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eniwetok

(1,629 posts)
Fri Apr 8, 2016, 09:55 AM Apr 2016

Here's The Moral Basis For Progressive Taxation

Sorry for the title change... I think this new one better describes the topic...

Bernie often says corporations and the rich need to "pay their fair share"... and sure. Sounds good. But I have no idea what it means. Some seem to think that if I dare suggest such a phrase be fleshed out... that I'm a closet right winger when what I want the left to do is come up with a strong narrative for progressive taxation. So... to borrow what I've posted in the Thom Hartmann forum...

What would Steve Job's concept for the iPhone be worth in an impoverished 3ed or 4th world nation without the prerequisite prior inventions or necessary infrastructure to exploit that idea?

What infrastructure? How about a nation secure from invasion provided by our military? How about law enforcement provided by various federal, state, and local agencies? What about our highways, harbors, and airports that allow for easy transport of product to market? How about a literate and educated workforce? What about a economic system that allows for the existence of limited liability corporations which facilitate business by protecting the private property of business owners and shareholders. What about FREE intellectual property monopolies such as patents, copyrights and trademarks? What about FREE limited liability protection for corporations and shareholders. What would be the added costs if a corporation had to purchase the above as insurance in the private market? What about a judicial system to protect such freebies and oversee contract laws? What about stable monetary and banking systems from which to get credit? What about a regulated stock market that permits corporations to raise capital? What about subsidized capital gains tax rates? Arguably the business was the nations first official welfare program.

What about a system to insure public health... from clean water to vaccination programs to prevent pandemics? What of publicly financed basic research that saves companies money in R&D? What of a system that redistributes wealth so poor states or towns aren't left behind or a nation that permits workers enough income to provide demand for products?

When run well, the public and private sectors bootstrap each other to higher levels of prosperity. Without such infrastructures, that killer idea for Steve Job's iPhone would be worth nothing. Great wealth might not even be possible. And THIS is the moral basis for a strongly progressive tax code... that the rich pay more for their use of these freebies and infrastructure. Perhaps the income tax should be renamed the Opportunity Tax. It's a tax on the opportunity this nation provides to accumulate wealth.

16 replies = new reply since forum marked as read
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Here's The Moral Basis For Progressive Taxation (Original Post) eniwetok Apr 2016 OP
Exactly Abouttime Apr 2016 #1
50% at $100k???? eniwetok Apr 2016 #3
Defining "fair share" as an allocation of the costs of government 1939 Apr 2016 #4
OP wasn't about corporate taxation eniwetok Apr 2016 #6
Good thought, but rogerashton Apr 2016 #2
missing the point eniwetok Apr 2016 #5
But I didn't miss your fallacy. rogerashton Apr 2016 #7
sorry... no fallacy eniwetok Apr 2016 #8
I have no problems with some inequality eniwetok Apr 2016 #9
Well, it already IS pretty well "fleshed out" whatthehey Apr 2016 #10
missing the point... eniwetok Apr 2016 #12
I suspect he, and I know I, assume it is axiomatic whatthehey Apr 2016 #13
We can't have a bumper sticker debate eniwetok Apr 2016 #14
Sadly, we can have nothing but whatthehey Apr 2016 #15
I was responding to eniwetok Apr 2016 #16
It's gotta be the shoes. Fla_Democrat Apr 2016 #11
 

Abouttime

(675 posts)
1. Exactly
Fri Apr 8, 2016, 10:02 AM
Apr 2016

Any income over $100,000 should be taxed at 50%
Capital gains should also be taxed at a 50 percent rate. The generation of wealth, capital gains, is not possible without government in place, the government should share equally in the distribution of that wealth.

eniwetok

(1,629 posts)
3. 50% at $100k????
Fri Apr 8, 2016, 10:20 AM
Apr 2016

I think that's WAY too extreme. The big problem the US has is excessive inequality at the top... and how the ultra rich have benefited by the irresponsible tax cuts over the past 35 years which is a big cause of the debt. So perhaps 50% starting at $10 million and I'd like to end the capital gains tax break except in cases where risky investments can benefit us all... such as medical and energy research... and if someone sells their home. And why should capital gains be exempt from FICA? There should be no tax breaks for speculation on Wall St or commodities...

