I am a capitalist exploiter. I benefit from the labor of my employees. They are nice people, smart people who work hard. I pay them a salary every month, but they generate more revenue for my company than I pay them. That revenue is large enough to cover all my operating costs and expenses, including salaries, rent, technology, staff training, travel and yellow number 2 pencils. In fact that revenue is even large enough to pay all taxes and leave a surplus at the end of the year.
I call that surplus “profit”. I do with that profit whatever I want. I could spend it on homes and cars and boats and clothes and toys that men like. Or I could reinvest it in the company. It’s my money, because it’s my business, and it’s up to me to decide what to do with it. I really like that. To me, that’s capitalism and freedom, and it’s very good.
Please forgive my off-color language, but I’m pretty pissed off about taxes. In my opinion, this country has lost its mother-loving mind about taxes. I want to tell you the truth about taxes, and I want you to please listen. Because I have a plan to fix America.
This country has a lot of problems we need to deal with, but I say the biggest, most urgent, most in-your-face problem is taxes. We need to raise some of them, and we need to do so right away.
Cut spending
Yes, we need to cut spending, too. Entitlement reform simply can’t be escaped. People will have to retire a little later, because people are living longer and we can’t afford to pay social security to people for quite as long. Medicare and Medicaid in their current forms are not sustainable in the future. Intelligent people without overly partisan agendas have said so, and I agree with them.
Defense spending will have to be cut. Whole programs must be killed or at least grievously wounded. We will have to close military bases in many parts of the world. That shouldn’t be too terribly hard, because best guesses say we have between 700 and 1,200 foreign bases. Nobody – not even our own military – seems to know the precise number.
Raise taxes
And now to taxes. This is a plea, from a selfish capitalist exploiter, to for God’s sake raise taxes on people like me.
To my friends and colleagues who bitch and complain about taxes, I say, “I hear you.” I don’t like playing taxes either. I’ve grumbled, too, and called for tax cuts in the past. And I know very well how high taxes can hurt investment and growth. But right now, our country is in a very bad spot, headed in a very bad direction. We’re broke. We’re losing respect around the world. Even worse, we’re losing power. As someone who does believe that America is exceptional and irreplaceable, that worries me very much. As someone who believes that a world led by America is better than any of the alternatives, that causes me real anxiety.
Simple plan
So… the plan. It’s very simple and unoriginal. Raise income taxes on wealthier Americans back somewhere close to where they were under Bill Clinton. That’s in the 39% range for the highest rate. Things were pretty good under Bill, weren’t they? Our lifestyles didn’t suffer all that much.
Also raise rates a little for middle-income earners. We need that broad base to put some muscle in revenue increases. If you’ve got a job and are earning money, you can afford to kick in a bit more for awhile. I know you’ve got kids and expenses, and it’s hard making ends meet, but everybody who is able has to contribute. It’s for the country. It’s for all of us. We need to think collectively about the things we value together.
That’s not communism, by the way, or even socialism. It’s teamwork. Remember, I’m a capitalist exploiter. I have no patience with far-left types who want to take away social incentives and redistribute wealth in a massive way. But I do believe in teamwork. And I do believe that in times of great challenge, we can all find a way to sacrifice something. Temporarily, at least.
The point - and I wish the Tea Party and its preferred talking heads would try to understand this - is that taxes cannot only and always go down. Sometimes, they have to go up. Such as when two presidents, from two different parties, for reasons they surely believed were good, spent trillions more than this country had to spend. Now taxes have to go up for awhile, and not just income taxes.
Introduce a VAT
America needs a national value added tax, or VAT. We’re just about the only developed country that doesn’t have one. It’s a consumption tax on goods and services. A VAT is essentially a proportional tax, neither progressive nor regressive, and it raises a lot of revenue.
People everywhere hate VATs, but people everywhere learn to live with them. They pay the government’s bills – that is, the people’s bills – and they do so relatively efficiently. Economists like VATs for a very good reason. Unlike personal and corporate income taxes, they do not discourage saving and investment. They are the least bad kind of tax, you could say. You can also adjust the rates, you can exempt essential goods and services, and you can provide credits for low-income people, to make sure they aren’t disproportionately hurt.
The VAT rate in most of Europe is over 20%. In Australia, it’s 10%, and it’s 5% in Canada. America could raise hundreds of billions in the next few years with a VAT of just 3 or 4%. It would be a smart thing to do.
