How is "Consumption tax" considered fair?

Depends a lot on what is included and not. Groceries, for example, are usually excluded from state sales tax.

How you equate financial instruments with “consumption” is beyond me. And beyond any possibility of my explaining it to you.

@CyanoticWasp For these purposes, anything you spend money on. Otherwise, the rich consume so little (as a percentage of their income) that they would effectively be tax-exempt.
Try me anyways though.

@CyanoticWasp

We each spend $100

I buy my kids shoes.
You buy Enron stock.

You shouldn’t be taxed?

“Investment” is not consumption. I know that I’m in an extreme minority on this board in my (grateful) support for capitalism, but just how do you think “jobs” are created? By law? Because Congress says, “You must employ more people, starting now?”

@jaytkay no. See my first response. It’s not hard to understand, if you’re the least bit interested.

Sales tax spread itself out. If you buy, you pay. But I don’t see it as a replacement for income tax. The idea is that people with more disposable income buy more stuff and end up paying more of this tax. We even have a ‘luxury tax’ and it’s a higher sales tax on things that are considered luxury items.

In some countries, sales tax is excluded from certain items that are considered essentials, and that is to help the ‘regular people’ keep money in their pocket. It can become an accounting nightmare though. In Australia, when they introduced GST (good and services tax) there were all sorts of exceptions at a grocery store and it confused the hell out of everyone.

Financial transactions, in most cases, are exempt from this service tax. In the UK, I think they may still have a ‘Stamp Tax’ that is paid on certain types of financial transactions, but I’ve been out of the game too long to be up to date on any of this stuff.

The ‘Investors’ pay on the other end. When they ‘realise’ their income on the investments they make, they have to claim that income.

If you ask someone to pay sales tax on an investment, it’s a bit like asking you to pay your employer for the opportunity to work for them. It’s a bit odd.

Personally, I think a simple income tax and an even handed, fair treatment of a federal sales tax would work wonders in the US.

@CyanoticWasp Jobs are created by companies, not people. Companies earn revenue, not income. Different laws apply there.

By the same token, I am in favor of limiting executive compensation so that companies can afford to expand and evolve. Hey, maybe if we shifted the tax burden away from corporations and onto individuals who earn more than they can spend even if they buy a Gulfstream jet for each day of the week then we can lower tax rates on businesses enough to keep them from going overseas! ]Last I checked, we had amongst he highest business taxes in the world, if not the highest. I guess that’s the price we pay for having low income taxes.
Personally, I could do quite fine on a mere $5 million a year, especially if that sacrifice means that the company I work for will still be around (and paying me) for years to come as opposed to crashing into bankruptcy in a few months or cutting headcount in favor of an overseas guy who will do my job for less money.

I know that I’m in an extreme minority on this board in my (grateful) support for capitalism

Sorry, I thought your answers were serious. Now I know better.

@jaytkay Isn’t it possible to support Capitalism without being in favor of handing all of the nation’s wealth to a few elite people? If not then I need a new word for my economic beliefs!

@cazzie I can see that, and I agree that double-taxing would be unfair. However, if that investment isn’t taxed upon cashing out since income isn’t taxed then it’s different and I feel that the purchase should be taxed in that case. I guess it depends on the details.

@jerv
RE: I know that I’m in an extreme minority on this board in my (grateful) support for capitalism

CyanoticWasp’s words, not mine.

@jaytkay Oops! Damned typos!

consumption tax is pro-rich. I understand their percentage of taxes is much larger than mine, but they have so much more than the poor.
I would support a flat tax, progressive to help the poor. I would also support getting rid of tax benefits for home ownership, since that really isn’t fair.

@jerv What do you mean income isn’t taxed on a realised investment? Where?

@jerv keep thinking it out, though. Where do “companies” get the wherewithal to create jobs? “Revenue” is fine, but it doesn’t just happen from good wishes and a plan. It takes “capital” to create jobs. The last time I looked at this (quite a few years ago) the “average” job in the US required over $125,000 in capital investment (we’re not talking wages and benefits yet) to set up the job. That is, tooling, space, supplies, etc. (Even a job for a migrant worker picking fruit requires capital in the form of fields, fruit trees, transportation for the product, etc.)

The capital comes primarily from investment.

Rich people also buy sneakers for their kids, too.

