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Author: stockmuncher100 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19380  
Subject: Re: Could your retirement survive this? Date: 5/9/2008 1:42 PM
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The socialist/far-left view which is evidently the view held by Obama & co. is that the default taxation rate is or should be 100%.

That is, NONE of the money you earn (whether by working at a job, running a business, living off investment income, capital gains, or whatever) really belongs to you as an individual. Rather, you are only able to generate that income in the first place, because you are part of a society which allows you to do so.

It is very, very important for those of us who disagree with this perspective to clearly understand where Obama, and many of the far left here at TMF, are really coming from.

They are looking through the wrong end of the telescope. They don't look at a tax hike as taking more of your money away from you; they look at it simply as the government "giving you" less, but that's O.K., because it's all really the government's money anyway. You get to keep anything that you earn solely from the sufferance of the goverment, not because you have any right to keep it.

So the difference in opinion is something basic and qualitative. It's not about the particular utility of a specific tax increase here or a specific tax decrease there, at least not for the leftists. It's not about belt-tightening or tweaking inflows and outflows. It's something much more fundamental.

Moderate conservatives/capitalists believe, that if there have to be taxes, there should be some sort of logical relationship between the tax imposed and the benefit received, and also, there should be some conception that some sort of value is being received in exchange for the tax, whether to individuals or to society as a whole. Conservatives also believe that the negative consequences of taxation (such as impairing capital formation, etc.) have to be taken into account, as well as the overall tax burden imposed by the various layers of government. In general if there isn't a pretty clearly defined justification for a tax, with a clearly definable benefit, it's probably not going to create a net benefit to society, and certainly not to the taxed individual.

Obama and the far left don't see things that way at all. To the far left, a "tax" is a purely political plundering which a majority can get by legislative fiat from the so-called "rich", i.e., it's politically sold as something that will always be paid by "the other guy." This is the class warfare idea. There's absolutely no idea that the amount of benefit I should receive in exchange for my tax payments should be in some sort of rough proportionality to the amount of taxes I pay.

I remember a recent thread where goofy hoofy kept repeating the idea that government activity "creates wealth." Example: government's use of tax dollars to create NASA which led to various useful technology etc. Completely failing to realize how those "tax dollars" were generated in the first place.

Leftists don't go into a particular say lower-income community and say, "Hey, let's impose a special tax just on the residents of this community, but we'll use those proceeds for the benefit of this particular community." Rather, they will go to the lower-income community and say something like, "Hey, that other community down the road has more wealth than you do, and therefore, they have more benefits, public and private. Therefore, we should tax that better-off community and funnel those proceeds to you, the down trodden poor." In other words, "we will give you something for nothing."

This is why the idea of Hillary/Obama nationalized health care is nonsensical. It's not rational as an insurance scheme because it's designed as a wealth-transfer scheme, not a true insurance plan; but in order to disguise that basic fact, they have to mess around with the entire health care system.

So, when you get into an argument or debate with one of the leftists here, you will never get an answer when you ask a question like: "Well if my dividend tax rate is increased from 15% to 28%, what benefit do I derive in exchange for that increase, either a direct personal benefit or something perhaps a little less direct?" The idea of that tax increase isn't to provide you with a personal benefit, and it isn't event for some hypothetical societal benefit which you can anticipate will indirectly benefit you. It's meant and intended as a purely socialistic wealth-transfer device--it is a direct transfer of wealth from a person who has accumulated capital (which serves as the basis upon which the dividends are earned, of course), ostensibly to the so-called "have nots." Of course we know that government bureaucrats and rent-seekers take a huge cut of pork so it's probably not even a very good way to transfer wealth, even if one actually believed in socialism.

Asking why your dividend tax rate should increase from 15% to 28% so some government bureaucrat can (supposedly) give that money to someone else is entirely a legitimate question. Instead to trying to explain how or why that could possibly benefit you, the leftists attack you. Because there is no benefit, at least no discernible benefit, to such a tax increase. The reverse question is equally legitimate: why should taxes be at the lower rather than the higher rate? but conservatives have a pretty simple answer--it aids in capital formulation and stimulates private enterprise and wealth formation. Now the leftists might not agree with that answer but it doesn't involve name calling and it's reasonably plausible economics.

Make no mistake, the leftists believe that you should be taxed simply because you have more income or more assets than their perceived political constituency. There is no other reason, there is no other justification. It's not about balancing the budget or being fiscally responsible. It's about wealth transfer because it's "not fair" for some people to have more than other people--regardless of whether that's because you worked hard all your life to save what you have.

To the far left, including Obama, the State is not a composition of millions of individuals, each of whom is important; rather, it is the State that is all-important, and individuals don't really matter.

Obama and Michelle are really frightening in terms of an economic policy. I mean she basically got a job because she's a senator's wife, making $300k+ a year, apparently doing nothing particularly productive, and she thinks 1) she's poor and 2) she's "entitled" to more. And he's a guy who apparently has never held a real job in the private economy, where he's actually had to produce a good or a service for sale in the marketplace.
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