This post shows a lot of thought. Just thought I'd react to bits of it.
No argument here. I'm rather reminded of "It's a Wonderful Life," where George Bailey asks how long it takes a workingman to save up enough money to buy a house without credit. I do think we often forget how much risk there was in ventures in the past (pre-20th century), though, before the FDIC and insurance generally. In Shakespeare's time, one storm sinking a merchant ship could ruin a rich man overnight.
I do recognize that there was a time before things like FDIC and insurance. IMO, even with these things in place the risk seems to be greater than it has been in the more recent past It appears to me that insurance tends to favor the lending institutions rather than the individual looking to take the risk, in fact, in the case of mortgages for first time buyers (especially out here in California), you have to pay extra insurance (PMI) against your own loan if you put down less than 20%. The logic behind this is that lenders that put up less than 20% have a higher default rate. So the solution is to increase the individual's monthly cost to cover the risk (at their expense), even though banks are already insured on the loans. And this is just for mortgages. Business loans are a whole different can of worms.
I think there's an important point in here, which is that people who have gotten good at making heaps of money are... well, good at making heaps of money. We've probably all read of Britain's "tax exiles" from the 60s and 70s, many of them are our rock-star heroes; crank up income taxes to 90% on the super-rich and the super-rich just move abroad. Or, as we see happening today, move their money abroad. Any solution is going to need to be one that gives the wealthy incentive to contribute more to society, carrots as well as sticks. Otherwise they will just make better tax shelters.
It's generally been said that the genius of capitalism is that rather than bank on how people ought to behave, it banks on how they actually do behave. You need to assume that people will generally act in self-interest and figure out how to harness self-interest to the general good. It would seem that we haven't managed to do so, at least not sustainably. You're never going to produce change by proposing reforms that run counter to the self-interest of the stronger interest group. Increasing taxation on the wealthy would be a dead end if it just means larger revenues at the disposal of government agencies dominated by... the wealthy. Or perhaps by a different segment of the country's privileged, which would be a marginal improvement at best.
I agree completely. The wealthy have successfully purchased the tax shelters and loopholes from our government. What they are doing is completely legal. If we close those loopholes and destroy those shelters, then we need to provide incentive for them to re-invest in the economy. There should be tax relief for providing benefits for your employees, for example. There should be tax relief for converting a certain percentage of your energy to renewable energy sources, for example. You can't just kill the rich and tax the hell out of them (as much as we like to demonize 'the rich'). They have already proven that the government is their shopping mall, so if legislation becomes to harsh they'll simply purchase counteractive legislation against it, or set up their base somewhere else. Plus, the extremely wealthy individuals are just as much an integral part of our economy as the working poor. They should be encouraged to participate with means to reduce their tax burden that benefit the economy and ALL it's participants.
It seems melodramatic to say that respect for human life itself is on the line - maybe, maybe not, I don't know. I think what is at stake is the "American experiment." Can we maintain a society of social equals permanently, or are we going to turn into the kind of hierarchical society that, well - that most societies have been for most of human history? It wasn't the entrenched nobility of Europe that came here, for the most part, we started with relative - relative - social equality. But there was still slavery, and a wide-ranging assumption that even here the privileged would guide the destinies of lesser people, hopefully with a sense of enlightened noblesse oblige. American egalitarianism is a powerful idea, but I'm wondering if future historians will look back on it as "one brief shining moment" that was doomed to run out of steam eventually.
You bring up some good observations here. I personally believe in the 'experiment', and I personally believe it can be achieved, but not without a massive shift in consciousness. Unchecked capitalism leads to things like slavery, child labor, human trafficking, and situations of massive leverage leading to things like black markets for organs and to a larger scale poorer countries giving up rights to their natural resources (water, fishing, oil, minerals, precious metals, etc). I believe that the experiment can be achieved with 'regulated' capitalism designed to create a playing field that is as equal and fair as possibly in regards to opportunities for those willing to put in the hard work and effort. We've shifted our consciousness before (we abandoned slavery and child labor, for example), but as it stands our country has been conveniently divided into two camps, and through media and other mediums, we are being kept divided, so that, IMO, we can be more easily managed.
