Thursday, May 17, 2012

Why Doesn't Buffett Just Pay More Taxes Voluntarily

A favored right wing tactic in debate is to simply offer unworkable solutions.  So for instance when people in poorer countries suffering under dictatorship rise up the right wing (including Obama) will say something like "Oh yes, we support your end goal of democracy, but now is not the right time.  For now let's step back and not rock the boat to much.  Work through other channels."  You have thousands of people in Tarhir Square right now.  You've got to make demands and see them implemented now.  If you wait and the combined forces of the people dissipate, change won't come.  Stepping down is unworkable if your goal is real change.

You see this in the debate over health care.  One workable solution is single payer.  It's favored by a large majority of Americans.  It's been done in many countries.  The right wing will say "Oh yes, I have a problem with our health care system as well.  I agree we are on an unsustainable cost path.  We should just have a totally free market system."  How might we bring that about?  There's no clear path.  Pursuing that strategy is a recipe for status quo.

My prior post raised the issue of tax hikes on the rich.  Debating the merits of it I think is worthwhile.  Would it help the economy or not?  Reasonable people can disagree.  Here's what's not worthwhile in my view.  This constant rejoinder from the right wing (watch Neil Cavuto subject Nick Hanauer to it here) that he should just feel free to send additional tax money to Uncle Sam.  "Why not just send an additional check to the government?"  That's often followed with a shit eating grin.  They're so proud of themselves when they say that.

Here's what I would answer if I were Nick Hanauer.  BECAUSE IT WOULDN'T WORK.  Cavuto already knows that.  That's probably why he suggests it.

The problem is poverty, unemployment, the fact that children graduate from college with mountains of debt.  If I, Nick Hanauer, sent an extra check to the government, would any of this change?

But Cavuto will reply that it would make a marginal difference.  Like maybe it will push a single government program over the line to where it would be permitted, creating the jobs and stimulation that the left craves.

In response I say the following:  I admit it.  I'm selfish.  I don't want to just help one or two people.  I get no satisfaction from thinking that maybe an extra bit of stimulus was permitted.  Here's what would give me satisfaction.  If I saw the unemployment rate drop 3%.  If I saw severe poverty return to earlier levels.  If I literally could drive around and not see the children of unwed mothers roaming the streets because Mom has to work at Wal-Mart rather than be at home raising her kids.  I want a massive reduction in suffering, not a marginal one.  If I alone sending a check to Uncle Sam could produce that much good then I'd do it.  But I can't.  We have to have thousands of others just like me doing the same.  It's a workable solution, not a solution that retains large masses of the population in a suffering state.  So if being selfish in that way is a vice, so be it.

Does that change the answer to the question of whether taxing the rich more would help the poor?  No.  Either it helps or doesn't regardless of whether I voluntarily send additional money.  If you disagree, fine.  We can discuss it.  Asking me to first send more won't change the answer to that question.

51 comments:

gulliblestravelsdma said...

I'm sure you already knew this but Warren Buffett actually did put his money where his mouth is.

Here's an article that discusses his challenge to other uberwealthy citizens. Voluntary donations don't seem to be a good answer.

Chad said...

Now here is a smart smart man.

http://blogs.wsj.com/wealth/2010/10/15/worlds-richest-man-charity-doesnt-solve-anything/

Might want to listen to the richest man in the entire world.

Jon said...

Why think that just because someone is rich this means they have good ideas about how to alleviate suffering? History doesn't justify this conclusion.

I think Slim may be a lot like the Koch's, Russian billionaires, and others. I think he got rich by feeding at the public trough, and now that he's reached this state of wealth he wants to deprive others of those same methods. I explained how the Koch's got rich from Stalin's communism before. From what I know of Slim it was something like that. Basically Mexico had a publicly run telecom system. After tax money and public support created a successful industry Slim stepped in and acquired it for a song in the wake of the banking crisis that came about following the implementation of NAFTA.

Russian billionaires did the same. Former politicians in many cases. The right wingers swept in and privatized everything. Gave it all away to these politicians for nothing. Like they'd pay $10 million for a company that would generate $20 million in profit in a single year. Slash all the wages, cut the benefits, etc. Just hand over the company that was built by the employees and the public over to a few investors. They cut compensation. Life expectancy collapses. Alcoholism, suicide, malnutrition all spike. And yet these investors, who did pretty much nothing in terms of the development of the companies, tell us we should be grateful to them because they are rich, and without them we'd have no job. Please. Without the public money and public support the rich investor wouldn't have this company.

It's the same old story for Slim and many others among the uber wealthy. It's Socialism and nanny state for them as they feed at the public trough getting rich. Then when they acquire their wealth and power they turn around and try and deprive all others of any public assistance. It's an old game.

Chad said...

Great sermon, but it does not mean that his opinion - well thought and spoken opinion is wrong.

Jon said...

You're right. Debating whether taxing the rich would help is a fair question. I'm not claiming here that it isn't.

What I am saying is the right wing rejoinder "Why don't you just send Uncle Sam more money" is a red herring.

Examinator said...

Chad,
Chad,
Be very, very wary of Sub editor's work ….their job is to make 'stories' more punchy (controversial, sensational) to peak interest , more readers = more advertiser interest.
One of their techniques is to give the story an eye-catching headline regardless of the articles CONTEXT. If you read the article carefully and in context Slim is in fact is saying ''playing Santa Claus” to the poor is pointless ….they need long term solutions, jobs.
In CONTEXTUAL reality he is merely asserting a modern version of the of the old adage about charity “ give a man a fish, you feed him for a day. Give him a net you feed him every day” who could argue against that?
He gives to the Gates Foundation as does Buffet etc. their money is targeted to achieve specific results... read the GF webside for details.
What he in context isn't saying is that rich shouldn't give charity rather let it be for long term benefits. Again with Immediate crises aside i.e. feeding potentially 10+ million in the upcoming famine in Chad I'd have to agree.

