To anyone who is truly upset about what happened on Tuesday, I'm sorry you feel that way. Believe me, I've been there. And I did have the opportunity to move to somewhere more liberal - Canada, western Europe, etc.. I don't know where to recommend you go if you would like to leave. To those of you that think moving to Canada is the option - learn what socialism means and read about Canadian government before you go. But I would really love it if you just waited for a moment before you decide what you think is going to happen in the next four years.
There have been a lot of catch phrases bandied about during this past campaigning period, but none more infuriating to me than 'socialist'. JP wrote a lovely response to what has been an overload of comments about how America will now be going by the wayside as Obama and his "socialist" ways take over:
"Nationalizing banks is a canonical socialist policy, yet Bush, Paulson and countless republican legislators support doing this. Even our current tax regime fulfills numerous redistributive functions that you likely have no problem with. If progressive tax structures are how you define socialism, then we've been a socialist nation for a very long time.
If you begin to look at socialism for what it is, a broad collection of economic theories, instead of some value-laden epithet, you may realize it is not a concept that should inspire fear in any rational person. America gave up on unfettered capitalism a long time ago, once confronted with the dehumanizing exploitation it wrought on the industrial workforce. To categorically refuse to consider the merits of any economic theory unnecessarily and dangerously limits us in our search for solutions to very complex and pressing problems."
Rather than leave it so vaguely defined as "a broad collection of economic theories", let's list some socialist programs that exist here in the U.S. already.
- Social Security
- Medicare/Medicaid
- CHIP program
- Cash Assistance
- Food Stamps
- LIHEAP
- Progressive income tax
If you are all right with these programs (or at least some of them), then I am incredibly curious to hear about why you are "terrified of this country's future".
Take a look at this table of Obama and McCain's tax plans from CNN:
Now let's take a look at the income breakdown in the U.S.:
According to Obama's tax plan, 1.85% of Americans will have higher taxes. Are you part of that 1.85%?
So, let's move on to where the money will be spent. The biggest cry of socialism comes from Obama's health care plan. Some of these extra taxes will go towards helping people who don't have health care get some. If you have been fortunate enough to always have health care, bully for you. You're very lucky. If not, you understand what it's like to be sick or hurt and faced with the decision of whether or not to go to the doctor or emergency room. Here's the thing - if you go to the emergency room, they have to treat you. They will bill you later, but if you can't afford the $500 (or $5,000), there's not much they can do about it. If you go to a doctor's office, they will expect payment at the time of service. Uninsured people cost the health care system. If you have insurance, you are paying for those people already. What is the problem with your taxes not going up (most likely) and some government funding for these uninsured people (which may make your insurance cheaper)?
Stay tuned for part 2, where we can talk more about the various propositions passed and not passed and what that might mean for America.
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12 comments:
excellent post!
amen, freya. amen.
Awesome freya, now imagina a world where our news sources weren't privatized so we could all be so well informed.
Great post! There's nothing like actual data to dispel the ghosts and bugaboos of radical Republicanist rhetoric. Hey! I'm alliterate.
I know I'm a bit late on this...
My concerns about Obama's tax plan has less to do with wanting the bottom to pay more taxes, in fact the bottom 40% has virtually none of the federal tax burden as it is (http://www.aei.org/docLib/20070306_ViardTestimony.pdf Figures 1 and 3), and more about taxes to capital gains and savings.
Increasing the tax rate on capital gains hinders the incentive to invest. While under the plan I certainly don't qualify as a high earner, I am interested in my investments returning value. It's the basis of my individual retirement strategy and how my parents have managed to save the money they have.
While Obama's plan may give short term tax benefits to the middle class, they may well be offset by shrinking the investment earning potential of these same people possibly to the extent of being a wash.
Let's do a quick mockup here. Let's use my folks, and say they made $70k this year (that's roughly correct). That places them considerably above average in terms of median income figures you provided. Obama's tax plan would save them about $300. However the 5% (obama's plan to not renew bush's tax cuts raises the capital gains tax rate for the middle income segment from 15% to 20% starting in 2010 )
((http://en.wikipedia.org/wiki/Capital_gains_tax_in_
the_United_States))
increase on taxes on their considerable investment portfolio would be greater than $300.
My parents are certainly not rich. Many of our friends parents are probably making comparable money at this later juncture of their professional lives especially if there are two people working. This is hardly "helping the middle class." This is punishing the wealthy and redistributing middle class income.
So yes, under Obama's plan my folks are NOT in that %1.85, but they would have a higher tax burden then they currently do.
"My parents are certainly not rich."
I think we might disagree on what "middle class" is. According to your statement, your parents are in the top 28% of earners in the U.S. Seems to me that middle class should comprise somewhere around the middle 50% or so, no? That leaves your parents on the lower end of "upper class" or the highest end of "middle class" (depending on where $70,000 actually falls in the distribution). If you make more than 72% of the population, I'm of the belief that you should help the other 72%. You have had the money to invest throughout your working life. The single mother putting her 2 kids through college might not have had that same opportunity.
Instead of percentages, let's look at it as people. You have 8 friends. Using pure distribution, if you make $70K/year, you make more than 6 of them. If you had a party, would you expect those 6 to bring a case of beer that cost the same as the one you did? Or would you bring a slightly better beer and share it with them?
Again, I'm ok with people thinking that it is not the government's responsibility to "share their good beer", but not once did McCain or Palin expand upon the "your taxes will go up!". Instead they yelled about how Obama was a socialist and a liar.