I'm not sure I'm following this, maybe I need to go back and reread Aborgman's post. A corporation is, by definition, a legal persona (property-owning etc.) that is NOT a single individual. If I understand you right, you're suggesting that all wealthy individuals be designated "corporations" above a certain wealth threshold and subject to particular tax liabilities etc above that threshold. I'm all in favor of structuring tax breaks toward things like employee profit-sharing and sponsoring public infrastructure, but I'm unclear how redesignating individuals at corporations really solves the income inequality issue.
My thinking behind this was that at some point an individual becomes so wealthy that their money resembles a corporation more than an individual. I define an individual with certain rights and freedoms upheld by the constitution (in our country). This includes things like voting in our political process. A corporation does resemble an individual in some ways. There is definitely overlap, but where they differ is in the way they're taxed, regulated, and what rights are afforded to the corporation. The notion of a corporation being a 'persona' first became defined with the 14th amendment. When the founding fathers created the constitution they purposely left out the rights of corporations because they wanted to make a distinction between the individual and the corporation. They had witnessed exploits by corporations like the East India Company and the Hudson Bay Company and wanted to make a distinction. Originally, the 14th Amendment was meant to eliminate the laws that created a discrepancy between slaves or minorities, by making all people (at the time, black males specifically) equal under the law. However, this amendment was used mostly to define the rights of corporations, not people. It has the word 'person' in it, and the Supreme Court initially defined this word as individual people, but corporations with more money and resources repeatedly challenged this definition until they eventually won. In 1886, a Supreme Court Justice, (I think his name was Wait <-- I could be wrong on the name though) kind of defined a corporation as a person with an announcement that they wouldn't hear further arguments in Santa Clara v. Southern Pacific Railroad case regarding whether the 14th amendment clause on equal protection under the law applied to corporations, because they believed that it did. This announcement became the cited precedent for subsequent cases of corporations demanding equal protection under the law to follow. As a result, the law that was meant to define the protection of individual civil rights became more commonly used to define the protection of corporate rights. Individuals have specific rights that shouldn't apply to corporations, IMO, specifically in areas regarding taxation and imprisonment. Corporations can be taxed, and now, in a sense they can vote (see Citizens United), because money became recognized as a form of speech, but they can't be imprisoned for wrongdoing. As a result, whether or not a corporation decides to break the law becomes more of a calculated risk and the fines a part of doing business more than a deterrent. In my opinion, Citizens United was a bad step, and in my opinion there should be a clearer distinction drawn between what constitutes a corporation and what constitutes an individual, because more often than not, when pitted against each other in the court of law, individuals are at a considerable disadvantage against a corporation simply by the amount of representation they can afford.
So back to the reason why I think that above a specific wealth threshold a person's money should be considered a corporation. A financial individual and the money they acquire behaves considerably different than a corporation. That individual has certain rights and protections afforded to him by the law. This includes the right to vote. When it pertains to the right to vote, an individual with more wealth in a sense has the ability to influence the political system much more than the value of that one vote. For example, they have more money to contribute to campaigns, lobbies, and Super Pacs (which are designed to specifically sway votes toward a specific outcome, but are still taxed as 'non-profits'). So back to that 14th amendment, if all individuals are supposed to be equal in regards to rights and protections, then as it stands a wealthier person's vote could theoretically count much more than a person in the lowest income bracket, simply because they have more disposable income that can be used to influence campaigns and elections. If there was a cap, put on the definition of what constitutes an individual financially, then I believe, in this regard, it would level the political playing field more. The individual does not cease to exist, but financially, the individual's income is only an individual's income to a certain point, then after a certain amount of wealth has been obtained, all wealth above that point would be considered a corporation and taxed accordingly. This is not much different than what a lot of people already do. The extremely wealthy have people that manage their money, so it continues to make more money and turn a profit anyway. Many already incorporate, or set up llc's. But along with this, I would make a further distinction in that a corporate 'person' does not share the same rights, privileges, and protections as an individual, such as the right to vote. How this person decides to pilot their 'corporation' is up to them, but I would also provide tax relief to these corporations that spend money on profit sharing for their employees (the more the better), invest in government infrastructural products, offer opportunities (perhaps funding new business ventures) that create new or expand markets, and or perhaps invest other ways that are deemed 'beneficial' for the economy as a whole. In a sense, they would be encouraged to re-inject this wealth back into the economy through incentives and tax relief.
