voting for Hillary? Or against Paul? 😉

  12. Ryan’s proposal looks better than Rangel’s, but they’re both on the right track.

    Except for the part about Rangel’s being an absolute increase in the tax burden.

    Raising taxes raises revenue. Cutting taxes cuts revenue.

    Except when they don’t, of course.

    At some point, the tax burden starts crushing the economy, limiting the size of everyone’s pie, including the State’s. Similarly, low tax burdens facilitate economic growth, etc.

    The question is, where are the tipping points and “optimum” points. Mouthing simplistic formulas, whether as a class warrior side or supply sider, ignores these realities.

    Another reality being ignored is the way greater progressivity leads to “moral hazards” – as more and more people are freed from paying for government, more and more people have no incentive to care about responsible government.

  13. “Raising taxes raises revenue. Cutting taxes cuts revenue”

    Then why have Federal tax revenues have been rising between 6.7% and 14.5% in each of the past three years? Bush cut taxes, it should have cut revenue, but it didn’t. In fact, the federal government is awash in money right now. If your simple platitude was correct, the government should be taking in less money in both real and nominal terms today than it was in 2002. But, that is simply not what is happening, nor what happened after the Reagan tax cuts or the Kennedy tax cuts. It is a hell of a lot more complex than that Joe and you know it.

  14. I’m a shill for Big Paul.

    Honestly, I don’t know how I’d vote if it came down to a Paul/Clinton race. I’m probably closer to Hillary ideologically, but a President Paul with a Democratic Congress would raise the possibility of making progress in areas that have been all-but-untouchable, such as the War on Drugs, the Farm Bill, and oil subsidies.

    Not to mention, he’s probably the most straightforward and honest person to make a serious run for president in my lifetime. That will make up for a whole lotta ideological disagreement in my book.

  15. Yes, John, the business cycle has ended, and it was only George Bush’s tax cuts that caused the economy to go into an expansion mode.

    Revenues have risen because the economy improved – just like it did in the early 1990s, after two rounds of tax increases.

    Talk about the rooster who thinks he made the sun rise.

  16. “Raising taxes raises revenue. Cutting taxes cuts revenue”

    Like the “luxury tax” that the Democratic Congress passed in 1991 which taxed the hell out of things like large boats. It managed to kill off the domestic yaht industry and move it off shore and never collect a damn thing in revenue. “A Joint Economic Committee study later found that 330 jobs in the jewelry industry and 7,600 jobs in the yacht industry were lost thanks to the luxury tax. Perhaps the greatest irony was that in 1991 the federal government paid out over $7 million more in unemployment benefits to those workers than it collected in luxury tax revenues.”
    http://www.opinionjournal.com/federation/feature/?id=110010377

    Yeah Joe, increasing taxes increases revenue. It is just that simple.

  17. RC Dean,

    The economy grew faster before Kennedy’s tax cuts than after. The growth rate between Kennedy’s tax cut and Reagan’s tax cut was greater than after Reagan’s tax cut. The growth rate after Clinton’s tax increase was greater than between Reagan’s big cut and Clinton coming to office.

    No one questions that taxes have some effect on growth, but those “tipping points” seem to bring us into quantum territory. For the observable world, the No Free Lunch theory seems to describe the relationship between revenues and tax rates pretty well.

  18. John,

    Cute, but it really has nothing to do with economic growth and the effect of income tax cuts. You remember those – they were the subject of the discussion before you went off on your tangent about yachts?

  19. Ooh, lemme guess – “Why is this so hard for you to understand, joe?”

  20. Yeah, Joe, loose money by the fed and tax cuts had nothing to do with the expansion. Amazing how every time someone cuts taxes the economy grows. Let’s see, Adenauer’s Germany. The US after Kennedy’s 1960 tax cut. The US again in the 1980s after the Reagan tax cuts. Further, go back and look at the 1990s. The growth rate for the first Clinton administration was fairly low. The boom didn’t happen until the Republican Congress passed the capital gains tax cut in 1995. Look at Ireland in the 21st Century. They cut regulation and taxes and became the “Celtic Tiger”.

    How many times does it have to happen? Even your hero Clinton cut taxes in 1995 and got better growth as a result of it. Further, if it is all about the business cycle, why not just tax at 80%? Or 95%? Is there any limit to how high taxes could go in your mind before they negatively affected the economy? According to your theory, there shouldn’t be.

  21. Ah, so now you’re dragging “loose money from the Fed” into the discussion. And dropping the issue of revenues – not just growth, but growth so robust that it actually boosts government revenues despite a lower tax rate – entirely.

    Keep crawfishing, John. Maybe you can change the subject entirely.

    BTR, it’s easy to tell when you’re going to build a straw man, because you start your posts with “Yeah, joe…”

    And, for the record, the term for what I did up there, by providing accurate information that refutes your points about Kennedy and Reagan before you even posted them, is “pre-buttal.”

  22. It is not about yachts you dumb ass it is about how taxes and regulations effect people’s behavior. If you tax something people do less of it. If you tax investment and savings people will save and invest less. If you tax wages, people will work less. Taxes are higher in places like Europe and not surprisingly people work less and produce less and the growth rates are lower. Yes we could raise taxes through the roof and we wouldn’t turn into Kenya. We would still be rich, but we wouldn’t be as rich and people’s lives would suffer. The Yacht example is just a small but illustrative example of this. It is also a good example of how economic illiterate jackasses like you harm the lives of real people.

  23. “Then why have Federal tax revenues have been rising between 6.7% and 14.5% in each of the past three years?”

    Probably the same reason that Shrek 2 is the third highest grossing movie of all time (US).

  24. Temper, temper.

    Gee, thanks for demonstrating that taxes can slow economic growth. That had never occured to me before.

    It really blows a whole in my argument about government revenues, since that entire argument was based on the concept that taxes are stimulatory.

    Any time you’d care to screw up the courage to take on what I actually wrote, you know where to find me.

  25. It is also a good example of how economic illiterate jackasses like you harm the lives of real people.

    I guess I totally missed the part where joe said “Taxes are good”. I did catch the part where joe implied “Deficits are bad”. And John, I know you’ve presented the “Deficits are sustainable as long as they’re not above X% of GDP” but I don’t buy it and apparently joe doesn’t either.

  26. Joe you know so little about economics and tax policy that frankly you are incapable of having an intelligent discussion about the subject. I would rather argue with the Ron Paul Gold standard nutcases than you. I will now stop wasting my time because not only are you ignorant on the subject, you are willfully ignorant in that you refuse to even try to understand the topic or admit that it is more complex than a few platitudes like “if you tax more you get more revenue”. What sad is that you are so illinformed you can’t even make the arguments for your own side.

  27. Does not having enough reading comprehension to accurately comprehend a simple point about economics written in clear English make one an “economically illiterate jackass?”

    See, I would have thought that the term would be reserved for people who think that money not spent on an item because of a high sales tax disappeared from the economy entirely.

  28. John,

    FYI, refutation of all of your points was available on the thread before you posted.

    It is not a monotonic, linear, or simple relationship that exists between taxes and revenues.

    Sometimes increases raise revenue.
    Sometimes they don’t.
    Sometimes they slow the economy to the point of being counterproductive.

    There is an optimal point that is very hard to predict, and may even be chaotic due to the complexity of the economy.

  29. Sigh. Yes, I guess I have to take Econ 101 so I can learn how a demand curve works. Because that’s totally the only reason one could find supply side economics misguided. Well, that, and the giant hole that appeared in the federal budget in the mid-80s.

    Hey, MP, Anon, and Cracker’s Boy – John doesn’t think you know anything about economics and taxes, and he’s done talking to you.

  30. BTW, John, I did make an argument for my side.

    All you managed in reply was to get spittle on your monitor.

  31. “Probably the same reason that Shrek 2 is the third highest grossing movie of all time (US).”

    Lamar,

    That is well above the inflation rate so in real terms the government is taking in more money than it did. So the Shrek example is not a good one.

