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 dragonpat
Joined: 9/29/2006
Msg: 1
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Why should there be more redistribution of wealth?Page 1 of 7    (1, 2, 3, 4, 5, 6, 7)
In another post a very intelligent poster pointed out that this nation has a progressive tax system. He felt that the primary purpose of this type of system is the redistribution of wealth. Many posters on here recognize that this is socialistic in nature and say what is wrong with socialism. So I was wondering, do most of you support the idea of wealth redistribution? Is it the purpose of government to take from those who have the most to support those who have the least? And is redistribution really needed and if so why? Finally, i would like to know with some less abiguious wording, what is fair. Should we take 40 or 50 percent of what "rich" people make to support those who make zero? How fair of redistibution should we have and what would be the real goal of said redistribution?
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 MacKevinized
Joined: 2/15/2006
Msg: 2
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Why should there be more redistribution of wealth?
Posted: 10/4/2008 7:02:23 AM
The redistribution of wealth began in 1912 with the installation of the Federal Reserve system.
This insured that the bankers would redistribute wealth to themselves via the method called compound interest.
By 1929 it destroyed our financial system to the point of collapse and it took over 10 years before FDR stepped in with the New Deal where wealth was given back to the working class and created the longest financial boom of our history.

Until the citizens understand the inherent corruption in the foundation of our financial system, there will be a tug-of-war between the financial entities and the government for who gets to control of the redistribution of wealth.

Remember when you get a mortgage on a $100,000 home for 30 years at 6%, by the time you pay it off, you will have paid $226,397.16, a 55% profit for the bank.
 flyonthewall!
Joined: 3/31/2008
Msg: 3
Why should there be more redistribution of wealth?
Posted: 10/4/2008 10:53:22 AM

Umm, one thing that should first be understood is that the tax system is not equal based on income... the rich pay WAY less percentage-wise than the middle class and the poor. Most people are completely unaware of this inequality.


Depends on what tax you're talking about. If it's federal income tax, the top one percent pay 40 percent, the top five percent pay 60 percent, and the top 10 percent pay 71 percent of all income taxes.

If you want to look at taxes paid as a percentage of income, the average tax rate of the bottom 50 percent of tax payers is 3 percent. The average tax rate of those in the upper 25 percent is 15 percent. So the statement above is untrue either way you look at it.

Further, the top 5 percent of tax payers earn more than $153K, so if Obama is only going to raise taxes on those who make more than $250K, he is really only going to raise taxes on about 3 percent of taxpayers. He's sure not going to make up the deficit that way.

Capital gains tax is also regressive, so higher income makers pay more.

The only tax on income that is not regressive is payroll tax. All income earners pay 6.25 percent Social Security tax, and 1.45 percent Medicare tax (double that if self-employed). This tax also cuts out at around $106K, so income above that amount isn't taxed at all.


When people claim that they want the rich to pay more taxes, they are not necessarily saying that the rich should pay for the rest of the nation or get taxed more than the middle class, they are just saying that "hey, 30% of my income is taken away by taxes while only 3% of the extremely wealthy guy's taxes are taken away."


Given the above, explain to me how this is true.


When I buy a shirt at the mall, I pay 8.05% in a state tax. Everyone pays this tax. It is equal. The way that the federal tax system is set up, it would be the equivalent of me paying 8.05% tax on a shirt, and the millionaire pays only a 2% tax on the same shirt.


Sales tax is never regressive. However, people with more income buy more consumer goods, and so they contribute a lot more to the sales tax pool. If you're poor, and you just have to have the latest iPOD, then I've got no sympathy for you. Pay the tax, or don't buy the thing.

There is no sales tax on food, medicine, rent, mortgages, and there are sales tax holidays in most states on basic consumer goods every fall.


Do I support wealth distribution? No, not in the traditional sense; this country greatly values individualism, as do I. However, I do support equality and our current tax laws are not even close to equal.


We don't even have equality now. If all tax deductions were eliminated and everyone paid a straight 15 percent in income tax, the poor would first be poor. We'd be back to feudal times.

