"I don’t think most people could bear to pay more."

February 12, 2012 9:52 PM

"We’re not going to say, 'Give it to me and let my grandchildren suffer.' I think they underestimate seniors when they think that way." But 71-year-old Barbara Sullivan cannot imagine asking people to pay higher taxes. And as she considered making do with less, she started to cry." (slnyt)

The New York Times speaks to residents of one rural Minnesota community about the government benefits that keep them afloat- and about their deeply-held belief that those benefits are too generous.

posted by Snarl Furillo (131 comments total)

"I don't think most people could bear to pay more." Reassuring words to the Wall Street 0.1% who the NYT is trying so hard to appeal to, the differences between it and Rupert's WSJ have disappeared.
posted by oneswellfoop at 9:59 PM on February 12, 2012 [11 favorites]

It's a nice article, full of truly epic cognitive dissonance of the "Get your government hands off my Medicare" variety — but I really wish they hadn't adopted the term "entitlements" as part of the piece's framing. What's wrong with calling them something like "social programs"? Framing Medicare and Social Security and food stamps and the EITC as something to feel entitled to, rather than as hard-won and well-deserved benefits that help keep poor and middle-class families safe from misery and basic components of a fair society, is already a step too close to giving them up.
posted by RogerB at 10:00 PM on February 12, 2012 [28 favorites]

The wealth of the truly rich is literally unimaginable, but I thought the otherwise rote SF movie In Time provided a good metaphor, where time is literally money and the average people live literally day to day, swapping and paying in minutes and suffer ever increasing costs and interest rates. When we meet our first representative of the rich, they're fast and loose with hundreds of years, and the truly rich are sitting on millions of lifetimes.

Those are people who should be paying more, and they've gamed the system to make sure they pay less than everyone else.
posted by The Whelk at 10:00 PM on February 12, 2012 [42 favorites]

People are idiots. You're not asking people in general to pay higher taxes, you're asking the big-time earners to pay higher taxes, which they can easily afford. If it makes you weep to imagine the Waltons, Gates, Buffet or any of the endless Wall Street douches to pay, say, 10% more on their exorbitant wages, I don't know what to tell you.
posted by maxwelton at 10:00 PM on February 12, 2012 [59 favorites]

Does anyone look up responses on FreeRepublic to articles such as this?

I find it all to be quite zen.
posted by Apocryphon at 10:01 PM on February 12, 2012 [1 favorite]

Apocryphon,

Do you have a link to share?
posted by Jonathan Livengood at 10:05 PM on February 12, 2012

Odd that the 1950s is always cited as the timeframe that "we have to take our country back!" to, yet no one ever seems to bring up the top marginal tax rates during that decade.
posted by T.D. Strange at 10:06 PM on February 12, 2012 [57 favorites]

Or for that matter, the capital gains rate.
posted by T.D. Strange at 10:11 PM on February 12, 2012 [21 favorites]

Do you have a link to share?

I usually just find them by Googling site:freerepublic.com "[title of article | subject of interest]"
posted by Apocryphon at 10:14 PM on February 12, 2012 [2 favorites]

Anyone who paid into social security (a wonderful, very successful program for the -average person- instead of the rich) for decades (and everyone notices the bite out of their paycheck) is indeed entitled to received the benefits they paid for.

I don't have a problem with that word, despite GOP efforts to smear it in shit. What they don't like is that it is the result of a government program to help people cooperate to provide for the common welfare. There's a good reason it's widely considered as the most effective and beneficial US government program: it freaking works.

Shame on the heartless propagandists who've made anyone think they're hurting someone else by receiving what their hard work has entitled them to.
posted by Twang at 10:15 PM on February 12, 2012 [35 favorites]

The Free Republic responses for the lazies.
posted by june made him a gemini at 10:16 PM on February 12, 2012 [5 favorites]

"Give it to me and let my grandchildren suffer."

I'm sure this lady doesn't want her own grandchildren to suffer, no. I hear this exact same sentiment from tea partiers all the time: don't saddle our children and children's children with debt!

