George Will's questions for John Kerry

Nope. Basically, the rich have a lot of control over how much tax they pay, by controlling what is, and is not, income. The people who pay the most tax are the people with the most _earned_ income. Investment income and other "passive" income may or may not qualify.

And the beauty of the system is that we do the buying, but someone else gets the benefit.

Al Moore

I think, in general, that the government is doing many things it has no business doing. I don't necessarily think that all of those things need to be done by the private sector, rather, I think that many of them shouldn't be done at all.

Gary

Of course they discourage people. Just not very much, at the present rates. Back when the top rate was 90%, the discouragement was a lot stronger.

What is tax-averaging? (I googled it, and got a bunch of hits from Australia, a bunch of hits relating to IRA lump-sum distributions, but nothing that people in this country could use routinely to average out income from year to year.)

Yup. It's progressive, but not extremely so. One of the things that neither the left nor the right particularly like to mention is that a very large part of taxation in this country is a flat tax. It's the Social Security and Medicare tax, which is about 15% if you add together the "employer's" and "employee's" contributions (as you should, since the two parts are treated identically in just about every way except name). And the Social Security part of it stops after the first $75K of income, which makes it a regressive tax. The left doesn't like mentioning this, because it's one of their favorite programs, and it's hard enough to finance the beast as it is. The right doesn't like mentioning it, because it's already a flat/regressive tax, which is fine by their standards.

Yup, and that makes it harder for them to pay off their debts from medical school, which are often over $100K.

Their total tax bill is more than the total tax bill of someone who made the same total amount of money working as a bureaucrat in a large company, with a steady salary. That doesn't seem even a little bit unfair?

(Of course ultimately, it isn't doctors who it's unfair to. Medicine is a competitive business; when doctors have higher costs, they pass them on. It's medical consumers who see the price of medical care being higher than it would otherwise be.)

Didn't say they did, but they do penalize them for being more successful by nailing them with higher tax rates.

Gary

Sheer speculation on your part, Norman. An unlikely in the extreme. If anything, it probably just makes them want to make more.

Apparently it's been eliminated. I used it back in the early '80s, when I was on a real see-saw. I think you got to average four years or something like that, and to pay the effective tax over the full period as if you'd made the same amount each year.

What the heck do you think a private four-year college costs today? Do you have any kids going to college over the next few years? I do. $104,340 is the average room, board, and tuition for a private college. Given the incomes that doctors can expect to make, doubling that cost for schooling doesn't exactly pluck my heart strings.

Nope. Average physician compensation, in practice three years or more, internal medicine (one of the lowest), $160,318. Opthalmologist, $256,872. What kind of bureaucrat was that you were talking about?

Any dollar consumers pay in one place for taxes is a dollar they don't pay somewhere else. Or do you have one of those magic-money ideas, like the magical VAT?

Ed Huntress

You're either a lot wealthier than you let on, or you've been very well trained.

The idea that the wealthy are treated unfairly by our tax system is bizarre. They have so many opportunities for deductions, deferments and outright avoidance that it fills entire books, Gary. Their taxable income typically is a small fraction of their real income. And, whatever they're making from year-long investments is being taxed at a reduced rate, which will be no more than 15% starting next year.

However, they deeply appreciate your sentiments, I'm sure.

Ed Huntress

"Gary Coffman" wrote

Okay, where does carrying a debt fall in this spectrum?

-- TP

Speculation it is. The general rule I'm using is is that if you tax something, you discourage it, and the more heavily you tax it, the more you discourage it. I know of no counterexamples, except for people who know about the rule and deliberately decide to act contrary to it, cost be damned -- and few of them maintain that attitude for long. So, when it's a question of what large numbers of people will do over long periods of time, I feel free to use the rule without any weasel-words.

Mine, neither. Like I said, they pass the costs on to consumers, with a premium to cover the risk of failing to become a doctor after spending much time and money trying.

Certainly not a low-level paper-pusher. But then people with the brains and drive to become doctors are not the type of people who become low-level paper-pushers when they go into business.

No, I just think it distorts the economy for taxation to be concentrated on one type of business. True, at the moment this is mostly history; the battle against ridiculous progressive taxation (which reached 90% in the US) has been fought and won; but it's worth remembering why the battle was worth fighting.

I think we overlook the fundamental characteristic of people who are psychologically disposed to acquire really large amounts of money. I've known a few. There are no obstacles they'll let get in their way.

Then apply the same principole to them that Gary applies to people who don't take advantage of opportunities to make money. They had the choice to become bureacrats. It's not our problem they decided to become doctors and take home less money -- if that were actually the case, which it is not.

Actually, it was 93%. And no one ever paid it, anyway. It was at the same time very easy to shelter income. Cattle investments and oil-depletion investments sprung up like mushrooms in those days, and some puny islands in the Caribbean suddenly became financial centers of the world.

