Everybody hates the rich. Certainly the writers of the scriptures had plenty of warnings to the rich.
First truth: it is undeniable that the scriptures make it clear that the rich should voluntarily give of their substance to the poor. The number of passages, especially from the Book of Mormon, emphasizing this is simply overwhelming.
Second truth: you who are reading this are most likely rich. Yes, you, the one who loves to bash the rich thinking it is anybody but you. Compared to most of the world’s inhabitants, you are rich. If you don’t believe me, travel to India or China or Africa or Latin America, where the vast majority of people get by on a few hundred dollars a month or less. So, go look at yourself in the mirror, buddy. When the scriptures are talking about the rich, they are probably talking about you. Take that beam out of your eye.
Now, on to some myths.
Myth number one: in the evil capitalist United States, the rich are getting richer. Actually, not true. It turns out there is a lot of mobility among the rich. One year, you’re up, the next year, less so, and a few years go by and you have lost it all. And sometimes middle class people like Mark Zuckerberg hit it big and become unexpectedly rich. The Treasury department actually publishes data on income mobility. When you study the data, it turns out that when you compare the rich from 1996 — the super-rich who made the top 0.01 percent of income — 75 percent were in a lower income group by 2005. The median real income of super-rich households went down, not up. The rich got poorer. For that period, people who were poorer actually did better than the super-rich when you compare growth of income.
Now it is true that the top 1 percent of people in 2005 made more money than the top 1 percent in 1996. But you would expect this: incomes as a whole should go up. But the point is, it wasn’t the same people. Some people made more money, some people made less. In fact, as I say, the majority of the super-rich (75 percent) made a lot less.
So, if what you want is a society where the rich are making less money and where the poor have an opportunity to make more money, it is already happening.
Myth number two: we can balance the budget by taxing the rich. The budget deficit for this year is going to be about $1.6 trillion. If you reinstate the Clinton-era tax rates for the “rich” (families making more than $250k per year), you get $70 billion a year. Not even close to balancing the budget.
How about getting even more money from those evil rich people? Megan McArdle from the Atlantic printed some data showing that best-case you might get $133 billion or so per year if you really socked it to those rich people. Sorry, if you want to deal with the deficit, there simply aren’t enough millionaires around. But even these numbers are incredibly optimistic. Rich people don’t like being taxed. They will change their behavior, hide their money, move their corporations overseas, etc, if you raise the taxes on them too much. Consider this: that super-evil rich guy Rush Limbaugh moved his entire business from New York, where he paid high state and city income taxes, to Florida, where there is no income tax. And when the city tried to get him to pay partial income taxes because he still travels there occasionally to visit his business, he closed down the entire business in New York and sold his apartment. What are you going to do? The rich (meaning you, you rich computer-owning guy or lady) are just mean-spirited.
Myth 3: the rich don’t pay their fair share of taxes. This is one of those subjective ones, because “fair” is subjective. But the rich certainly pay more taxes than the poor, even as a percentage of income.
The chart shows that the rich pay a much higher percentage of the taxes than they “should” compared to the percentage of income they receive. This is because we have a progressive tax structure, meaning rates go up as you make more money. So, even with all the tax shelters and deductions and high-priced lawyers and accountants, the rich still pay most of the taxes. Is that fair? Well, many think it is. But when you start hearing rhetoric that the rich should pay even more in taxes, well, you have to start to wonder what is fair and what isn’t. And you start to realize why many rich people won’t do it: they will stop working or they will move or they will change their behavior. You can only squeeze so much out of the rich.
Bottom line: the gospel is about changing the hearts of everybody, including rich people like you. Stop worrying about that mote in the other guy’s eye. Go work at a homeless shelter, pay some more money in fast offerings. Do some missionary work. Maybe you’ll even convert a really rich guy and he’ll give more to the poor.
Bummer. The last column of the chart didn’t show up. If you want to see it, go here:
http://www.fundmasteryblog.com/wp-content/uploads/2010/06/tax-policy-center-greg-mankiw-income_and_tax_shares_tpc_2010.jpg
Good points well made. A clear seperation is needed between taxes and alms giving. One is not the same as the other. The Book of Mormon states that taxes over 20% (one fifth of their substance) are an abomination.
Here in the UK I pay 40% on a larger part of my earnings. Does that go to the poor and needy? Heck no. It pays for expensive politicians and their administration.
Alms giving is truly about supporting the needs of thoae who cannot support themselves. Taxation is not an effextive way of getting money to those in need. Neither are charities who typically need to cover costs.
The Church welfare program is the only way ahead for me.
David
Myth #4: That anybody is actually calling rich people “evil” simply because they are rich.
Myth #5: That people are morally entitled to anything that they happen to have acquired without having broken the law.
As a Six Sigma Master Blackbelt, I applaud your use of data to support your clear analysis of the FACTS. It is too easy to demonize anyone who may be thought of as rich, However, we are instructed to judge righteously.
A comment or two about your analysis:
1) You are absolutely right about myth #1: Income fluctuates. In fact, the income of all people who have high incomes goes eventually to zero (except for the 3 Nephites and people in their class). Because of this, any comments about rich people need to include the fact that they will soon be poorer than the poorest person currently living on earth? Can’t we give them a break in view of their eventual poverty? (More seriously, IMO it would be better to talk about wealth than income when you define “rich”. Does your analysis simply say that very high income people slow down after the peak of their careers?
2) One could argue that because the emporers of Rome changed often (i.e. political power was not focused on one person for too long), one should not criticize their system. After all, the turnover showed that everyone had a shot. This is a facetious example, but I think it illustrates a flaw in the logic.
And here’s the counterpoint: http://www.wweek.com/portland/article-17350-9_things_the_rich_dont_want_you_to_know_about_taxes.html.
By the way, anyone who talks about these issues is going to pick and choose their data points. The rich and those who support them are going to present Social Security and state taxes don’t exist (and are going to pretend there aren’t many poor people in the U.S.).
