Constructive gadfly
Published on October 29, 2008 By stevendedalus In Politics

 

The much talked about Redistributor in Chief took place in 1981 when Reagan took the progressive tax structure on the wealthy from 70% down to 28%, the inevitable consequence of which simply brought into reality the adage the rich got richer and the poor got poorer. The additional bonus was the rise in numerous tax shelters to the point that true earnings were distorted. and to rub it in, investors looked to cheap foreign labor to enrich themselves further. Meanwhile in Washington union busting prevailed and living wages began to tank, roiling redistribution even more .    


Comments (Page 1)
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on Oct 29, 2008

So you are basically telling us that you use the word "redistribution" not for the act of redistributing wealth from X to Y but for the act of refraining from doing so?


Can you maybe explain why redistribution of wealth is good or necessary rather than redefine the word?

 

on Oct 29, 2008

Hi Leauki,

 

You are opposed to taxes, I believe?  In the US there was a time when we had no income tax.  The cost of doing business asw a nation, however, became so great that we needed a way to pay for those costs.  Hence Income Tax.  We tend to ague over what those costs should be, at what level of government they should be incurred, and how those costs should be distributed across the citizenry.

A structure was made.  From that point on, any change is a redistribution of that baseline.

steve is not redfining the word. 

Be well.

on Oct 29, 2008

And you think 70% was "fair"....is that your point?

on Oct 29, 2008



You are opposed to taxes, I believe?



Not at all. I am very much in favour of taxes. I am also in favour of a public healthcare system (but not a social welfare system).

I am, however, against using PC terms to explain why taxes are necessary. If we as a society want wealth to be redistributed, there is no need to refrain from saying that. But I don't trust people who want to redistribute money while claiming that that is not what they are doing. If they refrain from calling it that, it means that don't believe that what they are doing is right.

I am opposed to some types of taxes. For example I am against income tax and value added tax (and sales tax). I would prefer land value taxes, fees for using petrol (which are then used to pay for streets and railroads), and inheritance taxes. I think taxing productivity and economic activity is wrong (morally and economically).




In the US there was a time when we had no income tax.  The cost of doing business asw a nation, however, became so great that we needed a way to pay for those costs.  Hence Income Tax.  We tend to ague over what those costs should be, at what level of government they should be incurred, and how those costs should be distributed across the citizenry.

A structure was made.  From that point on, any change is a redistribution of that baseline.



No.

First of all, the cost of doing business as a nation does not have to include social welfare or public healthcare. Building streets and maintaining an army benefit everyone (everybody uses those things) and I have little problem with "the rich" paying more for the privilege.

But when tax money is used for social welfare and public healthcare we begin to use the tax system to redistribute money not from the people to the state (as is proper) but from the people to other people (which is not).

The structure is a mechanism. It does not define property rights.




steve is not redefining the word.




He is redifing the word. If you use the structure of the tax system to take money from some and give it to others, you are redistributing wealth. Whether that is good or not (I think it is not) is one question. Whether we should do it (I think we shouldn't do it a lot) is another. But for me there is no question of what we should call it.

If we _believe_ that taking money from some and giving it to others we _are_ supporting redistribution of wealth. And if redistribution of wealth is right, we shouldn't refrain from calling it such.

Who said government was supposed to give money to some people anyway? I don't want the wealth I create to be used by other people. Unfortunately, once those others are the majority, they don't ask me whether I want to.

You can say that it is the result of a democratic decision.

But so was segregation.


on Oct 29, 2008

No.

First of all, the cost of doing business as a nation does not have to include social welfare or public healthcare. Building streets and maintaining an army benefit everyone (everybody uses those things) and I have little problem with "the rich" paying more for the privilege.

But when tax money is used for social welfare and public healthcare we begin to use the tax system to redistribute money not from the people to the state (as is proper) but from the people to other people (which is not).

The structure is a mechanism. It does not define property rights.

 

Hello Again,

Yes. No. Yes.  Here is the point of basic contention and it is one that I pointed out in my earlier reply: we in the US argue over what those "costs of doing business" as a nation are.  You are arguing that they should not include the public welfare, I argue they should.  A healthy populace is a polpulace that can be productive,  It is to the benefit of all that we have a healthy and educated citizenry.  Some argue this is not the government's domain; I argue it is.  Who else will pay fopr it?  If we say each individual, we are kidding ourselves and will end up with an even greater divide between the healthy and educated and the unhealthy and uneducated. Talk about a recipe for revolution.

Goodness.

 

Be well.

on Oct 29, 2008

Sodaiho, there are two issues here.

One is whether we should call taking money from X and giving it to Y "redistribution". I think we should. I think it is dishonest not call it that. If redistribution is right, it certainly must be possible to explain why we need it without redefining the meaning of words.

The second issue is whether we should redistribute wealth or not and if yes, how much.