    As far as deficits, the issue is how much of the economy should the government take? Right now the federal government is taking about 18% of GDP. Why is that not enough? Before anyone talks about raising taxes, they ought to have to explain why it is that 18 cents of every dollar produced by this country is not enough of a contribution to the federal government. Until you answer that question, the deficit is a product of spending not taxes.

    As far as the economy goes, it is not just about some abstract Laufer curve. If you have the wrong taxes that really discourage work and investment, you can do a lot more damage to the economy. Not all tax increases are created equal. The problem is that the very things that create the most wealth in this country, savings and investment, are the things that the government seems to want to tax the most because the “rich” benefit.

  32. Joe,

    You wrote:

    “Raising taxes raises revenue. Cutting taxes cuts revenue.”

    This is an absolute statement, 1 example, like say a luxury tax on yachts, would disprove it.

    In many case your statement is true. It isnt always true. If it was true, we could crank rates up to 105% and still raise more money from taxes.

    The truth is much more complicated and depends on a variety of factors.

    However, you also said:

    “If you want to cut taxes, you have to cut spending, or there will be giant deficits which do, in fact, matter.”

    This is true. Absolutely. Even if the tax cuts raise revenue.

    BTW, one thing that people always forget is to take in to account all levels of government. If, hypothetically, the Feds cut the income tax to 0%, it is quite possible (even probable) that they would collect less money. However, the states, from their income and sales taxes, may increase revenue more than the Feds lose. Thus, even in that case the supply side argument of lowering taxes increasing tax revenue would be true. Just not for the specific government involved. Heck, lowering tariffs here may increase tax revenues for foreign countries if they tax exports.

  33. “There is an optimal point that is very hard to predict, and may even be chaotic due to the complexity of the economy.”

    Yes that is true. Further the optimal point depends upon the tax structure you have. If you have a flatter structure that doesn’t discourage work and investment, the point is higher than if you have a progressive structure that punishes work and investment. You could probably get by with higher tax rates in this country if we had a flat tax where people were allowed to keep a set amount of thier income regardless of how rich they are.

  34. I applaud Paul for putting the emphasis on spending, and I don’t claim to know all the details of recent revenue trends (which, as we can see, can probably be interpreted as the interpreter prefers), but it seems only common sense that there’s an optimum tax rate for maximizing tax receipts that’s somewhere below 100% just as with goods for sale there’s an optimum sale price for maximizing revenue above which revenues go down rather than up.

  35. “I applaud Paul for putting the emphasis on spending, and I don’t claim to know all the details of recent revenue trends (which, as we can see, can probably be interpreted as the interpreter prefers), but it seems only common sense that there’s an optimum tax rate for maximizing tax receipts that’s somewhere below 100% just as with goods for sale there’s an optimum sale price for maximizing revenue above which revenues go down rather than up.”

    True enough. But I take issue with the assumption behind that statement. The question shouldn’t be what is the point at which the tax rates will allow the federal government to take the most possible money from the country. The quesiton should instead be what is a fair and just percentage of the economy that should be taken up by the federal government.

  36. may even be chaotic

    Im not going to get into it now, but I refer you to mine and Neu Mejican’s argument from a few months ago. I stand by my contention, that in a strict mathematical sense, the laffer curve isnt chaotic.

    I do agree that the optimal point is hard to predict and that the economy is complex and that structure may affect it, but I just disagree with the term “chaotic”.

  37. Ya’ll keep in mind that the “luxury tax” was not an INCREASE in taxes. It was a “new tax”, which is (thus far) outside of this discussion. So the effect of the luxury tax on Yacht Sales is immaterial.

    Go joe!

    CB

  38. John,

    I am not sure if you realize it, but you just endorsed Al Gore’s tax reform plan.

    Take material throughput and carbon.
    Get rid of taxes on labor, etc…

  39. John,

    The question shouldn’t be what is the point at which the tax rates will allow the federal government to take the most possible money from the country. The quesiton should instead be what is a fair and just percentage of the economy that should be taken up by the federal government.

    I agree with this, however, I think it can never be fair and just for the government to tax above that optimal point. And they may be now.

  40. “Ya’ll keep in mind that the “luxury tax” was not an INCREASE in taxes. It was a “new tax”, which is (thus far) outside of this discussion. So the effect of the luxury tax on Yacht Sales is immaterial.”

    WTF? It was an increase in taxes on certain items. Just because it was a new tax versus adding to an old one is immaterial.

  41. oops,

    that’s “tax” not “take.”

    Funny typo.

  42. Cracker,

    A “new” tax is an increase from 0% to some non-zero percent. Plus, yachts and other luxury items were already being taxed (corporate income taxes, sales taxes, etc) so the luxury tax did increase the tax rate on these items. See my post at 12:03. Taxes arent separable. separatable? Whats the word Im looking for?

  43. robc,

    As a stand-alone statement, it would be untrue.

    As a summation of what Ron Paul was saying about the relationship between tax rates and deficits, it was an accurate description of an accurate statement.

    Within the realm of the remotely-plausible – where we’re talking about whether the top marginal rate (not the total take, but the top rate) of the income tax should be moved 5% this way or 5% that way, there is barely enough of a stimulatory or suppressive effect to influence growth rates, nevermind change them so drastically that they would make up and surpass the effect of the cut itself on revenues.

    The observation about a theoretical 105% tax rate is like saying that this desk isn’t really solid, because most of the volume of its atoms is empty space – technically true, but you have to get to a level so far removed from the reality we live in for such an effect to be at all observable.

    Talking about Ryan’s tax policy bringing in more revenue than Rangel’s is like saying you can walk through walls because of the empty spaces in the atoms.

  44. but I just disagree with the term “chaotic”.

    Just had a discussion on this point with an economist friend of mine.

    For the economy in general, the debate seems to be between chaotic = stochastic and chaotic = deterministic but unknowable due to the complexity.

    Now whether that narrow point applies here is a whole nuther debate.

  45. If you nominally cut taxes and the defict rises, you haven’t actually cut taxes. You’ve increases taxes, but pushed back the due date.

  46. Two points of interest . . .

    First, there clearly must be some optimal point of taxation where total tax revenue decreases regardless of whether tax rates are increased or decrease.

    Second, WHO CARES. It is not the role of government to maximize its revenue stream and then fund as many services as it can. The role of government is to determine the minimum set of services that cannot be effectively provided by private means and then set tax rates to cover only those services.

  47. As a stand-alone statement, it would be untrue.

    Well, in plenty of other threads you have gotten upset at not treating your statements in a strict, stand-alone manner, so I always treat your statements that way.

    Within the realm of the remotely-plausible – where we’re talking about whether the top marginal rate (not the total take, but the top rate) of the income tax should be moved 5% this way or 5% that way, there is barely enough of a stimulatory or suppressive effect to influence growth rates,

    Some others here argue that it is chaotic. If so, 5% would be way more than enough to drastically affect tax revenues.

  48. Some others here argue that it is chaotic. If so, 5% would be way more than enough to drastically affect tax revenues.

    B does not follow from A.

    You could say that, at a certain point, a 5% swing could have an enormous effect, not just on growth but on revenues, but that would not mean that a 5% change at any point would have such an effect.

  49. robc,

    Chaotic behavior doesn’t change the fact that systems have a sensitivity threshold. Certain changes will be too small to matter. Once you pass that threshold, then if the system is chaotic, it is hard to predict the results.

    There will also be an upper bound where the change is so large that it swamps the other elements in the system and results are predictable. It is the shape of the Laffer curve’s middle that is uncertain, not the margins.

    5% seems to be big enough to matter case, but whether the results are predictable is an empirical question.

  50. Check out this nice little chart that shows Global Taxes as a percentage of GDP :

    The US ranks 17th

  51. We’re missing the larger point here. Whatever the bias and incompetence of the WSJ, Charlie Rangel remains a giant shitty douche sandwich.