Myth number one would look a bit different if wealth were being considered instead of only annual income. Lazy person that I am, if I somehow were among the top 0.01% of income earners for one year, I would retire to the bottom 40% for the rest of my life and live off my previous accumulation very comfortably; there are plenty of things I’d rather do with my time than trade it for wages from the top bidder. I’m a bit surprised that 25% percent of the highest 0.01% of 1996 income earners were still at it in 2005. Either they are very industrious people, or it shows that at a certain level of wealth it is hard to invest so poorly that you fail to continue making much more money than most people.
“For that period, people who were poorer actually did better than the super-rich when you compare growth of income.”
A lot of people would feel that a drop in income from $300,000 to $120,000 is doing better than a rise from $40,000 to $60,000.
Sorry. Present=pretend.
Geoff,
Regarding myth number 1, the issue is that the rich are getting richer relative to the middle and lower classes. In other words, while the individual super-rich might be becoming the slightly less super rich and while the occasional middle class (or even lower class) person wins the lottery (figuratively or literally), more of the total wealth (such as it is) is flowing upward instead of trickling down.
Regarding myth number 3, the issue isn’t so much a notion of percentage as it is a notion of actual wealth. Rich people pay higher percentages, because even at higher percentages they wind up with higher actual wealth (which is why we consider them the rich). It is also worth noting that the tax increases in question are a return to taxes that existed in the 90s (okay, it may be what Obama is proposing will increase it above Clinton-era levels, but I doubt it; however, I haven’t read his proposals yet).
Spreading the tax increase across the board is probably the best approach, but top-loading increases is also a really good idea.
Myth #4: That anybody is actually calling rich people “evil” simply because they are rich.
Myth #5: That people are morally entitled to anything that they happen to have acquired without having broken the law.
This is from comment #3.
Jeff G, from what I’ve seen you are not evil, but I’m willing to bet you are rich compared to people in my ward in Brazil who made $100/month on average. I am glad to see you are not morally entitled to your standard of living. Would you please sell all you have and go live in a cardboard box? You can send your excess to me. Thanks.
Actually, Jeff G., I do think it is immoral to have above a certain level of personal wealth (let’s say 1 million dollars). Of course, I also think it would be immoral to legislate limits on personal wealth (possibly more immoral than having that much money). So I find progressive taxation a fine moral compromise. I don’t think I would use evil to describe the rich just for being rich; but immoral, that would be fine.
Geoff B.,
I think that unless you are also encouraging the Bill Gateses and Warren Buffetts of the world to move into a cardboard box, your admonition or suggestion to Jeff G. is empty. We could divide wealth in a manner that does a better job of moving closer to equality of opportunity without all of us living in recycled paper products. There is no need to go to hyperbole.
I am rich, I have a responsibility to help those less fortunate than me. I do not appreciate the government holding a gun to my head forcing me to do it. (efficiency of execution is a completely separate matter).
Geoff B.–the other side of the coin is that I’m probably poorer than anyone in Sweden. But does that automatically make me poor? Of course not. But me being richer than many people in Brazil does not make me rich either.
The way I figure it, anyone that has basic needs that are not met (safe food, adequate shelter, basic healthcare, basic education) is poor. And yes, I realize that there are billions of poor people in the world. Including many in the United States.
Tim, true story: I lived in Nicaragua when I was in my early 20s. I saw people literally living in miserable huts all over the place. When I was in my early 20s I had $30k in college debt and perhaps an income of $1000 per month. But I was definitely rich compared to the people there. And yes, you are rich compared to them.
My point is quite simple: face it, you are rich compared to other people. Stop being so judgemental about “other people” being the rich ones. People who spend their time worrying about the super-rich are, in my opinion, violating the 10th commandment against coveting. Worry about yourself and what you are doing to help the poor. The Lord will take care of the super-rich in his own way and in his own time. You can re-read the story of the rich guy who goes to Hell in the Bible if it makes you feel better. But personally I prefer to concentrate on myself and what I can do to be more in line with the Lord’s will.
Does this mean you have to agree with me politically to be righteous? No way. Politics is a temporal concern. I really don’t think the Lord cares that much one way or another (in the grand scheme of things).
The Lord cares about our hearts. And if we are spending our time coveting, our hearts are not right (in my opinion).
“The way I figure it, anyone that has basic needs that are not met (safe food, adequate shelter, basic healthcare, basic education) is poor.”
Tim, speaking temporally, there is a HUGE problem with this statement, and I’m guessing you’re smart enough to know it. All of those adjectives are subjective. Again, when I lived in Nicaragua there were people making $100 a month who thought they had all of those things, but by our standards they did not. Jesus said the poor will always be with us, and I think one of the reasons he said that is that until the Millennium there will always be people who are relatively rich and relatively poor. If your goal is to bring absolute equality, it ain’t ever going to happen, as I’m sure you know. You will also never see everybody living in what you would consider to be adequate housing, etc, even in the U.S. Your goal is a chimera.
Now, having said that, Jesus also makes it clear that we should work to help the less fortunate. I hope we latter-day Saints are all doing that in our own way.
they will stop working or they will move or they will change their behavior.
Change their behavior? Probably. Move? Maybe, but where to? The marginal/effective income tax rates and tax-to-GDP ratio in the US are among the lowest in the OECD. Stop working? I know there are rich people who say they will stop providing services if taxes are raised (to wit: http://www.nytimes.com/2010/10/10/business/economy/10view.html ), but as long as the marginal rate on each additional dollar remains well south of 100% I’m chalking up such claims as empty threats.
Let me address the claims about myth #1 that it doesn’t address the issue of total wealth (and indirectly address Peter LLC above). This is *exactly* the point. Most of our tax revenue comes from income, not wealth. This is what opponents of the income tax have been arguing for 100 years (and longer).
During the 1930s, FDR wanted to get a lot more income from the rich. He significantly raised the income tax. He did not succeed in getting the income he wanted. (Please see Amity Schlae’s “The Forgotten Man” as the source). Why? Because the wealthy literally stopped working. If you had $10 million in wealth in 1935, you were really, really wealthy. You might have had several mansions, etc. You might have $4 million under various mattresses, in safes, etc. The wealthy can live off of their saved money. They don’t need to have new income. In 1935, people didn’t know FDR was going to be in office until 1944. They thought he would be thrown out in 1936. All they had to do was wait a year and another, more reasonable president would come along and lower tax rates. Meanwhile, they would sit on their money rather than give it all away in taxes. In the real world, this is how people who are really wealthy behave.