Why doesn't buffet simply pay more tax answer :
The system would/couldn't accept the overpayment ….he'd be refunded ….it'd set legal minefield.

Secondly consider this if you had the odd billion to 'invest in the future' (target charity) would you give it to a system that will eat it up even provide profit for wealthy ? Apart from the fact that 10 billion either way wouldn't solve the US's problems (they're systemic). The money at best would make marginal difference to um 40 million people or spend it to help 2-3 BILLION people who are a lot worse off (survive) by looking for a cure to malaria. The disease KILLS millions each year and affects upto 4 billion people.
CHAD and Jon, To me the latter option of Malaria vaccination strikes me as meeting the most basic of Capitalism's criteria i.e. the most efficient usage of the capital.
Mind you it all depend on if you consider all human life equal or are racist/elitist and consider only US lives are worth saving. In which case having established a hierarchy of life then I would point to the all too common trend in the 'right' to further divide the population into ever smaller worthy groups. This begs the questions where and how do you draw the line?

Chad said...

It has some volidatity, if the answer is gov't or the cause is pure then voluntarily giving your or Buffets money seems logical. The argument that I must participate in your cause because you deem it great and worthy is the red herring sir.

Chad said...

Ex - birth control and sterilization in Chad seems to be the best use of capital too me.

Examinator said...

Chad
Red herring? in what way?
Sterilization? strewth you are now.
- firstly Chad isn't my cause I picked it because it is REPRESENTED a wider malaise. The choice of Chad was a convenient play on your name. to emphasise the point (personalise it rather than sth western Africa.
- ignoring the fact that the 12 million people already exist sterilization won't help them.
- the famine is due to a drought and 2 years of failing crops and spread across much of the area and several countries Chad is the epicentre!
- Sterilization?! gees we are now going into Eugenics... Do You have the temerity to suggest that other people (non Americans) don't have the right to choose?
What happened to 'the right's' (sic) (your team) obsession with right to life?
Democracy ?
I think you are missing the point and need to think your arm chair solution a bit more

Examinator said...
This comment has been removed by the author.
Examinator said...

Chad,
The capitalising of your name was to draw your attention to the part that referred to you. But the country exists. ,
Perhaps the biggest mistake the armchair westerner makes is that they don't understand that in the tribal community children aren't a luxury or an extension of their egos they are a matter of survival.
consider this.
When a tribal African man was told that of his 7 children statistically only 2 would reach adulthood, his reaction was to say I must have more children.
The aid novice asked why and he replied who is going to look after me in my old age? Besides 2 in 7 children per family he pointed out that the tribe would die out. They figure that 3-4 adult children per family are needed to produce sufficient extra for the elderly.
It a bit like one upon a time a single family wage was sufficient to provide for the nuclear family (mum dad and 2.3 children)that included replacements.
Sadly today many factors have distorted that, to whereby 2 person incomes are generally need to achieve the same outcome.
However, with under employment, casualisation of jobs and consequentially reducing wages (minimum wage) for nearly 40% of the people in Western societies (including the USA). As Jon's article accurately says we are all but the top 20% are by (comparative wage) worse off than 30 years ago. I would add to the $13000 per annum by noting that that figure *doesn't * include externalities and comparative cost of living. i.e. a degree today is in 1960/70 money is nearly 40% more expensive especially if one factors in the effect of the interest.

(version 2.0)

Jon said...

It has some volidatity, if the answer is gov't or the cause is pure then voluntarily giving your or Buffets money seems logical.

We both agree that a few rich individuals voluntarily giving more won't solve the problem. And yet it seems logical to you for rich people to voluntarily give more? It seems logical to you that the rich should pursue a strategy they know won't work? What is logical about that?

The argument that I must participate in your cause because you deem it great and worthy is the red herring sir.

Welcome to the USA. You participate in causes because your leaders deem it worthy. Wars. Corporate welfare. Subsidies to favored industries. You single out the one cause that helps the poor and you say very little about being compelled to participate in causes that help the rich. You never complain about the causes that helped you. Only the causes that help others, assuming they are poor. It's odd how this concern of yours only flares up at certain times.

Examinator said...

Chad,
http://www.rollingstone.com/politics/blogs/taibblog/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-20120515
Read this and weep this is how Big business views the law and therefore the public.

Chad said...

Ex - Breaking or ignoring the law is not acceptable at any point in time (ie - illegals) and I hope that they get punished with jail time to the max.

There are always going to be people in every business that break the law - it happens all the time and is something I never support.

Chad said...

Jon,

Its a damn if you do world, but the answer is not siezing money and private property just because the cause 'in theory' is a good one. If you took every available extra dollar - it would still not be enough and would cripple business capital which you need to hand out to others. Slippery slope.

Bottom line - If given my chance to make a difference and is within my abilities - I do it without forcing anyone else to participate. I may ask that you join said cause, but will not - by force - make you participate and that is major difference between you and I.

Let me ask you a more open ended/big picture question if I can. Why is it that you hold me or anyone for that matter responsible for other peoples poor decisions?

Jon said...

Bottom line - If given my chance to make a difference and is within my abilities - I do it without forcing anyone else to participate.

It is not within your ability to alleviate student loan debt for unemployed students, or reduce unemployment in a measurable way. You can only do it if others are compelled to participate as well. Should we do that? We're compelled to participate to fund wars, provide corporate subsidies, and other corporate welfare. Why draw the line at helping the poor and remain silent about the help going to the rich?

Why is it that you hold me or anyone for that matter responsible for other peoples poor decisions?

I'm not doing that. I'm saying I benefited from public subsidy which was used to fund my education. Since I graduated that subsidy has declined because Republicans have gotten their way. Not 100% of the way, but they've managed to reduce public subsidy for college. Why should I and others my age get the benefits, but then when it comes time to help others in the way I was helped, suddenly people my age say "You can't take the money I earned." I wouldn't be here earning this kind of money and living the life I now live without those before me helping out. Why do we suddenly get interested in personal responsibility? It didn't apply to us. It didn't apply to people older than us. It applies to the young. That's not right.

