GOP's not-so-secret weakness: unfairness



This civilisation has been designed by psychopaths, for psychopaths.


If I remember my talking points correctly, the desire that the system be fair is “the politics of envy”; and bestowing the most infefensible of giveaways on people who neither need nor deserve them is ‘incentivising wealth creators’.


I thought the purpose of the lower rate on capital gains, was that we want to encourage long term investment, over short term stock market speculation. So the capital gains rates are available only after money has been invested for at least a year, in order to encourage people to invest their money in enterprises that require capital.

There is a loophole, I’ll all the “Romney Loophole” whereby fund managers get to receive capital gains rate on their fees (i.e., what should be classed as ordinary income). That seems to have only a very distant connection to the idea that we reward the people who put their capital at risk for long term investments.

But the idea of lower tax rates for long term investments does not seem any more ‘unfair’ to me that the so-called ‘progressive’ income tax. What seems unfair is to increase the percentage of tax on people as their income increases. What would be more ‘fair’ in my opinion would be to have the same tax rate on everyone, regardless of their income.


Except for how that is a far more onerous burden on the poor than the wealthy, but whatever, eh?


Even flat tax is unfair, amirite? Why should one man pay more than another just because he is more successful?


Do you really think the poor in this country have it too easy? That if we just taxed them harder, things would be better? Really?


Be thankful I don’t take it all


There is nothing irreconcilable in the idea of having a lower gains rate to encourage buy-and-hold versus speculating with not having a lower gains rate than earned income rate.

For example, if the earned income base-rate was 30%, and the capital-gains buy-and-hold base-rate was 40%, then the speculative capital gains (the flipper tax) could be 50%.

Regarding fairness: the basis for progressive tax is that a tax on people earning subsistence (or below-subsistence) wage, then taxation could push you into homelessness, starvation, etc. People with higher incomes have more discretionary, non-subsistence oriented income, so they pay a higher marginal rate.


I read somewhere that in order to meet all of the U.S. budgetary obligations and pay down the debt using a Flat Tax scheme, that an appropriate Federal rate would be around the 20% mark - a far higher effective tax rate than most people pay today (80% of Americans have an effective tax rate below 15%) and this would also eliminate most common deductions such as mortgage interest.

So while this would be “fair” in the strictest sense of the word, it would constitute a huge effective tax increase for most Americans - wealthy included - and have the biggest economic impact on the middle class and poor whose discretionary spending is already the most constrained.

This would effectively kill our economy which depends mostly on consumer spending in order to keep it afloat. There are only so many yachts that a rich person can buy.

So while a Flat Tax may seem fair on the surface, it’s really by far the most regressive and would do tremendous damage to our society. It just goes to show that complex problems cannot be solved with simple solutions.


You mean, apart from the fact that over a certain amount of income, human overhead is minimal and an “equal” rate amounts to a massive extra boost to the relative power of the rich to rule over the lives of the rest of us.

How about an equal rate according to economic activity? Progressive income tax is only a hack to attempt to get the rich to pay their fair share according to their activity. What if all transactions were taxed? Retail, wholesale, financial, everything. Then stock trades would have to cover a small percentage in order to make a profit and long-term investments would have more net return than hyperfast algorithms.

Is fairness and rewarding success really your goal or not? Are you going to switch to an argument about how taxing transactions would harm liquidity? What’s on the top of the stack of canned responses?


For the record, in the USA before 2000, short-term capital gains were taxed as ordinary income, and long-term gains got a small break. Not exactly what you suggested, but for Americans your idea isn’t shocking at all, it’s pretty close to the way things used to be. Before the dark times… before the Empire.

I think you mean the shallowest and most literal sense of the word. It’s not fair, no matter how strict you are.


Well, it isn’t hard to see the absurd infairness of the imbalance in taxing hedge fund managers less than store clerks.

But you wouldn’t know it from the comments on that article, which go straight to ‘this is not a conservative article’ and attacking the writer’s conservative credentials - usually a good sign that they can’t attack the argument itself.


