WatchI was just listening to an NPR show discussing Ron Paul supporters who cheered at the idea of letting people without health insurance die.
One of the points that came up on the NPR show is that the Democrats do not have a coherent message on the proper role of government.
Republicans do have a coherent message. They want the law of karma to function: you should reap what you sow. You should not reap what other people sow. They love Aesop's fable of the ant and the grasshopper. The ant works hard, the grasshopper does not. Then winter comes and the grasshopper starves to death. Republicans want the grasshopper to starve, and that's why Ron Paul supporters cheered at the idea of letting someone die. They do not want the ant to be forced to share with the grasshopper, ever.
So government's role, in the Republican view, should be pretty much limited to protection of individual property -- but there is a very important and always unspoken addendum: no matter how that property was acquired.
The very rich absolutely love this idea of never having to share no matter how they got their money, and so rich Republicans generously fund campaigns which appeal to poor and racist Republicans who fear having to share with minorities.
Democrats, in contrast, want to "promote the general welfare" of the country, as is explicitly written into the constitution. Their assumption is that we are all in the same boat, and we have responsibilities to each other. But then it gets very hazy. Exactly what are these responsibilities to each other, and who is going to pay for them?
Democrats, just like Republicans, always and everywhere fail to distinguish between productive work and non-productive extraction of economic rents.
Rent does not just mean rent paid to a landlord. Interest is also the rent paid on borrowed money. The point is that "rent" here means money you get merely by being the owner of something, not from doing productive work. It means money that you could "earn" even if you were in a coma, taking it by law from people who actually did the work.
The difference is not always obvious. When you literally pay rent to a landlord, which is it? Is it reward for the landlord's productive work, or is the landlord just leeching off the tenant?
The answer is both. The construction and maintenance of the building is productive work, and should be rewarded with a certain amount of rent. But the payment of the rest of the rent for the use of the land is completely non-productive. No one created the land. The landlord merely uses his ownership title, without work, to extract money from productive people.
So back to the proper role of government. Should the ant have to feed the grasshopper in the winter?
To answer that, you need to ask one more question: Did the ant get his money from his own work, or from rents?
Money from his own work should belong to the ant. But money from rents should be heavily taxed and used to benefit the society the rent was extracted from. This is the idea behind Georgism.
Finally, back to health insurance. Should the person who refuses to buy health insurance be allowed to die? The answer is that non-productive rent income should be heavily taxed and used to fund universal critical care coverage for every citizen, like other countries already have. So there would be no people without critical-care coverage and the issue would not arise.
The ants would have no basis for complaint, because the health insurance money would not come from any productive work which they did themselves, and they themselves would be entitled to the same coverage.
So the role of government should be the protection of individual property acquired through productive work, and the promotion of the general welfare via revenue from taxes on non-productive rent-seeking.
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Patrick says
The focus group I was on last week were all pretty sharp cookies. I didn't feel like the smartest guy in the room at all.
If this was a random sample of my town, I'm impressed!
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Patrick says
This is why I think we need much smaller government, one that doesn't give someone an ability to lobby/vote themselves their hearts desires.
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FortWayne says
Money is an abstract representation of wealth. We live in a society where 1000 men can work to build a car, but the person that owns the car factory can tell them: "No no no! None of you can have any of the cars you helped create. They are too expensive and they aren't for you. Here, have some peanuts."
The real question is how do you keep the 99% from killing the 1% and setting up a socialist government once it becomes clear that the capitalists are hogging all the shared resources of the country.
Mexico is almost there. Russia went there, China went there, France went there, Venezuela went there. Keep it up and we'll go there.
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Patrick says
Exactly. If we are a socialist country, we are a socialist country that transfers wealth from the 99% to the 1%. Remember the bailouts!
In a free-market, small government system, the banksters would be out on the street selling apples.
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iwog says
This is the best damn oligarchy on the planet! Love it or leave it!
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wthrfrk80 says
USA has the worst form of capitalism+socialism. Profits are privatized and losses are socialized.
wthrfrk80 says
Ah the beautiful mythical free market.
http://jessescrossroadscafe.blogspot.com/2012/01/playing-free-markets-canard.html
Yes - it won't be the banksters but it will be the monopolistic corporations that have all the power then.
