Spread The Wealth (II)
Ross asks:
Another thing on this subject – is opposition to wealth-spreading in principle really now a litmus test for being a conservative? I thought that being on the right meant that you wanted a welfare state that’s small in size and limited in scope – that’s what I signed up for, at least – and the most just and reasonable way to shrink and/or restrain the American welfare state that I can see is to make it more redistributive, rather than less so.
I suppose a friendly way to reply to this would be to say that someone who wants a welfare state that’s “small in size and limited in scope” is on the right, but that is not why he would be identified as being on the right, except by comparison to those who want universal entitlements and who speak of government support in terms of rights. Nonetheless, Ross’ frustration with McCain’s schizophrenic hatred of socialism (or as McCain has been quoted as saying: “we loves redistribution of wealth, we hates it!”) is understandable. As I noted before, labeling Obama as the wealth-spreading candidate is not only politically stupid, but philosophically misguided as well. It used to be that conservatives believed and could articulate the belief that market economies were on the whole better at allocating resources and equitably distributing wealth than economies subject to a great deal of state intervention. The time was when broad and even distribution of wealth was a Jeffersonian and conservative goal to provide for a broad class of property-holders as the basis for social and political stability. It was not a description of a left-wing or welfarist plot. So much for that.
The bailout was redistributive, McCain’s crazy mortgage bailout pander (which is essentially a gift to lenders) is redistributive, and federal subsidies are classic examples of redistributing wealth, and McCain supports at least two of those three, but when Obama proposes tax credits for low and middle-income taxpayers (even if this results in additional subsidies) that is suddenly unacceptable socialism for McCain. It’s true that these subsidies are going to be funded out of general revenues, but McCain and a lot of his supporters do not oppose these things in principle. So what McCain and his supporters have been saying as they parse Obama’s supposed “tax cut for 95%” is the following politically savvy message: “If you are working-class or middle-class and did what you were supposed to do, you’re not going to get back any more of your money from the state, but if you are a financial institution that made bad loans or bought up mortgage-backed securities all the people who played by the rules are going to help you out.” Solidarity for financiers is not exactly a compelling message. What is even more incredible is that McCain and Palin have the gall to portray themselves as the ones who want to put the government back “on the side of the people.”
Bizarrely, rather than focus the attack on Obama’s proposed new entitlement spending or Obama’s raising of the payroll tax cap, McCain and his allies have spent the last week obsessing over the proposed tax credits/subsidies, which also go to those who don’t pay income tax. It’s not as if McCain opposes redistribution as such, but he does seem to be very much opposed to any kind of relief for most responsible taxpayers.
The time was when broad and even distribution of wealth was a Jeffersonian and conservative goal…
In some plane in the hereafter, the Sage of Monticello is still recovering from the shock of seeing those two words in the same sentence.
While your point about the McCain redistributivist tendencies are factually correct, I think they miss an important point. As wrong and corrupt as they are, his bailouts and subsidies are not based on the same principle Obama is using. That we give money to certain groups is the means to another goal. With the bailout, the idea was to keep a certain sector of the economy going. That a banker got the money didn’t matter, in theory. The same thing with Ag subsidies; even in their most corrupt form, they are intended to do something beyond enriching the guy with the check.
Obama’s mission, OTOH, is to simply take money from one group of people and give it to another, and that’s it. The final end is to make equality a government objective in itself, and that’s a serious shift in philosophy, even if the money sums are still about equal.
Whereas we have been transferring wealth to the wealthiest Americans for the last 8 years, that’s okay!
Markets don’t work if people cannot buy things. Businesses cannot succeed if people do not have the means to buy anything, and the amount of disposable income in the middle class has shrunk and we are heading into a recession.
Those who have money are not spending it on Main Street. They squirrel most of it away in investments that make financiers rich. Financiers that we are now backing with taxpayer money (!). The middle class spends their money on Main Street, so the rich can invest in those businesses. If they have it.
With a strong middle class, everyone succeeds. With a weak middle class, you have the current status.
Warren Buffett is backing Obama. Wonder why that is?