I'm dubious here. Many lobbies are, of course, ways for corporations to flex political muscle; others are ways for citizens to engage in collective expression. I don't know if anyone has found a way to prohibit the one and allow the other without making arbitrary a priori judgments. Meanwhile, I don't get the impression that most legislators are depending on their congressional salaries and benefits to pay the bills; as far as I can tell, most of them have huge investment portfolios or high-powered law practices to live on. Going after congressional salaries would only punish the handful of politicians who come from humbler origins and actually DO depend on that salary, while leaving those from rich jet-set families undisturbed.
Perhaps I wasn't clear. I would like for there to more transparency in regards to the money behind the candidate. In regards to lobbies, I'm not saying that we would eliminate the ability to collectively express an opinion, but I'd like to cap the money and level the playing field. Right now, the only voices that are given audience are the ones with the most money and the most 'political money'. I would also eliminate political ads, or at least grossly limit them. As far as the politicians who come from humbler origins, I would like to encourage more of this, and less of the folks with giant investment portfolios, because as it stands most of the folks that are going into congress are not representing their constituents as much as the money backing their campaigns. I would also like to limit a congressman two consecutive terms (or some other number). I don't buy the idea that congressional salaries and benefits are not much of a concern for the congressmen. If not, then why would they sneak in votes for pay raises during times when the public is distracted (like during the Boston bombing)? If it's not much of a concern, then why would they spend time carving out a different benefit package for themselves (retirement and insurance benefits). If they weren't concerned they would simply accept the same benefits package as other federal employees. I would like to directly tie their performance to their salaries. That way they would think twice about shutting down the government, still collect a salary, in the name of a political stunt.
Well, for one thing this would require a constitutional amendment. For another, what about entitlements? Which 50% of the budget are we talking about here? Because right now, you can divide the US federal budget up into 20% blocks, give or take a few percent in each block; debt servicing, social security, medicare/medicaid, the military, and "other (state dept., interior, etc)." The first three are entitlements that congress doesn't really get discretion on. So are individual citizens getting to decide if they want their taxes to go to federal debt payments or not, with the resulting likelihood of default? What if people who don't use medicare decide they're not contributing their tax money to go to that? What if there's a huge groundswell, based on some internet thing going viral, where we send trillions of dollars to save baby seals but no one bothers to designate development aid for Zimbabwe? I'm sure you've heard of the kind of people who don't think they should have to pay local property taxes because their kids aren't in the public schools. Do we want to encourage that mindframe at the federal level?
These are valid questions. I think the percentage and divisions can be worked out so it doesn't cripple the government. Perhaps you could work it out so that you can determine a percentage to each area of the government above a certain minimum percentage. But again, these other areas of the government are still going to be funded with the first 50 percent (or whatever percentage is agreed upon) of your taxes. You determine from there, where your taxes go. So you wouldn't have someone not contributing to education for example, but you'd have some people voluntarily contributing more than others. Right now, 100% of the budget is the responsibility of congress. I'd only like them to be responsible for a portion of it, with the rest of the responsibility relying on people's decisions when paying taxes. So, in theory, tax payers get a little say in where their taxes go. This would make congress less-inclined to do things like bail-out banks and private companies, or subsidize specific industries over other, etc. If a person doesn't want to participate, they can default into spreading their tax money equally (or some other set formula).
Because the average citizen has the time and the credentials to assess a candidate's qualifications in those areas?
I'm not suggesting a campaign, but more or less the ability to look at the possible candidates for the position, and allow the public to vote on it. Traditionally, these appointees have been nothing more than cronies giving each other reach-arounds.
I'm actually a big believer in building a multi-party system. The way we have it, you only have two serious choices. Voting for a third party means throwing your vote away except maybe in local elections. Candidates win party nominations by appealing to the more radical core supporters of their party and only afterward consider appealing to the moderate center. Even then, they may decide they're better off "energizing the core" to bring in more votes on election day. Politics become polarized and centrists (among whom I count myself) have no party that really represents their views. Also, there may be one or two issues you care deeply about but the party that represents your views on those may not hold views you agree on in other areas. So you end up having to vote for a candidate who's going to end up doing things you don't like.
It does seem to me that a system with five or six viable parties, each representing maybe 15-25% of the electorate and having to form coalitions to create an administration, would make for a less polarized and more representative government.
+1. Exactly. I'm tired of having to make a decision between two turds wearing different colors.