CBO estimates that more than 90 percent of the benefits of reduced tax rates on capital gains and dividends will accrue to
households in the highest income quintile in 2013, with almost 70 percent going to households in the top percentile.

http://www.cbo.gov/sites/default/files/43768_DistributionTaxExpenditures.pdf

1939

(1,683 posts)
4. Defining "fair share" as an allocation of the costs of government
Fri Apr 8, 2016, 10:22 AM
Apr 2016

While the OP talks about corporate taxation, the first poster jumps to individual taxation.

Why 50% at 100K? Is than more fair than 47% at 120K? What is magic about the 50% number or the 100K number? Would 99% over one million be "fair share"? If someone holds a stock for twenty years and sells at a profit, how much of that is "gain" and how much is "inflation"?

Since we are going to tax all corporate profits to pay for the government, why should distributions from those profits (dividends) be taxed at all?

Maybe we should balkanize the budget with corporate income taxes paying for defense and personnal income taxes paying for everything else. How would that strike you?

I am sure the New Yorkers, New Jerseyites, and Californians on DU will support 50% over 100K.

eniwetok

(1,629 posts)
6. OP wasn't about corporate taxation
Fri Apr 8, 2016, 10:27 AM
Apr 2016

It was more about how individual income is greatly enhanced, in part, through the freebies corporations get.

rogerashton

(3,918 posts)
2. Good thought, but
Fri Apr 8, 2016, 10:13 AM
Apr 2016

That's a sort of reversal of John Rawls' concept of justice as fairness. Rawls thought that inequality ought to be tolerated insofar as it improves the condition of the worst off. Now, cellphones do that -- fishermen and farmers in India increase their productivity and better respond to demand thanks to cell-phone services, and the people who depend on them for food are also better off as a result. These are some of the poorest. Well, it's not the iPhone that does that -- much simpler and cheaper phones will do it -- and those cheaper cellphones are not a result of entrepreneurship but were created by investments of Bell Labs, then part of a regulated and established monopoly, and the federal government. But the Bell Labs engineers were probably paid a lot better than the Indian fishermen, farmers and consumers, and Rawls would see that inequality as justified.

But you seem to be saying that equalization is OK as long as it facilitates the huge fortunes of the Billionaire Class. Interesting, but not persuasive.

If you really want a rigorous economic rationale for progressive income taxation, download Sir Anthony Atkinson's recent book.

eniwetok

(1,629 posts)
5. missing the point
Fri Apr 8, 2016, 10:22 AM
Apr 2016

My post has NOTHING to do with cell phones... it's only an example to counter the claims on the right that the rich are self made... somehow independence of the broader economic and governmental context.

rogerashton

(3,918 posts)
7. But I didn't miss your fallacy.
Fri Apr 8, 2016, 11:46 AM
Apr 2016

Yes, you made the case that the rich are not self-made. So far as I know, nobody except a few rich thugs think they are.

But that does not justify progressive taxes. Your argument is something like this:

Major Premise: "If fortunes were self-made, then progressive taxation would be wrong."

Minor Premise: "Fortunes are not self-made"

Conclusion: "Progressive taxation is right."

But there is a double fallacy here. If the conclusion was "Progressive taxation is not wrong." then it would be a fallacy of denying the antecedent. (Perhaps that is what you meant, not quite clear.)

In addition, of course, going from "Progressive taxation is not wrong" to "Progressive taxation is right" is a further fallacy, affirming a disjunct.

Like you, I used cellphones only as an example. Chill out, dude.

eniwetok

(1,629 posts)
8. sorry... no fallacy
Fri Apr 8, 2016, 12:24 PM
Apr 2016
Yes, you made the case that the rich are not self-made. So far as I know, nobody except a few rich thugs think they are.