The Jeffersonians and their inheritors have been the closest thing to a natural American conservative tradition since the Loyalists were kicked out. I don’t know whether Jefferson would be shocked by such an idea, but I doubt many later Jeffersonians would disagree with the larger point.
Obama isn’t proposing to establish income equality, nor is he making it an objective. He is proposing to subsidize various expenses of low- and middle-income taxpayers. We are really giving them “other people’s money” only if the credits they receive exceed their tax payments. I don’t really have a problem if someone wants to describe these transfers as being similar or equivalent to welfare, and I don’t support or endorse this plan. Nonetheless, in principle we should want wealth distributed or “spread around” more than we should want it concentrated.
Every government intervention McCain seems interested in backing favors oligarchy, which is the fundamental contradiction of his campaign.
Derek–
I think Obama has been pretty clear that his desire is not for complete income equality, but for progressive taxation that favors the middle class. Furthermore, his reasoning has always been that growing and strengthening the middle class is good for the economy as a whole, and certainly better than watching the middle class wither under top-heavy wealth concentration. So to characterize it as a giveaway or redistribution for the sake of redistribution is, I think, off-base. It’s as targeted as any other recent bailout plan, anyway.
Daniel, have you watched the Palin CNN interview from last night?
One thing I was struck by was how heavily Palin leaned on the notion that Obama’s tax plan is verging on, or leading us toward, socialism, and that tax cuts for big corporations are the only way to promote growth, etc. This is a plausible argument, sure, and she’s far from the first person to make it. But it might be a little more convincing were she not the governor of a state that taxes oil companies so it can literally mail every resident a couple grand every year.
I read the transcript. I haven’t seen the video yet. Of course it’s not credible when Palin makes this charge. She is the “most popular governor in America” because she gave everyone rebates from the tax hike on oil companies that she imposed, which is as pure an example of giving away other people’s money as it gets.
Daniel,
Is Obama proposing straight mathematical income equality? No. But some sort of leveling is being proposed. I don’t think that can be ignored. As something like 30-40% of the country pays no income taxes, then their “tax cuts” will be welfare payments, and those payments are being handed out solely because a person has not earned a certain amount. Conversely, money is being taken away from others because they earned more than some arbitary amount. This is a broad determination of what our social structure should look like. This is a far more personal intervention than a bailout or a subsidy.
Indyra:
Whereas we have been transferring wealth to the wealthiest Americans for the last 8 years, that’s okay!
Where did I say it was “okay.”? I said no such thing, and I hate W and McCain like poison. What I said is that those payments worked under a different rationale, one that didn’t assert a government’s duty to fiddle with a nation’s social structure. I’m not comfortable with that, even if Warren Buffet is.
And, Clinton had his own bailouts and sweetheart deals, so let’s not restrict this to the last eight years.
Matt D:
Furthermore, his reasoning has always been that growing and strengthening the middle class is good for the economy as a whole, and certainly better than watching the middle class wither under top-heavy wealth concentration.
That’s nice, and it also supports the point I’m making. He’s putting the government into the business of changing and maintaining our social structure through direct manipulation. Subsidies and bailouts, for all their evil, don’t do that.
Really, if he wanted to “strengthen” the middle class, he could cut off immigration, creating greater wage increases and making housing and other services more affordable. But that wouldn’t give him the ability to meddle with our lives.
The Alaska example does exhibit opportunism and pandering, but it’s not quite the same thing. First, you’re talking about collecting fees on a state resource, not on private income per se. Second, the reimbursements were sent out to everyone equally. There’s no attempt to monkey with the state’s social structure.
Most of those who don’t pay income taxes still pay other taxes. As Jim Antle notes in his review of GNP, “Payroll taxes now take a bigger bite of many families’ paychecks than the dreaded income tax.” If Obama really wanted to give tax cuts to most people, he would cut this tax, but he’s not going to do that because he doesn’t want to be accused of destroying Soc. Security. Instead he has this roundabout transfer payment scheme to offset what the government is taking from them. It would be far better to combat wage stagnation and growing income inequality in part by reducing payroll taxes. Continuing to take the same percentage from people as wages have been stagnating is a particularly obnoxious form of taxation. Of course, McCain has no intention of offering any relief whatever to these taxpayers. At the very least, McCain could be hitting Obama for raising the payroll tax cap, which would entail significant increases in tax for wealthier individuals, but that would just underscore that he seems to have no interest in making an argument for middle-class interests.