Steve Jobs has a miniscule salary. He lives off of selling his Apple stock every once in a while. If he had a $500k salary, we covetous Americans could get our hands on 35 percent of it (theoretically). Instead, we only get 15 percent of his capital gains when he sells his stock.
So, you may say that total wealth, not income, is the real issue of inequality, and you would have a point. But you can’t get at people’s wealth unless you start massive confiscation…or…unless you replace the income tax with a consumption tax. In the meantime, the only way to measure these things accurately is through income, as I have described in myth number 1. So, I stand by what I have written.
Peter LLC, as you may or may not know, I travel around the world regularly. I know literally several dozen people who have moved to low-tax havens like Panama (zero income tax on foreigners) and Singapore and HK, which have very low income taxes. They live there and run their businesses from there, which you can do in this day and age with videoconferencing, etc. High taxes do indeed change behavior.
Geoff, I thought this was great.
One thing that I, as a teacher of economics, scream when the “tax the rich” song is sung is that the “rich”, and anyone really, will change their behavior when taxed. To assume otherwise is very Matheusian.
So Geoff, it sounds like you are arguing that the future is that the rich will not pay any taxes. Also that nation-states have effectively lost the ability to tax rich people or corporations. If they can’t be taxed to maintain some minimal level of income equality, then, in your vision, we are headed for a dystopian future where corporations and the uber-rich act with impunity and crush us all under their heels, because the entire world gets stuck in a race-to-the-bottom vortex of deregulation and cutting taxes, eventually leading to neo-feudalism.
I’m not really sure I like your vision of the future.
(I’m basing this on your comment #18)
No, mostly I am saying that people need to be realistic about policy prescriptions. Right now, they are not being realistic and live in fantasy worlds where we can tax those evil rich and solve all of our problems. That is not the real world.
Geoff B.,
I think most reasonable people realize that raising taxes alone won’t fix things–that we also need to make reasonable government cuts. Raising taxes alone isn’t enough to fix our problems.
However, I think most reasonable people realize we also need to somehow change taxes. We can eliminate loopholes (which generally favor the rich), get rid of the income limit on social security (a very regressive tax), increase capital gains tax to a decent level, or increase taxes slightly on those who can most easily handle an increase of taxes. And we shouldn’t be afraid of allowing the IRS to enforce tax law.
There are too many citizens that believe that the answer to all our problems is to tax the rich. It’s fashionable to say “eat the rich,” but most people don’t understand the gravity of our country’s economic crisis and why taxing the rich will solve little to nothing.
This is a great video on why taxing the rich will not work:
Yet somehow a few dozen billionaires still find it worthwhile to call New York City home.
“Right now, they are not being realistic and live in fantasy worlds where we can tax those evil rich and solve all of our problems.”
I guess I’m just not aware of this being a huge problem. What I am aware of are actual leaders actually in charge of the budget, who want to slash government programs in the name of reducing the deficit and, in the same budget, actually CUT taxes for the rich. Who also support extending the Bush tax cuts on the wealthy.
The argument that is taking place right now isn’t “should we raise taxes on the rich to fix everything, or not?” The debate is one side saying “lets CUT taxes on the rich even more” and the other side saying, “look, we don’t hate the rich, but it certainly doesn’t make sense to cut their taxes even more right now, and cut social programs to pay for it.”
I honestly have no idea where these two notions you have are coming from: (1) that anybody “hates” the rich, (2) that anybody is debating a bill that just turns up rich taxes to 11 to fix everything.
Also, did you or did you not argue that you can’t raise taxes on the rich, because they will just move to Panama? I don’t see how that doesn’t entail us being already in a to race-to-the-bottom global competition vortex.
Ok, since I’ve been a bit testy this morning, I will say this:
I totally, totally, totally agree with this. And I totally agree that it is way too easy to lose sight of this, and we all do it.
#17:
“Unless you replace the income tax with a consumption tax”
In which case the black market and the rise in cash-transactions takes place and people start bartering services, etc. to avoid the tax. Having worked with about 800 small businesses as well as hundreds of thousands of consumers all over the world in my line of work I’m never surprised by the lengths people go to in order to avoid the various VATs, duties, etc. From on a small scale to hiding rolls of cash inside of aluminum tubes packed in boxes when crossing the border to the kind of stuff anyone with friends/family in Europe experiences (bringing back an iphone, computer, stocking up on various consumer items while in the US on vacation, etc.)
There will always be the incentive to cheat. You might say, that will change once the USA has a high consumption tax. No, it will just shift the incentive to some other enterprising nation to lower or eliminate their sales tax in order to take the USA’s place. Maybe more invasive policing of smugglers is needed? The law of diminishing marginal utility will (is already) come into play as governments increasing spending more and more and employing more and more people to accomplish incrementally less and less.
The uncomfortable (to the statist) solution is always individual freedom, responsibility and accountability.
I’m busy folks and will respond to some of the new comments later tonight.
One point: Chris is completely correct. A high VAT just means sales move elsewhere. The entire country of Paraguay is one big shopping center for people who don’t want to pay Brazil and Argentina’s VAT. There are really only two solutions: low, flat rates with no deductions and the spread of the Gospel, which is one means the Lord uses to get the relatively rich to voluntarily give to the poor.
Your chart which shows that rich pay more taxes than they should assumes that the progressive income tax is wrong.
King Benjamin didn’t seem to think so. (See Mosiah 4:27.)
As for government not providing aid to the poor, what about the People of Ammon who allowed the Zoramites to be refugees in Jershon? (See Alma 35.)
John Mansfield: “A lot of people would feel that a drop in income from $300,000 to $120,000 is doing better than a rise from $40,000 to $60,000.” Yes.
Paul,
We might be in agreement if you are suggesting we should put the phrase, “I would that ye should…” in place of “failure to comply will result in fine and/or imprisonment.” I fully agree that I have a heavy spiritual responsibility to pay (more) according to my ability, as pointed out in that scripture. I am doing my best to magnify that. What I’m not doing is requiring others to do that without coming to that conclusion on their own and of their own free will and choice. And doing it in an effective way with the Lord’s approval.
