It's Not (All) Your Money Stephen Levy's Economy Blog, posted by stephen levy, a resident of the University South neighborhood, on Sep 15, 2011 at 6:06 pm stephen levy is a member (registered user) of Palo Alto Online
Another false leap of logic made sometimes by posters is that their earnings are "their money" and the government has no claim on it to support public programs.
We all have faced situations where we would like to say "I don't want to pay for" (fill in the blank--the Iraq war, high speed rail, education for the children of unauthorized immigrants, subsidies to oil companies).
But that is because we don't approve of the programs and have been outvoted but not because it is "all our money".
Most of us have benefited from freely available public education, from subsidized tuition or federal grants at college, from federal funding for basic science research that helps our industry, from publicly funded infrastructure like highways, and from the security of being defended by our men and women in the military (even if we don't like every war).
And we have benefited by the taxes paid and investments funded by governments in our parents' and grandparents' generations.
Anyone who thinks that he or she has done it all on their own so it is all "their money" is either very special or not recognizing the role that public programs and investments have made in our opportunities and our earning power.
One problem (besides truth) with the assertion that half of the families don't pay taxes or that our earnings are "all our money" is that it divides us at a time when we desperately need to find a way out of this finger pointing stubbornness that is paralyzing our ability to move forward and address our challenges.
Posted by Dan, a resident of the Midtown neighborhood, on Sep 16, 2011 at 2:54 am
The most absurd thing is talk of devastating government cuts at the federal level when the overall federal budget is still increasing (along with the debt). Only in Washington can the same budget be called a cut or an increase in spending depending upon whether you are a Democrat or Republican... on the Democrat side , a draconian "cut" seems to be anything that is a reduction from the expected or desired rate of increase. They turn on Obama when he dares to acknowledge the unsustainable trajectories of beloved programs. On the Republican side, there is so much fear and loathing of expanding government that they can't acknowledge that taxes are going to have to increase if only to pay for the unfunded excesses of the past. I don't have much hope of people being able to "move forward and address our challenges" when two polarized sides can look at the same facts and reach completely opposite moral (I would say "religious") conclusions. For example, the rhetoric of the rich "not paying their fair share" according to the Democrat side. This way of framing the tax issue is clearly intended to divide. This "fact" can be seen from the other side as some "rich" people paying more taxes in a year than many will pay in a lifetime. The top x% of taxpayers pay y% of all taxes (sounds like the "rich" definitely paying their fair share because x is small and y is large). The top x% of taxpayers control y% of total wealth in the country (sounds like the "rich" aren't paying their fair share because x is small and y is large.). Interpretation of these facts depends upon your viewpoint and I don't see a whole lot of common ground expressed by anyone in the media these days. Most commentators seem incapable of accepting that any viewpoints other than their own are valid and I think this accurately mirrors much of the populace. I find it is both terribly interesting to read other people's views and also terrifying to see that viewpoints I assume would be universally held are far from universally held. There seems to be roughly a 50-50 fundamental divide in the country on many fronts.
While I seldom find Stephen Levy expressing views that I share, its interesting to hear a contrasting viewpoint. To close, the government investments that he mentions here seem cherry-picked ... most, like highway infrastructure and basic science research, accounting for smaller and smaller portions of the government expenditures. Look at what goodies went into the last huge "stimulus" bill (credit card charge). The long term ROI for that stimulus appears to have been remarkably low as investments go. So I am skeptical of the government throwing our collective tax "revenue" (and national debt) at the problem. The latest jobs plan looks like another ill-conceived cash-for-clunkers. i.e. not an "investment" but rather just more borrowed money redistributed to consumers to temporarily prop up the consumer economy and kick the can down the road as to who is going to pay for it. A majority of the people support raising taxes... as long as someone one else "rich" is paying for their clunker. It will be interesting to see what happens to the politician who finally admits that a family earning more than $40k has to be considered rich in order to solve the budget problems on the current government trajectory.
Posted by Walter_E_Wallis, a resident of the Midtown neighborhood, on Sep 16, 2011 at 3:01 am Walter_E_Wallis is a member (registered user) of Palo Alto Online
The question is the appropriateness of any particular expenditure. While I can see the value of the whole public supporting public streets and highways, I question that same largess toward roads that are essentially the extensions of private driveways. Many neighborhoods in PA have been configured to be of no use to the general public. Why should I be taxed for private gain. This is just one example of the ongoing question of appropriateness of any particular public expenditure.