No, there should be tax benefits to home ownership. Otherwise people are going to have to rent from people who own the homes as an ‘INVESTMENT property’ and that is a messy fish to fry. Incentives should be given for home ownership. (that’s the home you LIVE in not the 10 you own and rent out..that’s a different deal.)

@jaytkay: you wrote:
@CyanoticWasp
We each spend $100
I buy my kids shoes.
You buy Enron stock.
You shouldn’t be taxed?

the man who invests $100 in stock probably is paying $300 on his kids shoes and paying MORE sales tax than you.

and when he cashes in his investment and earns… maybe 5 or 6% after brokers fees, he has to pay income tax on those earnings.

@filmfann That depends, but last I checked, those in the low/mid-six-figure range paid the highest percentage of their income in taxes. Sure, the rich pay more in dollars because 17% of $41,000,000 is more than 30% of $100,000.

@CyanoticWasp So… companies can’t invest in themselves? And an individual who earns only $5–10 million won’t invest even though someone like my parents (who earn closer to $160K/yr) do? You’re making less sense now.

@cazzie It depends on whether income tax is replaced completely or not. Like I said, it depends on the details. However, I think you’ll agree that $300 is less than a weeks pay for Bill Gates, so the percentages still favor the rich. Let me know when kids shoes cost $100,000 or more and you might have more stable ground there.

the man who invests $100 in stock probably is paying $300 on his kids shoes

So he should be exempt from taxes the “little people” pay?

@jaytkay you didn’t finish reading what I wrote. He is paying tax on that investment. income tax. Just like you.

@cazzie… assuming income is still taxed. If not, then no.

Where are they talking about ‘replacing’ income tax? that’s crazy talk.

@cazzie Some people want it done that way, and I think you and I both agree that that is crazy talk.
There seems to be a lot of that going around lately….

Give me a bit for a bibliography; I see so much that I don’t always remember where I saw it all.

I’m in favour of a national consumption tax in the US. It wouldn’t have to be much at all and probably only on ‘luxury’ items. It would only have to be 1 or 2%, even. It would generate a huge pool of money that can be used to really help some of the problems in the current economy. But it can’t ‘replace’ income tax. If anything, some of the stupid loopholes need fixing. Gosh… those offshore tax havens and completely dodgy accounting practices allowed in the US… it’s nuts! I’m not surprised the whole thing is falling down. It’s not ‘capitalism’ itself, but the twisted variety that’s been allowed to flourish in the States. Irresponsible.

@cazzie Here is one I found pretty quick.
I am juggling a few things, so I can’t give this my full attention right now, so there is only one…
The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach…

However, I think you and I really are on the same page here. I also favor the “Luxury tax” that we currently have.

Until several years ago, if you made less than $5,000 annually, you were exempt from paying taxes, which made perfect sense. In fact, damn near everyone agreed that people who made such a miniscule amount shouldn’t have been taxed at all, yet they were. Instead of showing a little compassion, what did congress do? They LOWERED the taxable annual limit to $3,400.

Until we can talk some sense into our law makers to put forth as much effort toward creating tax relief for poor and lower middle class people like they did for the rich, this proposal works for me. The rich have incredible tax shelters that save them TONS of money, that the poor and middle class don’t get don’t get. This affects the housing market, grocery stores, the auto industry, and the economy, in general. This is the price we pay for carving out special places for one group, while ingoring everybody else. Everybody suffers.

If we can be this creative in finding and creating tax shelters for the rich, then we can be equally as creative for the poor and middle class. But then, we have no money left to run the country, so that doesn’t work, either. Plain and simple, the rich consume more than the poor because they have disposable income. Let em pay.

skimming the link you sent
wow… 23%. That’s aggressive. Of course, if the individual and employer is no longer responsible for the collection of taxes in the form of income tax, it leads to problems. (I speak from a particular angle here having dealt with the IRD in New Zealand and dealing with clients adapting to the GST system in Australia)

We had GST (goods and services tax) and it had to be collected by the seller of the goods. When the businesses were having problems they kept the GST (and the PAYE in some cases) and paid their suppliers instead in attempts to use the government as their cash flow donkey and they would try to trade out of their problems and just pay penalties to the government. Well, this rarely worked.