As was quoted in conference recently, Marion Romney said, ““Many programs have been set up by well-meaning individuals to aid those who are in need. However, many of these programs are designed with the shortsighted objective of ‘helping people,’ as opposed to ‘helping people help themselves.’” I’d add my own opinion that any system which “entitles” you to receive someone elses’ money merely by jumping few a few bureaucratic hoops does not qualify as “helping yourself”. Maybe we’d disagree on that.
In any case, my goal is for us all to echo King Benjamin’s words:”I would that ye should…” with patience, persuasion, long suffering. Rather than seeking to exercise compulsion, force, and dominion on our neighbors in order to get them to do the works of righteousness. For I believe it is the motivation and process of doing righteous works that develops a righteous people. You can’t just legislate and enforce what appears to be a righteous outcome and expect the people to become righteous without having done righteous works to begin with.
Chris, I appreciate your not taking the leap to suggest that government sponsored social programs are tantamount to Satan’s plan in the pre-mortal existence (though you come close). There are plenty of functioning governments and economies that have more social programs and higher taxes than the US does. I’m not suggesting they are superior, but I am suggesting that they are not evil in and of themselves.
Perhaps one key thing that our government programs could do (and have done, by the way, over time) is find ways to provide services (such as healthcare) for thosse who are working as hard as they can and are still not able to participate (for instance, in effective health care in the US because of high “free market” costs), or provide other supplementary services. In that way they mirror the church welfare program which focuses on commodities rather than cash (WIC or food stamps has a similar focus), in addition to encouraging someone to work for his benefit. (Even in church welfare, bishops are hard-pressed to ask the working single parent they help to work more and spend more time outside the home, for instance, President Romney’s comment notwithstanding.)
In the example of the poor Zoramites living in Jershon, there is no indication of how the decision was made. Did the religious leader or the political leader of Jershon allow the refugees to enter? Or did each family volunteer to take someone in? Or did a majority vote consitute the voice of the people to offer that protection? Since those Zoramites also enjoyed military protection, one assumes there was some government involvement in that process.
Paul,
I do agree that there are plenty of worthwhile basic services (like healthcare) that the government could provide to hardworking households using tax revenues. However, I still have a hard time feeling that the government should provide these services to the level that they currently do.
A quick anecdote to illustrate my point. A close family friend has a son with spina bifida. While they do have health insurance through the fathers work, they still have a lot of medical bills they need to cover themselves. Both spouses work to be able to cover these bills.
This couple related to me that during a discussion they had with another couple at the hospital, the other couple (also with a child with spina bifida) asked why they don’t just use government aid to cover these costs. My friends replied that they had filled out the application, but were rejected because of their income levels and the amount of savings they had. The other couple chuckled and explained how simple it was to manipulate the application. They had moved their savings to an account in their parents names, and the wife (who had previously been a working mother) had quit her job.
My friends started to ask around, and found that almost all the parents they associated with at the hospital had done similar things to avoid paying their own medical bills. None of them felt uncomfortable doing this. Many reported that they had learned these methods from the government employees who managed the application process.
I agree that if a family is doing all they can to honestly provide for themselves, but are unable to acquire basic health coverage, they should be able to find assistance from those who have more than enough. However, I don’t feel good about supporting government initiatives that force us all to contribute to a system that is so easily abused. A portion of my hard earned income is going to pay the medical bills of those families who can afford to pay for themselves. Additionally, a portion of the hard earned income of my (hypothetical) neighbor, who can’t afford his own health insurance, is going to pay the medical bills of those families.
I do believe that we as a whole suffer from a great lack of charity. We can all do a lot better at loving our neighbor. At the same time, I think our society is doing more and more to encourage people to look outside themselves for solutions to their problems, and I think this is just as dangerous as our lack of charity.
In which case the black market and the rise in cash-transactions takes place and people start bartering services, etc. to avoid the tax
Except at the borders a VAT is much harder to evade than the income tax. However, the problem you speak of is one of the reasons why a VAT / income tax hybrid is far more likely. If the public doesn’t want a trillion dollars a year or more of spending to be cut it is a near certainty that we will end up with both, and at relatively high rates.
Personally I would prefer that we used a ~10% VAT to raise about half the revenue of the federal government, and some progressive income tax system exempting those of ordinary means to raise the other half.
That and change Social Security and Medicare to a mandatory retirement savings system with a federal guarantee of minimum benefits, of course.
Paul,
Don’t worry, I see snares of satanic control in the roots of the argument to take from one and give to another. Whether or not you recognize it as such is a different matter. I see it in my own actions as well as I have a frequent desire to compel people to do things rather than patiently persuade them (and endure it and bear their burdens when they don’t). So I’m not calling your philosophy out on something that I also don’t see at the roots of some things I do. The difference I suppose is, I’m trying to cut those roots out, while you consider them a positive thing (apparently) when they yield the appropriate result (on the surface…in theory).
But you said:
“Even in church welfare, bishops are hard-pressed to ask the working single parent they help to work more and spend more time outside the home, for instance, President Romney’s comment notwithstanding.”
I hope most bishops take a self-reliance approach. If a working single parent is in a situation where they are consistently needing welfare the bishop can and should help them take steps to help themselves. I don’t seek to excuse myself from Pres. Romney’s comment, but seek to apply it. How can someone stretched to the limit be helped to help themselves? That’s a question in search of answers. I’m sure you can find some with the guidance of the Holy Spirit.
I hasten to add….
“to take from one and give to another…” …via governmental compulsion under penalty of imprisonment.
I am appalled at some of the comments. let me focus on 6 points.
1. In the last 20 years the wealthy have become richer and the poor and middle class less wealthy. The program of the Republican Party is to give more money to the wealthy (tax cuts) and take away programs that help the poor and middle class. In many cases the Democrats have been enablers in this effort. That is class warfare.
