On Progressive Taxation, or Freepernomics Disposed Of

[norml]

They sell this garbage the same way they sell the rest of their agenda, by promising that Big Money, Low Low Prices, and Jobs Jobs Jobs will come trickling down if only we remove most of the taxes, and regulations on the biggest businesses, and the richest people. Their agenda is all about getting rid of public services, protections, benefits, and rights. While such things can be overdone, the greatest prosperity the world has ever known has been during the times when we have had good public services, protections, benefits, rights, and a system of progressive income taxation, where the richer pay at a higher rate than the poorer. This makes it easier for those who are poorer to have spending money to stimulate the economy, and to better their lot. The economics of the evil movement that calls itself conservative are very bad for business, and very bad for society.

[The Traveler]

1. I think it is a matter of balance.

This is kinda long. A better writer could express the idea in fewer words, and probably with greater clarity.

The right wing, which attacks the scientific theories of evolution in our schools, nonetheless has long conducted a pseudo-intellectual love affair with the idea of natural selection.

One of the problems we face in debating the right wing is the concept of "Social Darwinism" ... survival of the fittest adapted to the market place in a simplistic conceptual model. The problem with that analogy, of course, is that is based on a piss poor and incomplete notion of evolutionary theory. Individuals as such do not "evolve" in a biological sense ... their genetic character being established at birth. Rather, population grounps evolve. While the fitness of the individual certainly plays a factor in the ability of the group to survive, it is certainly not the only factor. Even more significant is the ability of the group to organize individuals effectively.

The ability to organize, to cooperate, to care for each other was key to the survival of our ancestor species.

The point is, while primitive man certainly engaged in competition he also invented ever increasingly sophisticated methods of cooperation. That competitive drive married to an ability (and instinct) to cooperate is what got our ancestors through the Pleistocene. The dynamic tension between the principles of competition and cooperation produced the phenomenon we call "civilization".

Social/population groups are most successful when the needs individuals are well served by the operation of the group. One tangible measurement of that success criteria is distribution of wealth. When too much wealth is concentrated in too few hands, the health of the group is imperiled. The relative "fitness" of the individuals is irrelevant to the situation. As individuals feel less invested in the group, the ability of the group to compete with other groups and adapt to changing conditions is inevitably impaired.

Conversely, when wealth is too uniformly distributed it becomes difficult to get anything done. The competitive instinct, every bit as valid and necessary as the cooperative instrinct, becomes frustrated and the group becomes stagnant, rigid, and dominated by tabooes.

Neither situation is stabile, of course. The interest of the individual and the group are best served when the proper balance between the competitive and cooperative urges is maintained. Now, exactly where is that point of balance? How does one find it? That is a difficult matter to assess ... but one thing is certain. The optimal point of balance between the two principles of competition and cooperation is likely to shift as conditions change. It cannot, therefore, be identified purely through ideological first principles. It must be determined empirically, through trial, error, and adjustment.

If you accept this concept, then the policies of the past few years have clearly put our social group in a massively out of balance condition. Wealth and power have become far too concentrated, and the trend itself is accelerating. In the Clinton years, characterized by a swelling middle class achieving gradually increasing prosperity, I think we were closer to a point of optimal balance.

As we encounter the effects of global warming and resource crunches, the point of optimal balance will probably shift towards the principle of cooperation.

[blurp]

2. A couple of problems

and a system of progressive income taxation, where the richer pay at a higher rate than the poorer.

Wealth and income are not the same. It's entirely possible for someone to be wealthy and have a small income. It's also possible for someone to have a large income and have little wealth to show for it.

For example of the former, consider a widow in a large house making %2.5 on a principle of $1,000,000 = $25,000/year. She's rich compared to me, but has a much smaller income.

For example of the latter, just look at the many lottery winners that end up broke after spending all their winnings in a short time.

This makes it easier for those who are poorer to have spending money to stimulate the economy, and to better their lot.

Depends on what they stimulate it to do, doesn't it?

If money in the hands of the poor means the economy is stimulated to make more hamburgers or more CDs, is that really good?

On the other hand, if a someone with a large income buys machines to produce widgets or pays to have a medical device designed, is that really bad?

Further, the utility of money is not linear with the amount of money. $5 spread over 10,000 people tends to have less utility than $50,000 in the hands of one person.

Of course, too much money in the hands of a single person leads to waste, so you have to find the balance somewhere.

[norml]

3. One: Wealth is taxed directly through inheritance taxes.

Two: Poorer people being able to buy more hamburgers, more CDs, or more of whatever they want, IS really good. Why should someone with a large amount of money buy machines to produce widgets, or any other consumer goods, if there is no demand? Demand depends on the $5 spread over 10,000 people, not the $50,000 in the hands of one person. How many hamburgers, or CDs can one person buy? When the poorer majority of the public isn't buying, the richer minority will use any extra money they have not to hire more workers, or open production facilities here, but to buy out companies, fire workers, close production facilities, watch their stock rise as a result, and call it increasing productivity. If they use their money to open production facilities anywhere, it's in China. You know it's true.