Posted by No, I disagree., a resident of the Meadow Park neighborhood, on Sep 16, 2011 at 6:17 am
How on earth did we survive without the Federal Tax that began about 100 years ago? No education, no roads, no science? We must have been a horrid country back then.
No, we are not a democracy where the mob rules. We are not 2 wolves and a sheep voting on dinner plans. We are a Republic, with a Constitution that is founded to protect individuals AGAINST a government, whose job is to defend and protect individuals. We are 2 wolves and a sheep where the sheep is protected from being eaten.
It IS our property, our money and "we" have decided to give our powers away to a government farther and farther away from home. When we all banded together to hire the local teacher..ok, fine. When we all banded together to hire the local sheriff, ok, fine. But slowly the power of those choices have been driven to a locus further and further from home, so that now we have folks in DC deciding what happens to OUR money, what local banks can and can't do with OUR money, which of OUR roads gets fixed, how we treat OUR teachers. Soon, they will decide OUR firefighters, OUR police, ..the creep of power to DC must stop.
That is what this is all about.
Return power of decision to the people who pay. Take it from the Feds. I have no problem with being "divided", wolves against sheep, no problem with the "problem" of discourse and decision making, no problem at all with trying to reverse our course.
Posted by No, I disagree., a resident of the Meadow Park neighborhood, on Sep 16, 2011 at 6:28 am
Dan: "On the Republican side, there is so much fear and loathing of expanding government that they can't acknowledge that taxes are going to have to increase if only to pay for the unfunded excesses of the past"
False assertion. No, taxes don't "have to" increase. Amazingly enough, we had more tax revenue in real dollars in 2006 than ever in the history of the nation..AFTER massive tax cuts. Amazingly enough, and counter-intuitively, the higher the tax rate, the less tax revenue there is as the pool of taxpayers shrinks either through private companies moving out of the country, or shrinking in defense of more taxes per person, or individuals deciding it simply isn't worth making "more" to pay half of the increase to someone else.
As Rubio put so succinctly, we don't need more taxes, we need more tax payers. Like drops filling up Lake Tahoe, we all need to get back to work, and all pay our "drops".
BTW, inflation is coming in the next "fast and furious", which will also pay down our debt, while being a form of "tax" on all of us. Haven't you noticed how you are already paying about 20% more for food at the store? This is not going to change anytime soon. Buckle up.
If "more taxes" were the answer, why doesn't Greece simply increase its taxes? If "more taxes" were the answer, why don't we just decide to let the government simply take everything over $75,000/year that anyone makes? The answer leaps out at that point, doesn't it? Carry that in increments backwards, and you will see why "more taxes" decreases tax revenue overall.
Posted by Keltic, a resident of the Adobe-Meadows neighborhood, on Sep 16, 2011 at 9:50 am
from another thread:
"With the huge Recovery Act tax cuts and the enormous December 2010 tax cuts combined, President Obama has already signed into law tax cuts amounting to more than $900 billion from 2009 through 2012. Even after accounting for legislation that the president signed that increased revenue during that period, President Obama has cut taxes by more than $850 billion in his first term, or approximately 1.5 percent of GDP." Web Link
"How the cuts differ
Of course, there are two major differences between President Obama’s tax cuts and President Bush’s.
First, President Obama’s tax cuts are much more targeted at the middle class. The Bush tax cuts were heavily skewed toward the wealthy with more than half of the entire benefit going only to the richest 20 percent. President Obama’s tax cuts, on the other hand, are distributed more evenly. Eighty-five percent of the benefits of the Making Work Pay tax credit, for example, went to the bottom 80 percent of households, and because the very wealthy don’t pay payroll taxes on all of their income, the payroll tax cut, too, benefits the middle class much more than the Bush tax cuts did."
Posted by Jer, a resident of the Fairmeadow neighborhood, on Sep 16, 2011 at 9:55 am
I think you are wrong. In fact, I think looking at your earnings as anything but "your money" is dangerous. It is so important for every person to express their views on how the government is spending "their money." Why should you be resigned to let the government spend money on a war, or a social program, or anything else?
It is time for individual people to demand accountability as to how their money is being spent! How worthwhile is every single social program? How necessary is every single weapons system or military deployment!