2. The use of the word “evil” is pure strawman. Few call the wealthy evil. There are plenty of other perjoritives that are used (e.g. stingy) but which are usually directed at an individual or small group which are used but which do not carry the effect of a loaded woed like “evil”
3. To expect personal charity to replace government programs is a hoot. Human nature is not that munificent.
4. Much of what is labeled charity is not. I find particularly disgusting the people who give millions for buildings that will pamper their ego by being named after them. If you are going to give money for an ediface, forget the sense of self importance.
4. There are not charitable organizations set up to do the things that Government can do. In addition, Most of the large charities are big business with great profit margins. I got my union to drop United Way because in our area over 40% went to salaries and “other” expenditures. We simply changed to giving money directly to organizatrions that use money well.
5. Many government programs are not charity. The two biggest, Social Security and Medicare, are funded by worker and Employer contributions. Student Loans and Job Corps are programs to help people get an education and jobs. They are an investment in the future of our country, not a dole.
6. There are very good and decent people who are wealthy. But there are also many who send money abroad illegally, falsify information, and exploit the system. Look at the “fraud” at Golman Sachs that is in the newspapers today. There is a reason why Christ is quoted in three different gospels where there are comments about eyes of a needle and camels.
I will give all of the responders credit, however, they did not ape Dennis Miller on Fox News who called for the disadvantaged to be eaten up on the Serengeti Plain of life
.
Stan, most of your comment has nothing to do with this post but is a copy and paste standard liberal diatribe. I have news for you: you are rich. Yes, you. You are rich compared to the vast majority of the people in the world. Yet apparently you envy others and spend your time coveting their wealth. If you are serious about caring about the poor, please concentrate your efforts on what you personally are doing for the poor, and spare us the screeds against others.
Cynthia L, regarding your #20, I’m just trying to portray how I see things. The $1.6 trillion yearly deficit cannot be fixed by simply raising taxes. The numbers don’t add up and they don’t take into account the age-old behavior of people to avoid taxes.
Some people will move to Panama (I already know many). Others for various reasons will not. If you make $2 million a year running a hedge fund, and you can run it from anywhere, you save hundreds of thousands of dollars a year by moving to low-tax locales. That’s just reality. Whether that’s dystopian or not, I’m not sure. But it is the world we live in, and we need to face it and come up with common-sense solutions.
As I say, the best solution is a lower tax rate with a larger base and fewer deductions. The Obama deficit commission made this exact recommendation. The same applies to our corporate tax.
Massive cuts in government need to take place. We need to change our expectations about what the federal government can do for us. The interest on the debt alone will reach $1 trillion a year in just a few years, and this is if the Fed continues to maintain low interest rates, which the Fed cannot do without generating massive inflation. If you actually look at the numbers, the situation is extremely grim. If we don’t balance our budget soon, the bond market will force us to. Again, this is simply reality.
One last point: there are six main areas of the budget: discretionary spending, defense, social security, Medicaid, Medicare and interest on the debt. Most people are only talking about cutting the first, discretionary spending. We need to cut defense, big-time. On Social Security, we simply need to raise the retirement age slowly over time. Block granting Medicaid and Medicare to the states does not necessarily cuts. States will be more efficient at handling these programs without federal interference. Many people may find that their care improves significantly.
My point is: don’t believe all the hype about how this is all about cutting care to the poor. In some cases, care may actually improve. Retiring a few months later will not kill you. Don’t believe the demagogues.
Jeff B, and remarkably, if that family lived in Canada, they wouldn’t have to go through those hoops. There’s nothing morally wrong with single payer health care.
Chris, I would never suggest that bishops don’t do their best to work with families to instill self reliance. That has certainly been my experience (including as a bishop). But there are circumstances where one cannot squeeze more blood from the stone.
In our cries for self-reliance, let us never forget to lift up the hands that hang down.
Geoff B, any US citizen, regardless of his residence, is required to pay US taxes on his global earnings.
Paul, many people have dual citizenship or are renouncing their US citizenship because of taxes. I certainly don’t advocate it for me and mine, but it is the modern-day reality. You also may want to consider the fact that their income is not U.S.-based and therefore there are no W-2s and no way to keep track of how much they are being paid. There are many ways to get around the tax laws if a lot of money is at stake (again, not that I personally advocate that).
http://www.dailyfinance.com/2010/07/20/more-rich-americans-renounce-u-s-citizenship-for-lower-taxes/
“If you reinstate the Clinton-era tax rates for the “rich” (families making more than $250k per year), you get $70 billion a year. Not even close to balancing the budget.”
A mere $70 billion? Psha! That’s only $10 billion MORE than House tea partiers were saying was absolutely necessary to cut from spending if we are to balance the budget. And, if you multiply $70 billion over 20 years, that equals $1.4 trillion, only $100 billion more than that the savings needed to balance the budget. That is less time than it will take me to pay off my student loans and mortgage. Yeah, that is just chump change that we should ignore.
Paul, many people have dual citizenship or are renouncing their US citizenship because of taxes.
It’s worth pointing out, however, that the IRS is aware of this and has taken measures accordingly:
“Amended IRC 877 eliminates the tax avoidance criteria for imposition of the expatriation tax on certain types of income for 10 years following expatriation, and creates objective criteria to impose the tax on individuals with an average income tax liability of $127,000 for tax year 2005 (or higher amount for later years) for the 5 prior years or a net worth of $2,000,000 on the date of expatriation. In addition, it requires individuals to certify to the IRS that they have satisfied all federal tax requirements for the 5 years prior to expatriation and requires annual information reporting for each taxable year during which an individual is subject to the rules of IRC 877. Further, expatriated individuals will be subject to U.S. tax on their worldwide income for any of the 10 years following expatriation in which they are present in the U.S. for more than 30 days, or 60 days in the case of individuals working in the U.S. for an unrelated employer. Finally, even if they do not meet the monetary thresholds for imposition of the IRC 877 expatriation tax, the new law provides that individuals will continue to be treated as U.S. citizens or long-term residents for U.S. tax purposes until they have notified the Secretary of the Department of State or of Homeland Security of expatriation or termination of residency.”
See “Expatriation Tax”
In reality, it may be difficult to enforce the law and impose the envisaged penalties, but renouncing citizenship/terminating residency is neither a simple nor a sure fire way to avoid US taxes.
