Third Party & Independents Archives

June 12, 2006

Estate Taxes will Remain

The Senate blocked a vote to repeal the Estate Tax provision of the IRS code. For the very wealthy, this means a portion of their estate to be inherited by their beneficiaries, will continue to be taxed. Lowering rates and raising exemptions are expected, so only the wealthiest of the wealthy will incur the taxes. Voting for repeal were 53 Republicans and 4 Democrats. Voting to keep Estate Taxes were 38 Democrats and 2 Republicans.

By RNC and DNC standards this was a bipartisan effort. HaH! Had repeal taken place, another 1 trillion dollars would have been added to our growing national debt. On this vote, it was clearly the Democrats voting for fiscal responsibility.

If you would like to see how your Senator voted and thank or spank them, please click on the link following. Courtesy: Public Citizen.

For those mathematically gifted who recognized there were more votes for repeal than against, the explanation is that the blocking vote required a minimum of 60 votes to allow the repeal measure to come to a vote. Republicans failed to get the minimum 60 votes to bring the vote for repeal to the floor. (I know, screwy way to run things. Another reason to Vote Out Incumbents by Voting for Challengers.)

Posted by David R. Remer at June 12, 2006 03:38 AM
Comments
Comment #156663

David:

There are several proposals regarding how to deal with the estate or death tax. They offer different levels at which estates get taxed upon death. Do you support any of these, or do you support the original version, and if so, why?

What amount of estate do you think should be taxed—currently there are estates that will be untaxed because they do not meet the threshold. I believe (might be wrong on this) that the threshold is going to revert back to 1 million in 2011—if so, is that the right amount, or too high or too low in your opinion.

Lastly, would you agree with those who suggest that all estates should be taxed upon death, with no minimum amounts? The logic presented is that then estates would be taxed equitably, which eliminates class warfare since all classes are treated equally.

Your thoughts?

Posted by: joebagodonuts at June 12, 2006 08:06 AM
Comment #156664

David, Isnt this the 3rd or 4th attempt to repeal the estate tax during W’s watch? Wasnt this an all or nothing attempt with no neogoiation to raise the levels that the tax kicks in. This is a good thing for the middle class and a blow to the Arostocracy and Im glad it failed.

Posted by: j2t2 at June 12, 2006 08:08 AM
Comment #156666

And the Aristocracy too.

Posted by: j2t2 at June 12, 2006 08:22 AM
Comment #156681

Bush has been going for an “all or nothing” approach on repeal of the estate tax (let’s call it what it is — this is not a tax on death, otherwise everybody would be paying it).

He’s failed, fortunately, and as we all know, it takes an estate worth MILLIONS of dollars to trigger any of this tax. Anyone with that much money to worry about after death can easily manage an orderly transfer of estates through trusts, charitable contributions, or incorporation. (Read the letters in today’s NYT.)

To hear Republicans call this “class warfare” is laughable. They’ve shot down the money for programs for the poor so many times with the same nonsensical language before. It appears the only “class” they worry about are the super rich.

For all the nonsense about the poor suffering families of estate holders (that’s laughable on its own) who have to pay this tax to keep a multi-million dollar house: just do what the rest of us Americans do: GET A MORTGAGE!

Posted by: Steve K at June 12, 2006 10:22 AM
Comment #156695

David-
What is it about Republicans? Are they trying to work out a system so that they can take more of it with them?
It sounds like Bill Gates when he said he wanted his children to understand real life,so he would only give them 15 million dollars each.
At what point does the heirs unbridled greed and sick disregard for anyone except themselves,get called to task?
It appears that now would be the answer.

Posted by: jblym at June 12, 2006 11:31 AM
Comment #156707
would you agree with those who suggest that all estates should be taxed upon death, with no minimum amounts? The logic presented is that then estates would be taxed equitably, which eliminates class warfare since all classes are treated equally.

The good old “we don’t want class warfare” strawman.

The estate tax is another form of progrssive taxation (filled with all its own loopholes as well). It does not need to apply to everyone. It only needs to apply those people who are not one or two pink slips away from missing a mortgage payment on their only home.

At what actual $ amount should it apply? That’s an oversimplication, as all the loopholes and details of the tax will make that number meaningless (active farmland—exempt; money used to pay routine payroll to non-family members: exempt, etc. etc. etc.) In short, small businesses and farms can and will be protected (and perhaps other groups).