This group, American’s for Fair Tax, they want to get rid of the IRS? Who is going to see to it that the businesses pay this Sales Tax? It leaves the business responsible for the collection and reporting of both sales and tax collected. Hmmm.. and no IRS to check? ohh.. I smell a stinky fish.

@cazzie As it stands, I pay 9.5% state/local sales tax on most things, no state income tax, and little federal income tax (mostly due to having little income this year). At my income level, a straight consumption tax would be a bad thing!

@phillis It’s not quite that bad. A married couple with no children is effectively tax-exempt at $18,300 according to the 2009 instructions for the 1040.

We file seperately, Jerv, because my husband is an illegal immigrant. This is what the IRS agent informed us this past November.

Your logic seems a bit fuzzy regarding how the rich buy less than do the poor and middle class….You obviously have never been rich.

And then there is no capital gains tax or income tax on realised investments. And no business to business GST. Nah…. it smells a bit in this proposal form, but I do back the idea of it. We pay 25% sales tax and 30% for luxury items, PLUS we have a stepped income tax rate.

The problem with a sales tax only scheme is that, while it looks good on paper, it’s implementation is never done in any true form. Having high sales tax drives a large percentage of transactions into a ‘brown economy’. Unclaimed cash deals increase, the savings that the corporates make by not having to comply with the other taxes won’t be passed down. And suddenly, registered business will pop up, selling all sorts to other registered businesses and the consumption tax won’t be collected on those goods. Hell, we once got the GST back on a client’s purchase of a 911 Porshe, using the argument he needed it to drive between the rows of vines at his vineyard.

Looks good on paper, but it won’t work out like they thought and they won’t be collecting what they want. Real production and trade won’t be reported anymore. It needs to be a smaller percentage and only work side by side with a fair income tax.

@jerv
Assume that this thing is put in place, and that a “consumption tax” (crucial details omitted) does “replace” all other Federal taxes. Let’s just suppose…

Then an investor making millions in the stock market, real estate, commodities, business ownership, salary, etc. would not be paying money on that income. And let’s say the stock market goes wild, and he makes money hand over fist.

What do you suppose he’s going to do with that money? Most people I know make money in order to spend it. Okay, so Warren Buffett is an exception: he gives his away. Ditto Bill Gates. Maybe he leaves it to his kids—they’ll spend it. If they don’t, then they’ll invest it and create more jobs. Either way is a win for the economy.

Still, think of all the sports and movie stars who make those millions in salary. They invest some, I suppose (Michael Jordan didn’t start his restaurant chain on an IOU), but they spend it. That’s what it’s for. If people want to make tens of millions (okay, say hundreds of millions) in salaries and bonuses and then invest 90% of that to make themselves richer—what’s the problem with that? (I know that there’s a lot of envy, but that should not be driving policy.)

@jerv
Your statement to me earlier:
@CyanoticWasp So… companies can’t invest in themselves? And an individual who earns only $5–10 million won’t invest even though someone like my parents (who earn closer to $160K/yr) do? You’re making less sense now.
made no sense at all. I don’t see what I said earlier could have been misconstrued into that.

Certainly companies can invest in themselves. They often do. But “companies” in a capitalist system start from somewhere. Almost no companies start out on Day 1 of their existence being listed on the New York Stock Exchange. All of them started from an idea… and some capital that the person with the idea was able to scrape up. Every single one. Incidentally, this is the strength of the American economy: it’s not AT&T, Google, Microsoft, etc., it’s the huge collection of small companies that you never heard of… and likely never will.

I never said that rich people or the middle class could not or would not invest. Where did you pull that from? I think that everyone should invest.

They invest some, I suppose (Michael Jordan didn’t start his restaurant chain on an IOU), but they spend it.

And that is tax exempt as a capital expense under your scheme.

@jaytkay aside from the small fact that it’s not “my” scheme… yes.

@CyanoticWasp That makes a bit more sense, though I think it safe to say that most of the people you know are poor enough that they can actually spend money (as opposed to invest it) as fast or faster than it comes in, should they so desire.
Now, if the big company decided to only pay their hotshot CEO a bonus of twice his salary and used the other $40 million to create 200 jobs and invest the rest elsewhere then that would mean a few hundred more people consuming stuff, or at least more stuff than they would and still leave that CEO with enough to invest in creating their own fortune.
Oh, and hey, more revenue for the government! Maybe even enough to lower tax rates across the board!