“The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.”
http://news.yahoo.com/s/ap/20110417/ap_on_bi_ge/us_no_taxes
Seems like the middle class and upper middle class might want to do some complaining, as they’re paying a higher percentage of taxes than the super-rich. 17%. That’s ridiculous.
I like the way Nibley put it when it came to discussing meeting one’s needs: “More than enough is more than enough.”
People interested in facts rather than rhetoric on this subject may want to read the following:
http://online.wsj.com/article/SB10001424052748704621304576267113524583554.html?mod=djemEditorialPage_h
Tim, before you commit the sin of coveting the money of others, you may want to read this:
http://www.powerlineblog.com/archives/2011/04/028839.php
The author “John”, at Powerline, seems to be more interested in rhetoric than facts from my reading of his comments on the AP story: “Of course, Barack Obama is on record as believing that the capital gains rate should be raised even if it produces less revenue, thus requiring the rest of us to pay more, just out of spite. No doubt many other Democrats share that view.”
I wonder if they’ll institute a “spite test” before they’ll let someone register as a Democrat.
Actually, Mark N, people (mostly liberals) say they want to raise taxes all the time despite the fact the tax increases don’t raise revenue. What could be the purpose except for a)coveting or b)punishment?
#52: … people (mostly liberals) say they want to raise taxes all the time despite the fact the tax increases don’t raise revenue.
Could you provide a source for one of these quotes that are voiced “all the time”? I can’t recall anyone ever saying any such thing, but maybe I’ve just got my blinders on. I’m sure that “mostly liberals” often talk about the need to raise taxes on some people, but I can’t imagine them asking for such a thing while simultaneously admitting that they know that tax revenues won’t go up in spite of it.
Mark N, lowering capital gains from 20 percent to 15 percent increased revenue, yet nearly all Dems opposed it.
Geoff, you might be interested in this:
http://www.globalrichlist.com/
Cynthia L, looks really cool. Not working well from my blackberry for some reason, but I get the point. Very important message for all Westerners to understand.
Geoff, just an additional and perhaps minor point.
According to D&C 19:26, it is possible for us to covet our own property. In other words, it isn’t just people who think somebody else ought to pay higher taxes who may be guilty of coveting and greed. People who are uncharitable are breaking the 10th commandment, although that is probably the least of their sins.
Geoff B.: Maybe I misunderstood your #52, but it read as if you were claiming that a Democrat had been caught saying, in a single statement, that they know that raising taxes doesn’t increase revenue, but that they want to do it despite having such knowledge. Are you now saying you can’t provide such a quote?
Sorry, your #53, not #52.
Mark n, did revenues go up after the Reagan tax cuts, yes or no, and did the majority of deems favor that policy, yes or no? JFK clearly showed in 1961 that cutting taxes raises revenue. The evidence was there for all to see. Yet dems favor class warfare rhetoric over sound policy. And this is exactly what we’re getting from the current administration and dems in congress.
Mark brown, glad to see you admitting that you covet your own property. Please sell it all off tomorrow and send a check to me. I don’t covet your property – I favor policies that would allow you to keep more of it, but i’m sure I can put it to good use.
If there is any doubt of the sin of covering others’ property, you may want to read Micah 2:1-2.
“before you commit the sin of coveting the money of others…”
What? Who said anything about coveting the money of others? What does this have to do with anything?
I’m not complaining about my tax rate. Really, right now I’m so poor I have no reason to complain. I’m worried about the debt the U.S. is in. I’m worried about my fellow church members who don’t have healthcare, or who can’t afford to live in safe neighborhoods. I’m worried about the future of my children.
I realize people aren’t going to see eye to eye on this issue, but I hope we can be civil when discussing it.
Geoff B., I’m sure you don’t need me to tell you that any given number of observations reporting a rise in revenues when taxes are cut does not ensure that revenues will fall when taxes are raised.
People interested in facts rather than rhetoric on this subject may want to read the following…
I personally don’t view facts and rhetoric as occupying opposite ends of some kind of objective-subjective spectrum, but your use suggests that you do and so I wonder why you think the WSJ opinion pages would be a good source of unspun facts?
If lowering taxes always raised revenue then, following, lowering the tax rate to nothing would increase revenue the most. That obviously can’t be. Raising taxes from 0% to 1% would clearly raise revenue. How about 1% to 2%? At the other end, a 100% tax rate would also eliminate all revenue, since it would end all money flow through the economy. Obviously there is some kind of middle ground; an arguable one, since data is _read_ by both sides in order to make their points. The quickest glance will show that even Nobel winning economists do not agree on this stuff. How much less I’m inclined to buy someone’s zippy post to a political blog, or whatever.
Lowering taxes raises revenue, in theory, because it allows for more and more rapid flow of money through the economy, raising the income of not only those who spend that tax money, but also of anyone upon whose activity that money is spent. I “keep” more of “my money”, I buy a car, the car dealer takes his family out to dinner with his commission, the waitress buys a pack of cigarettes with her tip, etc. etc. (Whose money is it? Seeing that everyone needs it and it passes from one to another systematically.) Not only myself, but the car dealership, a car dealer, a restaurant and a waitress have all increased their income and potentially been taxed. But, government spending also moves money into the economy. Defense contractors and their employees, as well as SS recipients, all spend the money they get from the government, providing downstream, taxable income in the same fashion. When any sector of the economy slows the rate at which it spends, the entire economic structure feels some impact. An “entitlement” recipient who is cut off will no longer be able to spend that money, and the businesses s/he frequents will feel the reduction in income. Spread too broadly across the whole, this is a recession, or a depression.
I think one has to get these ideas firmly in one’s head before saying anything meaningful about the economy. This cannot be thought of as balancing a checkbook. Money directed in different ways will speed or slow the economy, and different people will suffer or benefit. (not that’s it’s a zero sum game) (The way we’ve been structured, increasingly since Reagan, has tended to benefit the wealthiest. In spite of amazing increases in productivity and the total scope of the economy, the middle-class has seen negligible augmentation, and now what looks like a slow decline of its money power. Who is stealing from who?)