But the point is that you just cannot transfer millions of dollars from one person to the next without paying some tax on it. What are you Republicans going to work on next: abolish the Federal income tax?

Posted by: Steve K at June 12, 2006 12:22 PM
Comment #156708

JBOD, our civilization, our government, and our unfortunate citizens ranging from widows of veterans, to bankrupt seniors, to students struggling to afford a college degree, to a massive increase in border security personnel for a period, to spiking numbers of homeowners finding themselves foreclosed on due to rapidly rising property taxes, all require tax dollars to function optimally as productive Americans in America.

Taxes are a reality which can be abused in both directions, too little and succeeding generations bear the brunt of deficits and national debt, too much and the economy languishes or retreats causing suffering and feelings of futility.

The very wealthy became so at the expense of any combination of the following, consumers, labor, consumption of publicly owned natural resources, tax dollar subsidies, favorable legislation by Congress, enforced contracts and regulations at tax payer expense, and all of the infrastructure which facilitated their accumulation of wealth from the Interstate Hwy System, to public health systems, to Banking regulation and oversight.

The wealthy benefit greatly from society, and likely 95% of America’s wealthy would not have become so in another country. So, there is an obligation by the wealthy to society to help insure that it functions well, prospers, and continues to be a safe haven for their wealth, homes, and businesses.

Fact is, there is nothing wrong with eliminating estate taxes entirely if the economy is strong, everyone who works is optimistic about the future, and government is not running deficits and debt, which via interest on that debt, robs taxpayers of services they could otherwise have had provided for those tax dollars.

So, my opinion is, as long as the nation is running deficits and debt with significant service payments attached, the estate tax is both moral, justified, and warranted. Where one draws the line on how wealthy one has to be to pay it, is a political decision that in part of necessity must include incumbents prospects for reelection. That is just the nature of our democratic system.

But, a wealth tax in the form of estate taxes above and over what everyone else has to pay when the civilization is in need of revenue to secure its future, is an obligation which the wealthy have above and over everyone else who has to work to stay in the middle class. There should be an exemption for private owned small businesses up to a certain amount since small businesses continuance is vital to our society.

Currently, the first 4 million dollars of inheritance is exempt from estate taxes for a married couple. It will rise to 7 million by 2010. As a political concession to the lower echalon of the wealthy, I can live with that. An adjustment needs to be made to insure the Adjusted Minimum Tax does not hit the working middle class.

Other than that, I say the estate tax should remain in place until the deficit spending has ended and the national debt is brought down to the point where service on the debt is negligible and inconsequential for the health of the society and its future generations. This has the effect of inducing the wealthy with the greatest lobby access to Congress to lobby against deficits and for reducing the national debt. In other words, it would get the wealthy to lobby for fiscal responsibility instead of corporate welfare.

Posted by: David R. Remer at June 12, 2006 12:22 PM
Comment #156710

jblym, no, what Republicans are doing is as plain as the nose on my face, and I have a substantial nose. They are deliberately and intentionally bankrupting the government toward their goal of ending entitlements like Medicare and Social Security. They can accomplish that goal IN NO OTHER WAY, for every other way would require the consent of the public that depends on those safety nets.

Posted by: David R. Remer at June 12, 2006 12:25 PM
Comment #156722

David
On this vote, it was clearly the Democrats voting for fiscal responsibility.


Maybe, but I wouldn’t doubt is was because they’ve never seen a tax cut they ever liked. Or most likely is was a political ploy . They do want control of Congress again. And they know that most folks were against it. I’m actually surprised it came up during an election year.

Posted by: Ron Brown at June 12, 2006 12:46 PM
Comment #156725

Is it too much to ask the absurdly wealthy of this country help take care of it? If there is a huge gap between rich and poor, believe me, no one is going to want to live here, rich or not. If our education, healthcare, and infrastructure suck, no one is going to want to live here, rich or not.

Shouldn’t everyone do their part? If you’re a billionaire, can’t your part be a little bigger monetarily? I’ll bet taxes hurt a hot dog vendor’s quality of life more than a billionaire putting a million towards the betterment of their country. It’s still less than any other country asks.

This country really used to be about something more than making a buck. We were all in this together to create a better society. To me, that’s the ultimate American “value”. If you don’t want to be a part of it, live somewhere else where you can get a better deal. But remember, better deal includes vision, healthcare, education, infrastructure, opportunity. All of which require investment.