Mr. Levy your are suggesting that we simply be resigned to let this "politcal class" which includes both parties continue to be influenced by a relatively small amount of groups which have entirely too much power (corporations, labor, interest groups.)
Every individual has a stake, and we should never, ever become complacent and be nothing more than just a "battery" to provide power to the force and will of the government.
You seem to think that moving forward and meeting our challenges just means giving an even greater share of working people's money to the government? Why should we? When the government at all levels is so rife with outright fraud, inefficiency and corruption?
Don't believe for a second that the government has a claim on your earnings. Instead, realize that long ago individual people granted limited powers to the government, and provided money for that government to function. Of course, it needs revenue to survive and function - but it has gone so far beyond that, and that is what people are so upset about.
The irony wiht your last paragraph is that you claim to eschew "finger pointing," but your column is really just another form of "stubborn finger pointing."
If there is a middle ground to be found, I believe it should start with people realizing they are stakeholders in the government. Whether you believe in any given form and amount of spending, you should realize it is your money, and you do have a say. Stop being part of "movements" and "labels." You are an individual and you have a say just like everyone else. Honestly this goes for both sides of the political spectrum.
Posted by chris, a resident of the University South neighborhood, on Sep 16, 2011 at 10:54 am
If you are truly middle of the road, that is the best place to see.
However, the tone of your piece gives too much comfort to the Tea Pary people who are trying to destroy the government. The true middle should be holding the government accountable, not try to destroy it.
Do you want to eliminate the EPA or reform it? Do you want to go back to the days of liars loans or do you want an efficient government to regulate the finacial and real estate sectors?
How long do you think the Republicans could control the government before they get thrown out? George HW Bush slid in on Reagan's coattails and couldn't get reelected. The country couldn't wait to get rid of George W Bush.
How long will Rick Perry last before he wears out his welcome?
Jer, you really need to identify specific fraud, waste, and corruption and get out of your fantasy world. You and the Republicans will find it is not as easy running an effective government as you think. Enjoy your flirtation with Rick Perry.
Posted by stephen levy, a resident of the University South neighborhood, on Sep 16, 2011 at 12:27 pm stephen levy is a member (registered user) of Palo Alto Online
What I said is pretty simple but apparently hard for some posters to accept at face value.
"Most of us have benefited from freely available public education, from subsidized tuition or federal grants at college, from federal funding for basic science research that helps our industry, from publicly funded infrastructure like highways, and from the security of being defended by our men and women in the military (even if we don't like every war).
And we have benefited by the taxes paid and investments funded by governments in our parents' and grandparents' generations.
Anyone who thinks that he or she has done it all on their own so it is all "their money" is either very special or not recognizing the role that public programs and investments have made in our opportunities and our earning power."
If your earning power is supported by public education, public science and teachnogloy research, public infrastructure and public safety spending, then you didn't do it "all by yourself". Most of us had lots of help even if our politics refuses to let us acknowledge the connection.
There is also a generational connection and debt. Kids don't pay for their K-12 schooling and all the other public programs that support them to thrive. A previous generation did that as we need to do for our children and grandchildren.
I don't think of this as a Republican or Democratic point or about Obama or Bush.
To me it is the American tradition and I am thnakful for the support I received.
Posted by Keltic, a resident of the Adobe-Meadows neighborhood, on Sep 16, 2011 at 12:38 pm
and "If your earning power is supported by" any company, then think of the effect of the court systems in protecting your income. Courts are used disproportionally by businesses. Half the lawsuits are "B2B", whether over IP, collections, etc.
The other half of the cases also include a lot of "B2C" cases with some "C2B". Don't believe the chamber of commerce talking points that the courts are clogged with just a bunch of ambulance chasers suing the poor, abused corporations.
Posted by Alice Schaffer Smith, a resident of the Green Acres neighborhood, on Sep 16, 2011 at 2:22 pm Alice Schaffer Smith is a member (registered user) of Palo Alto Online
In Sweden all citizens' incomes are posted. And taxed with almost no exemptions. In England they eliminated the property home mortgage deduction and have universal healthcare. Housing in Europe is a fundamental right, as is education. Employment also should be a fundamental right. The right to work, to have a job and healthcare.