Every move has consequences, perhaps most of them not totally foreseen. When government cuts spending, or raises taxes above an unknown and arguable level, money flow through the economy slows down and everyone potentially pays. Not only the recipients of government largess, but all of us downstream from their spending have benefited from government spending. Much of it is going to have to end, and everyone, except those able to protect their wealth, are going to pay. Similarly, not only the immediate beneficiaries of tax cuts have benefited from those cuts. What we are going to see in order to get the deficit in hand is, it seems to me, a very painful reorganization of the economy. Among my conclusions is that the pain is minimized if we do not panic and move faster than is truly necessary. Radical plans for cuts will bring our economy to its knees.
History moves on, power accrues here or there. The poor get trampled. We’ve collectively had an anomalous historical reprieve based on the fact that all sources of power, not only from within the government, have been checked. Now, we have forces possibly as powerful as government, any government, less and less checked. It’ll take you and I, grind us and spit us out. Welcome to the Telestial Kingdom.
Thomas Parkin, the arguments in your first two paragraphs have basically been rejected by most demagogues (mostly Democrats) in recent times. Every time anybody discusses any kind of change in the tax code that doesn’t involve raising taxes on “the rich” we get long, windy claims about how the poor will suffer. President Obama gave a long, unserious speech along these lines just a few days ago in response to Paul Ryan’s budget plan. Notice that under Ryan’s plan tax rates would go down but deductions would be eliminated, so for many people total taxes would go up. No matter, time to demagogue.
The truth of the matter is actually just as you claim: when the highest rate was 91 percent, we disincentived work. When we cut the rate (JFK did it), people went back to work. When Reagan cut it further, we had a boom in revenue. But we still had all kinds of loopholes and exemptions, which have multiplied over the years.
The truth is that the best thing for the economy would be a flat tax with no exemptions. Absolutely none. This would raise the most revenue. Twenty percent might be a good rate to start with. It would still be progressive because a guy making $1 million a year would pay $200k in taxes (definitely more than he pays now), a guy making $100k would pay $20k (probably more than he pays now) and a guy making $50k would pay $10k (probably more than he pays now). So, even though taxes would go up on most people (Steve Forbes’ plan exempts those who make less than $30k a year), most people would favor it because of the efficiencies it brings to the marketplace.
We probably will never see a flat tax because most politicians would rather demagogue than offer solutions.
As for your claims about Keynesian spending, I would remind you that government can only spend money in two ways: 1)by taxing people and taking money from them that they would spend themselves or 2)printing new money. Both are the least efficient ways of bringing productivity to the economy. People make the most efficient choices when they choose how they spend their own money. Printing money (like we are doing now with QE2) is extremely dangerous and is simply a way to fund big government and war. I would hope the complete failure of the stimulus plan over the last two years would end the fantasy that government spending could resolve anything. We have had the worst economic “recovery” since the 1970s, the last time we were stuck in stagflation.
Tim, regarding your #63, I’m simply trying to once again make a point that people need to bear in mind: almost all conversations about “the rich” tend to involve people like yourself worrying about how much money other people make and how other people can take that money away from them. Go read Micah 2:1-2. Covetousness is a very serious offense in the Lord’s eyes.
Now, having said that, it is possible to covet your own money. I address this concern way up in the second paragraph of this post (although somehow a large number of readers apparently missed that).
Here’s how I feel we need to balance these two realities. On the one hand, we need to be generous in our tithing and our fast offerings. We need to give to other Church funds when we can. We need to give time in service. We can probably never do enough, but I have found that when I am doing something I feel like I am on the right path.
On the other hand, we need to stop worrying about about those rich people and all their money. The Lord will take care of them in His own good time and in His own good way. In my opinion, many people sin and become covetous when they obsess about the rich. So, if a politician begins to complain about how the rich should pay more because it is “fair,” my question would be: why are you so concerned about the rich? Worry about yourself and what you are doing.
What does this mean in terms of policy? Concentrate on what works, what raises the most amount of revenue without negatively affecting the economy, not on what is “fair” (which is really a code word for “how can we get more of other peoples’ money?”)
Geoff B., I agree that we need to worry more about what works, and not about sticking it to the rich. But I don’t buy the idea that low taxes on the super-rich (currently 17%) is what works best. Plenty of rich people agree (including Warren Buffet, who talks about his secretary paying more taxes than he does). Please don’t assume those who disagree with you do so because they are coveting what other people have.
Tim, why doesn’t Warren Buffett send in extra checks to the Treasury? Sorry, he is not believable on this issue. He wants other people to pay higher taxes but is not willing to do it himself. The Treasury accepts donations. Let him put his money where his mouth is, and let’s see those checks to the Treasury.
As I said above, the reason people like Warren Buffett pay lower taxes is that most of their income is from capital gains. The capital gains rate was lowered to 15 percent precisely because it increased revenue. Read the attachment I sent you above. (The other reason that the capital gains rate should be lower than the ordinary income rate is that the vast majority of people who make capital gains are involved in one-time transactions that is not normal income. They are farmers selling a lot of land or people selling a business. There is no way it would be “fair” to tax a one-time transaction at 35 percent, rather than 15 percent. The fact that Warren Buffett mostly lives off of his capital gains is a sign that he has deliberately designed his life to avoid paying taxes. He could take a huge salary and pay more income tax, but he doesn’t do this precisely because he wants to pay lower taxes. Again, don’t trust a word he says on this issue).
If you really cared about what works, you would say, “hey, that’s great, we lowered the capital gains rate and we got more revenue! Yay us!” Instead, what I see is a lot of worries about other peoples’ money.
we need to stop worrying about about those rich people and all their money. The Lord will take care of them in His own good time and in His own good way.
I’m not sure I follow. On the one hand, “we can probably never do enough” to interfere in the lives of the poor, but on the other we should leave well enough alone when it comes to the rich because God will sort it out. What qualifies the rich for this extraordinary degree of attention from their Creator? And why must the poor rely on the weak arm of the flesh for their daily bread? Are we not all beggars?
