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> Obama on wealth redistribution, another unscripted moment
Blackstone
post Oct 31 2008, 05:17 PM
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Here is an audio transcript of an interview that Barack Obama gave in 2001. He was talking about the civil rights movement, what it accomplished, and what it failed to accomplish. What he said it failed to accomplish - "tragically", in his view - was significant redistribution of wealth. There's one passage that I think deserves particular examination, which will be the subject of the debate questions:

QUOTE(Barack Obama)
Maybe I’m showing my bias here as a legislator as well as a law professor, but I’m not optimistic about bringing about major redistributive change through the courts. The institution just isn’t structured that way. You just look at very rare examples during the desegregation era the court was willing to for example order changes that cost money to a local school district. The court was very uncomfortable with it. It was very hard to manage, it was hard to figure out. You start getting into all sorts of separation of powers issues in terms of the court monitoring or engaging in a process that essentially is administrative and takes a lot of time. The court’s just not very good at it and politically it’s very hard to legitimize opinions from the court in that regard. So I think that although you can craft theoretical justifications for it legally. Any three of us sitting here could come up with a rationale for bringing about economic change through the courts.


1. Looking at the above passage, would you conclude that Senator Obama was taking a principled stand against judicially-imposed redistribution of wealth, or that he was merely objecting to the strategy on practical grounds?

2. Would those practical considerations likely change if he were in a position to nominate judges for the Supreme Court, and send those nominations to a filibuster-proof Democratic-controlled Senate?

3. Does this interview, and perhaps other revelations from his days in Chicago/Illinois politics, add to the feeling that there's a lot we really don't know about Senator Obama and his agenda?
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Zack
post Nov 2 2008, 06:23 PM
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QUOTE(turnea @ Nov 2 2008, 09:48 AM) *
QUOTE(Bikerdad)
I can. Taxes are not the redistribution of wealth. Taxation is pretty much a necessity of redistribution, but taxation doesn't equate to redistribution. What the government does with the taxes determines whether or not its redistribution, as well as whether the taxes are equally applied. Basically, the greater the disparity between "government services" received and taxes paid, the greater the redistribution. If Powell's understanding of redistribution is that limited, then he's merely demonstrated his economic ignorance.

Actually Powell is 100% correct.

Taxes in fact do always lead to the redistribution of wealth. Services must be paid for and every soldier's (contractor's, congressperson's, law enforcement officier's) salary is some taxpayer's wealth.

Powell, as a soldier is likely well aware of that. People have been redistributing wealth to him for years.

Now if you want to try and place a monetary value on all these services, fine. But a blind average would not be an accurate method of determining who receives more services. Obviously those who avail themselves of these services get more bang for their (and someone else's) buck.

In practice taxes always redistribute.

In modern American taxes this is always even more direct. No serious political force in America opposes the progressive income tax.

No politician win any hope of national prominence is opposed to Medicare, Social Security, public education, SBA grants etc.

That's all redistribution, direct redistribution.

...and to say government regulation caused the crises.

Well, that's one school of thought but few serious economists subscribe to it.

Greenspan himself said this was a private sector failure.
Progressive taxation is not redistribution of wealth but rather taxation based on ability. Taxation is a method of paying for government commitments. One could say that FEMA is a method where the government redistributes wealth since it compensates sectors of citizens at the expense of others. In the case of FEMA a poor man only contributing SS/Medicare may have his contributions sent to another citizen who experienced a natural disaster or other disaster.
To logically consider progressive tax and how it’s applied to the non tax payers benefits in Obama’s tax plan one could look at home property tax and how it is used in schools across America. To be “fair” property taxes would be equally divided to each student across a particular state since the government service taxed for is an education of students, students regardless of class.
For a candidate to offer non tax payers a tax break the candidate is actually saying I’ll ask congress to legislate a payment to citizens in certain tax brackets, or in other words create redistribution legislation similar to FEMA. What if the other candidate offered the same group double or even triple?
Logically, if a president found the lowest income bracket to be undercompensated he/she should run on a platform of raising the minimum wage to correct that shortcoming. In my opinion the unfunded mandate of Minimum Wage is also wealth redistribution.

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Bikerdad
post Nov 2 2008, 07:58 PM
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QUOTE(Paladin Elspeth @ Nov 2 2008, 03:26 AM) *
John McCain's insistence on little to no oversight where Wall Street and the banks are concerned did not help the current crisis.
McCain, and the Bush Administration insisted on greater oversight of the subprime market, which is where the core of the problems lie. The Democrats blocked them. You may fairly fault McCain for not having enough leadership moxie to move his oversight bill forward, but don't charge him with fostering the problem!