Fact is that the upper 50 percent of income earners in this country pay almost ALL the federal income tax. The lower 50 percent only pays 3 percent.

We already have wealth redistribution.
 MacKevinized
Joined: 2/15/2006
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Why should there be more redistribution of wealth?
Posted: 10/4/2008 11:08:37 AM

The only tax on income that is not regressive is payroll tax. All income earners pay 6.25 percent Social Security tax, and 1.45 percent Medicare tax (double that if self-employed). This tax also cuts out at around $106K, so income above that amount isn't taxed at all.


Doesn't compute!

Being that there are cutoff limits for SS and medicare, someone earning more than 106K begins paying less than the %% you claim. Someone earning 212K will only be paying 3.125% of their income for SS and .725% on Medicare.

Then there's loopholes for the wealthy to claim they're not making any money and pay no taxes.

As far as the rest of your figures, as usual they're not believable without some citations.
 flyonthewall!
Joined: 3/31/2008
Msg: 5
Why should there be more redistribution of wealth?
Posted: 10/4/2008 11:57:47 AM
http://www.taxfoundation.org/news/show/250.html
 Super Ryan
Joined: 9/15/2007
Msg: 6
Why should there be more redistribution of wealth?
Posted: 10/4/2008 12:05:06 PM
Lots of wrong terminalogy here about the different tax structures.


Regressive Tax - A tax with an average tax rate that decreases as the taxpayer's income increases and increases as the taxpayer's income decreases.


Progressive Tax - A tax with an average tax rate that increases as the taxpayer's income increases and decreases as the taxpayer's income decreases.


Proportional Tax - A tax with an average tax rate that remains constant as the taxpayer's income increases or decreases.

-Macroeconomics 11th Canadian Edition; McConnell, Brue, Barbiero; McGraw-Hill Ryerson

America actually uses all three. Income tax is progressive, payroll tax is regressive, and sales tax is proportional.
 MacKevinized
Joined: 2/15/2006
Msg: 7
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Why should there be more redistribution of wealth?
Posted: 10/4/2008 12:17:23 PM
According to your link "http://www.taxfoundation.org/news/show/250.html, this is Adjusted Gross Income which means most of the income is put into loopholes that hide what the actual income is.

With some magical accounting tricks, many corporations are set up for the wealthy to defer income back into them so they don't have to declare it as personal income.
 HalftimeDad
Joined: 5/29/2005
Msg: 8
Why should there be more redistribution of wealth?
Posted: 10/4/2008 12:51:29 PM
I'm just going to answer the question in the headline. If you want the argument for more redistribution of wealth you should go to Rawls. He made as good a case as you're going to see. You may not agree, but he did make the argument when it was still permissable to speak about such things.
 Written by Hank
Joined: 3/8/2008
Msg: 9
Why should there be more redistribution of wealth?
Posted: 10/4/2008 5:08:45 PM
Laissez-faire Capitalism is a free market economic system left unregulated by the government. The idea is that, left unhindered, free markets lead to long term prosperity (this has been shown to be true - though some people end up far more prosperous than most others). Also, most who prefer this approach see Wealth Redistribution through progressive taxes as an infringement on liberty and as being simply unfair.

But it also leads to the wealth settling in the hands of the few. In simplest terms, it's like a big game of Monopoly played by millions of people over hundreds of years. In the end, one person wins and everyone else loses. In the Parker Brothers Board game, the luck of the dice determines the player's advantage. In real life, it's the luck of birth. People are born into circumstances that give them an advantage. Sure, some people rise out of poverty, but most do not.

Also, the advantage of those born into prosperity is compounded by the fact that they are the ones that end up getting to change the rules of the game as it is played - and the changes they make tend to add to their advantage. You can't have a society ruled by the wealthy few while the majority are forced into servitude to them.

So, what to do?

You find a way to redistribute the wealth. On way to do it is by progressively taxing the richest. How much that should be is a matter of debate. Personally, I despise the narcissistic arrogance of most of the wealthy and would like to see them pay. But you can't get personal about it - you have to find a balance. Also, you don't want them to pull out and move elsewhere (though that can be prevented through agreements between nations). And, you don't want returns for people to be diminished to the point where it is no longer worth their effort. So again, the balance.

