George Will's questions for John Kerry

You've been promoting this idea here for a couple of years, Gary, even though it's been pointed out to you numerous times that there is no free lunch, that any tax structure you propose still collects the same amount of taxes.

You've also shown that you're in favor of taxing the disposable income of the poor at the same rate as the rich, which means, I assume, that you want to drive the poor deeper into poverty and that you favor an aristocracy of the rich, who will wind up with most of the money.

So, what kind of society do you have in mind?

Ed Huntress

To quote one of our founding fathers, "Never a lender nor a borrower be."

Gary

I want a society where everyone pays his own way and is responsible for his own actions or inactions. I want a society where there is no free lunch (or bedtime snack either). In God we trust, all others pay cash.

Gary

That he has $45 billion and I don't says he's more successful than I am. That he pays a higher tax rate than I do says he is penalized for that success.

I don't expect special treatment because I don't make that much money, and I don't expect him to be treated differently either. Every dollar I make and every dollar he makes should be taxed the same.

(Actually, I want it to be every dollar I spend and every dollar he spends should be taxed the same. I don't care where the money comes from, if it is spent in the United States, I want it taxed in the United States.)

We're both citizens of the United States. We're both responsible for shouldering the burdens of citzenship, and we both have the benefits of citizenship. We should both be taxed at the same rate.

One man one vote, one man one tax. Liberté, Egalité, Fraternité

Gary

That's a sentiment, not a society.

Ed Huntress

No, it says he has more money than you have. Is this society now reduced to defining success and accomplishment in terms of how much money one has?

Why? He's made something like $45 billion. Are you saying that the taxes he pays are unfair, and that he's really entitled to, say, $100 billion?

Fairness is a big logical loop, Gary. You're putting all of the tax burden on consumption. Why shouldn't it be shared with profit-taking? For example, both consumers and companies like MS have benefitted from such things as rural electrification, government subsidies for telephone lines, and the enormous government support for microelectronics R&D. Without those, MS wouldn't have a market. But they never paid for it. It was there when they moved in. Are they supposed to get their markets for free? Are you giving them a free ride on all of the investments that built the market for them?

This isn't a position I'm taking, I'm only pointing out that your idea of fairness is all one-sided. That isn't fairness. Fairness has to be two-sided. In this case, it means a sharing of the costs on the basis of benefits received. If you compare what Gates made in this society with what he would make with the same ideas, the same effort, and the same management skills in, say, Botswana, you immediately recognize that most -- nearly all -- of what he's made was made possible by a system of markets that somebody else built, that somebody else paid for, and that has produced benefits for him all out of proportion to the taxes he's paid.

That's fairness. It requires basing taxation on benefits received. That's "pulling your own weight," or however you put it.

Ed Huntress

"Gary Coffman" wrote

That's a nice soundbite, Gary, but you surely do not believe it's good advice, either for individuals or governments.

Most of us carry a mortgage on our houses. We would have a very different US economy if everyone who bought a car had to pay cash for it. Without student loans, few people under about 60 could attend medical school. Etc. etc.

On the national level, never borrowing (i.e. never running deficits) would make large undertakings, like WW2, awfully hard to finance.

In any case, we can't undo history. Whether it was a good idea or not, the US government has accumulated about $7 trillion in debt, and George Bush is growing that by about half a trillion a year. The debt _exists_. So:

Should the US government continue to be in the business of carrying debt, or should we "privatize" that debt, so individuals can make their own decisions about whether to service or pay down their individual shares of it?

-- Tony P.

Money is how you keep score in the game of life.

No, actually, I'm saying he's probably really only entitled to about $30 billion. Our current tax system is so corrupted by exemptions and loopholes that I know he isn't paying the full tax rate on all his income. That's a major reason why I want a flat tax with no exemptions, specifically an out in the open sales tax which can't be ducked or dodged.

Because it is a whole lot easier to keep track of retail sales than it is to decide what is income and what is not.

Aren't you getting that same free ride? If so, why shouldn't you be taxed at the same rate as Bill Gates? If not, where did you miss the boat?

Well, Ed's Software Company has those same benefits, so shouldn't Ed pay the same for them? Just because Ed's Software hasn't been very successful, and Microsoft has, doesn't mean Ed didn't have the same social benefits. It just means Ed wasn't very good at making use of them.

Look, I pay $1.50 a thousand gallons for water. So does my neighbor. Now if he uses 10,000 gallons a month and I only use 500, does that mean I should get a discount on my water bill? Or does it mean he shouldn't have to pay for some of the water he uses? Or does it mean we each have to pay $1.50 per thousand? My water company thinks it is the latter, so do I.

Gary

Well, then, what the hell are you doing here? Shouldn't you be doing something that will make you a lot more money? Or do you like being a loser?