The result of flattening the taxes for the wealthy -- it actually will be a

*lower* percentage of income for them than for the middle class starting in 2005, if you look at the whole picture -- has been a doubling of the amount of income acquired by the top 1% of the income earners. I don't consider that to be success, nor a worthy objective. Its effect is to hollow the middle class and to divide the society along economic class lines like we hadn't seen since the Great Depression. It's a degeneration and a debasement of our society.

Every wise political thinker since Aristotle, who originally came up with the idea, has recognized that a democratic republic can only survive if the primary political power is held by the middle class. If it accrues to the ends, to the rich and the poor, it flies apart. That's what FDR had in mind with all of the income redistribution he pushed through during the Depression. We had fascists accumulating at one end and communists at the other. It would have ripped us apart if he hadn't pumped up the middle class and kept them from falling into a class of poverty.

You talk about "fairness" of taxation in isolation, as if you don't even look at the big picture. There is plenty of money in this society and incredible opportunities to make it, if that's what you want to do with your life. No one who has used the opportunities afforded him here to make $5 million or $50 million has any reason to carp about "fairness." He got a fairer chance than anyone in history to make that much money. Taxes are the price he pays for having had much of that opportunity handed to him in a way that no one has ever had it handed to him before. Taxes are what he pays to keep the doors of opportunity open for *other* people the way they were opened for him. Taxes are what he pays to prop up the middle class that must remain in political control. People like you and me.

Don't cry over "unfair" taxation for the wealthy, Norman. They've had a fair shake. That's why there are more multi-millionaires in the US now than at any time, anywhere, people who could cash out tommorrow and live lives of comfort on their investments. But don't worry, either, that many of them will do that. They're driven to acquire; that's how they got what they have. And their goal, having long since satisfied their needs and having achieved virtually complete control over their own lives, is to acquire power and control over others.

Think about it: there are only two reasons to magnify your wealth from say, $10 million to $100 million. One is an obsession with self-aggrandizing acquisition. The other is control, not your own life, but others' lives. The two tend to go hand-in-hand; acquisition of great wealth requires particular psychological dispositions and motives. The motive to control others is the one about which we have to be vigilant. That's the price of liberty for the rest of us.

Ed Huntress

Well said!

The thing I can't figured out is that all of the posters who have proposed flat taxes or consumption based taxes would see a huge increase in the taxes that they pay should any of them be implemented. (Unless we have some 1%ers in our mist.)

Kinda blows a hole in the idea of "rational self interest". ;-)

Observers have always remarked about the peculiarity of middle-class Americans that lead them to defend wealth and its prerogatives. It's an extreme case of wishful thinking, or one of the most successful snow jobs in history.

Ed Huntress

Not important. As much as I'd like to claim subtlety as an excuse, it's more likely that unclear writing on my part is to blame.

It's been my experience that when someone says, "Are you suggesting X?", that they're _usually_ making the accusation that the other person is in favor of X, rather than asking for clarification of the original statement. I wasn't sure which way you intended your question. Also, I started mentally rambling, thinking of the possible interpretations of "suggestion". Some of that rambling leaked out into my response to you, I'm afraid. Clear as mud, right?

As far as including/excluding people from the political process based on how much they earn, that argument doesn't directly address my question, which addressed political rights with regards to payment of tax. Your point is valid in its own right, but if it was intended to answer my question, the change in parameters confuses the issue (for me, anyway).

WRT to the points you raised in the portion of your post that I snipped, I'm still thinking about them. As I said, I don't have good answers to the questions that I raised. I'm working on it.

Thanks for your input.

R, Tom Q.

You've definitely out-subtled me. However, I see what you're getting at below.

It's an old debate, thousands of years old, in fact, but I'm in agreement with the present solution. Before we had universal education and back when political power was split sharply between rich and poor, there was a legitimate concern that the poor simply would vote all the money for themselves. That hasn't happened, and conditions have changed so that it's not much of a concern.

So now we can fairly ask if the principle we're operating under is that people have a right to self-determination, or if, for their own good, people at the top of the ladder should be making the decisions. I go with self-determination. It's a little like that quip about the 23-year-old currency traders. Individually we may be as dumb as fence posts, but collectively, we act something like a brain.

Even if we didn't, self-determination is a positive value in itself. If we make mistakes, they're our mistakes. We have no one to blame but ourselves and we have great incentive to get it right. On the whole, I think that a democracy that's blind to how much money you make is a wise choice. It works pretty well.

Some great philosophers have wrestled with these questions far more subtlely than I ever could. That part of our education is pretty weak in this country.

Once upon a time I had an academic advisor in college named George Will. (No, I did not start this thread. It's a coincidence.) Uncertain about whether to enroll in a new residence college of policy science at Michigan State, of which Will was a professor, he asked me what I wanted to study. "The classics," was my reply. "Which ones?," he asked. "I don't know," said I. In disgust, he turned away. In disgust with myself, I began a lifetime of reading them on my own. (Oh, I did enroll in the college, and studied Constitutional law, comparative politics, the welfare state, and other things I frequently pontificate about here.)