QUOTE
and some timely guidance rather than letting the market correct itself might have made the bailout ultimately less expensive for all of us.
"timely guidance"? From who? If you'll peruse the link I provided, you'll see that it was government "guidance", aka regulation, that is at the heart of this mess.

QUOTE
I'm sure you know more about economics than I do, but there are some pretty obvious causes and consequences that can be seen by even the (relatively) unschooled such as myself.
Well, the consequences are pretty obvious, but the causes aren't, unless one decides to look beyond what the MSM is touting.

QUOTE
It isn't so much trying to enforce scruples or morality as it is bringing some pragmatism into the way business is conducted in this country. Somebody must have an idea on how to do that!
Lots of folks have ideas. When the ideas are backed by the force of government, we better hope that they're right. The Community Reinvestment Act, at the heart of this current mess, is one of those bad ideas. The CRA is a template of what Obama has in mind. Pragmatic businessmen don't lend money at low interest rates to bad risk borrowers, unless intimidated to do so by 'community organizers' and government. Even then, it took government backed guarantees before they would do it.

QUOTE(Turnea)
Taxes in fact do always lead to the redistribution of wealth. Services must be paid for and every soldier's (contractor's, congressperson's, law enforcement officier's) salary is some taxpayer's wealth.
By that definition of "redistribution", when I purchase a Big Gulp from 7-11, I'm redistributing my wealth. Sorry, but that doesn't qualify as anybody's definition of "redistribution of wealth". For an indepth overview of the various definitions of the subject, I recommend you read this: Stanford Encyclopedia of Philosophy - Redistribution

QUOTE
Progressive taxation is not redistribution of wealth but rather taxation based on ability.
Correct. It is possible to have redistribution of wealth without progressive taxation, and it is possilbe to have progressive taxation without redistribution of wealth. What the government then does with the revenues (as well as how the government approaches a myriad of other matters) detemines whether or not redistribution occurs. Progressive taxation serves to make greater redistribution possible.
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turnea
post Nov 2 2008, 10:13 PM
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QUOTE(turnea)
By that definition of "redistribution", when I purchase a Big Gulp from 7-11, I'm redistributing my wealth. Sorry, but that doesn't qualify as anybody's definition of "redistribution of wealth".

It is, in fact, the literal definition of the term.

Any act that changes the distribution results in "redistribution".

What strict libertarians decry is purposeful redistribution.

Redistribution for redistribution's sake.

Of course neither major US party supports strict libertarianism

Edited to add:

Yeah!, what Hobbes said!

Services = Payment doesn't change distribution

I actually think the Big Gulp example counts as redistribution because of the phenomenon of profit.

What you pay for your Big Gulp cannot be what it cost to produce it.

This post has been edited by turnea: Nov 2 2008, 10:43 PM
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Hobbes
post Nov 2 2008, 10:35 PM
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QUOTE(Zack @ Nov 2 2008, 12:23 PM) *
Progressive taxation is not redistribution of wealth but rather taxation based on ability.


I think you miss Turnea's point.

QUOTE(turnea @ Nov 2 2008, 09:48 AM) *
[Actually Powell is 100% correct.

Taxes in fact do always lead to the redistribution of wealth.
...
In practice taxes always redistribute.


It is not progressive taxation always leads to redistribution of wealth, but taxation itself. You state as much in the next sentence.

QUOTE(Zack)
Taxation is a method of paying for government commitments.


Who do those commitments go to? The very people who paid for them? No. If the goal was to have no redistribtution, then we wouldn't have taxation to pay for these commitments, we'd have a pay as you go system where everyone paid for services as they were used. In this manner, everyone would pay for their own services, and no redistribution would occur. Turnea is absolutely correct in stating that paying for services used is not redistribution. In a nutshell, redistribution is having someone else pay for services you use. To follow his analogy here, if he buys a Big Gulp from a Seven-11, that is commerce, not redistribution, as no 'wealth' was redistributed--an equal exchange occurred. However, if someone makes you pay for his Big Gulp, then redistribution occurs: you are out the cost of the Big Gulp, whereas he got the associated value of consuming it. Your wealth was therefore redistributed to him.

It goes without saying (although many try to argue the point anyway) that taxation is set up to redistribute wealth, and particularly progressive taxation is designed to do so. Any glance through the tax tables will show that rich people pay alot more in taxes, whereas any similar glance through a listing of government services will show that the majority of those services go to those who aren't rich. As Turnea indicates, this is generally accepted in Western societies (and probably most others). But it really doesn't make much sense to argue that it isn't happening. It is in fact the entire purpose of taxation, and most especially of progressive taxation.