Tax credits and subsidies have long been used to encourage certain kinds of behavior and to use the tax code to pander to different kinds of voters. There is absolutely nothing unique about these subsidies, except that Obama has misleadingly portrayed them as tax cuts. We shouldn’t have such things, but given that we do I think it’s important that we understand what they are and what they are not. For a lot of households these subsidies are not going to exceed what they owe in payroll and other taxes. What no one seems to be concerned with are the other 50% or so who do pay some income tax on top of these other taxes–we wouldn’t say that they’re receiving welfare, would we?
I guess I can’t avoid quibbling, but I think the principle is an important one. Encouraging behaviors, like buying a house or a “green car” or something like that is different than simply rewarding someone for earning less, as ill-advised as that ‘behavior encouragement’ may be.
The FICA taxes exist, but they fall under a different rationale: that you’re paying into an insurance fund, which, in theory, you should be getting back.
I agree that a lot of this rationalization, and perhaps I should congratulate Obama on his direct, if unintentional, honesty. I’m just not thrilled with having this become an open principle of governance. The smelly hypocrisies at least act as something of a check, as flimsy as they are.
What no one seems to be concerned with are the other 50% or so who do pay some income tax on top of these other taxes–we wouldn’t say that they’re receiving welfare, would we?
The concern here is that we’re approaching the point where a majority of people would be net tax-consumers. I suppose it depends on how you want to juggle in FICA and other taxes, but that’s where the concern centers.
The concern here is that we’re approaching the point where a majority of people would be net tax-consumers.
Is it your contention that property taxes, sales taxes, gas taxes, estate taxes, gift taxes, excise taxes, and import duties simply don’t exist?
Can you not read the sentence that follows the one you quoted?
Sorry Daniel, that first line was sarcasm. It is just too ironic to hear people get scared at the tax plan as being “wealth redistribution” or “socialism” when we have just suffered wealth redistribution in the reverse direction, against most people’s better interests, not including the bailout.
As far as I see it, anything the government does meddles with our lives, some ways more directly than others. Cutting off immigration leads to the further outsourcing of jobs to cheap labor markets, or the increased cost passed on to the consumer (especially in agriculture). It still affects us.
The thing we need to get back is manufacturing – living wage jobs that people do not need a college education to have, and pay better than the service industry.
Can you not read the sentence that follows the one you quoted?
I can read it, but I can’t impart coherence to a paragraph that lacks it. If you bother to look at the total tax burden, the idea that a majority of people are tax consumers is patently ridiculous. If such things are a concern for you, you might as well be concerned about invisible monsters under your bed killing you in your sleep.
Indyra
Cutting off immigration leads to the further outsourcing of jobs to cheap labor markets, or the increased cost passed on to the consumer (especially in agriculture). It still affects us.
If so, then we at least don’t have to deal with the social costs of immigration, so the impact is less. For example, with Ag products, any increased cost is passed on to us anyhow, as we have to provide social services to more people.
Turbulence:
I can read it, but I can’t impart coherence to a paragraph that lacks it.
The paragraph is fine. The answer to your question is in the final sentence. If you read the quoted sentence, where Daniel asks about the other 50%. I was telling him why some McCainiacs weren’t discussing it. I was trying to explain other people’s POV. I’m not entirely committed to it myself, which was the point of the final sentence. I don’t know how all this stuff sorts out.
As far as other taxes, yes, they’re there, but we have to weigh in all the benefits as well as all the costs, the state aid, the education services, the health services, etc. Even factoring in the multitude of state and local taxes, there are still a good number of tax consumers, and with our continued importation of mass numbers of Third World poor, that number is increasing.
At any rate, the worry isn’t that this number is at a majority now, but that, down the road, it could get there if we make direct redistribution of wealth a policy. It could certainly make for a sizable voting block on its own. This is especially true if a future Obama Administration decides to create all sorts of new social programs.