OP, you're looking for a percentage point. I can't say, exactly. We were probably closer to the right number eight years ago, than we are now.
 cncgandolf
Joined: 7/29/2007
Msg: 10
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Why should there be more redistribution of wealth?
Posted: 10/4/2008 6:11:10 PM
"Is it the purpose of government to take from those who have the most to support those who have the least?"

No ... and that notion is a ploy to appeal on the basis of pity and fairness when in actuality those who fall for it are to be pitied for allowing themselves to be treated unfairly. A progressive taxation system aligns with a progressive reward system. Those who harvest the most from the system pay back to the system in proportion to their harvest.

Think of it as an apple orchard. Two go in. 1 takes 12 bushels while the other takes 1 bushel. To charge them the same for having taken different amounts is unfair. Now, let's take this a tad further. If the guy taking the 12 bushels damages the trees in the process, to give him tax loopholes instead of charging him even more for having damaged the orchard is even more grossly unfair.

Or, for those who want to shove the Bible down our throats: to whom much is given much is expected.

Taxation is a charge for what you take from the system. Take more ... pay more.
 dragonpat
Joined: 9/29/2006
Msg: 11
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Why should there be more redistribution of wealth?
Posted: 10/6/2008 8:49:29 AM
I am curious why everyone feels that it is right to take more from one group of people to give it to another. If i were to develop a new product and then to sell this product. If the product were to do well and i became rich, i would there for have to give a larger percentage of what i make to those who do not do as well. How is this right?
I am not saying that those who have more shouldnt choose to give, aka charity, but to be forced to support others with the products of their labors simply because they have not done well i dont follow the justification.
As for Rawls, the vail of ignorience doesnt justify redistribution as much as it justifies the idea of basic rights. The belief that people will choose to redistribute wealth is not really supported by his views on the vail. All too many people would prefer to keep what they make versus have it taken.

As for the idea that the rich dont pay a fair share already, this idea is unsupported. The highest income brackets in this nation pay the largest share of taxes. The top 5% pay almost 60% of the tax revenue for this nation.
 HalftimeDad
Joined: 5/29/2005
Msg: 12
Why should there be more redistribution of wealth?
Posted: 10/6/2008 10:38:21 AM

I am curious why everyone feels that it is right to take more from one group of people to give it to another. If i were to develop a new product and then to sell this product. If the product were to do well and i became rich, i would there for have to give a larger percentage of what i make to those who do not do as well. How is this right?


Okay, first clearly not "everyone feels that it is right to take more from one group of people to give it to another." You don't.

But, if you invent a product and are successful with it, you benefit far more from the civil society than most others. If you invented the radar detector, you benefit from the highways built by tax dollars. If you invented a data transfer technology, you benefit from the subsidies to the ARPANET that became the internet, as well as the subsidies to Bell to build the infrastucture. Furthermore, the courts are there to protect your rights to your intellectual property; the police to protect your physical property; the universities provide you with your lawyers, accountants and eager young engineers to continue your work; the State Department devotes most of its resources to ensuring that your patent is protected world wide; the FBI tracks any counterfeiting. Most of the apparatus of government outside of the military is there to protect the rich. It's not unreasonable to ask them to contribute fairly.
 dragonpat
Joined: 9/29/2006
Msg: 13
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Why should there be more redistribution of wealth?
Posted: 10/6/2008 12:13:32 PM
the key word is fairly. And as for most of the government being there to help the rich, i find your reasoning to be a bit faulty. The police are only out to help the rich, same with the FBI, and all the rest of the agnecies and organizations you mention would be a shock to many who work in those organizations. The poor also benifit from all of what you mentioned. So lets return to your word fair. How much do you feel is fair? Half of what they make? A quarter? More less? The rate in this nation has been as high as 90 percent. So since you feel that most of the government that taxes pay for is to benifit the rich how much should they rich pay. How much money should be taken from one group and given to another. Although you exempt the military, and by the same logic you have used they should be included. After all they go to fight wars to keep our rich in power. Right?
 HalftimeDad
Joined: 5/29/2005
Msg: 14
Why should there be more redistribution of wealth?
Posted: 10/6/2008 12:32:35 PM

Although you exempt the military, and by the same logic you have used they should be included. After all they go to fight wars to keep our rich in power. Right?