This post has been edited by Hobbes: Nov 2 2008, 10:47 PM
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barnaby2341
post Nov 3 2008, 12:02 AM
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QUOTE(CruisingRam @ Nov 1 2008, 06:49 PM) *
Sorry to have bored you with my "resume' rolleyes.gif - but I was pointing to the idea that the small increase in taxes for someone over 250k will NOT stifle business in anyway, in real world terms, vs far more important considerations in overhead for a business. Universal health care, for instance, would negate the need for workers comp insurance, or, at least mitigate it to the point that it is very, very affordable for adding an employee.

Wihtout "touting" my own resume'- can you agree that if you have a skilled labor type business (lets call it welding rolleyes.gif ) that you need to almost triple your per-hour charges to add another employee? Workers comp insurance is one of the big expenses, along with an increase in liability insurance and other payroll items, not to mention employee training and testing for licensure.

Right now, if you want to pay an employee 25 bucks an hour for welding for you, you need to charge about 100 dollars an hour, depending on other overhead issues- a big shop, with rising energy costs, really, about 125 bucks an hour to be 'worth it" to the smal business owner. That is the going rate where I am from- I have no idea what the going rate is in your area.

You take away the health care part of the equation, and all of a sudden, adding another employee becomes very, very cheap, and very good for your business.

Do you deny "job lock" is a real issue as well? I was also addressing blackstone via 'cross-dialogue" on points you made- do you not recognize that as well? hmmm.gif - or rather, adding to your points.

Business will NOT be nearly as harmed by an Obama so-called "wealth distribution" (at worst, a bad choice of terms) versus the McCain "no richy-rich left behind" continuation of GW policies.

That is why I used a personal anecdote- to highlight the "where am I being harmed" by Obama's so called "wealth redistribution".

You take away the reasons for job lock, and you get lots and lots of more people able to risk being a small business owner, rather than a wage slave.

How many people do YOU know that would "quit the dayjob" if they had the safety net of health insurance for thier families?

There is no way in hell my taxes are going to go up 1200 a month because of Obama's tax plan or universal health care- netting me (sorry, you too, didn't mean to brag on myself rolleyes.gif ) a actual increase in real world walkin' around money.

I also think that is why some corporations are starting to hype universal health care as well- they can't really afford it either.

Universal health care, a new tax structure, and what it means to your own personal bottom line can't really be seperated as issues.

Obama's economic plan, if he does get us some kind of universal health care, at least for kids even, is far better than anything the republicans have offered, well, ever.

What is up with people on this board, First Nighttimer, then turnea, and now you. I'm voting for Obama. Stop putting me opposite you just so you can spout off your beliefs. Obama's tax plan is going to be helpful to many Americans. I agree with that. Now, will you at least agree to stop disagreeing with me on issues that we agree on?

This post has been edited by barnaby2341: Nov 3 2008, 12:07 AM
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Ted
post Nov 3 2008, 02:02 AM
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QUOTE
1. Looking at the above passage, would you conclude that Senator Obama was taking a principled stand against judicially-imposed redistribution of wealth, or that he was merely objecting to the strategy on practical grounds?


Obama will tax the hell out of any group he can. The numbers keep changing.

He said 250K then 200K and finally Biden says 130K!

The reality is – for what Obama plans to do the only group that has the money to pay for it is the middle class – and he will bury us is taxes and higher prices for goods (like gas) from companies he taxes. And it will never be enough to pay for the big stupid government bureaucracies he will put in place.
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turnea
post Nov 3 2008, 02:26 AM
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QUOTE(Ted @ Nov 2 2008, 08:02 PM) *
He said 250K then 200K and finally Biden says 130K!

No in fact that's not what Biden said at all. The tax proposal hasn't changed.
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La Herring Rouge
post Nov 3 2008, 04:21 AM
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There have been some intelligently laid out explanations of the idea that "all taxation as wealth redistribution" already in this thread. Kudos to those posters for some excellent work. What no one has pointed out (that I have noticed) is that there is plenty of subtle wealth redistribution to the top already in this country. There are numerous examples (and we don't even have to talk about the bailout) of government complicity or complacency in support for large corporations doing their business. The have done so with policy AND financial reward.

The FCC has a history of coming down on the side of big media in their attempts to conglomerate. Link
QUOTE
The act led to a dramatic reduction in the number of station owners-there are 30 percent fewer radio stations now than in 1996, and one company, Clear Channel, owns more than 1,200.

President Bush's handpicked FCC chair, Michael Powell, (son of then-Secretary of State Colin Powell), attempted to push media consolidation even further. The commission under Powell tried to loosen media ownership rules at the local and national levels, proposing changes that would, for example, allow one company to own all the outlets in a particular media market.