Or take the billions of $ in subsidy to hi tech industry which funded the development of computers. People paid in the 60's and 70's, but the benefits weren't really visible until later after some of these taxpayers had died. I benefit enormously from their gifts and my thinking is I should likewise sacrifice for future generations so they can have a better life, even if those sacrifices result in benefits I don't live long enough to enjoy.

Those sacrifices today provide two benefits. First they provide future generations with technological developments. Second they result in employment. These are both important features. But somebody has to pay for it.

You want all the benefits provided by those that paid taxes before you. Now that it's your turn to kick money in for the future, suddenly you get very stingy. You finally figure out that government is wasteful only when you are asked to contribute. That's not right, and it's not likely to produce as good a world for future generations.

Chad said...

Thanks for your opinion, but I don't buy any of it.

Examinator said...

Chad,
A puzzle for you.
according to your reasoning, If I am opposed to war, the waste of money for the Olympic team etc much less putting it on. Then I shouldn't have to pay the percentage of my tax that pays for both? How about supporting the councillors,State/Federal pollies? Given I don't support them.

Chad said...

Yes Ex - that is right. What I have purposed before and what I would consider fair is that the all powerful gov't allow the private citizens to choose in what direction their tax dollars head.

I think our paychecks should look more like the back of a ingredient label - it should list exactly where every dollar lands in the federal, state and local gov'ts. Then I believe that every citizen should be able to allocate exactly where (by percentage) the tax dollars go within those groups as well.

We have to pay taxes, but shouldn't we have a right to choose where the funds go?

Jon said...

So would that mean an end to democracy? Poor people don't get a say? One dollar, one vote basically?

Examinator said...

Chad,
Just to be clear, do I understand that you are advocating that a citizen shouldn't have to pay for things they don't think they need or disagree with?
Follow up questions
1. how would you suggest that the govt. pay for defence then?
1b. pay for medical research? Why should I pay for research into diseases or conditions I don't need i.e. children's diseases ?
1c. Why should I pay for local libraries they don't keep the books I read.
2. how are the poor/ old going to pay for drugs
3.Services? Like govt subsidies to electricity/water I live in the wilderness and don't have access to them anyway.

3a Why should I pay for the CIA, FBI etc.I disagree with them any way ...consular services I'm not interested in going to 180 of the countries in the UN.

4. And the one I would like you to answer given that you believe in as you imply 'user pays' how are YOU going to afford any of the services?

Finally by your principles I wonder what you consider the purpose of society? Given it is for mutual( in a democratic environment this means the majority) well being, advancement etc.
I'm perplexed how you think society could operate with say only approximately 36% of the population in favour of shelling out for any one of the above.
36-40% of the population is a VOTING majority in the USA under the current system..
i.e. 51% of those who bother or are ALLOWED to vote by the state nefarious exclusion techniques.
One final question which emphasises Jon's point ....how long do you think before those who have the most money dictate what YOU can access? After all they're paying more than you?(sic)

Chad said...

1. Citizens like me may choose to apply the max toward Defense. If the percentage of Americans don't support the Defense fund it shrinks.

1b. Should be done by the Private market primarily, but see 1. If citizens believe it is a legit cause it will be funded.

2. See 1 - if important to citizens it will be funded. If you choose not to participate then you will not have access in your elder years (personal responsibility)

3. If you choose to live in the wilderness and can not pay for those items to be installed then you don't have those. If this is an issue the citizens dean worthy it will br funded.

3a. For every 1 of you there is probably 2 of me willing to put more I to those funds, if not the department shrinks.

4. Not entirely understanding the question.

What society are you speaking of exactly? Your vision or mine? The "Global" society or just the US society? Or are you speaking of the society in my State, County or maybe my Community?

It is funny to me that you object to allowing those who pay the bill to have a say about what exactly is being bought and why.

Examinator said...

Chad,
Thank you for responding.
I understand your perspective unfortunately the quantum of some of these numbers for some of these government paid 'services' are so utterly huge they couldn't be paid for by voluntary subscription.
Take for example the Electricity grid and electricity stations.
By that I mean there is no commercial organization that would be prepared to build them without Huge subsidies including a govt guaranteed price and subsidy.
The business case simply doesn't exist, not enough profit to justify the expenditure.
Any business with that much capital would be forced to look for more profitable ventures.
To flesh that out a bit to its logical extent. Some areas would have electricity etc and the poorer wouldn't, they wouldn't be able to afford it.
If you or I paid the true cost and maintenance I doubt we could and that's assuming we're middle class. I've seen credible estimates that indicate the real cost of electricity given the usual business (investor) short term focus on dividends etc,would be between 7-10 times more expensive.
Now if we took something controversial like the military where individual concious out of pocket support would be something less that 50% .... Historically wars have always been funded by the rich (e.g. Grand Daddy Bush, in fact much of European Jewish wealth [e.g. Rothschild] came from Napoleonic wars... as another aside the Brits promised the Zionists Israel during WW1 to get their financial support and again in WW2 because of the Zionist influence in the US pres of the time) and the poor have been the unwilling cannon fodder.

Don't forget that the average Joe/ Josie when they buy 'consumables' they look to the cheapest not where it's made...they let their Wants over power their reasoning.(real needs) i.e. those vegies/ Iphone are cheaper affordable BECAUSE they come from over seas (lower wages) and the Iphone is 'shiny' (fashionable emotional) ...but do we really need them? I ran a stock exchange listed Branch without one and when I had one I used only two functions. 9 years later I still use the same phone the same way. End part 1

Examinator said...