What you need is a system where there is rule of law and at least a semblance of democracy. This is a bare minimum for a sustainable government.
No rule of law for the 0.1%.
Government is bought and paid for by the 0.1%.
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uomo_senza_nome says
Yep.
Our healthcare system is also a combination of the worst form of capitalism+socialism.
Again, how do I legally immigrate to Canada or Australia?
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wthrfrk80 says
Bring ~$500,000 with you, or if you're under ~40 have a job offer. Or go on holiday and romance some sweetie there.
(what's odd is that all 3 dollars are pretty much at parity now -- we should do currency union when we got the chance)
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Apparently some think the "proper role of government" is to micro-manage every possible aspect of peoples business and personal lives.
$1,000 fine for tossing a Frisbee on the beach in LA county??? A proposed fine if you don't purchase government insurance??? A fine is the government endorsed toilet paper is not used??? A fine if the government required daily uniform isn't clean enough???
You may be subject to arrest by the thought police if you do not respond enthusiastically enough during a speech by the regime leader. The Telescreen watching you, while you watch it. 1984.
Are liberals crazy? Could this be why people, money and businesses are leaving the country in record numbers???
Is the proper role of government to attempt to centrally plan everything, given the fact they can't do anything right? Government...the servant has morphed into the master.
The solution? Sound money and limited constitutional government.
RON PAUL 2012.
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keep banging that drum, LOL
http://elections.nytimes.com/2012/primaries/delegates
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Oops, I'm wrong. The proper role of government is to provide everything for everyone, cradle to grave. In a word, "the nanny state". MOMMY.
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One of the great benefits to society from an LVT system, would be that all the churches and so called 'non-profits' would have to pay their fair share of taxes as well. There are more churches than bars here in my local city, and the local government (revenues) are hurting because the churches take up so much valuable land, and don't pay their fair share in return, for the privilege. Not to mention all the public services the "not-for-profits" consume, without contributing to the funding of. Parking garages too,,,,,how beautiful it would be to see them all paying their fair share
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Errc, you're kidding, right? If the government waste's miillions, billions and trillions of taxpayer dollars already, why should they get more ?????
Tax money to a politician is like crack cocaine to a junkie.
It was announced today that oBaMa gave two BILLION dollars to two solar power companies. In other words, two billion dollars was stolen from productive individuals and businesses and gifted to two companies with the hope that things work out. Does Solendra come to mind???
IMO that money would have been much better spent, saved, or invested by the people who earned it in the first place. Those people might have just as well been robbed at gunpoint, because thats the net result.
Junkies rob people at gunpoint to support their habit, just like politicians.
In case you haven't noticed, America doesn't have an income problem, it has a spending problem.
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http://www.atr.org/one-month-worlds-highest-corporate-tax-a6748
See, the highest corperate tax rate in the world. Watch, the liberals will say "BUT, BUT, BUT - THEY NEED TO PAY THEIR FAIR SHARE".
More is never enough to a liberal.
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What is the proper role of government?
To prevent the formation of a hereditary aristocracy. And all the usual stuff about controlling crime and providing infrastructure.
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Honest Abe says
The highest STATUTORY rate, but not the highest EFFECTIVE rate:
http://www.allgov.com/Where_is_the_Money_Going/ViewNews/Corporate_Tax_Rate_Too_High__Not_for_GE__2_3_Percent_over_10_Years_120301
http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html
The Effective Rate is what companies ACTUALLY PAY in taxes.
Corporate Taxes in the USA as a percent of GDP are about half the OECD average.
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http://en.wikipedia.org/wiki/Tax_rates_around_the_world
Thunder- the chart which shows taxes on corperate income as a % of GDP is a meaningless chart. America has the highest corporate tax rate in the world.
Could that be the reason American companies move offshore? The bottom line: American tax policy causes the loss of American jobs.
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http://www.americanthinker.com/2009/03/us_companies_pay_the_highest_t.html
US companies pay the highest tax rate in the world.