The FDA has given some drug companies carte blanche in their attempt to control all aspects of treatment for any ailment in this country. Link They have fast-tracked dangerous drugs through the testing process and worked to thwart Americans' attempts to reach out to other drug markets.

There are literally hundreds of examples of taxpayers' money being sent directly to large corporations in the form of tax breaks, R&D handouts, and no-bid contracting. The Cato Institute has a history of the business-government relationship.
QUOTE
George W. Bush, in the name of "compassionate conservatism," has handed big business big favors in the form of a prescription drug benefit from Medicare, an energy bill full of brand new special tax credits and subsidies to energy companies, and a record loan guarantee to facilitate business with known nuclear proliferators in China. A report by the directors of the Health Reform Program at Boston University's School of Public Health found, "An estimated 61.1 percent of the Medicare dollars that will be spent to buy more prescriptions will remain in the hands of drug makers as added profits. This windfall means an estimated $139 billion in increased profits over eight years for the world's most profitable industry."


Trickle Down was as much a wealth redistribution method as is Obama's plan. We have been supporting this economy from the top for generations and, yes, we have done quite well. When you consider the size of the income gap and find that we only compare to Mexico and Russia in the narrow distribution of wealth then you should be concerned. IMO it is time for us to fertilize the soil rather than sing to the plants. If we don't reinvigorate our middle class (the main consumers) then we are all in trouble. Anyone can certainly disagree with me on this point. You can argue that job creation is the answer. (To which I will retort: We have had no "tax cut job" increase since Bush's tax cuts. We did get some McJobs but wages went down.)

However, we can still debate the point. We cannot, however, continue claiming that Obama is the only one who wants to redistribute. Perhaps you mightn ot like his choice of recipient, but that is a different debate.
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logophage
post Nov 3 2008, 05:20 AM
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Turnea and Hobbes are absolutely correct. Taxation in any form is redistribution of wealth. Let me repeat: taxation is redistribution of wealth. If you don't like redistribution in principle, then you do not like taxation in principle. If you think taxation is useful (no matter how insignificant), then you are in favor of redistribution. It doesn't matter if the tax is flat, progressive, regressive, sales, VAT, income or property: if you agree with taxation, then you agree with redistribution. I know that's a bitter pill to swallow for all you partisans out there. But, them's the facts.

Assuming that most everyone on this thread things taxation is useful, then all we are arguing about is what form this redistribution should take.
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Bikerdad
post Nov 3 2008, 09:10 AM
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Turnea is attempting to use a very narrowly construed common usage of a word, "redistribution", in place of the meaning of a specific technical term, "redistribution of wealth." As a result, he and I only appear to be using the same language, and given that his usage renders the question of the thread so utterly broad as to be meaningless, and turns Powell's quote into a useless tautology, methinks there's not much point in continuing the exchange with him. dry.gif

Hobbes, likewise, suffers from having seized on the term and utterly debased it. La Herring Rouge (LHR) has provided us a perfect vehicle to illustrate the pitfalls of both Turnea's narrow construction and Hobbe's debasement.

First, let's make a theoretical assertion, based on the general tenor of the thread, and then test that assertion using both meanings of "redistribution" used by Turnea and Hobbes.

Redistribution "to the top" is bad because it harms those below.

Turnea's definition is that anytime an economic transaction occurs that involves profit, then economic redistribution has taken place. So, when you, personally make a purchase of M&M's, you are redistributing wealth to the top. Because doing so is bad and you are harming those below "the top", you should not purchase M&M's. Nor should you purchase Pedigree for your dog, and skip on the Dove when its time for your shower, because purchasing both of those will harm those below "the top" (whatever that may be). Unfortunately, by the time you finish growing, gathering, and processing the necessary ingredients, then whipping up a batch of M&M's on your own, your dog will have starved to death (so much for not harming those below), and nobody will come close enough to give you a hug of sympathy because the overwhelming stench of your long unsoaped body will repel even the most saintly. devil.gif BUT, you will be able to take comfort in not having participated in "redistribution" of wealth.

Now, the question is, when you purchase that bar of Dove, are you worse off than you were before you purchased it? How have you been harmed? What sort of an idiot are you to repeatedly harm yourself by paying others more than the cost of production? blink.gif wacko.gif Even worse, what sort of monster are you to CHARGE OTHERS more for your goods or services than it cost to produce them? w00t.gif hmmm.gif Heck, some of you were likely budding little monsters as children, selling lemonade for a nickel a glass when it cost you nothing! w00t.gif Ahh yes, evil redistributionists all! devil.gif

Turnea's definition breaks down. Either redistribution to the top is not bad because those below are NOT harmed, or this transaction wasn't "redistribution." Take your pick. laugh.gif