Part2
Frankly, your 2-1 is unrealistic ...given the US cant even get above 65% voting and at least 40% of those wouldn't support all the functions.
Did you know that the sewerage Company in one water sensitive country was so concerned about the reduced flushing of the pipes because of people recycling 'grey ' water onto their gardens and not into their system they partitioned the Govt to ban Grey water... think about what it shows and how you can't rely on the public to consider the nation first rather than their own convenience.

Consider this some one on struggle street is less likely (able) to put their hand in their pocket for something as esoteric as a world beating military.
You should also consider that the military manufacturing complex (including expensive research) has one client, the Govt. If it's expenditure dropped so would their profit and their interest ...they'd go off shore.

They currently sell to dodgy governments...imagine how much more profit if they manufactured off shore where the biggest recurrent expense any company has (wages) is much, much less?
The problem you perspective lacks is an understanding of how Governments work (macro economics). Only Governments can afford to borrow huge sums and get low rates because of their perceived stability and refinancing long term debt over and over again....i.e. the reliability of their tax base. With tout it's relatively stable minimum tax income the USA would be far less stable and could be more easily manipulated (bought).

In short No country could exist in a capitalist world without it's citizenry allowing some of its rights to be ceded to the “nation”. By the way Israel has an enormous tax impost about 60% despite that they still get Aid from the USA (your tax $). By your reasoning that should be cut
Oh yes have you got any idea what the tax form would look like to accommodate the 200million versions of tax ...not to mention the organizational structure necessary to divvy up the tax $'s? It would be simply unworkable.
Question4 was asking you how YOU could pay for all the above.
Sadly Macro Economics of a country is very complex and even more so in a even more unpredictable world.
Also note that Adam Smith (the father of our capitalist economics) saw the 'silent hand of the market' as being capital's reluctance to locate overseas (off shore production), nationalism. Tragically in one aspect this assumption is nonsense

Chad said...

I agree there is no way to make it work especially in a deficit spending environment. Imagine if the defense budget was cut by 30% due to under funding, the republican establishment (war mongers) would lose their mind!

Chad said...

Just another unrealistic idea really, but a un discussion! Thanks for entertaining the thought.

Chad said...

Excuse the typing flaws - fun discussion.

Chad said...

You know of course that the real, true an honest answer is somewhere in between. Always is and always will be.

Chad said...

I play like a hard azz right winger, but (and maybe you don't know this) I stretch my families budget to the brink every month trying to do right. We are trying to adopt a child from a 3rd world county now - what an ordeal and unbelievably difficult. Not to mention costly - last visit suggested that we may not have the financial resources to support adoption. Crazy damn world right, we could make a real difference, but we give too much so we might not be suitable for adoption of a child who barely gets dinner.

Chad said...

So we have to cut back on donations and show a more 'firm' bottom line in order to adopt, give unconditional love to a child not our own - silly.

Chad said...

They also are questioning the fact that I travel and my wife works full time as a factor.

I have to trust God on this one, it's frustrating!!!!!

Examinator said...

Chad,
I didn't say the budget would be cut by 30%. What I said that there would be only 30-40% of the voting population that would consider the Military budget as a priority to the point whereby they would accept a hike in their tax to cover.
More power to you for trying to adopt a child from another country....if you're rich I'm available and I'm house trained (well almost) :)
Where I live has a sponsor a child program with $30 per month we sponsor 2 and periodically get letters and we write back.
In reality the money goes into a administered fund for the village
to build maintain a school etc.
It's a clever idea it personalises our donations. We've seen the child grow up from dreadful poverty no clean water no school etc. to an environment equal to that of some villages in The pacific islands with most services.
My eldest son has visited one of the children and been given the grand tour. he was impressed.

And yes the final answer to everything is somewhere in between.
Hence my disdain for anyone, any side that advocates either an extreme or absolute! apart from which arguing in or by extremes tends to be counter if not unproductive as they tend to become emotional.

Examinator said...

chad,
As for your activities /ambitions being silly I would have to argue strongly against that notion. To me that's basic Christianity.
Although I'm not a religious person I, as a Humanitarian of sorts, recognise a sound idea when I come across one ..regardless of source. By the way MOST religions I've read or experienced have that principal in common.

Your challenge is going to come with other people's prejudices etc.
Not to mention the child's "who am I,really" questions about the time of puberty.
As my Word press description goes
'I've been there, done that..have the Tee shirt that says so and hides the scars" isn't an idle boast.
I was an adopted child...intellectually gifted but had a disability ....didn't I get stick! Later I had a Jewish daughter and she was never accepted in either camp. Likewise my very existence as a gentile much less one with a disability..and a brain had serious ramifications for her,her mom, and our relationship.

PS to complicate the issue further
my mom is a fundie and my wife mother of our 3 other children is and has a sister(constant visitor) who is a virgin Catholic Nun at large.
It gets worse but I won't bother with that.
These comments are merely to confirm that I've got experience with adopted children and especially those who don't fit common stereo types.
In short I wish you and your wife all the best with the statement that the love bit will be the easy bit....

Chad said...

Thanks Ex, not expecting it too be easy!

Good luck on our end!

CC

HispanicPundit said...

Jon writes, But Cavuto will reply that it would make a marginal difference. Like maybe it will push a single government program over the line to where it would be permitted, creating the jobs and stimulation that the left craves.

This is not what marginal means. The point of the "marginal argument" from the right is that the affect from your extra taxes is the SAME in both instances - whether others send in extra taxes, or not.

Think about it this way: Let's say that there was a blood shortage in the United States and Warren Buffett wanted to encourage more blood donations. He believed, strongly, that this would help society out so he proposed a law that required everybody to donate blood.

The correct analogy would be conservatives arguing that Warren Buffett is a hypocrite since he has yet to donate blood himself - and nobody is preventing him from doing so. More importantly, his blood donation would help the same number of people in BOTH cases - whether others donated blood or not.

Given that analogy, would you call Warren Buffett a hypocrite? I certainly would.

