September 22, 2011
Debates about taxation need to be divided into two distinct questions. We cannot talk about taxes being "too high" or "too low," without talking about what we spend the money on. Right now, we set tax rates, we see what money comes in, and then, at the state level, we cut to the bone or go on a spending spree, and at the federal level, we spend it all, or borrow more if its not enough.<br><br>Although government is much too complicated for each individual voter to run through this entire process, our framework for government needs to:<br><br>1) Set forth what, exactly, we want our government to do, within the limits of the powers constitutionally granted to it.<br><br>2) Assess how much each item on list #1 will cost us.<br><br>3) Determine whether, given the costs, there are some functions we would just as soon do without in order to save money.<br><br>4) Add up the costs of those things we are not willing to do without.<br><br>Then, we need to determine how the costs will be distributed. There should be a standard template of proportionality, and the exact rates should be adjusted based on the total bill we've decided we're willing to pay, rather than do without X, Y, or Z.<br><br>On the whole, what it takes to provide basic sustenance should be tax free, up to say $15,000 for individuals, around $40,000 for married couples with one or more children. (No, no additional credit per each child, families need to consider costs in making, or not making, such decisions). But, in real emergencies, on the scale of World War II, or when global warming starts to have the kind of effects that make the naysayers turn red while continuing to bluster that there was no way they could have known, perhaps a special surtax of 1-3% should apply even to these tax-free income levels. If its a crisis, we all put in something.<br><br>For the rest, rates should range from 10-15%, on the first brackets of "discretionary" income up to 50% of income over $1,000,000. The primary burden should fall on those who have income well above what it takes to simply provide, but they can still keep a nice chunk for themselves.
Timothy,<br><br>Interesting article, but I would quibble with your interpretation of the parable of the talents to mean the hoarding of wealth. Remember in the parable, the talents belong to the master, and the use of the talents is not for self-profit, but to return all of it to the master.<br><br>So rather than accumulation of wealth, the parable tells us to properly invest it so that we may give even more back (or away). Rather than contradicting the Sheep and the Goats, the two parables complement and build on each other.
One word: choice. Each person ought to be able to choose who is helped by his money--the Buffet rule merely takes and maybe will "help" the less fortunate. More politically liberal people like Bill Gates have done tremendous good through private giving rather than being forced to give through such a wasteful entity like the federal government. Think what positive Kingdom work might be accomplished by the Christian "Bill Gates"es when they can choose how to give in God's name!
Siarlys,<br><br>I could not agree more with your assertion that "We cannot talk about taxes being "too high" or "too low," without talking about what we spend the money on." In President Obama's proposal, the increased revenues from the Buffett Rule would go towards paying down the deficit, and that is why I oppose it. Set aside the increased revenue as payment for required services for the poor and I am all for it.<br><br>Thanks for commenting.
This, Sean, is both the beauty and difficulty of the parable form. I like your reading, but there can be no doubt that some use the parable in the way the article suggests.<br><br>Thanks for commenting.
I wonder what would happen if the entire Federal Budget was put online and citizens could designate what percentage of their taxes should go to which programs as they pay their taxes.
Tim, I'm confused. Do you oppose any tax increase to pay down our deficit, or are you just saying you oppose any cuts to services for the poor?
I'm suggesting here that the directive of Matthew 25 is not met by the Buffett Rule if the effect of the tax hike is to pay down the debt. Additionally, if the only way to pass the Rule is to offset it with cuts to services for the poor, then I can't support it.
Also, I think that tax increases to pay down the debt set a dangerous precedent--much like government bailouts do--in the sense that they may encourage the same behavior that created the debt in the first place. I think addressing the debt through changes to spending forces us to re-evaluate what we value most; consequently, we have a clearer idea of both the role we want the government to play and the funding levels necessary to play it.
And lastly--don't mistake my last comment as some form of conservatism. In the end, I think that taxes need to be much higher than they are in order to support an acceptable level of spending on services. I just think we first need to have the conversation about what weÂ want the government to spend taxpayer money on.
In some fields of economics and a related branch of political theory known as public choice, people have thought about this problem. Â A very brief summary is that public goods (i.e., things that many people can use without diminishing the utility of them for others and that people cannot be excluded from using, like the military, or public parks) will be underfunded because it is possible for people to free ride (not support services they use). Â For this reason and some related ones, the allocation of money across programs will not be ideal to serve the common good. Â The Founders were worried about this "tyranny of the majority," and in part that explains the structure of our government. Â LocalÂ governmentsÂ and organizations are often better suited to enabling groups of people to fund public goods (as the economist Coase showed), but in the case of goods that are solely the responsibility of the federal government (like defense), problems arise in a purely representative system.<br><br>js
Interesting. One of my criticisms of the faux-conservatives who dominate the current Republican Party is that they rail about the enormous size of the debt, but refuse to raise taxes to pay it down. In fact, better than half of the debt was run up by Republican administrations, who were convinced that "deficits don't matter." If we are serious about paying the debt down, then that has to be one of the things we do with any increased tax revenue. It is costing us a huge amount of interest, which could better go to pay for expanded services.<br><br>I think a special surtax to pay down the debt, separate from the necessary taxes to support appropriate government functions, would be a good idea. Voters would think twice about letting the likes of Reagan and Bush tell us we can have our tax cuts without cutting programs that, let's face it, a majority of Americans wouldn't want to do without.
I think we are largely on the same page here (and that we would both get to the same place eventually). I support higher taxes in the end, but I think we first need to settle on exactly what we want the government to provide, for only then can we determine appropriate rates. Once that is settled, we can figure out a way--probably through a mix of tax and spending measures--to systematically pay down the debt. By the by, I hope I did not give off the air of a faux conservative--I am a liberal nut-job according to many of my Christian friends.
I'm not sure that the government taking money from me by force and then giving it to poor people would qualify me as a sheep.Â If it does, then apparently anyone who pays taxes is going to heaven, especially rich people who pay the bulk of the taxes.Â That seems to contradict the statement about camels and the eye of a needle.
I used the term faux conservative in the third person, not the second person, because I had gotten the sense that you were not one. I wasn't so sure from the original post where you were going.
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