What of Hobbe's categorization of anything other than "pay as you go" as redistribution? In Hobbe's world, taxes don't qualify as "pay as you go", ergo, they're redistribution. Let's take a simple case, physical security. Imagine that you and a bunch of friends acquire a large chunk of land up in the mountains, and build yourselves a little village. Knowing that there's a plethora of hungry critters around, your friends ask you to hire a woodsman (Joe Hunter) to keep the critters out. To pay the woodsman, everybody chips in a few bucks each month, which you collect and give to Joe. Is this redistribution? Now, instead of a woodsman, we've got a park ranger (well, actually, its still Joe Hunter) hired by the town mayor (that's you), who's being paid the exact same amount of money, collected from exactly the same people, for doing exactly the same job, for exactly the same people, only now we call the collected monies "taxes" What's the difference? A "village HOA" vs. a government? A woodsman vs. a park ranger? In this instance, there is no difference save the terms used.

The "all taxes are redistribution" argument of Hobbes (and Logophage) clearly doesn't support this picture. Taxes are not redistribution.

2.2.2 Moralized Subjunctive Baselines - from the Stanford Piece
Discussions of redistribution have often focused on the permissibility of levying taxes. And it may therefore be tempting simply to identify the baseline with pretax income. Not all taxes, however, are generally considered redistributive. Indeed, economists and legal theorists have typically distinguished between ‘redistributive’ and ‘benefit’ taxation. Benefit taxes are typically understood [Biehl 1982, Cappelen 2000] as user charges: taxes that are paid to cover the costs of the use of public and private goods, services, and enabling social conditions (for example, security, the legal system, social cohesion, public health) that are secured by the government or taxing authority.

These taxes are, in effect, user charges. Redistributive taxation is also commonly distinguished from Pigouvian (after the economist Arthur Pigou), or what might most aptly called ‘compensation’ taxes, which pay for harms that persons cause to the environment or to other people through their activities.[11] Taxes on carbon emissions, maritime dumping, non-renewable resource extraction, and even currency transactions, have often been characterized in this way. Let us call this understanding ‘redistribution as tax and transfer’.


They are one of the simplest and most effective weapons in the redistributionist's arsenal. Progressive taxes can be used to great effect by the "rich to poor" redistributionist, regressive taxes (for instance, an automobile tax of X payable by each person, regardless of how many cars they have) can be used to move wealth in the other direction. Usually though, the "poor to rich" redistributionist will use various government erected market barriers, subsidies, and the like.

As the Stanford article I linked earlier makes clear, there are a variety of different ways of accomplishing redistribution (in either direction), and taxes are not even necessary for it. Which of course, brings us back to the thread's opening question:

Obama's plans for redistribution. Which direction has he said the wealth will flow? What methods will he use? What direction will it flow?

I really encourage y'all to read the Stanford piece. It will enable you to clarify your own thinking about redistribution. The various definitions, the various moral rationales behind it, the various benefits of it, the arguments over the baselines, etc.
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derekm
post Nov 3 2008, 11:57 AM
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QUOTE(Bikerdad @ Nov 3 2008, 10:10 AM) *
Turnea is attempting to use a very narrowly construed common usage of a word, "redistribution", in place of the meaning of a specific technical term, "redistribution of wealth." As a result, he and I only appear to be using the same language, and given that his usage renders the question of the thread so utterly broad as to be meaningless, and turns Powell's quote into a useless tautology, methinks there's not much point in continuing the exchange with him. dry.gif

Hobbes, likewise, suffers from having seized on the term and utterly debased it. La Herring Rouge (LHR) has provided us a perfect vehicle to illustrate the pitfalls of both Turnea's narrow construction and Hobbe's debasement.

First, let's make a theoretical assertion, based on the general tenor of the thread, and then test that assertion using both meanings of "redistribution" used by Turnea and Hobbes.

Redistribution "to the top" is bad because it harms those below.

Turnea's definition is that anytime an economic transaction occurs that involves profit, then economic redistribution has taken place. So, when you, personally make a purchase of M&M's, you are redistributing wealth to the top. Because doing so is bad and you are harming those below "the top", you should not purchase M&M's. Nor should you purchase Pedigree for your dog, and skip on the Dove when its time for your shower, because purchasing both of those will harm those below "the top" (whatever that may be). Unfortunately, by the time you finish growing, gathering, and processing the necessary ingredients, then whipping up a batch of M&M's on your own, your dog will have starved to death (so much for not harming those below), and nobody will come close enough to give you a hug of sympathy because the overwhelming stench of your long unsoaped body will repel even the most saintly. devil.gif BUT, you will be able to take comfort in not having participated in "redistribution" of wealth.