Restore American power
If we bite the bullet and raise these taxes, the US could be out of the fiscal woods in just a few years. We could be back to surpluses very soon. We could restore respect for this country, and restore our power. We could give America the flexibility to do many things cherished by the left or the right – be it more social spending or investment in green energy, or big new defense programs or cutting tax rates right back down again.
Taxes are not evil. They are a tool governments use to pay for the will of the people. Sometimes they should go down, and sometimes they should go up.
This capitalist exploiter would like taxes to go up for awhile. Maybe I’ll buy two fewer pairs of shoes and not skip off to Bermuda some weekend. Maybe I’ll wait another year before I buy a new car. But probably, I’ll just have a little less in my personal bank account for a few years. I can live with that.
Some capitalist exploiters love their country, too.
Now saying odd things on Twitter: http://twitter.com/#!/ManTalkNow
TIP:
Enter the amount, and click "Tip" to submit!
Pandora S. Bach
Lea Lane
Tom Cordle
Helvetica Stone
Erica K
divorcedpauline
Salon.com
Comments
Things we need to agree to:
1. Government has a role to play and that needs to be funded.
2. Government must be funded but it also must spend wisely.
3. Money always flows up. The working poor spend every dime on survival but that spending curve lowers as the income rises. No point in diverting money from the poor, that cannot help the economy. Taxes need only be on discretionary income only.
4. Equity is as much in the interest of the rich as it is the poor. Without it we ALL sink.
5. If you're going to have a rule one must work to get money then one is also obligated to provide money when work is denied. Moral of the story: don't deny people from work. We have unlimited things that need to be done.
6. Money should be used to serve us, not the other way around like it is now. We worship it to make our most crucial decisions. It decides if we repair our roads or not, make our food healthy or not, etc., etc. We're letting money decide if we survive as a race! There's a word for that: possessed.
It's not an economic problem, it never has been. That's just another mirror to our souls. It's a moral problem. Good thing about those is that they can be fixed for free :)
Increased taxes are only helpful if they are not applied to income that is not used to obtain necessities such as food, clothing, shelter, etc. Applying such taxes to discretionary income ONLY makes much sense.
I need not ask why raising corporate taxes is self-defeating. When you raise a corporation’s taxes, it simply passes that increase in costs on to the consumers of its goods or services just as it would any other increase in its costs. It thus becomes a “hidden tax” that consumers pay.
Our VAT here in Canada, is 5% at the Federal level. The provincial level (state level to you) is an additional 4% to 10% depending on which province you’re in. In some provinces one sales tax (our term for a VAT) is charged after the other has been applied making it a tax on tax.
It hurts when it is charged on necessities such as heating fuel and gasoline/diesel fuel for vehicles needed to provide transportation to work and for the movement of needed supplies from the manufacturer or grower to the market.
Harry’s Ghost makes an all too often forgotten point that money should serve society, not the other way around. I’ll add that our whole economic/social/political system should serve the citizens - not the other way around. We have every right to ask what the system can do for us; "doing for us" is what we have a system for in the first place! Yes friends, Mr. Kennedy had it wrong.
ᴼᴥƪ
.
It hurts my brain so much to see our political class incapable of thinking clearly, and incapable of negotiating decently when the stakes are so high.
Basic economic literacy is such a valuable civic virtue. It pains me no end to see it in such short supply among our leaders. All our lives would be made better if we could just damn well give a little ground in negotiations.
I cannot tell you how sensible it is but he certainly leaves us in no doubt as to how ‘common’ it is.
So let’s do this item by item....
“GOVERNMENT ALWAYS GROWS”
Yes, Snorzy, it grows because:
a) the population it serves grows
b) it is ever being asked to do more and more
c) ALL politicians, of EVERY party push for the growth of ALL the government departments in everything under their purview. They ALL want more control of everything.
“GOVERNMENT HIRES EMPLOYEES”
Please advise us of your method for getting the work of government done without employees.
“G’MENT PAYS BENEFITS TO EMPLOYEES FOR 50 YRS.”
Employees often get benefits in the private sector too. An advanced society doesn’t look for ways to cut the benefits of employees in one sector; it looks for ways to extend those benefits to all sectors.