My position on the first issue is that we should be honest, even if it sounds better not to use bad words like "redistribution".

My position on the second issue is that I acknowledge that a tax system doesn't have to redistribute wealth and is not originally meant to redistribute wealth but that it can be used to redistribute wealth. In the case of a public healthcare system, I am for redistribution, in the case of social welfare I am not.

It has nothing to do with being American or not.

 

on Oct 29, 2008

I agree with leauki, if you gonna redistribute wealth then call it what it is. Hiding something only means you agree it's wrong but want it anyways.

on Oct 29, 2008

when Reagan took the progressive tax structure on the wealthy from 70% down to 28%

Hey steve, 2 things"

First, can you provide some kind of link to this information? I am interested in reading where you got this from. It's a pain to sift thru google sometimes.

Second, why do you create articles and then take long periods of time to defend them when commenst are posted against it?

on Oct 29, 2008

One more thing I have to say steve, you probably have some good points to argue, but your lack of proper writing (no capital letters, missing words or incorrect use of words and punctuation), lack of explanation (you say so little without saying enough to make a complete point) and no reference as to how you came up with this makes it really hard to argue anything. Now everyone is like leauki, who seems to be able to understand these articles just fine.

on Oct 29, 2008

Leuki, I believe stev's point was that it was Reagon who redistributed.  You are saying, I believe, that since the rich earned the money in the first place that it is not redistribution to take from them and distribute it across the board in terms of the federal budget? Am
I correct or am I misreading you?

 

My point of view is that any taxation is a redistribution of wealth, whether its a poor man's or a rich man's. How can it not be?

On the upswing,

on Oct 29, 2008

And you think 70% was "fair"....is that your point?

 

No, and neither did many others, but 28% (which was my tax bracket in those times), was clearly not enough, in my opinion. Then, when you added all those wondrous shelters of the 80s many of us took full advantage of, many rich folks and corps (I understand) paid little to no taxes.

Be well.

on Oct 29, 2008

Leauki, I believe stev's point was that it was Reagon who redistributed. 

Yes. That was his point. And I disagree because Steve redefined "redistribution" to arrive at his conclusion.

 

You are saying, I believe, that since the rich earned the money in the first place that it is not redistribution to take from them and distribute it across the board in terms of the federal budget?

If the money is merely taken from them but not directly given to anybody I wouldn't call it "redistribution", yes.

The government protects our lives and property. The rich have more property to protect and thus "use" government more. (I believe in a monopoly on the use of force, hence only government may legally protect life and property in that sense.)

I therefore find it accceptable if the rich pay more taxes and I don't think it is "redistribution" if the tax system reflects that.

 

Am I correct or am I misreading you?

 

It's fairly simple. Redistribution is if X takes from Y and gives to Z. If X takes but does not distribute, there is no "redistribution".

I am against redistribution, not against taxation.

 

My point of view is that any taxation is a redistribution of wealth, whether its a poor man's or a rich man's. How can it not be?

Not all taxation is redistribution of wealth, even using your (now third) definition of redistribution. A land value tax would not distribute any wealth to anyone. In fact government would not even take away wealth created by the individual taxed (since land values are created by the community at large, not the individual plot owner).

 

on Oct 29, 2008

The much talked about Redistributor in Chief took place in 1981 when Reagan took the progressive tax structure on the wealthy from 70% down to 28%, the inevitable consequence of which simply brought into reality the adage the rich got richer and the poor got poorer.

Had to laugh at this.  Reagan allowed those people to keep more of their own money, the money previously confiscated by those exorbitant tax rates, & you call him the Redistributor in Chief.  You also neglect to mention that even after the Great Redistribution, tax revenues from those income brackets actually went up & that the vast majority of taxes are still paid by a small minority of income earners.  Calling Reagan tax cuts 'redistribution' is the height of demagoguery, not to mention irrational, delusional, crazy and.. oh, BTW, did I say 'False'?

on Oct 29, 2008

And you think 70% was "fair"....is that your point?

No, and neither did many others, but 28% (which was my tax bracket in those times), was clearly not enough, in my opinion

Oh, so how much extra did you end up sending in to the IRS to pay your fair share?

on Oct 29, 2008

In answer to CharlesCS request for citation:

"During Reagan's tenure, income tax rates of the top personal tax bracket dropped from 70% to 28% in 7 years"

http://en.wikipedia.org/wiki/Reaganomics which in turn quotes from Daniel J. Mitchell, Ph.D. (July 19, 1996). "The Historical Lessons of Lower Tax Rates". The Heritage Foundation.

The fact often overlooked about the Reagan years was that the budget deficit increased from $700 billion to $3 trillion. The US went from being the world's largest creditor to the world's largest debtor nation.

I do see a point to Steven's post. The gap between the rich and the poor the poor in the US has grown dramatically.See below.

Call it what you will, but wealth has shifted.

 

Gap Between the Rich and the Poor

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