Um....no.

Look, you're trying to turn my arguments into wild flights of fancy. The poor don't directly benefit from anti-counterfeiting operations. The poor don't directly benefit from efforts to protect American patents and copyrights. The poor don't directly benefit from parks in rich areas (and there's always more parks in rich areas).

Civil society benefits rich people more than poor people. Government functions to maintain civil society. So......
 MacKevinized
Joined: 2/15/2006
Msg: 15
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Why should there be more redistribution of wealth?
Posted: 10/6/2008 2:06:03 PM
When the fat cats get control over all the money, the rest of the population is by default enslaved by them.
Our current situation has nothing to do with creative inventions making people wealthy it has to do with creative rip off artists conning the rest of the population into thinking there's good reason to thwart poor people from ever having a chance at getting out of slavery.

Soon it will be time again to revolt against the money changers and take back the economy and government that supports them.

If Obama doesn't make some serious changes when he gets into office, there will be an uprising of the oppressed against the powers that be like there was when a bunch of radical terrorists did when they wrote the Declaration of Independence.

Like then, those in power will get all their wealth redistributed big time and their massive armies will not be able to control it.
 Written by Hank
Joined: 3/8/2008
Msg: 16
Why should there be more redistribution of wealth?
Posted: 10/6/2008 2:34:22 PM

I am curious why everyone feels that it is right to take more from one group of people to give it to another.


I'll respond to the question of the "fairness" of wealth redistribution. Whether or not the rich receive more services and protections from the government and should they pay more for it is a different question (I think they do and should, by the way).

But strictly speaking to taxing as a means of redistributing the wealth and if it's fair, my opinion is: it doesn't matter if it is fair or not. Because if the nature of Capitalism, the money and assets will always eventually end up in the hands of a few (or one). We can't have that. It is really that simple. Except for the rare individual like Warren Buffet, the wealthy aren't inclined to see the need to balance the economy.

Of course there are other ways to tax the rich besides progressive income taxes:


"Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy." - Warren Buffet


A Plutocracy is close to what we have now.

Plutocracy: Rule by the wealthy.
 dragonpat
Joined: 9/29/2006
Msg: 17
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Why should there be more redistribution of wealth?
Posted: 10/6/2008 8:14:09 PM
hank, by and large i always like your posts. You answer intelligently and with out spouting the "party line" as other people do.
I just question one of your assumptions. In a capitolistic society, if it were a true capitolistic society i do not see how the wealth would end up in the hands of few.
In a mixed society like you have constantly said, and i agree, maybe wealth does end up in the hands of a few. So in a mixed society i can understand the need to redistribute to fix the errors that were made by the system.
 dragonpat
Joined: 9/29/2006
Msg: 18
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Why should there be more redistribution of wealth?
Posted: 10/6/2008 8:36:55 PM
wanting to share has nothing to do with redistibution. The idea of redistibution is forcing one to share.
 Written by Hank
Joined: 3/8/2008
Msg: 19
Why should there be more redistribution of wealth?
Posted: 10/6/2008 9:41:58 PM
Thanks Dragonpat, though admittedly, I've been know to "toe the party line" on occasion in these forums.

Reagan cut taxes on the wealthy. Bill Clinton did, also. George Bush did the same. We now have the widest gaps between the rich and the poor this country has ever seen...and it is growing. The reason for these tax cuts, of course, was the belief the money would make its way from the wealthy to the poor with the middle class grabbing the largest share as it trickled down. It didn't worked. The wealthy just held on to it.

When you have pure, unfettered capitalism, someone eventually gains an advantage. That advantage brings them a little extra money. With the extra money, they can buy another advantage. It compounds - more money, more advantages - until they no longer need the advantage because they own it all.