If we start with fundamental rights, then we should figure out how to finance these. Taxes are the means to that end. Some propose a flat tax. I believe in a graduated income tax which has few, if any deductions. Cut the tax code to a simple formula that everyone can understand. The English tax form (go look at it on line) is about 30 pages long. It is a questionnaire. If you say yes, you put down the amounts. Taxes are withheld at source and you get back refunds.
Of course VAT is regressive, but in some countries it does not apply to children's clothing under 16, to food or other basis necessities.
So let's tax all services and products, get rid of Proposition 13 exemption which is unequal on its face and stop pretending that we don't need government services.
Posted by Matt, a resident of the Meadow Park neighborhood, on Sep 16, 2011 at 7:37 pm
I like this from the other topic -
""The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.""
Posted by No, I disagree., a resident of the Meadow Park neighborhood, on Sep 17, 2011 at 6:48 am
No, Mr. Levy, I accept at face value your comments. But I can take it further behind the visage.
I, like all of us, have benefited from tax supported programs. I went to public school. I went worked my way through public college. I received grants, scholarships and loans. I had surgery that may have saved my life. However, the difference is that the programs and surgery I benefited from were locally or privately controlled and funded....schools and roads, and medical advances that were funded through private donations or investments. Fine...
As control of such decisions move further away to DC, our own ability to choose decreases. We have suddenly lurched from most college loans being private to most being Fed backed. Yikes. From innovation in medicine being privately driven to be being suppressed from the Feds or "funded by" the Feds. From local schools making choices of their constituents to the Feds trying to control them. From local roads and bridges being built to the Feds building them.
How much should the Federal government "own" of my time and earnings? At what point are we each responsible for our own lives, our own families? How local should decisions be made for taxes and "benefits"?
I submit that DC taking and redistributing destroys our local abilities to choose, our own individual ability to choose the results of our lives.
Solyndra is a prime example, though by now already far overused. DC choosing to take our local money and distribute it to their cronies is NOT what we need. I prefer individuals choosing who to trust with their investments.
The end of this path is not pretty. I prefer we keep our choices, leave DC out of it.
Posted by No, I disagree., a resident of the Meadow Park neighborhood, on Sep 17, 2011 at 6:53 am
Alice: Fundamental rights? A "right" to have employment, housing, health care? A "right" to take from others for your desires? What about a "right" to a car, Macy's clothes, and a big screen TV?
Sounds familiar, and has worked so very well everywhere it has been tried, hasn't it?
A "right" is not something bestowed on you by the work of others. Don't get confused on what a "right" is. A "right" to live your life, free from government intimidation and control, free to follow your own path, yes. A "right" to have the path "given" to you, no. A wild pig can be corralled by setting up a feeding trough and building walls and a gate around it. No thanks.
This is the slippery slope we are sliding down, folks.
Posted by No, I disagree., a resident of the Meadow Park neighborhood, on Sep 17, 2011 at 6:58 am
Perhaps Mr. Wallis got confused with Schumer's threat to simply take 100% of the bonus of CEOs..Why not? Right? Everything belongs to the Feds, right? They can do what they want, pick whoever the enemy du jour is to take from and give it to whoever the friend du jour is.
Posted by stephen levy, a resident of the University South neighborhood, on Sep 19, 2011 at 9:54 am stephen levy is a member (registered user) of Palo Alto Online
Maybe we could start this discussion over and have people share stories about the public investments and programs that have supported their earning power and quality of life--
Rather than this endless back and forth over politics.
I went to public elementary and high schools. The colleges I attended received large defense and non-defense grants. My work is supported by extensive public data gathering necessary to understand economic and demographic trends.
In addition I receive the benefits we all do from America's military, courts, and public investments in transportation and basic research.
Posted by Matt, a resident of the Meadow Park neighborhood, on Sep 19, 2011 at 10:39 am
Ted Kaczynski tried living away from government services out in the middle of nowhere.
"I receive the benefits we all do from America's military, courts, and public investments in transportation and basic research." Basic research at the taxpayer expense is a huge corporate welfare program.
Besides the education you mentioned, consider the air quality in the 70's. Water quality, as well.
Food safety is still an issue. "In the United States, using FoodNet data from 2000–2007, the CDCP estimated there were 47.8 million foodborne illnesses (16,000 cases for 100,000 inhabitants)"
Compare to France: "In France... 1,210 per 100,000 inhabitants"