Now, how much did MJ spend to start that chain up? Gordon Ramsay and Ray Kroc managed to be quite successful in that arena without mega-money, and from what I’ve seem of that chain, it looks like he spent no more than one games worth of income on that venture. It looks to me like his biggest “investment” was a divorce settlement.

Maybe you could find a better example? Maybe some of the rock stars from the ‘80s? Okay, some of them spent themselves into poverty, but then there are those like Gene Simmons who really do make a lot of investments. His income is considerably lower but he still manages to have a sizable net worth.

Besides, I think that if you managed to make it so that fewer people were worried about paying the rent each month, more people would invest. Considering the lifestyle I am accustomed to, I’d pretty much stash/invest everything I got in excess of ~$50K.

As for where I got that “crazy idea”, it sounded to me like you were saying that multi-millionaires are more likely to invest than mere millionaires. Maybe I read it wrong.

I am beginning to see how it could work, but it would require other major changes that would cause a lot of discontent and probably be deemed Socialist. In that respect, it may be best if we look at other ways of doing things. Maybe a hybrid tax system, maybe just tweak the current system.

BTW – if a higher Capital Gains tax would help ease the federal deficit, would that really be a bad thing overall? Not a major change, just enough to bring the effective tax rate on people like Warren Buffet to somewhere around what his secretary pays (30%). If he thinks it’s a good idea, and he knows more about money than you and I put together, it might be worth a shot ;)

@filmfann re: “I would support a flat tax, progressive to help the poor.”

This is unclear to me. Do you mean a flat tax, or a progressive tax?

@laureth I’ve often heard of flat tax with a deduction to make the poor effectively tax-exempt. Maybe that is what they meant?

@CyanoticWasp
Thanks for making it clear.

Tax those who work, exempt those who “invest”.

Paris Hilton salutes you!

@jaytkay I thought Paris did neither. Isn’t her fortune pretty much the result of merely being born?

@jerv
According to the Wikipedia article on him, Ray Kroc needed $2.1 million to buy McDonald’s in 1961. That’s a pretty fair chunk of change now, and it was a huge amount then. The article also mentions his backers and investors.

However, he didn’t build the business just by banking a little bit on each burger he sold, either. When he took the company public he sold shares to other investors, and the proceeds from the sales of those shares were used to build the business. I don’t know how many new shares McDonalds has issued since their initial IPO, but I’m sure that it could be researched pretty handily.

This story is pretty typical, other than the fact of how wildly successful McDonalds has been as a franchise. Most businesses operate in pretty much that way, but without that level of success. And that’s why the idea should be encouraged. And you’re right about Paris Hilton, too.

(@jaytkay is demonstrating how little he has to contribute to this discussion. We’re talking about not taxing ‘those who work’, but ‘those who spend to consume’. Maybe one day he’ll get it, but I’m not holding my breath.)

@CyanoticWasp I think that $2.1M is easily possible for someone earning “only” $5–10M/yr, so I remain unconvinced for the need to have $50–100M bonuses, especially for people who drive their companies into the ground.
I also fail to see how an intelligent money-handler could fail to make a sizable fortune for themselves on “only” 7-figures. I mean, Warren Buffet only gets $41M/yr and look at his net worth!

@jerv you’re not tracking: That $2.1 million in 2010 would be on the order of 10x more. Not many people were earning in the millions in 1961.

Aside from that, we’re talking about different things: you were talking about a consumption-based tax, and now you’re back on a “soak the rich” soapbox… due mainly to envy, I think. That’s a separate topic.

@CyanoticWasp I forgot to account for the inflation. Mea Culpa That $2.1M in 1961 figures out to $14,894,315.48 in 2009. I need more coffee!

Still, given that it has been pointed out elsewhere that someone living on their own on minimum wage can still sock away enough to save up $100K (in excess of five years income) in less than a decade if they play their cards right, more if they live at home, I still see it as doable on $5M/yr, especially if you can get others on board. Many smaller businesses take longer to generate less and still do well.

Oh, and McDonalds was actually around a bit before then, and Kroc had his hand in for a smaller amount to start with. Or are you referring solely to Kroc’s total buyout in 1961, after he had already done some investing in the company?