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Amazing, neither you nor American Thinker understands the difference between tax rate and taxes paid. It's really not difficult. It's like list price on a car. I wondered who actually read American Thinker.
Not that you have any interest in facts or anything beyond your sound byte thinking, but actual corporate taxes PAID in the US is pretty much exactly the same as the rest of the first world.
Maybe companies move offshore because they can pay workers 25% of american workers wages, pollute as much as they want, and have no health or safety expenses for their workforce. Just maybe. I assume you would be the first to volunteer to return to 1920's working conditions. Am I correct?
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Honest Abe says
Yes, should of not been given away to Solar companies. Silicon Valley success rate is not great.. maybe 10% or less make it. Could of gone elsewhere.
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bob2356 says
Depends what industry your talking about. For many our move to outsource manufacturing to another company (domestic or/foreign) was a response to deflationary pressure. Some was market forces, and some was due to product dumping BELOW cost by the Japanese... and later the Koreans not to mention soon enough by the Chinese.
The Americans companies are not responsible for the Contract Manufacturers labor and enviromental policies. The US mfg companies have no ownership in foreign operations and we do not dictate another countries laws and policies. But the foreign companies, govt, and workers are all to happy to keep what our former US jobs in China.
Cost of product is also dependent not only on Labor but also on Material and Overhead costs. And while Material and Overhead is about the same, our labor productivity is much higher quality which allows our so profit on higher volumn production.
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thomas.wong1986 says
That's the whole problem. Don't ask don't tell. Everyone in America wants to buy everything at third world prices, but wants to live and work in a clean, safe environment. Can't have it both ways. There won't be a viable economy selling each other insurance policies and hamburgers. I've always believed import duties should be the difference in spending (on a percentage basis) between America and the importing nation for items like health, safety, and pollution control. Totally impractical, but a thought nevertheless.
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thunderlips11 says
The short version of it...
Stat and Effective rates and Liability comes out the same over time.
Aside from Permement Taxable Income tax differences like ...
(for tax return only)
- Salaries for Officers over $1M are not deductable expenses.
- only 1/2 of Entertainment and Meals are deductable expenses.
- Receivable reserves are not deductable
- Charitable Contributions (10% of Adj Tax Inc.)
- Govt Fines and Penalties (not deductable)
- NOL carryback/forwrd
- Capital Loss Carry Back/Forward
- Gains on increase/dcrease "fair value" are not recognized.
Many of these Perm diff. will increase taxable income... even they were paid but limited to deductability for taxable income.
Then there are Temporary Tax Inc Difference like depreciation.
- (for tax return only) where as MACRS allows more depeciation expense to taken earlier and less in later years than on accounting booms. Therefore taxable income lower in earlier years than later years. These differences are deferred and will eventually be paid in last half of an assets life.
Overall all these differences create a deferred liability which will be paid in time. So Stat and Eff is the same over time.. if Congress disallowes other business expenses like Officer Comp over $1M that will increase corp tax bill.
Of Course there is also the AMT on Corp tax returns...
http://en.wikipedia.org/wiki/Deferred_tax
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thomas.wong1986 says
That is the oddest statement I've seen in a while. For that to be true there would have to be NO exceptions in the tax code. There are tens of thousands of exceptions thanks to our lobbying friendly congress.
Deductions for salaries of "covered officers" are limited to 1m. That would be the CEO and top three officers. See the instructions for 1125-E. Everyone else is deductible.
Considering that meals and entertainment are the most abused expense in the world (I've abused it plenty) 50% is pretty realistic.
Why would reserves be tax deductible? You write off the loss.
When did charitable change? As far as I know it's still 50% of agi for public and 30% for private.
I don't understand you point with NOL. You are just offsetting profits in one year with losses in another. This allows you to effectively lower your tax rate (since the IRS doesn't give money to you if you have a negative year) or at least balance it out year to year. This actually goes against your premise that effective and stat rates work out the same.
Why should fines and penalties be deductible? That's why it's called penalties.
I really don't see how any of these issues create a deferred liability. They don't come back in later years. The only deferred liability is load balancing your depreciation. That still doesn't affect the rate. You deduct more at first and less later. It balances out long term, the net will be the same.