Btw, even then this analogy doesn't do the conservative side justice. Since in the analogy above, I assume that giving blood is the best case scenario - in the more taxes argument, you could make a strong argument that even if giving more money were a cure, if you really wanted to help the poor, giving it to the government is your worst choice.

Jon said...

I just went to dictionary.com and marginal is "minimal for requirements".

I think your blood analogy is pretty good. Not perfect, but good. I agree that if Buffett pays more some people are helped, even though he doesn't see them. That's what I mean by a marginal difference. Yes, it's the same amount of help from his blood. Maybe 1 life is saved from his blood. But it's a marginal change when you consider that thousands need blood.

Let's pursue this analogy. Suppose you have a field full of wounded soldiers that need blood, and if they don't get it they'll die. You have a corresponding field of healthy people that can give blood without any difficulty and Buffett is among them. Let's suppose you are the king and you could require everyone to give blood and save all the lives. Buffett walks up to you and says "You should make these healthy people give blood and save the lives of the 10,000 people that are dying and you can start with me." And you answer "I'm not going to do that because that is forcing them. But you can give blood yourself and one person will be saved." You offer that solution knowing that if Buffett takes it probably nobody else will. They just aren't going to do it if they aren't forced. But Buffett says no anyway.

Are you going to stand there and act like you've proved your point? You've offered a solution that you know won't work to solve the major problem. It could have saved 1 among 10,000 but it turns out it hasn't done that either. You can call Buffett a hypocrite if you want. But you can't now say "It appears that even Buffett doesn't believe donating blood would help these soldiers." Not true. He just wants the constant dying to stop, and it won't really appear to change if he along gives blood.

you could make a strong argument that even if giving more money were a cure, if you really wanted to help the poor, giving it to the government is your worst choice.

That's why I said the following at the end of this blog post:

Does that change the answer to the question of whether taxing the rich more would help the poor? No. Either it helps or doesn't regardless of whether I voluntarily send additional money. If you disagree, fine. We can discuss it. Asking me to first send more won't change the answer to that question.

HispanicPundit said...

Here I was merely addressing whether or not it is hypocritical to call for more taxes and not, you know, pay more in taxes. I think we've established that it is indeed hypocritical, or atleast as hypocritical as the guy who calls for more blood donations but doesn't give blood himself (yet has the health to do it).


Your second question is far more complicated. It's basically at the heart of all political disagreements: does giving more money to the government and having the government supposedly use said extra revenue to help the "poor" a good thing?

Republicans will tend to answer no. Democrats will tend to answer yes.

But keep this in mind: Buffett, when given the choice, decided to donate a large sum of his money (that approach the level of what a higher tax rate would raise) to charity - not the government.

Now if you were to create a tax that forced us all to give some of our money to a charity organization like the Bill Gates foundation - I wouldn't mind that as much. Really.

Jon said...

But keep this in mind: Buffett, when given the choice, decided to donate a large sum of his money (that approach the level of what a higher tax rate would raise) to charity - not the government.

What conclusion do you draw from that? Is this proof that Buffett really doesn't think higher taxes on the rich would work to solve certain economic problems our country has?

Now if you were to create a tax that forced us all to give some of our money to a charity organization like the Bill Gates foundation - I wouldn't mind that as much. Really.

Why? Do you have a preference for undemocratic methods? A little Bryan Caplan in you?

BTW, I don't agree that Buffett is acting hypocritically by not paying taxes. Higher taxes for all of the rich would solve certain problems that Buffett's charities can't solve.

For instance Buffett can't fund Social Security, a program that has probably done more to eliminate elderly starvation and homelessness than any other program. Deficits, even though not really much of a financial problem at this point, are being used as the excuse to dismantle this program. Raising taxes will alleviate the deficit problem and reduce the pressure to curb SS benefits. If the right wing gets their way we are going to have a lot of elderly suffering, and Buffet hopes that can be avoided. Raising taxes on the rich would go a long way.

Single payer would solve the problem, but that's not in the cards.

HispanicPundit said...

A few responses/questions/comments for you:

1. Do you think the person in my analogy, the Buffett who refuses to donate blood while pleading with others to donate blood, is a hypocrite?

2. Your statement that social security "has probably done more to eliminate elderly starvation and homelessness than any other program" is completely unsubstantiated. I'm wondering if you even know the conservative case against it - let alone enough of both sides to make such a one sided statement. Care to take a stab at it (and its not that the returns suck)?

3. The conclusion I draw from Buffett choosing charity is that he see's private charities as more marginally effective at alleviating the worlds problems than government programs. Else, why donate to charity instead of give more to government?

4. The reason why I prefer Bill Gates charity over government is that Bill Gates actually, you know, focuses on the worlds poor people. Which are truly the poor. "Poor people" in the United States are more properly defined "not rich by US standards, but rich nonetheless".

As I said before, I take more a world view of things than a specific ethnocentric view.

Jon said...

1-Yes

2-If you don't think conservatives argue that SS is bad because of it's poor rate of return then I would suggest you familiarize yourself with conservative arguments. That's one argument, but there are others.

3-I think you have to ask Buffett what his goal is. I just pull SS out as a possibility. Maybe he thinks the program is in jeopardy and he wants it to be saved. If he sends money this won't save SS. That same money can go to Africa and save someone from death of AIDS. He knows if he sends money to the Gates Foundation it will achieve that goal. There's no sense in sending money to the government if you don't think it will achieve what you hope to accomplish. If however everyone was required to pay more he'd gladly send because the goal he hopes to achieve could be accomplished.

He's holding money in his hand and he's going to send it somewhere. Before sending it he asks this question. Will this help achieve a goal I help to achieve? If the answer is no, then there's no point in sending. That's a sensible approach in my view, and it is not hypocritical.