“Here is my math: $330750 = ((40*7.35+40*7.35*1.5)50)(25–16)

If they invested at 0% they would have to invest a third of their income but of course a reasonable rate of return may be 8% which would require just over 20% savings rate which is very reasonable.”
(That from @malevolentbutticklish)

As for soaking the rich, I don’t see how making them pay the same tax rate as the middle-class is “soaking”. It’s not like I want a return to the days when they were taxed at obscene rates. Of course, that increase in revenue will allow for reduced tax rates on the middle class, making more investors.

Considering the vast dollar amounts involved, I don’t think it’d be that bad; probably around 25% or so off the top of my head. Possibly less given the rising inequality.

But the original question was one about fairness. Are you claiming that regressive taxes are fairer than progressive taxes?

@jerv
Whoa. Where did that come from? But the original question was one about fairness. Are you claiming that regressive taxes are fairer than progressive taxes?

The original question was about a tax on consumption. Depending on the details of the tax (this has been presented in a number of ways, and I’m not interested in rehasjing all of the details now), it can still have some progressiveness built in. For example, according to one proposal I saw for this once, every adult could be “given” a set amount of cash for the year (free money from the government! w00t!) which would cover an adult’s “basic needs” for housing, transportation, food, etc. Then tax every purchase for consumption, since people’s needs are effectively taken care of.

Or it could be done the way sales taxes are already computed: most grocery items are exempted, but all goods and services are taxed normally.

What I’ve been saying right along is that “the rich”, with more money to spend… spend it. That’s no surprise. Their purchases would be taxed; what’s unfair about that? (This would actually be much fairer than taxing ‘income’, which can be shielded in so many ways. And no matter how much people want to invest, and not be taxed on that investment, the entire purpose of “growing investments” is… to spend the money someday.)

I guess it’s a matter of inflection, but the way this has gone so far is enlightening just the same even if it isn’t quite the question I asked.

If we went with a set amount, it would have to be regionally adjusted. Every place I’ve ever lived had a cost of living around 5–10% above average, and there is no way that I could survive on what it costs to live in places that I barely even want to acknowledge the existence of.

I am also trying to think about how progressive it really would be. I mean, the people you know make money for the purpose of spending it, either now or when they retire. And one thing about being rich is a higher quality of living…. to a point. Sure, Gene Simmons has a much nicer lifestyle than I do, but is Warren Buffet or Bill Gates leading a life that is notably better? I mean, they have over 100 times the net worth.

Diminishing returns is a bitch. When you have so much money that you can’t spend it, it really doesn’t do much good, at least not for these purposes. Sure, you can invest it, or you can give it away, but you can’t really spend that much, and that is where it becomes regressive.

As for a few individuals investing being great for the economy…. considering the way things have been the last few years, I don’t see it. Sure, the bigshots are making money hand over fist, but the companies paying them are weakening, job creation is definitely not there… basically it’s a total disproof of supply-side economics. It didn’t work over a century ago, it didn’t work a decade ago, and it isn’t working now.

I can see some of what you are saying, and I can see the theory behind most of it, but the cynical realist in me still doesn’t see how it could work in the really-real world, especially not if the theories it seems to be based on are that closely tied to something already proven to not work.

I think we both agree that the best thing for the economy is more money in the hands of companies, though we disagree on how to best do that. You seem to say that having a few uber-rich investors is the best way while I am of the opinion that letting companies keep enough money through reducing bonuses to a level that still gives these fatcats enough to invest on their own and/or shifting the tax burden from companies to individuals more than 500 times what the average employee in their company does and/or have bonuses that are more than twice their salary would be better.

As for Warren, one thing to bear in mind about him is that most of his income is based on money he spent long ago, so he is a bit of a special case. That, and many other things, like driving a DTS instead of, say, a Maybach.

@jerv
I still think that you’re getting some wires crossed here. You seem to think that a tax based on consumption is regressive because (I think) rich people spend less of their total income in a year than poorer people do, and would therefore pay a lower proportion of their total income in taxes. If there’s no deduction for basic cost of living items such as food and shelter, then that’s true. But in general people of means are going to spend a lot more in absolute terms and so would pay (continue to pay) the lion’s share of total taxes. Just because a person makes a higher income is not really a justification for confiscating more of it. Progressivity is fine to a point, but there has to be a buy-in from every taxpayer, or else a majority of citizens end up not paying tax… and therefore feeling free to vote for more government and more taxes. That’s a vicious cycle that can’t be permitted any traction.