  52. To be fair, Italian dressing is half douche.

  53. I think Carrick is thinking very clearly on this topic.

    How, I wonder, will government calculate the appropriate rate to cover expenses without considering the relationship between tax rate and revenue?

  54. Second, WHO CARES. It is not the role of government to maximize its revenue stream and then fund as many services as it can. The role of government is to determine the minimum set of services that cannot be effectively provided by private means and then set tax rates to cover only those services.

    The point is simply offered as an argument against those (which does not include anyone on this thread, BTW) who profess to believe that revenues always go up when taxes go up.

    However, as you correctly point out, when dealing with tax policy, one shouldn’t simply be arguing about maximizing revenue. Justifying expenditures should always be the focus of any tax related argument. The revenue raising mechanism is secondary to the expenditure side.

  55. It’s fine to suggest high tax rates reduce revenues, but a reasonable argument also requires some nod towards an optimum rate,…

    There is an optimal point that is very hard to predict, and may even be chaotic due to the complexity of the economy.

    The maximum amount of money the government can extract from us is the optimum?! Perhaps if you are spending the governments money.

    I prefer something much closer to zero.

  56. If you nominally cut taxes and the defict rises, you haven’t actually cut taxes. You’ve increases taxes, but pushed back the due date.

    In a static model, this is true. However, it is not true in a more dynamic model, in which your tax base increases faster than the government’s cost of capital (all netted from inflation, of course).

    Given the rate at which tax revenues have been increasing in the absence of tax increases, I would say that we seem to be living in a more dynamic model.

  57. carrick,

    Second, WHO CARES.

    Those whose opinion about tax cuts are influenced by their effect on the federal budget, or who would base their budgetary policy on the effects of tax increases or cuts, should care very much.

  58. “I never bought into the Hall/Rabushka argument that capital gains should not be taxed. This 15% rate has hedge fund managers laughing all the way to the bank. It’s BS.”

    I never bought into the argument made by anyone that taxes should be based on income of any type to begin with.

    My income, whether it is derived from salary or capital gains is not a “service” provided to me by the federal government. There isn’t a single thing “special” that the federal government ever did for me that created any of my income or caused it to be any higher than anyone elses.

    Taxes should be a user fee paid for by each user of the particular government service being financed regardless of that person’s income. And those activities that are really nothing more than transfer payments and not actual services at all like social security, should be eliminated.

  59. Charlie Wrangel’s disgusting defense of the gestapo raid at Waco and the murder of civilians makes him the most putrid example of authoritarianism in D.C., so he can go fuck himself and I don’t give a shit what he has to say about taxes.

  60. Whew, that felt good.

  61. “Justifying expenditures should always be the focus of any tax related argument. The revenue raising mechanism is secondary to the expenditure side.”

    You’ll die of old age waitng for any of the liberal democrats to address it on that basis.

    LOL

  62. right on stuartl

  63. Or was that Charles Schumer?

  64. right on Gilbert Martin

  65. robc,

    that in a strict mathematical sense, the laffer curve isnt chaotic.

    Are you more comfortable with the term “self-organized critical?”

    We have provided a brief review of the recent literature about the ideas of chaos. Chaos is a nonlinear deterministic process which looks random. In fact, chaotic processes have first and second moment properties that are the same as for white noise processes. The distinguishing feature of chaotic systems, however, is that they exhibit sensitive dependence on initial conditions, meaning that nearby identical chaotic systems in slightly different states will rapidly evolve toward very different states. We have also argued that chaos is important since evidence of chaos implies that (nonlinearity-based) prediction is possible, at least in the short run and provided that the actual generating mechanism is known exactly. In the long run, chaos implies that prediction is all but impossible due to sensitive dependence on initial
    conditions.

    But as already noted, the relations between
    our models and the real world should be properly assessed for further significant contributions regarding the workings of real systems. In this regard we should also note that there is a second type of nonlinear process, known as self-organized criticality, recently discovered in physics by Bak et al. (1987). Self-organized criticality applies to large interactive systems such as the human body and the stock market. Unlike chaos, however, self-organized criticality is a probabilistic process. It incorporates a dominant long-run trend toward greater sensitivity and a short-run catastrophic element, which is triggered by random shocks within the system. There is thus another issue, that of whether real systems are chaotic or self-organized critical.

    http://www2.ku.edu/~kuwpaper/2005Papers/200517.pdf

  66. Why, RC, you big Keyensian, you!

    When looking at those tax revenue increases, you need to keep in mind three things: inflation, population growth, and the timing of people taking capital gains.

    Especially the third – there is always a spike of profit-taking immediately after a capital gains tax cut, and it always levels out.

    It is true that investing government debt into the economy can be a good investment, as the economy will often grow at a higher rate than the accumulation of interest on government debt. I can remember when people were fretting about paying off the national debt too fast, for that very reason, back in aught-zero.

    But, once again, there is an important distinction to be made between economic growth and revenues. If the economy growth at an additional 1% per annum because of a tax cut – which would be a really astounding increase in growth, almost 1/3 of what we’ve come to expect in total annual GDP growth over the past century and a helf – a government that collects 20% of GDP in taxes will see a 0.2% increase in revenue MINUS WHATEVER THE ORIGINAL RATE CUT WAS.

    How big would a tax cut have to be in order to boose GDP growth by almost 1/3? Probably a lot bigger than 1% of revenues/0.2% of GDP.

  67. What is a fair and just amount of taxation?

    The amount that we spend, unfortunately. If people had to pay for these things that they want, they may come up with a better way of providing them. However, for the time being, it may be a tax/revenue increase scheme, but at least it will be fair to future generations.

  68. Rangel is also a hypocritical twit in writing an article entitled “stop the middle class tax raid” – since it was his party that created the AMT in the first place and it was his party that did not index it for inflation.

    The purpose for ever creating it in the first place was bogus and the money being collected from it was not money the federal government should ever have been collecting at all in the first place.

    So if it’s going to be elimiated, the difference should be made up entirely by spending cuts and not one cent should come from any tax increase on anybody.

  69. Taxes should be a user fee paid for by each user of the particular government service

    This simple concept works nicely for some services.

    For other services (e.g., education) it is hard to determine exactly who the user is. Even poverty reducing plans can be argued to be a service provided to non-recipients as the consequences of poverty spread beyond the individual experiencing poverty to impact the society at large.

  70. Second, WHO CARES.

    Those whose opinion about tax cuts are influenced by their effect on the federal budget, . . .

    I will make a bodacious and totally unsupported claim that it should be intuitively obvious to any rational person, that the point of optimal revenue for government is way beyond the point of taxation required to meet the minimum functionality of government to provide services that cannot be effectively provided by the private market.

    So the first question should be ‘why are we providing government services that could well be left to the private market?’. The most likely response is that taxation and government spending is required to achieve someone’s definition of equitable distibution of wealth. Liberals and conservatives will argue about “equitable distibution of wealth

    I get fed up with debates about whether or not we as a people are or are not taxed enough; whether the government will get more or less revenue if marginal rates go up or down; etc.

    I want to go back to the fundamental question of what should government be? Worry about taxes later.

  71. Ahrg, a phantom mouse click just posted my unfinished message 🙁

    Sorry for the redundant post.

    Second, WHO CARES.

    Those whose opinion about tax cuts are influenced by their effect on the federal budget, . . .

    I will make a bodacious and totally unsupported claim that it should be intuitively obvious to any rational person, that the point of optimal revenue for government is way beyond the point of taxation required to meet the minimum functionality of government to provide services that cannot be effectively provided by the private market.

    So the first question should be ‘why are we providing government services that could well be left to the private market?’. The most likely response is that taxation and government spending is required to achieve someone’s definition of equitable distibution of wealth. Liberals and conservatives will argue about “equitable distibution of wealth” means, but libertations will tell you that is not a legitimate role for government.

    I get fed up with debates about whether or not we as a people are or are not taxed enough; whether the government will get more or less revenue if marginal rates go up or down; etc.