Now, the question is, when you purchase that bar of Dove, are you worse off than you were before you purchased it? How have you been harmed? What sort of an idiot are you to repeatedly harm yourself by paying others more than the cost of production? blink.gif wacko.gif Even worse, what sort of monster are you to CHARGE OTHERS more for your goods or services than it cost to produce them? w00t.gif hmmm.gif Heck, some of you were likely budding little monsters as children, selling lemonade for a nickel a glass when it cost you nothing! w00t.gif Ahh yes, evil redistributionists all! devil.gif

Turnea's definition breaks down. Either redistribution to the top is not bad because those below are NOT harmed, or this transaction wasn't "redistribution." Take your pick. laugh.gif

What of Hobbe's categorization of anything other than "pay as you go" as redistribution? In Hobbe's world, taxes don't qualify as "pay as you go", ergo, they're redistribution. Let's take a simple case, physical security. Imagine that you and a bunch of friends acquire a large chunk of land up in the mountains, and build yourselves a little village. Knowing that there's a plethora of hungry critters around, your friends ask you to hire a woodsman (Joe Hunter) to keep the critters out. To pay the woodsman, everybody chips in a few bucks each month, which you collect and give to Joe. Is this redistribution? Now, instead of a woodsman, we've got a park ranger (well, actually, its still Joe Hunter) hired by the town mayor (that's you), who's being paid the exact same amount of money, collected from exactly the same people, for doing exactly the same job, for exactly the same people, only now we call the collected monies "taxes" What's the difference? A "village HOA" vs. a government? A woodsman vs. a park ranger? In this instance, there is no difference save the terms used.

The "all taxes are redistribution" argument of Hobbes (and Logophage) clearly doesn't support this picture. Taxes are not redistribution.

2.2.2 Moralized Subjunctive Baselines - from the Stanford Piece
Discussions of redistribution have often focused on the permissibility of levying taxes. And it may therefore be tempting simply to identify the baseline with pretax income. Not all taxes, however, are generally considered redistributive. Indeed, economists and legal theorists have typically distinguished between ‘redistributive’ and ‘benefit’ taxation. Benefit taxes are typically understood [Biehl 1982, Cappelen 2000] as user charges: taxes that are paid to cover the costs of the use of public and private goods, services, and enabling social conditions (for example, security, the legal system, social cohesion, public health) that are secured by the government or taxing authority.

These taxes are, in effect, user charges. Redistributive taxation is also commonly distinguished from Pigouvian (after the economist Arthur Pigou), or what might most aptly called ‘compensation’ taxes, which pay for harms that persons cause to the environment or to other people through their activities.[11] Taxes on carbon emissions, maritime dumping, non-renewable resource extraction, and even currency transactions, have often been characterized in this way. Let us call this understanding ‘redistribution as tax and transfer’.


They are one of the simplest and most effective weapons in the redistributionist's arsenal. Progressive taxes can be used to great effect by the "rich to poor" redistributionist, regressive taxes (for instance, an automobile tax of X payable by each person, regardless of how many cars they have) can be used to move wealth in the other direction. Usually though, the "poor to rich" redistributionist will use various government erected market barriers, subsidies, and the like.

As the Stanford article I linked earlier makes clear, there are a variety of different ways of accomplishing redistribution (in either direction), and taxes are not even necessary for it. Which of course, brings us back to the thread's opening question:

Obama's plans for redistribution. Which direction has he said the wealth will flow? What methods will he use? What direction will it flow?

I really encourage y'all to read the Stanford piece. It will enable you to clarify your own thinking about redistribution. The various definitions, the various moral rationales behind it, the various benefits of it, the arguments over the baselines, etc.

obama is right you cant use the law to redistribute wealth. IMHO what is needed is a redistribution of not money but liability. If you are in the lower earning classes and you make a mistake you get fired and the impact is catastrophic you can lose literally everything. The upper earning classes have a liability immunity. You make a mistake and you get a golden parachute. The huge differential in earnings provide for a cushion that makes them immune to the storms.
For a whole variety of reasons we need the best paid to feel the pain of getting things wrong that the rest of us share. Becuase they are much more in power we need them to take care as well as take risk.
I would propose that progressive liability is needed as well as progressive taxation. What do I mean by progressive liability?
The more you earn the more you share in the liability of the company. e.g. you earn above $500K p.a. you get a rollling 5 years worth of liability that you cannot reinsure.
Screw up and the company goes under and 5 years earnings including shares options bonuses pension etc.. go up in smoke. And it applies for upto 5 years after you leave.
This will mean the people in power are not always going to vote themselves more money instead of internal investment. It will mean they will share in the risk that their employees take. It makes the rich have more incommon with the small businessman who has staked his home and his future on trying to make a go of it. It makes the rich have more in common with the employee who loses everything if his towns biggest employer goes belly up. It is in line with capitalist principles and corrects the injustice of unbounded corporate limited liability.