I made no claim about the benefits of having more or fewer super-wealthy investors. But I will: I think everyone should be an investor, because that gives more people an interest in seeing ‘the market’ move in the right direction. (And because even super-wealthy investors can make bad decisions; that happens every day.) We have too many on the sidelines of this economy feeling too much schadenfreude as it is when the Dow Jones tanks “and haha those fat cats are taking it in the shorts”. As it is now, those ‘fat cats’ determine the directions of our economy, whether we like it or not. In addition, the only way (short of really misguided legislation) to curb executive salaries and bonuses is… to be an investor in a company and vote your shares against that. When enough owners of a company (shareholders) feel that way, the board will respond. (That might not be a smart decision for them to make, either… but it’s democratic, and controlled by the owners.)

If you look at the financial statements of most public companies, you’ll see that the “huge salaries and bonuses paid to executives”, while a lot of money to you and me, are not ‘make or break’ amounts for the companies involved. They pay, generally, for performance. Unfortunately sometimes that’s “last year’s performance”, but that’s how we set salaries for ballplayers, movie stars… and corporate executives. No one has a crystal ball.

I still think that we need more individual investors in every facet of our economy. The only thing that should be poor is the government. The more they take in taxes the deeper in debt they take us. That is not a good thing.

I see it as a curve, actually, Those at the low end like I am currently won’t get dinged too bad if for no reason other than DC doesn’t want millions of “peasants” with pitchforks storming the castle. Those at the high end… maybe we have different definitions of “spend” here, but there is a point where spending (according to my definition) as a percentage of income tails off. Investing is, to my mind, something different. But later for that.
It’s the middle-class, those in the $50k-1m range that would bear the brunt of it, since they are “poor” enough for things like luxury cars to cost a substantial portion of their income. Combine that with the fact that there are far more millionaires than billionaires, and I think you see where most of the spending really occurs. Sure, the top guys make bigger purchases, but a hundred time as many purchases of one-tenth the value still total ten times as much, if you see where I’m coming from here.

Moreover, we really don’t need to flatten the curve terribly much anyways. But the curve has changed shape enough in just the last decade to start to cause problems. I doubt we;d even have this conversation (except as a theoretical worst-case scenario) back before the turn of the century.

I do agree that those who can afford it should invest,and I also feel that those who invest should take a more active role in how their money is handled as opposed to merely buying some stock and sitting back to collect dividends.

Maybe I’ve just seen to many “performance bonuses” for failures to perform. I am all for profit sharing, but that requires making a profit. If your company is in the red, then you deserve to suffer the same fate as the company and those who work under you. That is also one of the reasons I don’t have much of a problem with Bill Gates; he did well because Microsoft does well and I think that they’ve hurt fewer people on the way than most insurance companies or banks… or the government for that matter!

But you are correct that we don’t have a crystal ball. Maybe that is why they should look at whether they have enough money this year to pay for last year. (I didn’t put my thoughts down accurately/completely here, but there are more and I can’t find the words for them. Fuck!)

Regarding your last paragraph…. if we privatized things like roads and law enforcement, I would agree with you more, but the way I see it, they need money to do essential things that I wouldn’t trust the private sector with. Not that I trust the government either really, but I see it as the lesser of two evils. However, I don’t agree with the fact that they are allowed to run a deficit. If you or I tried that to the extent Uncle Sam has, we’d be in a cell… at taxpayer expense.

The government should be non-profit duh!, but they should be just as lean and mean as a for-profit that has to watch the bottom line. I think that they often forget that when they come up with some of their spending plans and then make us innocent citizens pay for their inefficiency and waste.

Maybe it’s time to reset things. Roll the clock back, chuck out a lot of the cruft, band-aid solutions, etcetera that has accumulated over the years and start from scratch. I wonder how many of our current issues are the result if trying to apply outdated/inapplicable models in much the same way that “theft” took on new meanings with the proliferation of computers, leaving the law unable to deal with computer crime.

@jerv
You’d better watch out there, bud. You’re starting to think more like me. Most new government programs, if you pay attention to this… are enacted to correct problems introduced by previous government programs.