I'd like to be able to condense the thinking of everyone from Plato ("The Republic") through John Stuart Mill on democracy and republics, but it's beyond me. Anyway, it's a dozen books. Your questions are addressed in there many times, from many angles, by brilliant men.

Ed Huntress

Now if I were to win the Mega Millions lottery I would definitely be in favor of a retroactive flat tax. OTOH, if I were struck by lightning I would be in favor of the retroactive repeal of Ohm's law too. :-)

Ok, I'm not (real) dumb - that's polite for "I have no idea what you're trying to say", right? That's OK, it's not importance.

Ok, I tried to snip your comments, for all the right reasons, but couldn't seem to find enough superfluous material to warrant snipping. Usenet purists can sue me.

Well, thanks (I think). It's somewhat reassuring to know that great philosophers have wrestled with "my" questions.

Oddly enough, I believe you. That's one of those things that makes life interesting. There _is_ such a thing as coincidence - there has to be (unless you happen to believe that buying lottery tickets is a worthwhile retirement investment).

I'm afraid to read Plato. I'll do it before I die (probably not in Greek, though). J.S. Mill & Adam Smith & C. Darwin are on my short list - I've read a lot about them, but I haven't read _them_. Who are your other 10?

R, Tom Q.

On Tue, 24 Feb 2004 19:59:37 GMT, "Ed Huntress" brought forth from the murky depths:

That it is. And those who are capable of teaching philosophy are seldom inclined to do so.

"Suckage!" he said, suavely and intellectually.

Ah! You have even more time in this area than I suspected.

Darn. I can't do that, either (even if I had the patience) and had hoped you'd do the honors for us.

BTW, your illumination today on "reasons for wealth and the wealthy" today was very well done and gave me a new perspective from which to view them. Thanks.

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What's the line, "six degrees of separation"? It's funny when you know someone when they aren't famous and then they become famous. George Will was only in his mid-20s when he was my academic advisor and professor. He wasn't quite so pompous and officious then.

Well, that was 12 books, more than 12 people, and I was thinking in terms of the way Charles Eliot (former president of Harvard) grouped them when he compiled the 50-volume Harvard Classics series. If you select the authors from that series who are relevant for understanding our present ideas about democracy and republics, it boils down to maybe 12 volumes' worth: Plato, Aristotle, Plutarch, a couple through the Middle Ages and then a gang of them from Hobbes through the late Enlightenment -- Rousseau, Locke, Madison, etc. That is, it's around 12 volumes if you accept the way that Eliot already condensed them.

Are you looking for a reading list? If so, my suggestion is not to compile one on your own. They've been compiled for you. The Harvard Classics series was organized to give a classical liberal education to someone who never got it in school, like most of us who went through public schools and universities. It's a dose to read. It took me 12 years and I skipped quite a few of them. There are other lists, including Clifton Fadiman's "Lifetime Reading Plan," which is mostly literature but it hits all of the high points in political philosophy, as well.

If you have the time, it's still not a bad way to go. But the Reader's Digest Condensed Version, if you only have six months or a year to spend on it, would be the same authors, as boiled down by the Encyclopedia Britannica and one other encyclopedia for leavening. Take your pick. Encarta isn't bad at all for this stuff, and it often gives a different take from that of Britannica. Just use one of the lists and then look up the authors in the encyclopedias. It ain't the Jesuits and then Oxford, but it beats the hell out of what most of us go through life knowing about how we got these crazy ideas.

Here's one: the early Greek democracies (there were hundreds of them; Athens was just the largest) sometimes picked their leaders by lottery. They did it to avoid having an oligarchy of popular figures, such as actors and sons of wealthy politicians.

Maybe they were right.

On the other hand..there are folks like me who almost never buy anything "new" except food and toilet paper.

Gunner

The two highest achievements of the human mind are the twin concepts of "loyalty" and "duty." Whenever these twin concepts fall into disrepute -- get out of there fast! You may possibly save yourself, but it is too late to save that society. It is doomed. " Lazarus Long

On Wed, 25 Feb 2004 08:06:14 GMT, "Ed Huntress" brought forth from the murky depths:

Will was 10% less pompous back then, eh? I still like the man despite his faults. Ditto the slightly bigoted Pat Buchanan. Brilliant mind, though twisted in a different way than my own.

Isn't a better description "to study Plato" than "to read Plato"? He was definitely not your novel-a-night type of writer. ;) I tried it once and didn't have the time or anywhere near the inclination that I had supposed.

Hey, I didn't see Ambrose Bierce in there. Reason? ;) (As you can see I'm a fan of author of the Devil's Dictionary.)

Dad left the second (including Epictetus) "E" volume to me but I haven't gotten to it in the 2 years since his death and my move. As I recall, it's a smallish book but a heavy volume, both in weight and content.

Excellent idea. The quick synopses will no doubt breed interest in some of the authors and in-depth study where there is time.

I tend to agree. Let's put anyone but a politician in office and see how we fare. It absolutely _can't_ be worse. Where are our Mr. Smiths when we need 'em?

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