Derek

This post has been edited by derekm: Nov 3 2008, 11:59 AM
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turnea
post Nov 3 2008, 12:39 PM
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QUOTE(Bikerdad)
Turnea is attempting to use a very narrowly construed common usage of a word, "redistribution", in place of the meaning of a specific technical term, "redistribution of wealth."

1.) My given definition of "redistribution of wealth" was broader than your "technical" use of the term.

2.) Redistribution of wealth isn't a technical term so much as a simple mathematical concept perverted into a meaningless political buzzword.

QUOTE(Bikerdad)
So, when you, personally make a purchase of M&M's, you are redistributing wealth to the top

Not necessarily the top, just away from you.

Part of the problem here is that some are insisting in thinking of economics in one-dimensional terms.

Some of that profit goes to "the top" eventually but first it goes to the retailer, then the wholesaler, then the producer, then the employees, the stock holders....

Whether this results in a net distribution to the top depends on how much profit is spent on what purpose.
QUOTE(Bikerdad)
Turnea's definition breaks down. Either redistribution to the top is not bad because those below are NOT harmed, or this transaction wasn't "redistribution." Take your pick.

When did I ever said redistribution was bad?

That's what I've been trying to get at, it's a normal part of everyday life in a currency based economy.

QUOTE(Bikerdad)
A woodsman vs. a park ranger? In this instance, there is no difference save the terms used.

Suppose you're a pretty sure shot yourself. You've built a fence around your land and you have a special love for big ugly guard dogs.

The woodsman/park ranger never comes around your place and if he did he'd just be like a worn dingy tossed in the waves of your radiating manliness.

Why are you paying into the pot/taxes? What benefit have you received?

I will agree though that break even user fees aren't redistributive, but no nation runs on break-even fees.

Unless your congressman charges per letter.

This post has been edited by turnea: Nov 3 2008, 12:46 PM
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Zack
post Nov 3 2008, 12:55 PM
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Wealth is having more property than required to meet a person’s basic needs, as you exceed this basic need the result is income. All wealth is based on natural resources that when traded are transferred into money. I have land, cattle, pigs, chickens and sheep and I hire workers to care for these assets and still have more than I need after covering all of the expenses. The results of my excess is income, the trade of my natural resources for labor is paid as income to my workers and the excess profit I retain is my income.

If I have ten million dollars the value of that money is based on the above value of the natural resources, if I then loan that money to thousands of citizens at 24% interest I yield income if those persons repay me but I have no wealth.

Wealth is having excess trade of natural resources and income is the result of trade.

Government taxation of income pays for all government functions that are not paid by revenues generated by government owned natural resources. If the government expends revenue to citizens not paying revenue then they are redistributing “income”, or that tax portion of those citizens supporting the government revenue. An orphan or other ward of the state receives income redistribution as a result of income taxation. Therefore citizens not taxed receiving tax become wards of the state or social welfare recipients.
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turnea
post Nov 3 2008, 01:05 PM
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Economic definition of wealth:
QUOTE(Wiki)
In economics and business, wealth of a person or nation is the value of assets owned net of liabilities owed (to foreigners in the case of a nation) at a point in time. The assets include those that are tangible (land and capital) and financial (money, bonds, etc.). Wealth may be measured in nominal or real values. Measurable wealth typically excludes intangible or nonmarketable assets such as human capital and social capital. In economics, 'wealth' corresponds to the accounting term 'net worth'.

Link

That puts a sharper image on it, I think.

QUOTE(Zack)
Therefore citizens not taxed receiving tax become wards of the state or social welfare recipients.

These two terms are not interchangeable.

A ward of the state is under the direct legal guardianship of the state. Social welfare recipients are often tax payers. Anyone who receives funds from government programs targeted towards "social welfare" are welfare recipients.

All you "welfare queens" who got social security or Pell grants, that means you.
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Zack
post Nov 3 2008, 02:09 PM
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QUOTE(turnea @ Nov 3 2008, 09:05 AM) *
Economic definition of wealth:
QUOTE(Wiki)
In economics and business, wealth of a person or nation is the value of assets owned net of liabilities owed (to foreigners in the case of a nation) at a point in time. The assets include those that are tangible (land and capital) and financial (money, bonds, etc.). Wealth may be measured in nominal or real values. Measurable wealth typically excludes intangible or nonmarketable assets such as human capital and social capital. In economics, 'wealth' corresponds to the accounting term 'net worth'.

Link

That puts a sharper image on it, I think.