So if what you are saying is true then corps like GE that have been paying single digit or less taxes for decades will be coughing up trillions of dollars at some future point? That will certainly help the federal debt. When will that be.
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bob2356 says
For a typical corportion the above example is the normal case.
bob2356 says
If your talking about one off exemptions like EnergyStar program. They get an exemption as manufacturer, and you as buyer (consumer) get one as well.. You may well see similar program down the road, or not, for pumping algea into car gas tanks. Is it corporations or congress that writes these tax laws to encourage social agenda?
http://www.energystar.gov/index.cfm?fuseaction=rebate.rebate_locator
http://www.sba.gov/content/federal-tax-credits-energy-efficiency
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thomas.wong1986 says
It's irrelevant who writes the tax laws. The debate is if corporations actually pay the full 35% federal tax rate which would make the US the country with the highest taxes for corporations. You say they do, but then you talk about exemptions. Which is it? If there are ANY exemptions then the taxes paid are less than the tax rate.
GE's statements list "cash taxes paid" of 2.9 billion last year. It is assumed by most analysts (since no one but the IRS gets to see GE's actual tax return) that is all of federal, state, local taxes. That would work out to 14% tax rate for all taxes paid. It's not the 2% or 0% rate activists groups claim, but its a pretty long shot from 35% for federal only.
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You picked GE which like other Appliance mfg received credits for Energy legislation put through congress. Therefore not the norm for typical corporate tax fillers. Far more have straight forward tax filings.
What your really asking about is this...
many of the Fortune 500, which GE is part of, actually make half revenue and profits from overseas sales and operations.
Per the US IRS code, overseas profits are not taxed,
Therefore your looking at rates less than 35% because your looking at the published revenue and profits submitted to the SEC, but not the IRS taxable income (Domestic only).
http://www.bloomberg.com/news/2011-06-27/a-plan-to-tax-foreign-income-of-u-s-companies-commentary-by-robert-pozen.html
You should also be aware we tax foreign corporations doing business in the US that generate a profit like BMW, Toyota, Samsung or many other. But no one complaines because they dont compare US taxes paid to overall revenues/profits of foreign companies.
You may well find that a US CEO/CFO will see the more favorable foreign tax rate vs the US side of the business on the PL.
On the topic, there really isnt a Loop Hole.. Ireland and Bahamas are the issue since they encourage foreign companies to invest their Euro-Asian HQ located in said host country. This is all legal under US IRS code, since foreign profits are already been taxed and kept overseas for foreign office expansion.
You can also ask why US companies are all Delaware corporations for tax reasons... same thing favorable tax laws by Delaware, but you dont see Delaware complaining as they gain State Income tax collections. Do you see California complainaing about Delaware? Nooooo!
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The proper role of government should be to preserve and protect Freedom & Liberty - not squash and eliminate it.
The founders either disapproved of, or would have disapproved of: Democracy, a para-military police state, State sponsored racism and discrimination, an overwhelming dependency of government programs, fiat currency and the like.
Those things are NOT the proper role of government.
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Honest Abe says
The most effective way to squash and eliminate freedom and liberty is to allow a few people all the wealth and all the power. This is what you're desperately fighting for.
Honest Abe says
The founders would have disapproved of democracy? State sponsored racism and discrimination? Fiat currency?
You're not a big fan of actual American history, are you.
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iwog says
Well said. "Freedom" is often a code-word for the aristocracy ruling in its own interest at the expense of everyone else.
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wthrfrk80 says
You have the freedom to persue your own interest.. or do you expect to be given a job by they age of 18 as one of your basic Human Rights.
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Honest Abe says
What is it about some ancient church building, that makes you think the proper role of government is for me to subsidize their existence?
They want to use the land and operate under the protection of OUR government, than they should pay their fair share, just like i do
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San Jose, CA
My biggest fear is that I dont yet know what happens if some bad illness does strike me at some point. Most people dont know how good their insurance is until they need treatment for something chronic or difficult. Even though my job comes with supposedly good insurance and they just use united to administer it but manage the money on their own, I dont trust this system.