Posted by: Max at June 12, 2006 12:51 PM
Comment #156736

I was watching CNBC recently with Ben Stein and (the guy who played the first tent mate to hawkeye on MASH) A former actor, now investor talking head, discuss taxing the rich. Since nominal rates for the very wealthy are now down to 30 something percent Ben Stein made a good argument for raising their taxes. They benefit disproportionately from our society. Our police/jury system keeps the masses from climbing their estate walls and killing them and taking their money. Pay now or pay at the revolution. Maybe that will provide some perspective and incentive to the rich.

Posted by: gergle at June 12, 2006 01:23 PM
Comment #156755

JBOD,

How can the right accuse Dems of “class warfare” but at the same time maintain that this is a classless society, where anyone can become a millionaire or become president? You can’t have it both ways.

Posted by: ElliottBay at June 12, 2006 02:02 PM
Comment #156793

David, good reply to jbod, but I have to take issue with this sentence:

Fact is, there is nothing wrong with eliminating estate taxes entirely if the economy is strong, everyone who works is optimistic about the future, and government is not running deficits and debt, which via interest on that debt, robs taxpayers of services they could otherwise have had provided for those tax dollars.

The two things which immediately come to mind is: 1. Much of the income on an estate is money which has never been taxed in the first place (stocks), so collecting taxes on that money should never be eliminated at all. 2. Let’s say everything is really looking good for our society — what’s wrong with using collected estate taxes to provide all American’s with services and benefits we’ve never had before now — such as free health care for all children under a certain age, or the first two years paid for college education (or the equivalent for certificate programs)? Those kinds of things could only make America a much healthier and more competitive place in the long run.

Max — well said.
Elliot — good point.

Posted by: Adrienne at June 12, 2006 03:11 PM
Comment #156836

Elliot:

The way to have “class warfare” even in a classless society is when one party tries to make it look like there are classes. Our society does have classes, but they are not so set in stone that they act as barriers. I play sports with a group that includes doctors, attornies, delivery men, CEO’s, low level salesmen up to National VP of sales etc. Some live in expensive homes, while others rent small apartments. The only “classes” that exist are based on how good someone is at the particular sport.

However, if anyone becoming President or a millionaire is a sign of a classless society, as you seemed to suggest, then we certainly have a classless society.

Anyone can be President. Look at Bill Clinton. His father died before he was born, he had an alcoholic and abusive stepfather, a family that was disfunctional, had precious little money, and he came from a state that doesn’t hold political importance, but he worked hard, made connections, won elections, lost elections etc. His was not the normal path to the Presidency, but if someone from his circumstances could make it, then anyone can.

Anyone can be a millionaire. Look at Chris Gardner. He rose from being the homeless father of a child with very few prospects to a multi-millionaire. It took cojones, it took perseverence, it took hard work and simple bullheaded ‘won’t take no for an answer’ doggedness, but he made it. If someone from Chris Gardner’s background can become a millionaire, then anyone can.

Posted by: joebagodonuts at June 12, 2006 04:47 PM
Comment #156849

JBOD,

Sorry, that doesn’t wash. You can’t have class warfare and argue that there are no “real” classes.

What the elimination of the estate tax would do (aside from getting more donations for Republicans) is create a whole “class” of people who are wealthy, not by virtue of hard work, but based solely on their luck at having been born into money. That isn’t rewarding hard worker - it’s rewarding the hard worker’s children, who did nothing to deserve their wealth.

Posted by: ElliottBay at June 12, 2006 05:22 PM
Comment #156903

JBOD, your reply to Elliot is way, way off base. First anecdotes don’t make the case for society at large. Second, ask a young black male or female in high school if they have the same opportunity to become a millionaire, or ask most middle class blacks if they have the same opportunity to buy a home in the suburbs of Aurora Colo. (35 years ago), or any other of many thousands of all-white communities with a few tokens excepted to keep plausible deniability intact.

Your conservative slip is showing. You know the one that says in America everyone has the same opportunities as the next guy? There are exceptions, but, they only prove the rule. Not everyone can be a Bill Gates. Bill Gates was lucky in the extreme in countless ways, not the least of which was being brought up in a home with garage.

