Occupy Wall Street trash.
Saturday, October 29, 2011

Tax the Poor

For some reason the people of Occupy Wall Street seem to think that they are poor, and that the rich should be taxed to support them.

This whole idea that the rich should pay more gets a pass from most people, and yet no one ever asks if the rich should in fact pay for the poor. They might have a moral obligation to help the poor, but thats an act of charity that concerns them, God, and the poor person.

In what store do people go in and pay for items that are not in their cart? In what universe are people charged for services that they do not use?

The true division is between tax consumers and tax payers. No government employee is a net tax payer. More precisely, no federal employee pays net federal taxes. No state employee pays net state taxes. No local government employee pays net local taxes. Their salaries are paid out of taxes. If their salaries were reduced by the amount of taxes they paid, and they simply received that amount tax free the effect on the government coffers would be the same. The same goes for contractors. They are tax consumers.

The poor are, naturally, the greatest consumers of taxes. Their income and benefits, welfare, schools, health care, and all of the other expenses of life is based on money extracted from other people, processed by bureaucrats, and turned over to them.

Now in any kind of business, a bookstore, a plumber, an electrician, you pay for the goods or services that you actually purchase, not for stuff that you don’t use so that someone else can use it. When Borders was still around, and I went in I would get a large coffee drink, a magazine, and a book or two. I didn’t pay for Joe’s spinach and feta sandwich and soy latte with a double shot of espresso and caramel flavoring and his copy of Penthouse and his DVD of music videos. I pay for the plumber to install a garbage disposal, not Dave’s new shower.

As you move up the economic ladder you shed the things that the government provides. You can afford to send your kids to better schools, and so you send them to Catholic schools, or to private schools. You send them to private colleges rather than to community colleges. You stop using emergency rooms and free clinics, and get insurance. So you put less demand on the public purse than the poor.

And yet the rich, who demand less from the public purse, and who contribute most towards job creation are vilified, and taxed the most. The ones who actually demand the most, and contribute the least, are loved and praised, and not taxed at all.

In a rational system people would pay for the benefits they receive and the services they use. Taxes would be heaviest at the bottom, and lightest at the top.

Someone will no doubt object that that is the way things are in reality. The fact is that it is the richest who presently pay more of the taxes than anybody else, and that some 47% of the population gets away with no federal tax burden.

In order to restore fairness we should reverse this situation, and thereby establish a tax incentive to advance out of the lower brackets into the higher ones. The present practice merely means that people with more money will devise shelters to hide it, or will not be motivated to be more productive, and will in fact in hurt the economy.

It bears pointing out that while some things, such as consumer electronics and appliances, are better than they were 40 or 50 years so that, for example, a video camera that is capable of shooting high definition video can now be had for less than $200, other things, schools and medicine among them, have gotten more expensive and risen in price faster than the overall rate of inflation. Cost of college is 32 times what it was in 1964. The overall inflationary rate is 7 times. It is precisely by feeding the colleges through student loans and grants and through imposing diversity requirements and other interferences that costs have risen, and the burden of student indebtedness has become so oppressive. In order to lower the cost of higher education, starve the college beast, and cut off the loans and grants. Medical costs have risen because Medicare and Medicaid have pushed money into the sector. Starve the beast.

The ability of unions to act against a town or a city or a county school system is diminished if each school is a separate economic entity with its own administration, teaching staff, and labor policies, in short if it is a private entity, rather than one massive political-economic beast. It is far easier to strike one than ten or twenty or a hundred. Starve it. Break up the school system. Privatize it. Let people choose their schools.

Getting people to reverse generations of pious preaching about the obligation of the rich to pay for the bad habits of the poor is probably not likely. It may be possible, however, to persuade people that a flat tax, which is paid by everybody, is better than the present situation which merely guarantees employment to lawyers and accountants.