    I want to go back to the fundamental question of what should government be? Worry about taxes later.

  72. NM,

    Yes, that seems much more likely.

    I dont buy “chaos” because I dont think we would “rapidly evolve toward very different states” if the top marginal rate was 36% instead of 35%. What you posted about “self organized criticality” seems much more likely.

  73. I’m a shill for Big Paul.

    I had been wondering about this very thing with you, joe. Just idle curiosity — because you speak well for both candidates. Thanks for answering.

  74. robc,

    The interesting thing to me about the distinction is that “chaos” is a “deterministic but essentially unknowable” state while “self-organized criticality” involves an element of true randomness. So in terms of the Laffer curve, we would be moving away from a deterministic relationship between tax and revenue.

    To me, there just seems to be too many mediating elements in between tax and revenue to make meaningful predictions about policy in general, and these mediating elements are hard to identify for the particular case.

  75. robc,

    In other words, I would argue that the relationship is deterministic, but that we can not adequately measure the distance between initial states because of uncertainty regarding what elements mediate the process.

    A change in the tax rate in two identical systems may not be chaotic, but given that we can not adequately define the current state, our predictions are no better than if the tax rate revenue relationship were strictly chaotic.

  76. What is a fair and just amount of taxation?

    How about none. If you want to fund wars, social security, aid to foreign governments, subsidies to businesses, welfare. Spend your own money but leave mine alone. That would be fair.

  77. “For other services (e.g., education) it is hard to determine exactly who the user is. Even poverty reducing plans can be argued to be a service provided to non-recipients as the consequences of poverty spread beyond the individual experiencing poverty to impact the society at large.”

    No it isn’t. The users are the specific persons enrolled in school being educated. And unless you’re talking about college, that person would be a minor and the responsibilty of his or her parents who should be footing the bill.

    There are all sorts of “consequences” created by the actions of others all the time. That doesn’t create any sort of obligatory relationship between people.

    Whether my next door neighbor keeps his grass cut could have an effect on the market value of my house if I happened to be trying to sell it. That doesn’t obligate me to chip in and help buy him a new lawn mower.

  78. Rereading that last post.

    I may not have convinced myself.

    The complexity of the system and the number of mediators may make the relationship non-deterministic.

    I’ll have to think on it.

  79. Gilbert,

    We clearly won’t agree on this issue, but I think if we stick to a strictly pragmatic view of things, your obligation flows from the benefit you receive whether or not your recognize that benefit.

    Your lawn mowing example falls into the class of services that can be assigned a clear user.

    Not really germane, imho.

  80. Why should anyone be forced to pay for services for other people. Shouldn’t charity be optional? Not forced on you by government?

  81. Gilbert,

    Re: education.

    You are flat wrong.

    The users of education include the employer who gets a trained worker and the society which gets an informed voter.

    Not to mention the more intangible benefits of an educated society.

  82. John,

    When you say that the dynamic model negates the claim that an increased deficit requires a future rise in taxes, I would ask (as one should in any economic discussion), compared to what? In other words, while I fully agree that a deficit of absoolute zero is not necessary to ward off absolute tax increases in the future, it still stands to reason that the higher the deficit is at any point in time, the higher taxes will have to be in the future compared to what they would have been otherwise to adequatedly compensate for that higher deficit. No? I think the only way one can argue with this is if one has a model in which other factors increase tax receipts as a function of whatever also increased the deficit. I guess this is what supply-siders presume. Maybe it’s true and maybe it’s not (and maybe it depends on the circumstances extant at the time of implementation), but it’s certainly a necessary part of the equation, not just dynamism or growth.

  83. Do taxation threads always have to bring out the extremists? sigh…

    Yes, yes, extremists, we know taxation=theft and that user fees are the only way. Now, can we get back to the policy debate at hand?

  84. James,

    pay for services for other people.

    They probably shouldn’t, but the determination of who receives the benefit of many government services is not so simplistic.

  85. MP What is so extreme about wanting to keep every cent you earn and spending it how you want to spend it are you kidding me?

  86. James,

    When you use terms like “every cent you earn” you are talking about the extreme end of a spectrum that starts at “every cent you earn” and end with “every cent you earn.” On one end you keep it all. On the other the government keeps it all.

    That is the definition of extreme.

  87. The users of education include the employer who gets a trained worker

    The employer pays for the education via higher salary. This also encourages other potential workers to get an education so that they can receive a higher salary. There is no need for the employer to pay directly for education, he already pays via incentives.

  88. “your obligation flows from the benefit you receive whether or not your recognize that benefit.”

    I’m under no constraint to abide by your personal opinion as to whether something constitute a benefit to me. Because that’s all it is – your personal opinion.

    “You are flat wrong.”

    Not on your say so. The user is the direct receipient – nothing more.

  89. Gilbert,

    Like I said.
    We will disagree on this.
    I don’t expect to convince you of anything other than the fact there is a difference of opinion on this topic among reasonable people.

    Back to your lawn mowing example.

    Obligation may flow in the other direction.

    Does your neighbor have an obligation to you?

  90. re: flat wrong.

    Intended to indicate that the issue is clear, not that your opinion is less valid than anyone else’s

  91. Re”Ryan’s proposal.

    I like it, but what could possibly be the point of the choice between filing under the current system and filing with the new scheme?

  92. “Back to your lawn mowing example.

    Obligation may flow in the other direction.

    Does your neighbor have an obligation to you?”

    There is no obligation flowing in any direction. There are no obligations created on people for the secondary effects that may occur to other parties as a consequence of their actions.

    All those people who decided to shop at Wal-Mart instead of K-Mart don’t owe anything to all those ex-employees of K-Mart who got laid off as a result of their aggregate actions.

  93. NM,

    Giving 2 systems means that you dont get the complaints that occur from the people who changing systems hurts. Ryan’s new system may be better for *most* people, but there will be some people who it would cost more. They get to stay under old system.

  94. Rangel is also a hypocritical twit in writing an article entitled “stop the middle class tax raid” – since it was his party that created the AMT in the first place and it was his party that did not index it for inflation.

    AMT was originally passed in 1969 and went into effect in 1970. Rangel was first elected in 1971.

    Is Paul a hypocrite for opposing the Iraq War?

  95. robc,

    Sure, but the organizational costs of maintaining the two systems would seem to outweigh the benefit of reducing those complaints. No?

  96. “AMT was originally passed in 1969 and went into effect in 1970. Rangel was first elected in 1971.”

    It doesn’t matter whether Rangel was around to personally vote for it or not. It was his party that did it and he’s trying to spin his new tax bill as democrats protecting the middle class.

  97. Gilbert,

    There is no obligation flowing in any direction. There are no obligations created on people for the secondary effects that may occur to other parties as a consequence of their actions.

    How can you claim rights without recognizing obligations flowing from your actions?

  98. It doesn’t matter whether Rangel was around to personally vote for it or not. It was his party that did it and he’s trying to spin his new tax bill as democrats protecting the middle class.

    Let me get this straight. Anything that a political party has ever done should be laid at the feet of every member of that party?

    I’ll go back to my earlier observation. Does Ron Paul hold any responsibilty for the mere fact of, or the conduct of the Iraq War? Per your logic, he should not be able to oppose it and he is not allowed to even talk about it without being accused of spinning.

    I know you’re incensed about the issue, but your logic is insane.

  99. de stijl

    You throw around that term “logic” like it means something.

    ;^)

  100. “How can you claim rights without recognizing obligations flowing from your actions?”

    The only obligations that anyone has toward another is to refrain from actively doing direct harm to the person or property of someone else via physical assault or theft, etc.

    Your rights consist of the obligations of others to refrain from doing the same to you.

    Obigations and rights are negative in nature. There are no affirmative obligations or rights.

    And there is no obligation created just because some negative economic effect may happen to someone due to someone else exercising their freedom of contract – just as I mentioned earlier in my Wal-Mart vs K-Mart example.