Posted by: David R. Remer at June 12, 2006 07:28 PM
Comment #156908

The fact is that with the amounts that are exempt, even under the 2001 levels, a person can live pretty comfortably. In 2001, and in 2011 if nothing changes, the estate tax will exempt the first $1 million and tax 55% after that. So on an estate of $3 million, the beneficiary would recieve $1.9 million. At a paltry 5% APY, that is about $95k/year in income forever. Sure, they would pay regular income taxes on the $95k, but that’s still a nice paycheck for doing nothing.

Another talking point that those in favor of repeal like to bring up is the strain on family business, but it is pretty rare that the estate tax effects a business. This is due to the step-up provision in teh code, which allows for an original purchase valuation of assets. So, for instance, if grampa bought the family farm in 1920 for $5k, then when you inherit it it is valued at $5k as far as the estate tax is concerned, making it totally exempt from taxation. This becomes an issue when the beneficiary tries to sell the farm, because they will pay capital gains based on the $5k as well. It is a great exemption for those who want to keep the family business in the family.

Posted by: David S at June 12, 2006 07:38 PM
Comment #156909

Ron Brown, quite right. Neither Democrats nor Republicans move in opposition to either their own greed for money or power, or their constituents paying their bills. Unless mental illness is involved, of course! Many Democrat politicians are so mentally unbalanced they can’t help but to drift left when trying to walk a straight line. Republicans too, they make complete U-Turns when trying to walk a straight line (smaller government, fiscal responsiblity, and individual freedom and liberty from government intrustion.)

Posted by: David R. Remer at June 12, 2006 07:39 PM
Comment #156926

Does the estate tax apply to just inherited money or wealth in general? For instance, if a middle-class man inherits several million dollars worth of land but no actual money, would this tax still apply to him? Perhaps this is one of the aforementioned loopholes, but if it’s not, it just doesn’t seem fair to me.
I do agree with the estate tax in general, but I’ll admit to not knowing much about the subject.

David R.,
Thanks for the link that showed how the senators voted. I’d like to see that kind of thing in more articles of this type. Of course, as luck would have it, my senator (Schumer) was one of only two who didn’t vote…
I voted against him, but when the guy who you’re trying to vote out has an opponent who couldn’t (or simply won’t) campaign his way out of a wet paper bag, anti-incumbency efforts really don’t do much good.
I agree with your VOID stance, David, but both parties have a habit of offering only token opposition to incumbents, or in many cases, no opposition at all. That’s why the Republicans don’t come close to winning (national) elections here in New York. It’s also why I don’t think the Democrats will take back either house of congress this year.
Sorry I got off topic…

Posted by: TheTraveler at June 12, 2006 08:17 PM
Comment #156946

I am against the estate taxes but not “baby out with bathwater”—against it.

Here’s the reason, and this may classify me moreso on the right column but the truth is the truth.

With estate taxation, the lion’s share of those moneys go to lawyers, now what’s wrong with that? What is wrong with it is that the lobby that most wants estate taxation existent is the lawyers. Lawyers donate millions annually to the Democratic party and the truth about estate taxation is that the real rich fat-cats are actually the Genreational trust fund people NOT thyose looking to transfer their estates per se.

My solution to this is to cap estate taxation at a clean 6.5% or there abouts which generates minimal revenues for lawyers being that they become very simple contracts and procedings. Then those inheritors pay their normal taxes at that bracket—fairness.

Now how do we get the generational trust fund kids and their installments? Such families would include The Bushs’, The Gores’, The Kennedy’s, The Rodhams and the Clintons’, The Rockefellers, The Heinz-Kerrys’, Any family with old money that gets moved into trust funds.

My solution: cap it at a 12.5% per installation as they can afford it and be done with it. Then allow normal taxation to get the rest and not give families or persons in those very extreme brackets such “tax-relief” as they have really more money than they can possibly spend employing people are not. In other words their money is SO BUSY making money that they really haven’t got the downtime to go broke. It’s like an octopus to see if actually we knew diagrammatically how much they have invested across the board—and truth be told we don’t touch them.

So if you make good in like with say like make over 1 million or so and what to pass it on to six family members to share, roughly 60% of it will be going to attorney fees, IRS courts and the whole messy process.

That is one major reason I am against how it is done—It keeps the wealthy super wealthy by making them untouchable and those who make a nice chunk of change in life and want to pass it on get screwed because they are not Rockefellers and so on. Estate taxation is pretty much for those in the low millions range.

