Not necessarily. Sliding scale taxes (e.g. richer people have a larger tax rate or are in a tax bracket) means that the government robs a man because he makes large amounts of money. Taxes are fine, but sliding scale taxes rob people.
This is called progressive taxation. The alternative is a flat tax, which is essentially regressive as it bites into poor people's incomes much more harshly than it does rich peoples.
Basically it works like this: if you have made money from everything that society provides, you are expected to pay taxes towards the upkeep of that society. If you have made significantly more money than someone else from this society, then you should be contributing a greater share of your wealth, but you are also much better off. Then there's also the fact that if you're wealthy, you don't *need* the next extra money as much as someone else who is poorer.
It seems morally repugnant in general that a society should exist in which a minority of people can have trouble choosing what pair of designer shoes they should wear to go with their designer gown, while another person in the same society has to choose between going to the doctor to get treatment for an infection or buying food for their children to eat this week. That is, some people can squander their wealth on pretty much meaningless pursuits to make themselves marginally happy, while someone else is desperately struggling to even meet the basic necessities of life.
Incidentally, in NZ and possibly in the USA too, although I wouldn't know for sure, the tax brackets remain constant, but due to inflation of a max of 3% each year, people earn more and more money. Basically, more and more people will move into higher tax brackets, while not earning any more real world value in their money. At the very least, the tax bracket system should be set up to increase each year with inflation. Ideally, there'd be no inflation at all, and only one tax bracket. Why should someone be punished for earning large amounts of money?
This is called fiscal drag, where because of wage inflation to keep pace with price inflation, you rise into a higher tax bracket and effectively have less after-tax real wealth.
In 2005-2006, Michael Cullen proposed permanently indexing tax thresholds to the CPI inflation rate. This was criticised by National (and picked up by the media) as the "chewing gum tax cut" that would only deliver $10/week at best to some people. As a result of the negative publicity, Cullen ended up dropping the idea. As we have now had much higher inflation rates for the last few years, this indexing would have actually moved the thresholds up quite a lot by now. So you can blame National for our thresholds not being inflation indexed - and they had ample opportunity to introduce it in the tax changes for 2009 or 2010, but chose to give massive tax cuts to the rich instead.
Well, I could start with a sob story.
Thanks for that. It shows that you truly do have a realistic perspective on these issues; many on the right of the political spectrum simply do not have any real comprehension of how other people live in society (or have been brainwashed by the media to vote against their best interests).
While I myself haven't grown up in a particularly rich household, I would say my parents are solidly middle class. My dad was always employed and my mum ran a sewing business from home. We never had to go without food or the necessities, but at the same time my parents are very frugal with their money - we never really went on holidays or bought into the consumerist lifestyle at all when I was growing up (as it should be, really). I don't have any serious health issues at all, and neither does anyone in my family. I now have a job paying $35/hr and an interest-free student loan that has under $9k remaining, and a car worth about $10k with no debt on it at all. So I am comparatively pretty well off.
But in the end what I'm going to say is this. The idea of social security, welfare, medicare, medicaid, is not a bad one. I'd be thrilled if the government paid my entire education. But right now I'm thrilling they are able to provide me about $6k in aid a semester. I am fortunate that we have these programs - even if I think they are broken. I am not looking forward to paying for programs that don't work, though, and that are treating symptoms instead of the root problems.
Yes, it is always difficult to target welfare in such a way that it isn't abused and yet gets to those who need it most at levels that are actually useful for them, without also being a huge bureaucratic nightmare with heaps of paper work that needs to be shuffled. The root of most social problems boils down to education, which is very expensive and takes a long time to really sink in. It's also quite difficult to do properly and difficult to measure, so it's very easy for funding to be withdrawn in the short term due to "lack of results", or schemes to be drawn up with the best of intentions to improve educational outcomes but actually end up wasting money or even harming outcomes.