  101. “Let me get this straight. Anything that a political party has ever done should be laid at the feet of every member of that party?”

    THIS particular member of the party created a tax bill for the purpose of giving HIS PARTY political credit for “saving the middle class” from a tax bill that HIS PARTY created in the first place – and for the purpose of raising more taxes on some other people.

  102. How can you claim rights without recognizing obligations flowing from your actions?

    I’m not sure I see the connection here.

    For example, your right to free speech is not affected at all by any particular action that you take, absent commission of libel or slander.

    Remember, to a libertarian, rights are negative, not positive. They do not have to be earned in exchange for undertaking or discharging obligations. They are yours by virtue of being a human being.

  103. Again NM what is extreme about my keeping money that I work for? The government hasn’t done anything to earn the right to take money from me. I don’t believe in war, social security, welfare corporate or social so why should I have to support a system that doesn’t benefit me? As Gilbert mentions in his post

    “The only obligations that anyone has toward another is to refrain from actively doing direct harm to the person or property of someone else via physical assault or theft, etc.”

    He is right of course and to view this as extreme is silly beyond words (well maybe not beyond words).

  104. NM please explain your view that it is OK for government to take my money (and it is taking for I don’t have the option of saying no to the government when it comes to taxes)to redistribute to whomever?

  105. NM I earn my paycheck. I work eight hours a day or more so I can provide a living to my family. Under what rationale is it extreme for me to want to be able to spend every cent of the salary that I earn through my efforts as I see fit? What has the government contributed to me that should allow it to arbitrarily decide it gets a portion of the fruits of my labor.

    Government produces nothing without taxes there would be no money to distribute to the various causes the government supports.

  106. THIS particular member of the party created a tax bill for the purpose of giving HIS PARTY political credit for “saving the middle class” from a tax bill that HIS PARTY created in the first place – and for the purpose of raising more taxes on some other people.

    Are Democrats allowed to vote for AMT reform? Must they oppose any and all attempts to reform AMT because they were the majority in 1969? Can they only vote for Republican sponsored bills on the matter?

    Do Republicans inherit any responsibility since it was signed by Nixon? Spiro agnew was President of the Senate – is he on the hook?

  107. Re: negative rights and obligations.

    A nice idea, but very problematic in application. Likewise the distinction between individual rights versus collective rights (see “freedom of assembly” or “freedom of association”).

    James.

    You asked what was extreme about your position.
    The label “extreme” applies to any position that includes an “all,” “every,” “always,” “never,” “only,” or “any” (c.f., this statement) or other terms that indicates total or complete exclusion of alternatives.

    By that definition: “The only obligations that anyone has toward another is to refrain from actively doing direct harm to the person or property of someone else via physical assault or theft, etc.”

    Counts as extreme, I guess.

    As for the justification for taxes, it comes down to fee for service. We just disagree on what counts as a service.

  108. “Are Democrats allowed to vote for AMT reform? Must they oppose any and all attempts to reform AMT because they were the majority in 1969?”

    Spare me the spin.

    It isn’t reform – it’s another attempt to redistribute wealth.

    That is tax that should never have existed at all in the first place and money the government shouldn’t have been collecting at all in the first place. The Democrats were only too glad to spend all that money each and every year since the tax was passed and they want to keep spending it – and more.

    The only “reform” that is needed to is flat out eliminate the tax WITHOUT increasing any other tax to “pay” for it. They can pay for it by cutting spending. Get rid of farm subsidies, get rid of the Dept of Education, get rid of the Dept of Housing & Urban Developlent, get rid of the Dept of Health and Human services, get rid of the Labor Dept, get rid of the Energy dept, get rid of EEOC, get rid of the Endowment for the Arts. There are plenty of places to cut spending seeing as how a very large number of functions and government spending relate to things that were never within the federal government’s Constitutional authority to begin with.

  109. “versus collective rights (see “freedom of assembly” or “freedom of association”).”

    Those aren’t “collective rights”. Each person decides for himself whether to particiate in a particular group or not. No one else can force him into or out of it.

  110. james reminds me of this famous Onion piece. Except he probably wouldn’t call the fire department.

  111. “As for the justification for taxes, it comes down to fee for service. We just disagree on what counts as a service.”

    Then how do you justify the government providing services to people who pay no taxes?

  112. Then how do you justify the government providing services to people who pay no taxes?

    Pay attention.
    The direct service to person A (who pays no taxes) is also an indirect service to persons B thru Z (who pay taxes).

    B-Z are paying for the indirect service that adheres to the direct service provided to the non-tax payer.

    It really ain’t that complex.

    I understand your position, and disagree with it. Do you really find mine that hard to understand?

  113. Gilbert,

    “Those aren’t “collective rights”. Each person decides for himself whether to particiate in a particular group or not. No one else can force him into or out of it.”

    Nice try, but an individual can not assemble.
    The right is a right for groups to form as groups. Even at the level of two individuals, that is a collective right.

  114. To clarify,

    The right of an individual to join a group requires both that that individual participates voluntarily AND that the group voluntarily allows that participation. It is the conjunction of these conditions that makes the right collective.

  115. Gilbert,

    Here is the root of your error on the collective rights question…

    No one else can force him into or out of it.

    So since I want to join the group made up of “people that live in your house,” when can I pick up the key?

  116. “The direct service to person A (who pays no taxes) is also an indirect service to persons B thru Z (who pay taxes).”

    Even, if for the sake of argument, I agreed that some indirect benefit is derived for persons B thru Z – that benefit is secondary, minor in nature and non-quantifiable whereas the majority of the benefit goes to person A who directly receives the service.

    So even going by your “indirect benefit” theory, person A should STILL be required to pay for the majority of the service on a pro-rated basis or be denied the service if he doesn’t.

    So what is your justification for allowing him not to pay for any of it?

  117. Gilbert,

    You’re gonna go with “that benefit is secondary, minor in nature and non-quantifiable” and follow with “A should STILL be required to pay for the majority of the service on a pro-rated basis.”

    Really?
    Think that one through a bit more carefully.
    Focus on the word “non-quantifiable.”

  118. “So since I want to join the group made up of “people that live in your house,” when can I pick up the key?”

    Real cute.

    Because your right to join a group doesn’t overide my private property rights to control what goes on in my own house.

  119. Re: non-quantifiable.

    The degree to which the benefits are clear and quantifiable will determine the degree to which a “fair” solution will look like a direct fee-for-service scheme.

  120. Because your right to join a group doesn’t overide my private property rights to control what goes on in my own house.

    Okay.
    Two issues.
    How do you determine that one right (property) out weighs another (assembly = can’t be forced out of the group, by your defintion)?

    Second: remove the property rights issue and explain an individual has a right to join a group that doesn’t want him. The right of association/assembly is a two-way street.

  121. Remember,

    Two way = collective.

  122. “Really?
    Think that one through a bit more carefully.
    Focus on the word “non-quantifiable.”

    No YOU focus on coming up with some rationale as to how it is physically possible for some service that is provided directly to one person to actually “count” as being a greater “benefit” to anyone else than it is to the person who directly got the service.

  123. “Second: remove the property rights issue and explain an individual has a right to join a group that doesn’t want him. The right of association/assembly is a two-way street.”

    I never said he did. The right of assembly and association relates to non-inteference BY GOVERNMENT.

  124. Gilbert,

    You started your statement with “for the sake of argument” and then came up with some strange pro-rating scheme.

    My argument is that the justification for taxes lies in the very difficult-to-quantify nature of indirect benefits to society. The attempt to partition benefits at that fine-grained a level is the source of the problem.

    It is quantifiable at the aggregate level that an educated populace is good for the society as a whole. Attempts to partition that benefit at a level that results in some sort of pro-rating are impractical.

  125. I never said he did. The right of assembly and association relates to non-inteference BY GOVERNMENT.

    But the government CAN force you out of a group if that group does not want you as a member…that is why the right is collective. The government can step into enforce the right of the group to NOT have you as a member since your attempts may conflict with the rights of the group.