Posted by: Novenge at June 12, 2006 09:11 PM
Comment #156950

Sorry about my above post—typos galore!

Posted by: Novenge at June 12, 2006 09:14 PM
Comment #156958

TheTraveller:

There are distinctions in the existing Laws for Farmland and such.

If you inherited a multi-million dollar Mansion Estate, then you will probably pay.

Posted by: Aldous at June 12, 2006 09:27 PM
Comment #156973

The Traveler, the estate tax does not apply just to monetary assets. Pretty much anything that can be sold for money will be taxed.

As such, I think a very high progressive tax would be a very good thing. Children should not be entitled to handouts from their parents and not have to work a day of their life.

Posted by: Zeek at June 12, 2006 09:47 PM
Comment #156993

Aldous and Zeek,
Thanks for the answer.
Btw, welcome back Zeek, I haven’t seen you in a while.

Posted by: TheTraveler at June 12, 2006 10:34 PM
Comment #157018

David:

My response to Elliot was directly on target. I showed two examples of people who didn’t allow the likes of you to tell them how hard it would be to accomplish greatness. No, they didn’t listen—-they just went out and did it. Despite their circumstances, they succeeded.

Elliot’s response was a simple rehashing of his earlier statement—nothing more. He then talked about how doing away with the estate tax is wrong—-and I’ve not even said that I’d be for that. Instead, I asked questions about which estate tax plan would be best. A world record in the conclusion leap.

David, the world is not fair. It never has been and never will be. No matter what you do, it will not be that way. Certainly some have better opportunities than others, some have more money, some more power, some more brains, some more luck, some better timing.

But I showed how a guy on the bottom rung of society succeeded….and he did so by relentlessly working hard and not giving in to the temptation of thinking he couldn’t succeed. He never gave himself that cowardly “out”.

We can all succeed to different degrees based on our circumstances. I have no need nor desire (nor the skill) to be a millionaire. Yet I am successful in my life. I make enough to take care of my family, as do you. You might make more than me or you might make less. Doesn’t really matter much.

Life cannot be made equitable and fair. My father died when I was 11—I knew him very little before that. That’s not fair. It is what it is. I cannot and WILL NOT allow that fact to determine my future. I’ve faced difficulties because of not having a father, like not knowing certain things or not feeling comfortable with certain issues, but I’ve succeeded nonetheless.

If you want to deride my holding people accountable for the larger part of their success as having a “conservative slip”, then I wear it proudly. I’ll not hold others responsible for my well being, and I’ll not do more than lend a hand up to others. I won’t give them the lack of respect by assuming that they are down and out and its beyond their means to do better. I won’t disrespect them in that way.

Posted by: jeobagodonuts at June 12, 2006 11:21 PM
Comment #157028

joebagodonuts:

Unfotunately, your President paid for his Budget via Chinese VISA. With Tax Cuts and bloated spending, how would you propose to pay the Interest?

Posted by: Aldous at June 12, 2006 11:39 PM
Comment #157054

I’m a liberal who strongly believes it is appropriate for the wealthy to bear the larger tax burden for the very reasons David enumerates in his first reply here. That said, I do believe the estate tax as it exists is poorly formulated. It probably should be eliminated, but only if it is replaced by an improved inheritance tax which seeks to assure that a wealthy heir pay a fair share of the “income” which is their inheritance. There are certainly problems with such a wholesale replacement, but since no one is talking about such a thing, the only fiscally responsible thing to do is to keep the estate tax with all its foibles.

Basically the idea of my inheritance tax is that the estate would provide forms to the IRS declaring the value of the inheritance of each benefactor of an amount over some threshold value (60K? 150K?). The inheritor would then be required to list that amount on their 1040 for the year of the inheritance, and could deduct some amount of it tax-free, but would then pay tax on the rest at their regular rate. Currently I believe there is an inheritance tax on very huge amounts, but that threshold is so high because of the estate tax. Such a tax would be fairer because inheritors who could afford to pay would, while those who really need the cash would pay at a lower rate without having the estate reduced before their inheritance is determined. There would also be less burden on the executors of the estates, and wealthy people who really do choose to give it all away to charity could avoid the tax, but wealthy heirs would never get a free ride.

Any replacement tax should be figured so that it is at least revenue neutral, but better still if it adds more to the treasury to fund programs for the truly needy.