“BABY MONEY”
The cost of delivering a baby is minimal compared to the cost of rearing it properly. Ensuring that every parent has gainful, properly paid employment (until we do away with rent-a-slave “employment”), will not only relieve the government of this cost but bring in taxes as well. The minimum wage is a disgrace. If we insisted that all elected representatives get paid only minimum wage we’d soon see that get fixed!
“40% OF CHILDREN BORN OUT OF WEDLOCK”
So what? Are there more children being born per capita than before single motherhood became so popular? Nope; birth rates have gone down, over-all. I suppose, Mr. Snorzy, you’d force people into marriage in order to “allow” them to have a child. You, and those like you, to be the ones who decides who is to receive this “permission”, I suppose.
“POVERTY & SINGLE-INCOME FAMILIES”
The percentage of single parent families is exactly the same across ALL INCOME LEVELS in relation to the regular child birth rates for those in the different income brackets. Poverty does not cause ‘single-income families’. Neither do single-income families cause poverty.
The greatest contributor to poverty is a dog-eat-dog system that allowed half of the wealth of the nation to concentrate into the hands of 4% of the population while allowing people to be used to create wealth that they only share in a tiny portion of the benefits thereof. Any DECENT employer ensures that his employees are able to earn a decent income and has whatever benefits employer & employee agree on.
The next great contributor to poverty is our greed capitalist habit of keeping a “labour pool” of unemployed handy so as to drive down wages and benefits, and use as a whip over present employees.
You don’t want to pay them properly but you don’t want them to ask for anything when dumped into the labour pool. Any sensible employer knows full well that part of his taxes go to support the people who are unemployed so that they’ll still be alive and healthy when he needs them. It doesn’t hurt to have them around as customers either.
“FOREIGN BASES”
In most cases the US government has twisted arms and otherwise forced those bases on the countries they’re in. As to “protecting those countries”.... Ha, ha, ha, ha! Who are you kidding? Are you starting to believe your own propaganda? Most of those countries would gladly pay you to leave!! Ask Japan!
Ask Turkey! Ask ANY country that has US military bases imposed upon them!
.
re: taxes that change over time--
there is a new concept of a tax that changes based on wealth disparity, one that I favor.. I wrote a blog about that one.
skypixie0, I'd enjoy having a beer with you.
vzn, you'd enjoy having a beer with me, more than you suspect.
This government has never been concerned with governance and stewardship. They got on the gravy train and can't be concerned with anyone who hasn't hopped on or gets in the way. Power corrupts and absolute power corrupts absolutely.
You bring the munchies, anything crispy & salty, and I’ll bring the beer - I presume you can handle Canadian beer?
I’d really like some of us who are representative of average entrepreneurs, not out to tread on others, just out to do as well as we can in the system we were born into (or came to), to form a loose group to refute the socialist bullshit that has every businessman labeled as a heartless goon who will step on a working man’s child to make a nickel.
That kind of behaviour is actually more representative of those employees climbing the corporate ladder than it is of the businessmen and entrepreneurs who all together employ the largest portion of workers.
That said, let me mention here that I think our present economic system is on its last legs. Do not confuse the mess we now have with “capitalism”. There are a few different forms that capitalism can take. One is, as I’m sure you know, laissez faire capitalism which is like ours, only worse. Then there is ours which brought forward with it, as it grew out of feudalism, something which is acting as a cancer in our system and is killing it. It has almost finished it off as we see from recent developments.
One great problem with our present system is that it “just grew”. We did not decide that we wanted this system, sit down and design it to work at its best, and determine what it ought to do for the people of this society. We desperately need to do that. Our technology is too complicated; our methods of doing business are far to sophisticated, to allow a “randomly grown” economic system to be our path to the future.
We need to determine what we want of an economic system. We need to determine what it should do for those who live under that system. We need to resolve the question of the sharing up of the wealth that is created by the efforts of competent entrepreneurs, businessmen, managers, labour and customers. We need to determine the role that government ought to play in keeping things running on an even keel and ensuring that some basic rules of fairness and taxation are in force.
But most of all, we need to be prepared to design a workable, concerned for all, capitalist system from scratch. If we don’t do it, it won’t get done. There is no one else around to come to our rescue and hand us one. We have to decide what it should do. We have to determine how it will do what we want it to do. We have to design it to do as we wish it to do. And we have to implement it. If we do that job well we’ll have a system that will knock yer socks off! If we don’t, we are headed for history’s trash heap.
.