4-Concern for the world? That's kind of tough for me to take. I mean, you're an open advocate of violence against so called Communists. When left leaning political parties have won or were on the verge of winning via the democratic process and the US has intervened violently (Indonesia, Nicaragua, El Salvador, Chile, Haiti, East Timor, Vietnam) with genocidal results you basically say that's OK because they are "communists." I'm now to believe that you are really advocating this because of your good will and concern for the rest of the world?

Let me offer a suggestion for why Heritage, AEI, Cato, etc like private charities. Because they are not subject to democratic forces, whereas government potentially is. The super rich who give want people helped on their terms. They don't want any input from others. Koch will feed you. Provided you do certain things he decides is in your best interest. Others don't get a say even if they don't agree. He wants to basically be the king. Kiss his ring and you get what you want. They really prefer tyranny to democracy, so this is how they prefer to help people. Dictatorally.

HispanicPundit said...

A few more comments/questions:

1. okay good. So then why is the "blood donor" a hypocrite but not the "more tax" Buffett?

Please note: you may have already meant to explain this to me...but I don't understand it enough so I am asking you to do it again. Specifically, I am asking to focus on how you could say the blood donor buffet is a hypocrite, but not the more taxes buffett.

2. I didn't mean to imply that the horrible return of social security was not an argument. It certainly is...and it deserves a response. My point was that it wasn't the best one, or the only one - or more specifically, the one that most appeals to me.

Care to give other reasons?

3.Okay - then we agree. Your explanation basically explains, in much further detail, what I wrote: The conclusion I draw from Buffett choosing charity is that he see's private charities as more marginally effective at alleviating the worlds problems than government programs.

4. Where did I claim to be "an open advocate of violence against so called Communists"?

With that said, let's not personalize this and try to avoid the ad hominem attacks...assume I am arguing in general, not necessarily my views.

Let me rephrase my point 4 with:

The reason why ONE would prefer Bill Gates charity over government is that Bill Gates actually, you know, focuses on the worlds poor people. Which are truly the poor. "Poor people" in the United States are more properly defined "not rich by US standards, but rich nonetheless".

ONE can take more a world view of things than a specific ethnocentric view. This is good.

Your response?

Jon said...

1-You are right to not follow my reasoning on blood donor hypocrite vs tax hypocrite because I haven't explained it. I'll try to now.

You notice that I said the blood donor analogy isn't perfect, but it's good. Here's where it does break down in my view. To give blood is basically a zero cost proposition from Buffett's perspective. It's not like there are other things he can do with his blood and it will do marginal good. So there's no reason not to give and there is a good reason to give. I should be a little careful to apply the word "hypocrite". Maybe it's not quite hypocrisy, but it is wrong. Let's agree on that.

Money is different. There are other things he can do with his money, so to send it to the government does cost Buffett. I think his refusal to send voluntarily makes sense. He says if you compel all the richest to pay more we can save SS. Let's do it. If you say no then why should he send? If he sends he won't save SS. So instead he'll go with charity. Perfectly sensible.

2-Are you asking me to guess among the myriad of arguments against SS which one you like best? Why don't you just tell me? I don't really want to try and guess which one you think is best.

3-I guess we do agree on that. He sees charity as more effective than a personal contribution to the tax man that others are not required to make. Makes sense. Still, his position is reasonable. He doesn't want to send money to achieve a goal that won't be realized.

4-In this blog post after looking at a picture of a boy that was probably being taken to the river where he was smashed to death against rocks you said that you were "sort of" kidding when you implied it wasn't a big deal because it was Communists. In this thread you said yeah, the mass killing was kind of bad, but not worth getting too worked up over. Just communists.

Jon said...

That's the same pattern we see at Heritage, National Review, and AEI. Tremendous concern for the world. When it means support for activities that are in the interest of certain wealthy sectors. I'm reading up on genocide in Indonesia from Chomsky. Our government installed Suharto in 1964. A straight purge of Communists with CIA help and US weaponry. Students would finger a teacher and he'd get shot on the spot. People would try to demonstrate their capitalistic bona fides by identifying people as communists, who were subsequently murdered. It may be the largest genocide since WWII. Suharto would subsequently invade East Timor after the leftist FRETELIN party took the reigns with popular support. A multi decade campaign of genocide followed. It went from 1975 into the Clinton years. All with US backing and of course right wing backing. All to the enormous gain of US investors. So when I see similar sounding right wing elements say "No new taxes on the rich because I'm just so concerned with the world's poor" I can't take that seriously.

Preferring charity to increased taxes is understandable and perfectly reasonable. The key for me though is this question. How do we go about achieving the most good? Are you interested in sovling a deficit problem? I am. It's worth raising taxes to do it. To me it's worth raising taxes to shore up SS. This isn't going to prevent people from giving charity.

I just don't think leaving it all to charity would actually work. We have about the lowest taxes in our country that we've had in a while. Total government expenditures per capita are about as low as they've been in a long time. Some people have a lot of extra money that they could give to charity, but don't. If we just say fine, leave it alone, then we will see a lot of suffering. If we tax people, that's a cost. But if you look at those studies I've pointed to regarding happiness and income you find that it wouldn't hurt the wealthy that much in terms of their happiness. Not at all actually. So for little cost we can do a lot of good.

What would work? That's what needs to be asked. Raising taxes would go a long way to solving some problems. Charity is good too. Let's do both.

HispanicPundit said...

1. Okay - then let me change the analogy on you. Say Buffett was arguing that we should raise taxes in order to support the war in Afghanistan, or a future war for the supposed national defense. Yet he won't give more tax money until others do.

Would that be hypocritical?

2.  I don't want you to guess what I find persuasive. I want you to defend your strong statement. You wrote: "...Social Security, a program that has probably done more to eliminate elderly starvation and homelessness than any other program".

Now given such a strong statement, I am sure you weighed both sides of such an argument. The critics, as well as the defenders. So please, tell me what arguments you consider critical of said statement and why you found them wanting. That is all I am asking.