Treatments are going to get more and more expensive specially end-of-life type treatments and its not clear how this is going to be paid for. There is also no incentive system, people who smoke, are obese (lifestyle choices) do not have any negative incentive to reduce their eventual medical costs.
My backup plan is to probably relocate to my home country around retirement time. I actually buy private insurance in that country so I can continue to have it for later even though its useless right now. Paying by cash for surgery or long term nursing care is also a reasonable option even for things like a neurosurgery.
ALthough I will have paid into Medicare for enough years to be eligible, I am not sure about how wrecked the system will be 30 years from now and whether they will pay for a treatment that may be life saving.
Logically, catastrophic medical needs are not common and if they do happen are impossible to bear so this does need some social insurance. At the same time day to day costs for the small time problems need to be brought down drastically.
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Patrick says
If we went to direct democracy, I would invest in every media company I could find!
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thomas.wong1986 says
I know all about overseas profits, I'm talking about domestic. As I said only the IRS actually sees the tax return. But you can back into the numbers, as many people, including bloomberg, have done.
As per your bloomberg article "A recent academic study on effective corporate rates -- what companies paid on average in major countries -- found the average was 22.5 percent in the U.S., and 19.8 percent to 21.5 percent in large European countries". Do you suppose the bloomberg people that wrote the article you posted to support your position are also confused about domestic vs overseas profits?
Do you still stand by your assertion that companies in the US actually pay a 35% corporate tax rate? That is still the question on the table.
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bob2356 says
I read many 10-K's, thousands of them.
The 22.5% is the blended overall rate of multinational companies based in the US. Some have heavier foreign presense while some don't. It consists of the statotry rate in many countries. Of course, it is only 22%, because companies have taken the position to reinvest thier income permanently and don't have to pay the rate differential, but that cannot happen forever so a company like Apple, with a huge cash hoard in foreign bank accoounts have a huge tax discount.
bob2356 says
Yes, primarily domestic companies pay around that rate. Look at the ETR for companies the last 4 years.
Best Buys
Lowes
Home Depot
Target
Chesapeake Energy
Waste Management
Wells Fargo Bank
Dish Network
Cardinal Healthcare
These companies pay around 33-37% ETR. Chipotle, Panera Bread pays about 38%
If you are primarily a domestic company that is not in manufacturing or research and is profitable, that domestic company will be paying around 35%.
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SFace says
That's a pretty long cry from your original flat out statement that effective and statutory corporate tax rates are the same, period. If you add enough qualifications any statement can be made true.
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Punitive tax levels, inflation and wealth confiscation are all forms of debt bondage for the average worker.
The rise of the Tea Party and the 99%'rs is a direct response to the realization that the two major political parties are co-enablers of the decline of the greatness of what used to be the United States of America.
And there you have it.
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thomas.wong1986 says
Thomas,
I never implied that anyone is entitled to a good job (or any job) as a basic human right. I actually do not believe that. Nor do I have a problem with people pursuing their own interest.
What I do fear is extreme wealth concentration. Politicians are bought and sold on the open market like any other commodity. Do you really want our politicians controlled by a few extremely wealthy individuals? Ever play monopoly? What happens when the winner gets so rich they can buy politicians to rewrite the rule book to further cement their power and your enslavement? Unregulated, untaxed capitalism necessarily leads to extreme wealth concentration. Which leads to aristocracy. Don't believe me? Look at history. 100 years ago the US was a de facto aristocracy. We are rapidly moving in that direction again. That should terrify you. You really don't have much freedom when you're working 100 hours a week at Moneyworth Enterprises for $1/hour.
The world runs on money money money. And power. And weapons. It's all about who has the power...and who doesn't. Be careful what you wish for when you talk about "freedom." Freedom for whom? You? Or your future masters?
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wthker80, what intelligent people want is freedom from busy-body, manipulative, do-gooders with sociopathic tendencies...you know, politicians.
All of us are suposed to turn over a high % of the fruits of our labor to a small group of wealty sociopaths with a proven track record of financial and economic mismanagement?????????????
Comrade, maybe thats your vision of an ideal future, but its not mine.