Short-term capital gains taxes remain treated as ordinary income in the US. The overall rates were lowered in 2000 and there were a few changes in preferences (vis a vis the AMT, among other places), but if I buy at 100 and sell at 200 next week, I’m paying tax on 100 just as if I had earned an extra hundred dollars in wages. Of course, if that 100 goes to 0, all I get for my investment is a capital loss carry-forward.


But it doesn’t. Other than in an IPO (or subsequent PO), stock prices rising in the market do not mean new capital investment in the company. All it takes is not selling your stock for a minimum amount of time and you get the lower tax rate, despite not having any capital investment in the company.

In the vast majority of cases, the “capital enterprise” involved is merely the investor’s personal net worth.


What? This is totally fair. As soon as you manage to have enough capital to invest in markets, you are treated just like every other wealthy American! It’s not like the US Governmwnt is capricious with its tax policy!


Who can save us from the politics of envy and socialist class warfare? Who?

And there is a war on. We hate them from the bottom of our souls because they threaten our very life, because they oppose our national existence out of envy, jealousy, and ill-concealed national pride.
-Joseph Goebbels (1933)
The Führer drove arrogance and contempt, envy and hate of labor and possessions, from Germany.
-Robert Ley (1936)
‘Anger, envy, hatred, rage,
Are in the blood of the Jew,
German anti-Semitic childrens book (1938)
People’s comrades, we have spoken of those all to eager to accuse others, who are driven by envy,
-Hermann Goring (1933)
Once each was the enemy of his neighbor. Envy, mistrust, and hatred were everywhere;
-by Robert Ley (1937)


Meanwhile, the base yellow press of our enemies has forced us to defend our lives with guns in our hands against the envy and resentment and threats of our enemies.
"How They Lie"
They hope to realize their infernal destructive goals, driven both by their political and economic envy as well as their Old Testament hatred, by shaking German war morale.
“Die Aktivierung der Partei!” (1943)
We are fighting to save our children from the unbearable threats of the Western democracies, driven by envy and hatred
Nazi propaganda magazine (1939)
Mr. Roosevelt recently told the nation, he retired to his bedroom to write a prayer ....that (God) will help them enslave a part of the world that is attempting to live modestly from its own resources. This they cannot tolerate, out of greed and envy.
-Joseph Goebbels (1944)
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For last year, the effective tax rate of the top 1% was 23.5%. The top 50% of filers – who had an AGI of at least $34,823 – paid an average tax rate of just under 14%. The people at the bottom, of course, paid nothing because they didn’t earn enough.

…so if that figure is true, flat tax would represent another big tax cut for the 1%, a tax hike for the vanishing middle class, and a massive shafting of those at the bottom of the ladder.

Some of that can be fixed. For example, you can have a Universal Basic Income, or you can have a cutoff beneath which income is untaxed. However, that still leaves the 1% doing really well out of the deal.

What might work and be fair without shafting the poor would be to have a flat tax on earned income, and a different flat tax rate (probably higher) for all unearned income. After all, unearned income is basically taken from the rest of society, so it makes some sense to tax it more. Anyone ever heard that advocated?


Wick Allison is an oddball, isn’t he? He’s a Texas conservative, runs a publication called The American Conservative, yet he writes pieces like this and endorsed Barack Obama because he felt Romney was too liberal.

Romney is the opposite of conservative, with a plan that is fiscally reckless and a foreign policy that is unnecessarily militant. Obama has done about the best that could have been done, considering the united GOP opposition in Congress. My questions about Obamacare and my disappointment that we are not already out of Afghanistan are not enough to make me embrace a candidacy that even George W. Bush would have been repelled by—and, having had time to reflect on his own record, perhaps is.

The comment section on that op-ed piece are depressingly predictable, blasting Wick for being a liberal and people putting forward predictably terrible plans for being “fair”. I don’t get how people don’t understand that taking, say, 20% of a person’s income, regardless of income, is incredibly unfair. I don’t get how they can’t realize that taking $7,000 from someone who makes $35,000 is a much bigger sacrifice than taking $200,000 from someone who makes $1,000,000.


Yes, because flat taxes are so popular.