3. Nothing more needs to be said. We generally agree.

4. You first wrote: "you're an open advocate of violence against so called Communists." Strong words. But when you actually dig into what I actually said, you see that my comments were not so strong. Not necessarily "open advocate of violence against so called communists". Scroll down, I make my position clearer (even call the guy who killed communists "bad").

But here, let me briefly summarize my views and try to disentangle them from your confirmation bias: yes, killing people for their beliefs is bad. People who do this are bad. This should not be done. But there is a difference between someone who kills, say a cop just for being and believing cop principles and someone who kills say a gang member, who actively endorses violence. Or there is a difference between someone who kills say an anti-Nazi and someone who kills a Nazi. Or someone who kills say a capitalist and someone who kills a communist.

Not saying it's excusable...just saying, basically, that they are not at the same level.

Agree or disagree with the specific examples, that is okay - but we can all agree that said statements are far from "an open advocate of violence against so called Communists".

Regarding charity vs more taxes, it is important to keep a few things in mind:

A. Nobody here is arguing about absolutes. I am not arguing we should have it be ALL charity vs ALL taxes. Certainly you need SOME tax revenue. I am here talking about the marginal value of the extra dollar now. Would giving an extra dollar today, with today's already in place tax rate,  do more good going to the US government, or to a charity like Bill Gates Charity.

B. You made a good point when you wrote: "The key for me though is this question. How do we go about achieving the most good?"

My argument is that no matter how pressing the deficit is, or how important the problems of the USA's "poor" people are, the more important issues are things like malaria in Africa. Global Health. Mass starvation. Water sanitation in third world countries. etc.

Would you not say that, on the margin, that would be 'a greater good' than worrying about people who are already at the 70% percentile by world poverty standards?

C. You write:"To me it's worth raising taxes to shore up SS. This isn't going to prevent people from giving charity". Can you elaborate on this? Are you saying that there is not a trade-off between giving more money to taxes vs giving more money to charity, at the margin? If so, what do you base this on. I ask this because I have seen strong arguments to the contrary.

Jon said...

No, I don't think it would be hypocritical for Buffett to advocate war but not give unless others are compelled to give. If he thinks some defensive (or offensive) action is warranted he's going to assume that if he alone pays this will not achieve the defensive action. It's not going to be undertaken merely because he gives extra to the government.

All you are asking is that I offer several conservative arguments against SS and also critique them? That's a lot to ask.

Instead, why don't I just provide some evidence for my claim. Check the effects of Johnson's expansion of Social Security. Not bad.

http://www.nber.org/bah/summer04/w10466.html

I'd consider laying out conservative arguments, but I kind of don't think you offer that in good faith. It becomes a game of "Guess what I'm thinking" and if I don't guess by talking about the specific argument you have in mind you'll say "You missed the most important one, ignorant, etc". You know I've learned my lesson on that because you try this often and I no longer bite. So I'm not going down that road. I made a claim. I'm prepared to back it up, as I have above.

OK, I withdraw the claim of "open advocate of violence against so called Communists." Let's put it this way. You look at a kid on his way to getting smashed against rocks and you say sure, it's bad, but only like it's bad to kill a violent gang member. Nothing to lose sleep over. Holocausts aren't a big deal provided the victims have the wrong ideology.

In my view a dollar taken by the government doesn't mean one less dollar available for charity. Krugman makes this point all the time, and maybe you saw him make it in my recent link with him debating the two British austerians. An economy is not a family budget. This is a frequent right wing error. Your spending is my income. My spending is your income. If you take a dollar from Buffett what happens is it gets disbursed by the government, perhaps in the form of SS. That's income for an elderly person. The dollar hasn't disappeared. That elderly person may spend it on consumption, and that of course is income for someone else. A portion of it may end up as charity.

The other thing is if Buffett is taxed $1 more, this does not translate to $1 less in charity he gives necessarily. That's not how I operate. If I make more money from one year to the next I tend to just save more. If money is tight I don't withdraw the charity I give. I just tighten my own belt, as I had to do recently due to some money being tied up in an unforseen way. I made it work.

It's possible Buffet personally has said he's going to keep maybe $50 million for his family after he dies, so taxing him $1 will reduce the charity he gives by $1 but in the aggregate (when you include the many other rich people that would be taxed, some of whom give very little to charity and instead want to leave their children with the maximum amount of money) taxing them more won't translate to $1 less to charity.

HispanicPundit said...

A few final points:

1. Thanks for the social-security link. I actually had not seen that study before.

Btw, I wasn't necessarily disagreeing with you on this point...as you know, I am not a libertarian - so I don't call for the complete elimination of social-security, medicaid, etc...I'm kinda torn on these issues, still. Undecided even.

So reading more on these specific trade-offs is very informative to me.

2. Regarding killing communists and my responses. You see "a picture of a boy that was probably being taken to the river where he was smashed to death against rocks"...and I just see a boy with assault rifles. And a not very clear picture at that. Even looking at it now I can't really tell what it is of.

With that said, here is a much more reasonable account of what happened: I scanned your post, saw it as a lot of leftwing propaganda, and wrote something that was intentionally meant to rifle your communist sympathizing feathers - in a playful sort of way. You can tell based on the content and context of the comment. I didn't say holocausts are okay, smashing kids heads on rocks are something I sleep through, or whatever else you read into my comment.

But if it makes you feel more "caring" and "compassionate" and "sympathetic", all those things lefties pride themselves over, to think otherwise...that is fine with me. Go right ahead. :-)

Regarding taxes vs charity, I wasn't referring to the governments POV. I was referring to the POV of the tax payer itself.

In other words, say tomorrow the tax rate is increased by X%...do you believe that this will have ZERO impact on the charity rate (I am not saying one way or the other, just want to see your position and why)?

