Saturday, September 24, 2011

Random Mustings About Money And Taxes

Over at the Madville Times, Troy Jones and I engaged in a little back and forth about taxes and money and wealth.  As is usual in such engagements, we talked past each other and came to no conclusions.  The debate, if one can call it that, did prompt me to do a bit more thinking about wealth, money, and taxes and come up with the following working observations.

1. Poverty is at 50 year high.

2. The income gap between rich and poor is double what it was in 1968 and growing.

3. The top one percent control nearly 40% of the wealth.  Twenty-five years ago they controlled 33% of the wealth,

4. Income and wealth are tools to gain and keep power.

5. Wealthy people dominate Congress.

6. Income and wealth ought to be valued for their instrumental nature, but it seems as if many people value money and wealth as ends unto themselves.  I suppose one could logically assume that people value power over everything else and seek money to achieve it.

7. Will Wilkinson is probably correct about the following two observations:  First, we argue about freedom in rather backward and convoluted way.
Everyone who professes to care about liberty does the same sort of thing. It seems to me that most of our high-level political concepts like "freedom" or "equality" are tailored and tweaked to justify the kind of political regime we already tend to favor. If you are offended by taxation, you'll settle on a conception of liberty according to which taxation is a violation. If you think a relatively high level of taxation is necessary to give people what you think they ought to get, you'll settle on a conception of liberty according to which taxation is not a violation, but not giving people what you think they ought to get is.
Next, Americans probably not as free as we think we are.
Of course, we're all constantly subject to the wills of others. People are constantly enjoining and entreating and wheedling and shaming and peer-pressuring and so forth. One doesn't want to say that self-rule or autonomy requires total immunity from the influence of others. And it's plainly circular to say the problem is being subject to an external will in a way that limits our freedom. But I think noting that helps us to see that the question is not really one of being subject to an external will or not, but of the way in which one is made subject to an external will.
It seems pretty plausible that subtle psychological manipulation, "brainwashing," and even just internalizing the norms of a culture that discourages the development of a sense of independent self-efficacy can make one the subject of a will not really one's own. If the capacity for self-rule has developmental and ongoing material and psychological preconditions, freedom as self-rule can require a whole lot more than immunity from physically coercive interference.
8. Wilkinson's points lead me to believe that political and business leaders have raised the art of bread and circuses to a new level.  The current bread and circuses are usually recent technological innovations.  These items fulfill the function well because everyone over the age of 18 may remember a time when people didn't have laptops or cell phones, but most of us are able to ignore the fact that we have reached a point where these items have become necessary.  I really can't imagine any professional firm hiring someone who didn't have a cell phone or the ability to check email away from work.

9. Americans seemingly equate wealth and power with wisdom and intellect.

10. The tax code has become a tool to modify human behavior not a means of collecting revenue.

Were I Martin Luther, I might be able to develop some secular theses to nail on some door.  Were I Marx, Hayek, Keynes, or Friedman, I might be able to develop some economic and political theories that would apply.   I'm not, so I'll state the obvious.

First, the current economic woes will continue and worsen.  The U.S. will experience its version of Japan's lost decade.

Second, the wealth and income gaps between the rich and poor will continue to widen.

Third, if the monied elites begin to believe that Americans will not be soothed with new HD televisions, faster laptops, or new versions of Angry Birds, America will be at war again within the next 5 years.

Fourth, there will be no meaningful tax reform.

Fifth, any reforms that do occur will come at the expense of the middle class in the form raised retirement age and lower Social Security benefits.

Sixth, Americans will continue to mouth an increasingly empty phrase: they live in a land governed "of, by, and for the people."

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