Culture is also a root problem, which is very difficult to mould in specific directions, and also takes a long time. Education can help, though. There was an American news report on the Japanese disaster that I caught on TV, showing what a different culture they had. The power companies were needing to impose 3 to 6 hour rolling blackouts as they currently don't generate enough electricity for everyone to use as much as they wanted. But they found that they didn't need to implement specific blackouts, because the people, without any particular prompting or cajoling, voluntarily cut back on their general power usage so that blackouts weren't required. I can't imagine the same happening in the US (it didn't in California during their Enron crisis), or in most other western countries for that matter. Another stark example of particular American culture is your attitude towards guns - no other country in the western world handles the issue the way you guys do (where you can pretty easily buy an automatic assault rifle or rocket launcher if you want to).
I think that's true of obamacare. I surprisingly don't know many people who are thrilled about obamacare.
From what I understand of obamacare, it is really a half-arsed solution that doesn't go all the way. It's not really state-run healthcare, but essentially corporate welfare for insurance providers by forcing all citizens to be insured (more customers). Probably the only real redeeming feature is the requirement that pre-existing conditions must be covered and also the attempt to make it easier to compare insurance policies from different companies and be able to understand with what you're actually buying into.
Most of my contemporaries are bracing to pick up the bill from all the welfare programs that do not work and will not last. While our parents get thousands of dollars in tax breaks, we're waiting for when the government notices 'oh we needed that money' and so increases taxes in the long run. The 90s and part of the 80s were very prosperous, but we are not any more. We don't have the buying power to support the same habits our parents had. We need to change our outlook. We need to stop demanding stuff from our government and suck it up, cut programs, and refine the programs we must keep.
Yes, the US has a huge budget problem. But there are two ways to balance a budget - cut spending or raise revenues. There is massive tax avoidance (the legal form of 'tax evasion') going on in the US by large companies and wealthy individuals that structure their income using legal loopholes to avoid paying as much tax as possible. Essentially they are free-loading parasites - they take all of the benefit of a functioning society (law and order, educated populace, roads, electricity etc) and then pay as little as possible towards the upkeep of that society. In some ways this is simply a product of the environment they operate in - companies are legally required to maximize value for their shareholders, and can even be sued if they fail to do so. This leads to a situation where you must cut costs in any way possible so as to keep abreast of your competition, and unfortunately taxes are essentially just another 'cost' to a business, and often are one of the largest single sources of cost, so finding ways to reduce their tax bills is essentially mandated by law.
Another aspect is that military spending in the states is completely out of control. Really I think a lot of military spending is actually welfare spending but with a side effect of making some weapons that are useful for projecting the US power abroad.
While undoubtedly there is plenty of welfare spending that can be re-targeted or simply cut to help balance the budget, seriously clamping down on tax avoidance and military spending can provide much bigger savings with comparatively less human suffering.
I find it surprising that America is still considered the most prosperous country because we're not. That prosperity is a damned lie - it will damn us all as long as we continue to pretend that we have money.
The country is truly broke. You're basically sailing along on your infrastructure that was built from 1940 to 1980 or so, a lot of which is actually falling apart and in dire need of maintenance. I think the apparent wealth in the 80's and 90's stemmed from deferral of maintenance on this infrastructure as well as short-sighted cutbacks in educational and health spending (and corrupt politicians feathering their own nests and furthering lobbyists interests), and now all of those issues are starting to come home to roost.
Whereas countries like Saudi Arabia, which does have extremely good benefits for their citizens, including free health care as well as a lot of help with higher education, makes a lot more money and is much more prosperous.
Saudi Arabia exports oil and precious little else. The population itself is down-trodden and actually have pretty poor quality of life overall, along with it being the most conservative of the Islamic states. The government provides health care and massive subsidies in every day life as way to stop dissent and keep themselves in power. Eventually there will come a point where they will be forced to migrate away from this paradigm and it remains to be seen how well they can manage it.
What you really should be asking what's China's excuse? Why does China have a surplus even though they are pumping money into a failing (and hazardous) dam project, their people are still largely impoverished?
China is ruled by some very smart people. They've artificially kept their currency low so as to benefit greatly from their massive exports. Essentially globalisation has shifted western world's manufacturing, notably the US's to China, and now have to buy the products back that they used to make themselves. While a large number of Chinese still live in relatively primitive conditions, they are still improving the living standards of their citizens at a rapid pace.
Post has been edited 7 time(s), last time on Mar 17 2011, 8:20 am by Lanthanide.
None.