Lastly, you failed to answer my most important question, so i will repeat it again:

You made a good point when you wrote: "The key for me though is this question. How do we go about achieving the most good?"

My argument is that no matter how pressing the deficit is, or how important the problems of the USA's "poor" people are, the more important issues are things like malaria in Africa. Global Health. Mass starvation. Water sanitation in third world countries. etc.

Would you not say that, on the margin, that would be 'a greater good' than worrying about people who are already at the 70% percentile by world poverty standards?

Jon said...

Take a closer look at the picture. It's not a boy with an assault rifle. It's a crying boy being carried at the hip by a man with an assault rifle. Yeah, joking about it will rifle my feathers. But I didn't take it as a joke. You said pretty much the same thing in the other link. I really don't think you think it's a big deal. Do you? To me it's huge.

I agree that suffering in Africa is more important than suffering here. But I don't accept the either/or mentality you have. And also you know my thinking on so called right wing concern for the world's poor. This concern is very selective. It applies more when useful for expanding right wing economic ideology.

Concern for Cuba is very high. And Castro has failings. You can point them out if you like. What about the government in Honduras? Any problems with them now that a coup has removed the democratically elected government? Follow the human rights reports and you'll see that it's much worse there. But you won't hear the right wing complain about that. The new government is more investor friendly. That's why Obama backed the coup regime even though he knew it was illegal (check my Wikileaks disclosures).

What about taxes vs charity? I'll tell you how Buffett probably sees it, how Krugman sees it, and how I see it. Not to argue the point, but just explain. Our economy is depressed due to lack of demand. Corporations are sitting on record profits. The wealthiest families have more wealth than ever. One solution to our economic problems is to tax that wealth and use it to create demand. This will stimulate the economy. More income in the pockets of the poor and middle class would result and this could result in more charity.

Cutting taxes ostensibly to increase charity to Africa could be like slashing government spending to solve the deficit problem. Because it depresses an economy further, which is already faltering due to lack of demand and has troves of underutilized resources, it could actually make the deficit worse. Krugman repeatedly cites studies that show the Ryan budget should be expected to INCREASE the deficit. Despite spending cuts. Those cuts further depress the economy, keep resources underutilized, and the reduction in total output causes further contraction in the tax base, producing greater deficits.

Based on similar reasoning I suspect that increased taxes on upper income groups could lead to even greater charitable contributions. That's just a suspicion based on the analogous case (the relation of deficits and spending cuts in our present economy).

HispanicPundit said...

A few final final points:

Let's step back a bit. My point about charity vs more taxes was a general point I was trying to make early on when I wrote: Btw, even then this analogy doesn't do the conservative side justice. Since in the analogy above, I assume that giving blood is the best case scenario - in the more taxes argument, you could make a strong argument that even if giving more money were a cure, if you really wanted to help the poor, giving it to the government is your worst choice.

As I see it, you were making a "help the poor" argument for more taxes. I was arguing that IF that was your goal, there are better ways to achieve it. This is a point in the conservatives favor with regard to the blood donation analogy. In that case, donating blood is the best available option to saving more lives...so the need is pressing. But in the more taxes argument, even if one granted that "help the poor" is a valid objective, it still does not follow that one should then be compelled to give more taxes.

This is why later I wrote: Now if you were to create a tax that forced us all to give some of our money to a charity organization like the Bill Gates foundation - I wouldn't mind that as much. Really.

In other words, you can't just assume that "more taxes to government" = "more help for the poor". It's alot looser than that. After all, the money could be used, on the margin, to help fund our aggressive wars overseas, instead of say, helping social security recipients. And even if the money does go to helping social security recipients, that is a FAR cry from helping actual poor people - like the Melinda Gates foundation does.

The conversation then got muddied by you thinking I was asking for tax cuts. I wasn't. Or thinking I meant "general giving to charity", I wasn't. I was specifically arguing that if Buffett was truly concerned for the poor, he should be arguing in favor of a mandatory tax that gives the money to the Bill and Melinda gates foundation - not the US government. That would be far better and a harder argument to rebut, IMHO.

Jon said...

I am not arguing that more taxes is a help to the poor. I want to emphasize this point. I am not arguing that more taxes help the poor.

What I'm saying is that whether or not Buffett gives more to the government, this is in no way relevant to the question of whether more taxes help the poor.

Obviously you and I answer that question in different ways. That's a worthwhile discussion. But the answer to that question doesn't hinge on whether Buffett personally voluntarily gives additional money to the government.

From there we've drifted a bit and what I'm trying to get across is this point. Step into Buffett's shoes. Take on his assumptions. Granting his assumptions does it make sense for him to decline giving more to the government voluntarily. The answer to that is yes.

What are those assumptions? They may very well be the same types of claims Krugman makes. Asking the rich to give more to government, like was done post WWII up until the Reagan years, allows the government to spend, which stimulates demand, and helps the economy overall. This can literally lead to increased charitable giving, just as increased government spending can reduce the deficit. More charitable giving than would be given if Buffett was allowed to keep more of his income and give it to charity, like he's doing now.

Here's where I think you're going off the rails. You want to argue about the validity of Buffett's underlying assumption. Again, a fine point to debate, but this is not what I'm trying to communicate here. That's another huge debate that requires a lot more supporting evidence than I've provided.

All I'm trying to show here is that within Buffett's worldview his actions are perfectly reasonable. He may be wrong. Maybe you are right and he's better giving his money directly to charity as opposed to giving it to Uncle Sam. That would do more good. You can think what you want, but given that he thinks differently, within his worldview his actions are reasonable.

It's kind of like you are an atheist looking at a Catholic and arguing that taking the Eucharist is silly so this person must be crazy. No. Within his worldview the Eucharist is important, so what he's doing makes sense from his perspective. Whether the Eucharist is ACTUALLY worth doing is a separate question.

HispanicPundit said...

Makes sense. I think you have a valid point.

Jon said...

What the hell?