But that’s a dream for later when we have real dialog return to the halls of Congress. For now we need to keep pushing back against the effort to bankrupt our treasury while padding the wealth of the wealthiest.

Posted by: Walker Willingham at June 13, 2006 01:08 AM
Comment #157065

The wealthiest of the wealthy, i.e. the Kennedy’s, don’t pay estate taxes. They pay attorney’s to set up trusts to avoid estate taxes. They don’t pay income taxes either. These are myth’s fabricated by socialists, or as we call like to call them, Democrats and Senate Republicans, and supported financially by billionaires, who pay neither of these plebian taxes, but find that contributing money to socialists ensures fewer billionaires to compete with.

These two taxes are designed to keep people from becoming wealthy, or to make it more difficult to do so, not to punish the wealthy. Do you idiots actually believe that wealthy attorneys would pass laws that punish wealthy attorneys?

Like lambs before the slaughter.

Posted by: David C. at June 13, 2006 01:53 AM
Comment #157088

David C., what a lot of specualtive drivel. Produce some authoritative links demonstrating that the Kennedy’s or any other wealthy end run the estate tax or income tax other than charitable giving, and your comments may have some credibility.

Back it up, or be content with your comment’s impotence to persuade.

Posted by: David R. Remer at June 13, 2006 03:40 AM
Comment #157090

JBOD, your last reply to me is so full of illogical right wing arguments I hardly know where to begin. I will cover just a few for brevity.

My response to Elliot was directly on target. I showed two examples of people who didn’t allow the likes of you to tell them how hard it would be to accomplish greatness. No, they didn’t listen—-they just went out and did it. Despite their circumstances, they succeeded.

That was quite a retort to my claim that anecdotes don’t argue for the general population. Like many conservatives you reiterate an illogical response as if that somehow makes it more convincing.

Life cannot be made equitable and fair.

Does the fact that utopia is not achieveable diminish the need to strive for it? It doesn’t appear that the lives, injuries, and abuses of civil rights activists from the 1860’s through 1960’s were wasted. Life for millions of non-caucasion Americans did indeed become more equitable and fair. Your statement is patently false as demonstrated by numerous examples of American history from child labor female abuse without punishment, to women’s suffrage.

I’ll not hold others responsible for my well being,

But, the fact remains that your well being is maintained by the majority of Americans via the military protecting us against invasion to emergency medical services, to banking regulations which protect your money in your checking and other monetary accounts. You do indeed depend on others for your well being whether in your mind, you hold them responsible or not. I suspect if the bank made off with your money, you would hold them responsible. Another right wing myth “the rugged individualist successful person depends on no one but himself for his success”, dispelled.

We live in one of the most interdependent realtionships with our fellow man than any in history ever have. Success is a very dependent affair, dependent on society, dependent on others taking responsibility for you and yours, dependent upon luck and time, and YES, dependent upon personal effort and goal oriented achievements. The problem with many conservatives is their penchant for discounting everything except the personal effort which is a fraud perpetuated to keep from sharing their success. Truth is, most very successful people readily acknowledge time and again the many people and the society at large that were instrumental in their success. Another truth is, most really wealthy people don’t mind sharing the success or wealth with fellow citizens if the contributions are put to use where they will do the most good. Case in point, the survey done of wealthy persons back in 2002 I think it was, asking if increasing their taxes to offset the 9/11 deficits was a worthy cause. The majority said yes.

Posted by: David R. Remer at June 13, 2006 03:58 AM
Comment #157112

David:

One of the most common logic mistakes is assuming that if you disagree with someone’s viewpoint, then that viewpoint must be illogical.
You’ve fallen into that trap.

You then use a fun debate tactic…take the other person’s point to the Nth degree and make it look wrong. And of course, at the Nth degree, most points look wrong, both yours and mine. Let’s take your goal of equality for all…and lets achieve it by dividing all the wealth in the United States by the number of citizens in the US and then doling it out equally. Pretty stupid sounding….just as stupid as assuming that I care nothing about the interdependence in society and want a 100% non-dependent society.

We all want opportunity, and we want opportunity for all. I believe we have that in the US, though for some, the opportunity is easier. But its still there for all.