    Like I said, a TWO WAY STREET.

  126. NM,

    Its easy. The government isnt enforcing the group’s right to keep a person out. They are enforcing the individuals’ right to keep someone out of their group. Individuals have the right to assemble and make decisions as a group. The right belongs to the individual, not the group.

    However, even that doesnt matter. If you are assembling in a public place, you cant stop someone else from assembling right next to you. Even if your group doesnt want them there. See Westboro Baptist Church for more details.

    If you are assembling in a private place, then the property owners controls who assembles. It becomes a property rights issue, not an assembly issue.

  127. Gilbert,

    To be clear.
    To form an argument that the right of assembly/association is an individual right and not a collective right, you have to explain how the government functions in the case where there are conflicting rights claims. In the case of right to assemble, the government has to balance your right to join the group against the collective right of the group to exclude you.

    There is no way around the collective nature of that right, even if it is limited (as in anti-discrimination laws).

  128. “You started your statement with “for the sake of argument” and then came up with some strange pro-rating scheme.”

    There is nothing strange about it. You are just trying to spin your desire to justify allowing some people to pay no taxes while still claiming the justification for taxes is fee for services, however non-quantifiable.

    It is absolutely quatifiable whether a particular person is in fact paying any taxes or not. The particular person who is not paying taxes is receiving direct benefits from some services and indirect benefit from others just as are the ones who are paying taxes.

    So there is no justification for allowing that person to escape paying for those services when other people are not allowed to escape paying for them.

  129. robc,

    That is a more nuanced reply, but notice how your statement about enforcing the “individuals’ right to keep someone out of their group” includes two interesting plural possessives.

  130. Gilbert,

    I am not under any illusion that I am going to convince you.

    I hope you recognize that your position is not convincing to me either.

    Your position is no more or less rational than mine.

    The difference in how we frame the axioms underlying the issue is the source of our disagreement.

    You take as self-evident certain concepts that I find unconvincing. That, to be sure, is a two way street as well.

  131. NM, what ROBC said.

    He nailed it quite nicely.

    “Its easy. The government isnt enforcing the group’s right to keep a person out. They are enforcing the individuals’ right to keep someone out of their group. Individuals have the right to assemble and make decisions as a group. The right belongs to the individual, not the group.”

    Right – and if someone tries to physically intrude into a group like a private club where he isn’t wanted, when the police step in they aren’t enforcing any “group assembly rights” they are enforcing laws against physical assault and /or tresspass.

  132. robc, Gilbert,

    Individuals have the right to assemble and make decisions as a group.

    Show me how this is not a claim for a collective right.

    focus on the phrase “make decisions as a group.”

    Are you claiming that individuals have a right to participate in the group’s decision even if the other members do not recognize them as members?

  133. I am not sure if this will be heard through the noise, but a serious question if anyone knows:

    How did these various hedge fund managers get their income counted as capital gains and not as management fees (the latter would be I think ordinary income.) Did they sell enough or all of their personal stake in the fund so that the proceeds are capital gains?

    I find it hard to believe that the IRS can’t, by rule, declare the money received from their funds is income. (I’m not necessarily saying this is a good idea, just that I thought this is the sort of power and authority the IRS has)

  134. “Your position is no more or less rational than mine.”

    Not so.

    It is not rational to claim the justification for taxes is fees for services rendered, claim that a bunch of those services are non-quantifiable and then not object to allowing some people to pay no taxes at all. There is no rational way you can argue that the person not paying taxes is not receiving ANY government services whatosoever.

  135. Individuals have the right to assemble and make decisions as a group.

    Show me how this is not a claim for a collective right.

    focus on the phrase “make decisions as a group.”

    Are you claiming that individuals have a right to participate in the group’s decision even if the other members do not recognize them as members?

    First, to your last question, no, no one has a right to participate in a group that does not want that individual’s participation.

    As for the right to assemble being a “collective right,” look, you can call it whatever you want, it’s just a semantic matter the way you’re treating it. I didn’t see where this particular debate started, but generally when people talk about so-called “collective rights”, they’re talking about rights that are bestowed based on membership in a particular group, usually one that has some sort of sociological significance. Since all individuals have the right to assemble as a group, membership in any socially recognized group is irrelevant to that right, so the recognition of this right does nothing to contradict those who deny collective rights in the context in which they’re using the term. The fact that the right to assemble can be seen to have a “collective” aspect (simply because people must “collect” before they are technically exercising that particular right) is neither here nor there.

  136. Gilbert,

    here is no rational way you can argue that the person not paying taxes is not receiving ANY government services whatosoever.

    Nor have I tried.

    Like I said, this is a framing issue.

    The person “not paying taxes” may be “paying” for the service in another modality connected to the indirect benefit that accrues for the rest of society.

  137. NM, your spining is getting tiresome.

    Individuals have a right to decide if they want to form a group. The particular individuals who want to form a group then decide on what they want the rules of the group to be. Those who individually decide they agree with those rules can stay in the group. Those who don’t can go elsewhere. The ones who individually chose to join the group then abide by the rules of the group – or individually leave it if they later decide they no longer want to.

    And the government is not involved in forcing anybody into or out of the group.

  138. Fyodor,

    That is a very different take on the issue, and one that I appreciate.

  139. “Like I said, this is a framing issue.”

    More like a spinning issue.

    You’re just trying to rationalize your desire to force some people to subsidize the existence of others – or engage in that favorite liberal pastime – redistibuting wealth.

  140. Gilbert,

    That doesn’t solve your problem.

    If the group does not have a right to collectively determine membership in their group, then someone can be a member who does not recognize the rules that the group has, as is their right, determined are constitutional for their group.

    In real groups, of course, these rules are dynamic and flexible, as is the degree to which an individual member accepts or rejects them for a group to which they claim membership.

  141. NM,

    First, lets go to the constitution:

    Congress shall make no law … abridging … the right of the people to peacefully assemble.

    So, thats what they are talking about. Now let me lay out 3 scenarios:

    A group of people are meeting on the Mall in DC
    A group of people are meeting in a private bar
    A group of people are meeting in a private home

    In all cases, Congress can neither force you to join in with that group or prevent them from showing up.

    They, as individuals, are protected from the government preventing them from showing up. There is no group right involved. Congress cannot pass a law that prevents the individual from showing up.

    Now, lets say you an anti of this group. They are Olde Mejicans.

    In the first case, they cant prevent you from showing up, milling in amongst them and holding up anti-Olde signs.

    In the 2nd case, it would be up to the bar owner.

    In the 3rd case, the house owner.

    In the first case, the cops would protect your 1st amendment right to assemble. You have just as much right to stand on the mall and hold up signs as any of them do.

    In the 2nd and 3rd case, the cops could haul you off for trespassing if the owner doesnt want you there and you refuse to leave. Assembly never comes into play.

  142. Gilbert,

    Framing = spinning.

    We spin the issue along a different axis.

    You are self-deluded if you think that your take on the issue is any less the result of an attempt to spin things to fit with your predetermined value system.

    The validity of that system is not as apparent to others as it is to you. The chances that it is objectively correct are slim.

  143. robc,

    I did not disagree with that formulation when you first made it.

    I asked about your specific claim that “individuals” have a right “to make decisions as a group.”

    How can this not be a claim for a collective right?

  144. Another complication when discussing the reality of collective rights comes about when we talk of corporations.

    Corporate law is an attempt to treat collectives as individuals and to give those collectives certain rights.

    Does the right to assemble get tangled in the issue of corporate law?

  145. NM,

    Individuals can enter into contractural obligations with other individuals. For example, I, in my previous home, lived in a condo with an HoA. I contracturally entered into a situation to make decisions as a group. I think I individually have that right. Its pretty clearly listed under Amendment 9.

    The HoA has no rights. The individuals have the rights. The HoA is just an organization we formed. (I realize some court decisions treat corporations as individuals – if that applies its still an individual right apparently).