I agree these are different things.
I guess the journey is as important as the result. There wasn't some broad government support program for my father. My grandfather who never graduated high school worked in a steel mill and never made than $7,000 in a year. He had three sons.
My father has described his difficult childhood (lots of spam(seriously) and soup where water was added to the broth repeatedly for extra meals) as a motivator for him. My father and one of his brothers went to college, and both paid their own way (now, similar people would receive tons of need-based aid). They both now are part of households making $70K +.
My father's income paired with my mother's makes that 70k figure, although it's mostly his income. It's hard to see yourself as upper class even the lowest the of upper class when even I as a child remember things being tight. Part of the reason was because money was being put away, and things that weren't needed weren't bought, i.e.- I remember other people having the jordans while I just had plain Nikes.
I guess my point as I've said before, is I've seen the system work. I realize we fundamentally see the issue differently, but what kind of money do you think JP and you will be making in 5-10 years? You will have worked considerably for that money (law school, etc...) It is my position that you should benefit from that labor, to the extent you see fit. Donate to charity, help your
community, set up your children/family etc. The point is that since your sacrifice and good decision-making yielded the money, you should benefit.
Your hypothetical single mother is a sympathetic figure no doubt, and should avail herself of financial add and loans where needed. Hell, all four Rogel children went to college, and while it's not my business to talk about their finances, let's just say that Mrs. Rogel has gotten the absolute maximum out of what is coming in because she always emphasized education. It is because I believe the individual has the ability to achieve that I fear things that my remove people's incentives to do so.
I will always be willing share my "good beer." But I do not desire some outside agency to dictate how much I "must" share.
Rob: The fact that you had the Nikes at all (as opposed to, say, $5 Keds knockoffs, or your cousin's old sneakers he grew out of) still makes you pretty privileged, on the whole. Your argument is predicated on the erroneous ideas that:
1) America is a meritocracy; the people who have more, do so because they are better, smarter, or more prudent than those who have less.
2) The disparity in wages between, say, a lawyer and a ditch digger can be explained by how much "harder" one has to work as a lawyer than as a ditch digger.
Manual labor is hard labor, and it is not particularly well compensated for, but not everybody can afford to go to law school. The story of your father and uncle putting themselves through college is a nice little parable of bootstrap-pulling and "personal responsibilty", but in practical terms, the cost of a college education has more than *quadrupled* since the mid 70's.
In short, it's not that simple.
It is also worth noting that capital gains are already taxed at a much, much lower rate than ordinary income as it is, that our current 15% rate is the lowest rate we've seen since WWII, and that a 20% capital gains tax would still be the lowest rate you saw during Dear Sainted Reagan's era.
In short, if your parents are really making enough income from their "considerable investment portfolio" that this 5% hike is going to take a big bite, then they are very, very fortunate indeed.
as a concerned American, i should choose what types of charities i support. Freya you made a comment about the single mother of 2 having to pay for her kids college tuition. quite frankly thats not my problem, maybe she should have made other decisions in her life that could have prevented her current situation. there are student loans, scholarships. if obama and his wife can do it why cannt others. the biggest problem with people in this country is they want everything for nothing. Last year i made less than $42K married with 2 kids. I qualified for all types of free govt help Chip, etc. I wouldnt take any of it because i believe in W-O-R-K-I-N-G for it...no welfare or food stamps for my family. why dont you go into the parking lot of your local WIC office or welfare office and see how many brand new cars, suvs are there. if you can afford a $400+/mnth car payment you DONT NEED govt help. stop the entitlements and let these people get off of their ASSES and work!!!! dont punish succesful people, anyone in the top 5% of income earners should be applauded for their succes not punished with higher taxes!!!!! do the American citizens a favor and tell you legislators to repeal the 16th amendment and put America on the Fair Tax system. We will all benefit!!!
Tara - perhaps you missed this part of my entry: "If you are against all of these, ok. Then yes, you hate socialism. I happen to disagree (especially about a flat income tax!), but we can leave it at that."
I'm not going to fight about what percentage of people abuse the system and what our responsibility is to the rest of the human race. We'll never reach a consensus on this, which is why I made the above remark in my post.
However, I am curious about what you plan to do with your Social Security check that you will eventually receive. Mail it back to the government?
I'm really curious where this Lexus- and SUV-filled welfare office is. *In your mind* perhaps??
Ok, that's probably unfair. Maybe you really did go the wellfare office that you refuse to do business with. (Why you went there when you hate the institution so much is still a mystery to me - must be to count SUVs.) Even if you did, are you sure that those nice cars didn't belong to the people _working_ at the office?
Also, I dispute your presumption that the top 5% of the income scale is up there because they fairly deserve to be. It's mostly because they tricked, lied, and manipulated their way to the top and almost certainly reap the benefits of a heavily exploited foreign workforce. There are plenty of rich people who treat everyone in their employ, even the industrial workers, fairly; but I'd say that for most of them there are a thousand kids sewing soccer balls for $5 per week instead of $5 per hour and they get so rich by pocketing the difference. In the places we outsource our manufacturing to, their entire family has to work constantly just to survive instead of just one or two family members working 40-50 hours per week to provide for the rest, as the middle- and upper-class do here. So when the heads of our corporations start treating their employees fairly, maybe we'll consider taxing them fairly. (As if the "Fair Tax" is anything even remotely resembling fair, which it doesn't.)
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