I know no rich thugs, but I do know that narrative is deeply held even by True Believers on the right. Perhaps you never meet them at DU

But that does not justify progressive taxes. Your argument is something like this:

Major Premise: "If fortunes were self-made, then progressive taxation would be wrong.

Minor Premise: "Fortunes are not self-made"

Conclusion: "Progressive taxation is right."
"


No, that's YOUR take. There's also a ability to pay argument. You're falsely assuming that there are no other justifications for progressive taxation when I'm merely adding one. Maybe my title change implies a single reason.

eniwetok

(1,629 posts)
9. I have no problems with some inequality
Fri Apr 8, 2016, 12:34 PM
Apr 2016

I think there should be rewards for innovation, self-improvement, and hard work. That's not an exclusive list. There certainly are social needs that can't be met by the market. I have problems with grotesque inequality especially if it's the result of government policies such as taxing unearned income at a lower rate than earned income.

As for But you seem to be saying that equalization is OK as long as it facilitates the huge fortunes of the Billionaire Class. Interesting, but not persuasive.
I have NO idea what you mean... nor do I have any clue where you're getting that from anything I wrote. Perhaps you should project less.

eniwetok

(1,629 posts)
12. missing the point...
Fri Apr 8, 2016, 02:04 PM
Apr 2016

The issue I was addressing was that Bernie... the one I most associate with the phrase make the rich and corporations "pay their fair share" needs to go beyond that phrase and flesh out WHY what he proposes is morally fair. I've been listening to Bernie on the Thom Hartmann show for a decade and Bernie tends to just let the phrase... one that contains that unexamined assumption, stand alone. But he's not always going to be talking to libs and progressives... and slogans just won't cut it in a debate with Cruz or Trump when he's trying to change minds to vote for him.

whatthehey

(3,660 posts)
13. I suspect he, and I know I, assume it is axiomatic
Fri Apr 8, 2016, 02:17 PM
Apr 2016

People have basic needs, and auxilliary wants. People can quibble with minutiae of Maslow but his basic thrust is universally acknowledged. The less you can afford, the greater percentage of what you have is chasing the lower stages of the hierarchy, so taxing you at an equal rate to those whose needs are well and truly satisfied along with an ever-increasing amount of wants as income increases, is increasing a greater harm to a greater number. A just civilization will tax more where the reduction in disposible dollars taxation causes harms the least number to the least extent. In short, taxing a person who cannot afford decent shelter and food the same as a person who might simply have to settle for a silver-plated Bugatti instead of gold when taxed is not really up for debate ethically speaking is it?

If utilitarianism doesn't seal the deal, there's the Willie Sutton answer too.

eniwetok

(1,629 posts)
14. We can't have a bumper sticker debate
Fri Apr 8, 2016, 02:27 PM
Apr 2016

And the phrase is not axiomatic to those who sit on fence or disagree. They will need some flesh on the bones before they buy into the real world policies and justification behind a bumper sticker slogan... and it must meet some basic conditions for it to believed... such as it's a plausible explanation and that it's moral. I don't think ANY policy can be sold... good or despicable, unless it's presented in a way that meets those criteria.

whatthehey

(3,660 posts)
15. Sadly, we can have nothing but
Fri Apr 8, 2016, 02:51 PM
Apr 2016

There is a vanishingly small amount of the US electorate who have the patience to consider even my brief precis above. If it's not Aaron Rodgers' completion percentage or Kylie Jenner's favorite nail enamel too few people care beyond "have more, pay more" vs "everybody should pay the same for the same benefit". It's even simpler than that really. "Society is important" vs "I'm important". Of the maybe 110M who will vote in Nov, 100M won't think beyond or even to that.

I'm curious though since we are at least trying to be among the 10M left over, what of my answer was either implausible or immoral?

eniwetok

(1,629 posts)
16. I was responding to
Fri Apr 8, 2016, 03:36 PM
Apr 2016

I was responding to the title of your post: I suspect he, and I know I, assume it is axiomatic

not the content. Sorry for the misunderstanding.

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