You don’t want anecdotes, but then you discuss anecdotally Bill Gates. There are myriad stories of people who have achieved success despite bad odds due to their hard work, effort, perspiration and luck. In there too is our society, which provides opportunity. For some, that opportunity begins with the military, followed by an education, followed by a career. For others, it starts with a publicly funded education. For others yet, it starts with a vision of and idea. Each opportunity exists in part due to a society that allows opportunity, part due to the person’s ability and effort, and part due to luck. Society provides the overarching support—infrastructure, security etc.

I know a guy who started cutting lawns in junior high….last I knew he owned the largest landscaping company in town despite the lack of education beyond high school. That could have been anyone….anyone willing to sacrifice their after school fun to cut lawns. Anyone willing to sacrifice their money to keep reinvesting. Anyone willing to work like a dog to get ahead.

Personally, when it comes to taxes, I favor a flat tax because it promotes true fairness. Everyone pays a fair share that is based on their ability to pay…those with more pay more, those with less pay less. If implemented, it would need to be revenue neutral (though of course, we need to curb the spending side of things greatly).

If we hold people to high expectations, they tend to meet them. If we coddle them with low expectations, they tend to meet those too. I’ll keep my high expectations, as a measure of respect for people’s innate abilities.

Posted by: joebagodonuts at June 13, 2006 06:54 AM
Comment #157126

JBOD, those who succeed do so as much and more BECAUSE of their circumstances as much as despite them.

Your lawn care guy. Great example. Now put 300 others in his location all vying for starting the same lawn care empire. All 300 are NOT going to succeed even if all 300 exert the same effort and diligence and committment. Again, the one-sided argument often used by the right doesn’t hold up. Because in our society this is exactly the situation we have. Intense competition by folks most of whom are dedicated to succeeding and willing to sacrifice to succeed. The marketplace however, can only support so many successors at the top of the ladder. Too many at the top, and they all fall down. The Tech Bubble of 2000 was a case in point.

I believe in a progressive tax system, but, nor for America. Our political situation cannot sustain a fair progressive tax system, because the wealthiest end up with lobby power to exclude themselves from it. Progressive tax system can and is working, too well, in China. They are funding so much growth and development that that very growth and development is destroying the habitats and environments needed to feed their people as it consumes 7 to 10% of their arable farm land per year.

I agree with you that the fairest tax plan for the U.S. can only be the flat tax system. It is less than optimal, but, the fairest and most equitable that can be achieved, since we are incapable of maintaining a fair and equitable progressive tax system. This is where Democrats and Republicans both fail in tax reform entirely. Neither really wants to abandon the broken progressive system we already have since they are underwritten by the benefactors of it.

Posted by: David R. Remer at June 13, 2006 08:49 AM
Comment #157133

David:

I see some agreement as usual in our thinking, despite our differences.

Of course there cannot be 300 top lawn care guys in the same area. There can only be one number one. But that doesn’t mean there isn’t opportunity for success. Personally, I wouldn’t want to sacrifice what the lawn guy did to get what he got. He’s got me beat in spades financially, but I’ll take my family, my family time, my enjoyment, my free time over his company. Point is that he’s free to do things his way, and I’m free to do them my way.

But the opportunity is there. Maybe in his community, there isn’t room for another lawn service. So go into house painting, or computers or stockbrokerage or….any number of possibilities. Be Michael Dell and sell computers out of your dorm room…WHAT??? how could THAT possibly work? Guy had an idea and slaved at it to make it work. He FOUND opportunity instead of waiting for it. He saw a void and he filled it—rather than copying other people’s ideas of how to do things.

Agreed on the idea that both Dems and Reps fail us, and why they do. By the way, my flat tax has some progression to it—three rates in a bell curve with 80% in the middle range. It could work, but we probably gotta vote out all the Dems and Reps and elect Steve Forbes. Know any organizations that can help get rid of the incumbents? :)

Posted by: joebagodonuts at June 13, 2006 09:13 AM
Comment #157142

JBOD, What a great reply right up until Steve Forbes. That name ruined it. :-)

The problem with a tiered flat tax is that it is no longer a flat tax. The appeal of the flat tax is that it is flat. Introduce progressivity or tiers to it, and it will never pass Congressional muster nor to the common sense of the American people. They are fairly literal minded on things. Call something one thing but design it to be another, and they get confused and uppity.

Posted by: David R. Remer at June 13, 2006 09:49 AM
Comment #157176

TheTraveler, that’s because I’ve been hiding my posts in the depths of the red section ;)

Posted by: Zeek at June 13, 2006 11:16 AM
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