We don't want to live in a place where only a few individuals have most of the wealth. So, to put it bluntly, with progressive taxes, we take some of their wealth away from them. Hate to say it, but, most people are greedy (not all, but most - it's human nature, I think). The Invisible Hand is not there. If people weren't greedy, Capitalism, left on it's own, would probably work just fine.

Invisible Hand: Basically, Greed is good. By acting selfishly, you inadvertently increase the fortune of others.
 MacKevinized
Joined: 2/15/2006
Msg: 20
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Why should there be more redistribution of wealth?
Posted: 10/7/2008 3:53:07 AM

wanting to share has nothing to do with redistibution. The idea of redistibution is forcing one to share.


Not wanting to share is the reason for your definition of redistribution.

The fat cats take the profits they make and fly to the cayman island banks to hide it or send it to china to pay for cheap labor instead of sharing it with there fellow americans.
 flyonthewall!
Joined: 3/31/2008
Msg: 21
Why should there be more redistribution of wealth?
Posted: 10/7/2008 7:52:21 AM
^ ^ ^ ^ ^ No. That's what happens when taxes on the wealthy become predatory. Not only will the wealthy hide money of shore, but they'll wholesale move their legal residences.

The result? Monaco gets overcrowded, and the US has even more trouble funding its overbloated programs.
 eeeo4U
Joined: 6/25/2007
Msg: 22
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Why should there be more redistribution of wealth?
Posted: 10/7/2008 9:38:22 AM
If they took all the money in the US away from its owners and divided it equally, let's say for the purpose of argument 5 million per person over age 21, what would result in a couple of years would be that the homeless alcoholics and drug users would probably be broke or dead in a couple of years. I and people like myself might have what I started with or if lucky twice that. Donald Trump, Bill Gates, Warren Buffett would be gazillionaires again.
Equality of opportunity does not equal equality of outcome and that's what liberals try to force...
 HalftimeDad
Joined: 5/29/2005
Msg: 23
Why should there be more redistribution of wealth?
Posted: 10/7/2008 10:09:22 AM
Nobody is arguing to strip the assets of the wealthy; complete egalitarianism is collectivism and is disastrous.

However, some by dint of birth have advantages over others. That advantage could be being born into money, or simply talent. Warren Buffet was born with a talent that neither you nor I have. He is astounded that he pays a lower portion of his income than his receptionist. He's also said there is a class war going on, and his side is winning.

The idea of taxing the wealthy more and helping those who can't rise on their own has a very long tradition - the Romans did it. It's just a fundamental fairness that goes deep into human nature. Probably as far back as when we started out as small tribes - giving a portion of the food to those who couldn't bring in as much as they consumed. It's a basic instinct that in fact allows us to be social animals and go from tribes to villages to cities to nation states.
 cncgandolf
Joined: 7/29/2007
Msg: 24
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Why should there be more redistribution of wealth?
Posted: 10/7/2008 10:50:30 AM
"If i were to develop a new product and then to sell this product. If the product were to do well and i became rich, i would there for have to give a larger percentage of what i make to those who do not do as well."

Because without the economic system (the orchard) to harvest from you would not have had any harvest. Your product is what I metaphored with the "bushel" harvested. When you take money from the economic system from your invention you are harvesting from the system. The more you harvest, the more you pay for harvesting.

Yes, that is fair.
 dragonpat
Joined: 9/29/2006
Msg: 25
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Why should there be more redistribution of wealth?
Posted: 10/7/2008 11:37:06 PM
I am sorry I just dont buy into the whole orchard idea. I also dont buy into the whole redistribution idea. If we want businesses and the rich to not have loopholes, fine, i can buy into that. If we want government to stop favoring the rich and businesses, i will buy into that also. But the idea that we should reward those who work hardest by taking more from them, to me that is counter productive. We are saying the old saying the more you make the more we take. I know that that isnt a way to motivate people. Each according to his ability to each according to his need, well that one just doenst work for me.
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