Geoff,
Many differences. No time to tackle them. Among the differences: I think you are misreading and overstating the feelings people have towards the wealthy. I also think you are overplaying the taxation is theft angle. I don’t think your position on these is nearly as strong as you seem to think it is. If I was going to take the time, these are where I’d argue with you.
Best!!
Peter LLC, it seems pretty clear to me. The warning against covetousness is a warning against being a busybody, a warning against worrying about other people when we should concentrate on ourselves. There is little we can do to change the badness of those around us (except to bring them the gospel) – there is a lot we can do to change ourselves. There are people in Brazil who make $100 a month and are supremely happy. There are millionaires who are miserable. Stop envying the wealth of others. And also realize that you are a lot richer than most people in the world.
Just read 72, and then 73. I give up. Sigh.
People aren’t interested in taking money away from the rich just to be punitive. What they are interested in is making sure that the poor have their basic needs being met. Teaching people the gospel can solve a host of problems, but people aren’t able to put the teachings into practice until their fundamental needs (heal the sick, feed the poor; for some strange reason, Christ decided that it was necessary to take care of those needs first when He visited the Nephites, and then, when that was done, the teaching began) are met. Nobody would give a rat’s patoot about how much time the rich spent rolling around in their money if the needs of the poor were being met. They’re not. I suppose we should just tell them, “Hey, the poor people in Brazil are living off of $100 per month. Get over yourselves.” And the Good Samaritan should have counselled the mugged guy in the gutter how much better off he was than others less fortunate; after all, he wasn’t hurt so bad that he couldn’t heal of his wounds if someone else would just come along and actually give him the care he needed.
Don’t worry. Be happy.
“Nobody would give a rat’s patoot about how much time the rich spent rolling around in their money if the needs of the poor were being met. ”
I agree with you that we should all be concerned with helping others to help themselves as well as helping those unable to help themselves.
However, I disagree with the above quote. It is demonstratively false. Either that or you are not satisfied with any attempt at progressive taxation or socialism in the world. I have not seen a country, regardless of what they offer (monthly child allowances, free education, free health care, free food, free housing, free vacations, etc.) that does not have people demanding the “rich” need to pay more to support the poor.
So if as a policy you are saying we need to “double Europe” as it relates to the level of taxation, and then all will be well in Zion, please come out and say so. Otherwise it’s a red herring to say no one will care about the rich’s money as long as the poors’ needs are being met.
The sad truth remains, you will never meet the poors’ basic needs by taking from a few and giving to many.
Please come out to Sacramento, CA, and let the homeless people camping out on the banks of the American river know that it’s not true that their needs are not being met, and that if they would just give a little thought to their situation, they’d find that their really not all that badly off.
When I can stop reading about the homeless and the poor in America, and about how they swamp the free health clinics that get organized for them, then I’ll believe their needs are being met.
“Crowd camps out for first day of free health clinic at Cal Expo”
Read more: http://www.sacbee.com/2011/04/02/3522133/crowd-camps-out-for-first-day.html#ixzz1JzqVQnTD
A comment from a reader of the above link:
“I have a nurse friend from Fresno who is here helping at this event, volunteering lovingly, carefully, gratefully, with a glad heart, doing what she gets paid to do, for those who could not pay her. I cannot wait to see her this evening, to hear her witness of the gifts of gratitude from those served, and for being able to heed the call! She is a first generation American whose parents arrived from China to pursue the American dream; she never dreamed this need, at this magnitude, could exist here.”
Mark N, I think you ought to help them. I think you ought to organize volunteers to help them. Be a good example, go among them as the savior would. Appeal to peoples’ good nature to voluntarily help them. Just don’t force other people to help them by confiscating their wealth. You cannot force people to be virtuous. When you try, you get neither virtue nor true charity.
And by the way, you might take some time to look at the economic policies that the left has created in California. It has one of the highest levels of taxation and regulation in the country. The left has destroyed jobs in the name of green energy and put literally hundreds of thousands out of work because of a small fish in the delta. The best way you could truly help the poor for their lifetimes would be to support policies that would create jobs. But the left would rather have millions of impoverished living off of others, creating entire generation of misery and dependency.
Well, of course the left would rather create an entire generation of millions, living in misery and dependency.
And Sean Hannity thanks you for your viewership. You are, after all, a Great American.
Sadly, it appears you are correct, otherwise the left would adopt policies that put people to work.
The warning against covetousness is a warning against being a busybody, a warning against worrying about other people when we should concentrate on ourselves. […] Also realize, you are a lot richer than most people in the world.
As a wealthy man, I am one of the rich whom God will take care of in his own good time. So are the rest of the posters. I’m sure I speak for them all when I urge you to review your faithless attempts to infringe on our stewardships in the hopes that you will recognize and repent of the sin of busybodiness:
Stop envying the wealth of others.
I think you ought to organize volunteers to help them. Be a good example, go among them as the savior would. Appeal to peoples’ good nature to voluntarily help them.
Let him put his money where his mouth is
Go read Micah 2:1–2.
please concentrate your efforts on what you personally are doing for the poor
Please sell it all off tomorrow and send a check to me.
Retiring a few months later will not kill you.
Wow Peter, limited liability corporation, I am honored your are reading me so carefully. I know this will be difficult for you to comprehend, but the difference between our philosophies is that you want to force others to do what you think is virtuous by taking their money and distributing it to the people whom you consider less fortunate. My philosophy, on the other hand, allows you the freedom to do what you want with your riches, while noting that Christ would encourage charity. But I would never force you to do anything. The moral inferority of your approach should be obvious (but I’m guessing is not). The busybody is the one forcing his way into another person’s life, not the one saying, “let them be free to make their own choices.”
Btw, Peter limited liability corporation, was the Savior a busybody when He stood up for free will as opposed to the forced virtuousness in Satan’s plan?
And with that, ladies and gentlemen, we have arrived at the end of this thread. The left has shown up with its usual empty and bankrupt arguments, the same arguments that are bankrupting most of the world currently. A few brave souls have stood up for freedom of choice. Others insist on forcing “virtue” and good works on the unconverted for the good of the majority. Sounds eerily like the pre-mortal council to me.
You can post, but your posts will be moderated. Stay tuned. There will be more.