  146. Your comment beat me out, by I already covered the corporation thing, as wrongheaded as it is.

  147. I would say collective rights are fine but forcing people to join one’s collective is not among them.

  148. While we are discussing it, the term “states’ rights” is bogus too. States dont have have rights, only individuals.

  149. de stijl snark only works when it’s clever. I bet the people in California are glad that the government was able to protect their homes with the fire departments paid for by tax dollars.

    Lewrockwell.com had an interesting article regarding the situation in California. Here’s the link. http://www.lewrockwell.com/orig5/seiler4.html

  150. NM OK than I am just crazy extremist for wanting to keep my money and not allow it to be distributed by the government. Have you checked out Jay Nock yet “Our Enemy the State” might offer you a little enlightenment also read Hayek The Road to Serfdom it will wake you up to the government and how it really works.

    Is it really that difficult to get your mind around the fact that what you earn should be yours to keep. If a thief ran up to you and took your money you would be OK with that? If not why are you OK when government does it? Oh because government provides a service that’s not stealing. What if I didn’t ask for anything though?

  151. “Framing = spinning.

    We spin the issue along a different axis.

    You are self-deluded if you think that your take on the issue is any less the result of an attempt to spin things to fit with your predetermined value system.

    The validity of that system is not as apparent to others as it is to you. The chances that it is objectively correct are slim.”

    And that is just more spinning on your part.

    The top 50% of income earners pay 96% of the federal income taxes collected. This is a fact.

    The top 50% of income earners are most certainly not receiving 96% of the benefit of government activities – direct services OR indirect benefits.

    The bottom 50% who pay 4% of the taxes collected are indisputably receiving more than 4% of the benefit of government activities – direct services OR indirect benefits.

    There are a lot of people that the government is forcing other people to subsidize.

    That is a plain economic fact – period.

  152. Gilbert NM is not getting it at all. Based on his arguments I’m beginning to think he may be a troll. No one and I mean no one is that obtuse. You got me NM good one. LOL

  153. Yo de stijl I found another good article for your edification on the great job government does fighting fires.

    http://www.mises.org/story/2764

  154. “Gilbert NM is not getting it at all.”

    Oh he gets it all right.

    He just doesn’t want to admit that what he wants is really what he wants. He wants to pretend it’s something else.

  155. James, Gilbert,

    If there has been a point to this pointless discussion it is this.

    Axioms are not facts.

    Assumptions such as

    Only negative rights are legitimate.
    There are no collective rights.
    Actions and there indirect consequences do not involve obligations.
    Coercion is unethical.

    are only assumptions.

    When someone disagrees with you because they do not take your axioms to be self-evident, they are not going to be convinced by arguments that depend upon acceptance of those axioms.

    Libertarianism has at its core an assumption that only negative rights exist and that rights adhere only to individuals. You will not convince someone that those assumptions are correct by building arguments that depend upon them being correct.

    Even in this discussion about why collectives don’t have rights, attempts to formulate real world examples led to language that implied collective’s having rights.

    A similar outcome would have occurred had we stuck to negative rights.

    robc,

    Does the HoA have a right to exclude you even if you want to join. Let’s assume/say your house abuts the boundary of the HoA and you want to join. Let’s also say that individual members of the group disagree about whether to allow you to join.

    I can’t imagine a way to formulate the negative case without using some collective term: either “individuals” a plural form which indicates the collection of individuals, or “the HoA” a definite form that denotes a collective.

    And yes, this has been a semantic argument from the beginning, but in my view since semantics = meaning, semantics matter in precise formulation of political positions.

  156. Gilbert,

    He just doesn’t want to admit that what he wants is really what he wants.

    It is possible to have a discourse about policy without expressing anything about what I really want. This has been an example, for the most part.

    The closest this thread has come on that count was my contention that I “want” the government to develop a plan an implement it rather than kludging together a hybrid plan like the one Ryan proposes.

  157. NM I understand you are comfortable with your truths. I was there once as well. You’ll keep learning as did I and I’m sure that your views will change. You seem intelligent enough. You’ll figure it out. I believe the State is the biggest con ever. History supports that view of it. The worst depredations and evils man has committed against man has been at the request of the State, rather that state was Democratic, Theocratic, Socialist, Communist, Monarchy they are all different sides of the same thing you’ll see.

  158. James,

    It is unlikely I will go back to the anarchist viewpoint of my youth. It would require me to ignore too much empirical evidence about the benefits that societal institutions contribute to human existence.

    Keep reading.
    A considered critique of libertarian views (not mine, I don’t endorse it all, but it raises points you should consider).

    http://www.tardis.ed.ac.uk/~james/politics/libcrit.txt

    And no libertarian stance is justified without addressing the points made by the georgists.
    http://en.wikipedia.org/wiki/Geolibertarianism

  159. Gilbert,

    I know that this is an attempt to be rigorous and empirical, but you don’t quite get there.

    The top 50% of income earners pay 96% of the federal income taxes collected. This is a fact.

    The top 50% of income earners are most certainly not receiving 96% of the benefit of government activities – direct services OR indirect benefits.

    The bottom 50% who pay 4% of the taxes collected are indisputably receiving more than 4% of the benefit of government activities – direct services OR indirect benefits.

    There are a lot of people that the government is forcing other people to subsidize.

    That is a plain economic fact – period.

    The problem still resolves around the “unquantifiable” nature of those indirect benefits. Unless you can give me a metric that quantifies those indirect benefits rigorously, you are just stating an opinion.

    That, is a fact.

  160. And Gilbert,

    Some suggested metrics.

    Purchasing power.
    Capital gains.
    Income.

    Imperfect, surely, but at least quantifiable.

  161. Here’s a “what I want.”

    I would endorse reforms that move us towards a tax on material throughput and away from taxes on income and labor.

    The basic concepts can be found in this book.
    http://www.natcap.org/

    Details would require a significant amount of work to design.

  162. “Axioms are not facts.

    Assumptions such as

    Only negative rights are legitimate.”

    It is not an assumption. It is a recogntion of the fact that all the individual rights ennumerated in the Bill of Rights in the Constitution are negative rights.

  163. “The problem still resolves around the “unquantifiable” nature of those indirect benefits. Unless you can give me a metric that quantifies those indirect benefits rigorously, you are just stating an opinion.”

    Bullshit.

    There is absolutely no way in the world that the 50% of the population paying 4% of the taxes could only be getting 4% of government services. Particulary when a lot of them are getting direct transfer payments for things like food stamps, Medicare, Medicaid, etc. paid for by the top 50% – things that neither you nor anyone else can “quantify” as being any sort of service to those paying for them.

    It is an economic fact that some people are paying a subsidy and others are getting a subsidy.

    Furthermore, I don’t accept your contention that there ARE any “indirect benefits” in the first place. You can’t provide any “rigorous quantification” that they exist at all.

    The only thing I said earler was that, for the sake of argument, even if there was some “indirect benefit” for persons B thru Z in providing some service to person A, – person A is still receiving a direct benefit that he should be paying for.

    All you could come up with is some nebulous nonsense about the person paying for the service “in some other modality”. Let’s see some “rigorous quantification” for that.

    Your talk is just a bunch of obfuscation for your desire to have the government redistrtibute wealth.

  164. “Some suggested metrics.

    Purchasing power.
    Capital gains.
    Income.

    Imperfect, surely, but at least quantifiable.”

    I just went back and noticed this one.

    It is also nonsense.

    None of those metrics is a “service” or “benefit” provided by the government.

    My purchasing power was created by me.

    My capital gains were created by me.

    My income was created by me.

  165. Oh and one more thing about all those “intangible benefits” you claim exist.

    The burdern of proof is on you to prove that they do – it isn’t on me to prove that they don’t.

    I don’t have to prove a negative.

    If someone who claims something exists can’t prove that it does, then the presumption is that it doesn’t.

    Those are the rules of debate – and the law – as in “innocent until proven guilty”.