@CyanoticWasp I think you can see why I am mildly insulted when people call me a Liberal then. Sure, I want to spread the wealth a little bit, but only because there are millions of starving children here in the US. Why is it that we have no problem sending food and medicine to Africa but we won’t do the same for Alabama? However, beyond the very basics, I think that the government should butt out and that people should be left to their own devices if they actually want to prosper.

Maybe where people get the misconception that I am a Liberal is because I feel that we are entitled to at least the same standard of living as Ethopians. Do you want to starve or drop dead of a disease that could have been prevented with a cheap vaccination? If we were a nation that couldn’t afford to help ourselves then I would be more inclined to go along with America’s “everyone for themselves” attitude, but we throw away food and then arrest poor people forgoing through our trash to get it because we are too greedy to give half a stroke of dry fuck about our fellow human beings.

And I really wish business could regulate themselves. Maybe if honor and decency meant something in our society, it could be done that way. We seemed to do pretty well overall without too much interference a century ago. Problem is that the only one stepping up to keep the marketplace competitive and prevent price-gouging monopolies is government; business sure as hell isn’t following the ideal models the way it used to.

Relax and take a breath there, @jerv. First off, Alabama isn’t in such dire straits. Neither is Mississippi, news reports to the contrary notwithstanding. In fact, the less they have to do with the Federal government in those places, the better they generally feel about it. (Ask the folks in New Orleans’ Lower Ninth Ward if that isn’t so. Yes, when the city is flooded and people need to be evacuated, there is definitely a place for the Federals to help out—if only they would—but five years later? Not so much.)

In fact, the group of people in this country most in need of assistance from the Feds are—Native Americans living on reservations—who are already more or less wards of the government. This is why they need the assistance, because of the rampant corruption, political grandstanding and ineptness of the government agencies entrusted with their oil royalties, leases and general welfare.

For the most part, putting aside your disgust with what you consider to be excessive salary and bonus packages for some (maybe even “most”) high-level executives of major corporations, I think the case could be made that businesses actually do a pretty fair job of policing themselves—and each other—through market competition. You can always find exceptions, of course. But laying off FDA food safety inspectors, for example, has not led to mass poisonings (at least for food produced domestically—Chinese and some Mexican imports may require more oversight), and in my industry, construction, accidents and deaths are on a downward trend because of internal controls and oversights—and because insurance rates go through the roof after accidents. OSHA has very little to do with that—they’re like the cops who are called to “make a report” after the fact of a robbery or accident.

I only cited Alabama as it was a state beginning with “A” and did so merely to say that we have issues here in the states. That comment wasn’t meant as a specific place or problem, but as a generic symbol of domestic issues. Sorry for the confusion.

As for policing themselves through market competition… yes and no. Like society at large, there have recently been problems that have required some sort of regulatory body to step in and lay the smack down. I’m not talking merely distasteful stuff, but some outright criminal shadiness. And where is the competition between NiMH-powered EVs and regular gas-powered cars? Hint: look at who owns the patents on NiMH battery technology. Personally, I prefer my corporate warfare to be one of who can meet consumer demands at the best price, not who can cut whose throat.

Speaking of corporate warfare, you might be interested in Shadowrun. The Federal government is pretty much a joke, and megacorps (complete with heavily armed paramilitary security and extraterritoriality) pretty much run things, but the Corporate Court, which is composed of one “justice” from each of the AAA megas, keeps their asses in line unless they use “deniable assets” (a.k.a. “Shadowrunners) in their squabbles. I couldn’t help but see the correlation between that and talk of self-regulating business so I thought I’d mention it to you.

But back on track, I think that we agree that if they did a better job then there wouldn’t be so much outcry for reform in the form of government intervention. Of course, I think it could be better handled by stockholders and consumers taking matters into their own hands a little bit instead of running to Uncle Sam for help and spending taxpayer money of yet more laws that do nothing substantial, but the sad fact is that, like many other things in life, that is too idealistic to happen, at least (or maybe especially) in today’s society.

Now, I think that a properly executed flat tax is a better and fairer solution, and also would be considerably easier to implement if for no reason other than it would be less of a culture shock since everybody is already used to an income tax anyways.
An added benefit is that it would be easier to take our current system, flawed as it is, and change a few numbers than to do a total restructuring. As much as I would love to chuck the old system in the nearest toxic waste dump, I think I would rather have a system that requires less government bickering at taxpayer expense, and I think a flat tax rate in our current system would be easier to get through Congress than a total rewrite.