Hmmm. So, that means, with no other taxes, he'd have to buy enough of something to pay $15 billion more in sales taxes, at 23%. That's a hell of a lot of Budweiser. That's even a lot of Gulfstreams.

No kidding, Sherlock. Tell us again how Gates is going to spend $15 billion in sales taxes, eh?

If I made a profit on it, I would expect to be taxed to pay for the profit-making opportunity. I'm not, so I'm not. That's fair, isn't it?

I don't have a software company. If I did, and if I made $45 billion because there was a market for my products, one created by others' investments, why shouldn't I repay them for the part of the investment that created a market for me? That's fair, isn't it? Somebody is paying for it, why shouldn't it be paid fairly by all those who benefit from it, according to how much they benefit? Isn't that the basis of your plan?

So do I. We're talking about taxing the water company, not what you should pay at retail for water, remember?

BTW, under your plan, you're going to pay $1.85/thousand gallons. 'Better open up your wallet.

Ed Huntress

Ahem. "Current tax system is so corrupted" makes sense. Could you PLEASE explain how the *new* tax system you propose will avoid the political shenanigans that cause corruption?

So before we take the new flat sales tax system out for a test drive, why don't we do a beta test on the 'anti-corruption tires' with the present tax system? If they work for yours, they should work for the one we have now.

Simply saying 'everyone has to pay it' does not qualify as an anti-corruption feature.

To put it another way, if you could make your system work, it would be dead easy to make the present one work three times better.

Jim

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I bet Gates paid FAR, FAR less percentage than you on his accumulated wealth. I bet in the 5% range.

Why stop at the same rate? (playing devil's advocate here..) why should he pay more *dollars* tax than you?

Best regards, Spehro Pefhany

Did George Will serve in Vietnam? No. He was born in 1941 and hid out at Trinity College and then Oxford and Princeton universities. John Kerry was born in 1943.

To me , that is not an issue. George Will is not running for President.

Not to take sides here, but George Will went through all of his undergraduate and graduate studies, culminating in the PhD. from Princeton at age 23, by 1964. We had only 16,500 troops in Vietnam at that time. Hardly *anyone* was going. And even fewer men volunteered for service after they graduated and had started on their careers. Kerry was odd in that regard. As I said before, the fact that he went in '67 makes me question his sanity. By then he knew, as we all did, that the situation was (to borrow Gunner's immortal word) a "ratfuck."

I also don't think Will has ever played the Jingo Bells routine. He's taken Kerry to task here for things he said and did *other than* serving in the military itself. Unlike most of Bush's cabinet, I don't recall him ever sounding like a chickenhawk. Not that I've read everything he's ever written, but it just doesn't sound like his style.

Ed Huntress

"Ed Huntress" wrote

Did you read his 1984 columns on "America, the Undertaxed"? Twenty years ago, George Will was passionately arguing that Reagan's tax cuts must be rolled back lest the national debt get out of hand -- like, go over $3 trillion :-)

George Will apparently considers it OK for himself to have changed his opinions over twenty years. No doubt he considers it a good thing that George Bush is a changed man from what _he_ was, twenty years ago. But if a _Democrat_ does not hold absolutely the same positions he held twenty years ago, George Will gleefully portrays him as a waffler. This ability to free his thinking from the fetters of consistency shows the true greatness of George Will.

-- Tony P.

You'd lose that bet. I pay far less than 5% of my *accumulated* wealth to government annually. I just ran the numbers, I pay 14% of my annual gross income in taxes on my accumulated wealth (ie property taxes and other levies against assets). But that's a much smaller percentage of the valuation of my accumulated wealth, about 0.85%.

Gary

Founding father? Hardly. It's from Shakespeare's "Hamlet", and it's taken from Polonius's admonition to his son Laertes, as the latter is about to leave home to enter university. The bit in question goes:

Neither a borrower nor a lender be; for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.

-tih

The states which use a sales tax instead of an income tax don't seem to have any problem keeping track of what's owed, or by whom. They just take X% of gross sales. Done deal. No exemptions, no deductions. No arguing about what's income, what's expense, if you sell it, you owe the tax on the gross proceeds. It is simple, and it is very difficult to successfully work the system to avoid it.

Gary

Gary you *must* be deliberately steering around the point.

The problem is *not* enforcing the existing tax code. My question was, how do you prevent your new tax code from having all the loopholes build into it by special interests, while it is being assembled? Saying 'everybody must pay it' does not answer this question.

You might as well say, 'everybody must pay income tax' right now, and those folks who don't will then have to, and the tax revenue would probably double. But special interests have jiggered the code to benefit them, so they don't have to pay income tax. They will do the same thing with any other kind of tax, including flat sales tax. They WILL engineer in an exception/exemption/loophole.

The *real* problem you are trying to solve does not involve which kind of tax is fairest. It really involves the issue of who has access to the political power that drafts the tax codes. And the answer to that of course, is 'rich folks.'

Never will change.

Jim

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