  166. Rangel is a nutcase. ANYONE who advocates more taxes is a nutcase.

  167. Gilbert,

    rules of debate

    Good one.
    What about rules of discourse?

    My purchasing power was created by me.
    My capital gains were created by me.
    My income was created by me.

    Since I don’t have to defend a negative, I’ll say

    bullshit,

    prove it.

    And I won’t have to point out that without the institutions of society supporting the activities that led to your ability to make contracts, conduct business, trade for products, etc…you would be digging roots in the mud without an income, or a concept of purchasing or capital gains.

    Now to an actual substantive point:

    It is not an assumption. It is a recogntion of the fact that all the individual rights ennumerated in the Bill of Rights in the Constitution are negative rights.

    You are mostly right, despite being wrong.

    In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.

    And when did rights start flowing from government documents? I thought you were a libertarian.

  168. “bullshit,

    prove it.”

    That’s easy.

    It was paid to me and not someone else.

    Anything and everything is worth exactly whatever someone else is freely willing to pay for it at any given time.

    “And I won’t have to point out that without the institutions of society supporting the activities that led to your ability to make contracts, conduct business, trade for products, etc…you would be digging roots in the mud without an income, or a concept of purchasing or capital gains.”

    If the “institutions of society” was the cause of people being succesfull, then every single person in the society would be a success. The “institutions of society” are there for anyone to make contracts. If you are incapable of successfully negotiation one with someone else, that’s your own problem.

    And I’m still waiting for you to prove the existence of any “intangible benefits”.

    Or how someone who pays no taxes and is getting a specific government service or subsidy (such as food stamps) is actually “paying for it in some other modality”.

  169. Gilbert,

    You have a strange sense of what constitutes proof.

    If the “institutions of society” was the cause of people being succesfull[sic], then every single person in the society would be a success.

    That is the case if you compare them to where they would be without those institutions.

    The “institutions of society” are there for anyone to make contracts.

    Proof of intangible benefits, thanks.

  170. Or how someone who pays no taxes and is getting a specific government service or subsidy (such as food stamps) is actually “paying for it in some other modality”.

    I’ll keep it simple for you.
    Let’s say, for instance, that someone get subsidized health care even though they don’t pay taxes. They, as a result, stay healthy, earn a wage and buy products. This benefits the society at large in a very tangible sense. If we assume that the health care was for a highly contagious disease, they are a benefit to society because they avoid becoming a disease vector. Both tangible benefits to society even if they never rise out of poverty to pay a dime in taxes.

    They fact that your framing of the issue does not allow you to recognize those benefits does not mean they don’t exist.

    Now address how your world view, based strictly on the constitution can hold that “there are not positive rights” when positive rights are provided for by the bill of rights.

  171. I never bought into the Hall/Rabushka argument that capital gains should not be taxed. This 15% rate has hedge fund managers laughing all the way to the bank. It’s BS.

    A 15% rate qualifies as “not being taxed”? What rate is sufficiently high to qualify as “being taxed”?

    It’s not BS, by the way. The reason for a 15% rate is that much of your capital gain is phantom due to inflation, The IRS gives you a reduced rate to compensate. The more complex but superior solution would be indexing basis to inflation and charging ordinary tax rates on your now non-phantom gain. Can you imagine the average person doing a capital gain computation with an annually compounded basis increase? Much easier to use the easy to figure historical cost basis and charge a lower tax rate.

  172. “It’s not BS, by the way. The reason for a 15% rate is that much of your capital gain is phantom due to inflation”

    It is also due to the fact that corporate income is double-taxed -once at the corporate level and once at the individual. The individual stockholder as a proportional owner of the corporation has already paid a tax via his proportional share of the corporate tax.

  173. The “institutions of society” are there for anyone to make contracts.

    “Proof of intangible benefits, thanks.”

    The institution that enables the creation and enforcement of contracts is the court system and there is nothing “intangible” about it.

    And anyone can file a lawsuit against anybody so that service is an exactly equal benefit for everyone. The court system doesn’t cause one person to be more successfull than another at negotiation business. That outcome is caused by the relative skills and intelligence of one person vs another.

  174. “Now address how your world view, based strictly on the constitution can hold that “there are not positive rights” when positive rights are provided for by the bill of rights.”

    Getting a free lawywer when the government has charged you with a crime is not an affirmative right. It is part of the mechanism that checks government power to deprive you of the negative right to liberty so that the government can’t throw you in jail for no good reason.

    You don’t get a free lawyer for anything other than that.

  175. “Let’s say, for instance, that someone get subsidized health care even though they don’t pay taxes. They, as a result, stay healthy, earn a wage and buy products. This benefits the society at large in a very tangible sense.”

    “Society” is merely a term for a collection of individuals. Society doesn’t pay taxes – specific individuals do. Society doesn’t receive benefits – specific individuals do.

    In order for it to provide ANY benefit to anyone other than the direct person being subidized, a realistic economic calculation of the net present value of the estimated future dollar value of that portion of any productive output of the person being subsidized that would accrue to anyone else (instead of being consumed by that same person) would have to exceed the present dollar amount of the taxpayers moeny being spent on the subsidy.

    Furthermore, since most of the taxes are paid by the top 50% income people, it would not ONLY have to be shown that the subsidy resulted in a net aggregate benefit to someone other than the person receiving the subsidy, it would ALSO have to be shown that a portion of that net aggregate benefit is going to the specific individuals who actually paid the tax for it – and that the specific individual’s share of that net benefit exceeded the dollar value of the tax that specific person paid.

    That’s what you call cost-benefit analysis – and return on investment analysis.

    And speaking of cost-benefit, my calculation of it determines this exchange has gone on long enough.

    It is clear to me that you are basically a socialist who fancies himself clever at manipulation of words.

  176. Gilbert,

    a socialist* who fancies himself clever at manipulation of words.

    Yeah, I get them words to do my bidding all the time (I sent them to re-education camp). Sorry you don’t seem to have an equivalent ability.

    To whit:
    Getting a free lawywer when the government has charged you with a crime is not an affirmative right. It is part of the mechanism that checks government power to deprive you of the negative right to liberty so that the government can’t throw you in jail for no good reason.

    You don’t get a free lawyer for anything other than that.

    A swing, and a miss. The motivation for the affirmative right does not determine its valance. It is positive. It is a right. It is a positive right.

    “Society” is merely a term for a collection of individuals.

    Very astute, if beside the point.

    a realistic economic calculation of the net present value of the estimated future dollar value of that portion of any productive output of the person being subsidized that would accrue to anyone else (instead of being consumed by that same person) would have to exceed the present dollar amount of the taxpayers moeny being spent on the subsidy.

    Whew, a nice way of saying the same thing only louder. I got your point the first time. I disagree with the underlying premise.

    Try screaming “It’s not fair!” really really loud. Maybe that will work better.

    I get it. I just disagree with you.

    The last point, in case you do check back.
    This whole thing started with you stating this:

    Even, if for the sake of argument, I agreed that some indirect benefit is derived for persons B thru Z – that benefit is secondary, minor in nature and non-quantifiable whereas the majority of the benefit goes to person A who directly receives the service.

    So even going by your “indirect benefit” theory, person A should STILL be required to pay for the majority of the service on a pro-rated basis or be denied the service if he doesn’t.

    I pointed out that “for the sake of argument” you had posited “non-quantifiable” “secondary” benefits and used them to determine who received the greater benefit. Since those secondary benefits are non-quantifiable, their value in the cost-benefit analysis is estimated arbitrarily (perhaps using a proxy of some type).

    We disagree on their value and what proxy should be used to estimate that value in the cost-benefit analysis. I think they are significant. You don’t.

    *a hint. I don’t actually give a shit about the picture of me you carry around in your head, so your attempts at insult just waste pixels.

  177. And Gilbert,

    Reviewing, I realize that you should have been able to cut your loses by reading careful my comment on

    | October 30, 2007, 3:51pm |

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