QUOTE(Zack)
Therefore citizens not taxed receiving tax become wards of the state or social welfare recipients.

These two terms are not interchangeable.

A ward of the state is under the direct legal guardianship of the state. Social welfare recipients are often tax payers. Anyone who receives funds from government programs targeted towards "social welfare" are welfare recipients.

All you "welfare queens" who got social security or Pell grants, that means you.
Actually this is a better source for understanding taxation http://en.wikipedia.org/wiki/Income_tax_in_the_United_States

Social programs are "new" federal involvement in state issues. Regardless, all distribution of taxed income to non contributers is redistribution regardless what the target, should it be foreign aid, PELL grants or any other non contributer such as 52 million citizens that do not contribute to the revenue.

Taxing an employer or coorporation always returns to be paid by the lowest in the culture, an excellent example is the results following an increase in the minimum wage, nothing changes but your "money" buys less and less people are working.
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post Nov 3 2008, 02:13 PM
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QUOTE(Zack @ Nov 3 2008, 08:09 AM) *
Social programs are "new" federal involvement in state issues. Regardless, all distribution of taxed income to non contributers is redistribution regardless what the target, should it be foreign aid, PELL grants or any other non contributer such as 52 million citizens that do not contribute to the revenue.

More than that, even contributors who receive more than they themselves contributed are being redistributed to.

That's the majority of Americans.
QUOTE(Zack)
Taxing an employer or coorporation always returns to be paid by the lowest in the culture, an excellent example is the results following an increase in the minimum wage, nothing changes but your "money" buys less and less people are working.

Ah, you don't think most Americans benefit from progressive taxation?

This post has been edited by turnea: Nov 3 2008, 02:21 PM
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post Nov 3 2008, 05:12 PM
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QUOTE(turnea @ Nov 3 2008, 10:13 AM) *
QUOTE(Zack @ Nov 3 2008, 08:09 AM) *
Social programs are "new" federal involvement in state issues. Regardless, all distribution of taxed income to non contributers is redistribution regardless what the target, should it be foreign aid, PELL grants or any other non contributer such as 52 million citizens that do not contribute to the revenue.

More than that, even contributors who receive more than they themselves contributed are being redistributed to.

That's the majority of Americans.
QUOTE(Zack)
Taxing an employer or coorporation always returns to be paid by the lowest in the culture, an excellent example is the results following an increase in the minimum wage, nothing changes but your "money" buys less and less people are working.

Ah, you don't think most Americans benefit from progressive taxation?
What party took SS out of the locked box and placed it in the general fund, started taxing SS, spent the contributions on social programs other than what the contributions were intended for? http://en.wikipedia.org/wiki/Social_Security_(United_States)

Check out these plans:
http://www.youtube.com/watch?v=bueCxeXZAUU
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post Nov 3 2008, 05:15 PM
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Who said anything about parties?

The subject of this particular thread is redistribution of wealth, which both major parties and candidates support.
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post Nov 3 2008, 06:18 PM
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QUOTE(logophage @ Nov 3 2008, 12:20 AM) *
Taxation in any form is redistribution of wealth. Let me repeat: taxation is redistribution of wealth.

If that's the case, then why is Obama advocating "redistribution of wealth", as though that's something that's not already going on?

I think what most people here are confused about is redistribution as a side effect, versus redistribution as the main purpose of taxation. As in: this group of people have too much money, that group of people have too little, we're going to take wealth from this group and give it to that group. Because that's what's "fair".

That is what Obama is advocating, to the point where he thinks the courts should have their own role to play in forcing it upon society. Anyone who can't see the seriousness of that because of constant nitpicking over what, by some stretch or another, can be considered "redistribution", is completely missing the forest for the trees.
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post Nov 3 2008, 06:23 PM
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QUOTE(Blackstone @ Nov 3 2008, 12:18 PM) *
I think what most people here are confused about is redistribution as a side effect, versus redistribution as the main purpose of taxation. As in: this group of people have too much money, that group of people have too little, we're going to take wealth from this group and give it to that group. Because that's what's "fair".

That is what Obama is advocating, to the point where he thinks the courts should have their own role to play in forcing it upon society. Anyone who can't see the seriousness of that because of constant nitpicking over what, by some stretch or another, can be considered "redistribution", is completely missing the forest for the trees.

I don't think you do justice to the argument for progressive taxation.

We don't tax the rich more because they "have too much money" but because they are far less harmed by taxes they can afford to contribute more to the common cause of a strong nation.

You may not like the principle but it's a basic part of both Obama and McCain's platforms.

Obama hasn't proposed anything new in this snippet of conversation plucked from the airwaves.

It's not that we don't see the forest, some of us are just wondering why it's so important we tour a plastic forest.
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