However, they seem to have very little problem letting the younger generations suffer when they are minorities or immigrants, and frequently couch references to these groups in parasitic terms.
posted by wikipedia brown boy detective at 10:16 PM on February 12, 2012 [5 favorites]

How can anyone complain when so many are spending extravagant sums on youth sports and tattoos? The decadence of it all...
posted by MetalFingerz at 10:17 PM on February 12, 2012 [3 favorites]

but I really wish they hadn't adopted the term "entitlements" as part of the piece's framing

I don't think it matters what you call it, the term will be villified. They are called entitlements because things like a dignified retirement are things people are legitimately entitled to in a civilized country.
posted by furiousxgeorge at 10:19 PM on February 12, 2012 [5 favorites]

Griftopia makes the ( good ) point about the alienation of the rest of the country from the top earners, just the scale of what the really rich make. Your average working class/ middle class person thinks rich means a tax tier or two above them, the people they know and see around them, and they assume thier problems are shared by everyone, not knowing just how easy it is for people with truly astounding amounts of money to warp the system to thier favor and pass laws and move overseas, if for no other reason then they've never had reality altering amounts of money.

Or, another way, even someone who makes 150k a year are part of the lowly masses. The people without influence. The people who fundamentally don't matter.
posted by The Whelk at 10:21 PM on February 12, 2012 [18 favorites]

I don't get this attitude that taxes are bad. It's how we stay out of being a third world country, and i'll turn a popular phrase people tend to say around to them "freedom isn't free". You want to be a part of a good society, then pay taxes and quit trying to weasel out of them. I'll relate a personal story here. Early 90s my parents decided to retire and sell their bank and our stock in it. They tried to get me to fake move to florida (i wouldn't really live there, but i'd be registered to live there) so i wouldn't have to pay state income tax on it. My final tax rate for that sale was around 40% if i remember right. You know what? I don't mind, but i also see the stupidity of the ones who make that in a fraction of the time i did trying to not contribute to this being a better society. I've lived decades on that, literally. When i hear the uber rich saying how hard it is, i want to smack them and make them live the lives of some of my friends, who have been homeless.
posted by usagizero at 10:22 PM on February 12, 2012 [17 favorites]

I didn't want to emphasize that FR thread too much, but articles such as this one that are in the vein of "did you know this about ostensibly conservative people?" make me wonder what the conservatives would make of it. I'd do the same for articles that might cause Democratic Underground to blow a gasket, as well. Sometimes it's good to know what both sides of partisan ideologies think about a subject.
posted by Apocryphon at 10:34 PM on February 12, 2012

Which is to say the people who should be taxed are not even in the same boat as these people, they're not on a boat. They're barely on the same planet.
posted by The Whelk at 10:41 PM on February 12, 2012 [1 favorite]

bullshit lying propagandistic articles like this really make me sick. the privileged in this country are so much more powerful than the underprivileged that they're able to convince them, through articles just like this, that:

1) all of them, every one of them, are suffering because of some undisclosed moral or intellectual failing of their own.

2) they should be grateful not to have enough, and should feel ashamed of themselves for wanting more.

it just completely makes me want to throw up seeing the way the underprivileged classes have been divided and conquered in this country - the only alternatives are: 1) self-loathing, or 2) loathing of others in one's own social class, or lower. or both.
posted by facetious at 10:50 PM on February 12, 2012 [10 favorites]

articles such as this one that are in the vein of "did you know this about ostensibly conservative people?" make me wonder what the conservatives would make of it.

I truly thought the article did a good job of humanizing people who have taken the idea of "shared sacrifice" deeply to heart and who don't want to think of themselves as people who take advantage of the government or who need financial assistance from the government and the deep cognitive dissonance they employ about that. It was really sad to see that the only people who were totally unreserved about cuts were people who weren't getting the benefits from them, the tattoo artist and the father who was willing to sacrifice services for his disabled daughter.

I thought the most egregious absence from the conversations the reporter must have had with these people, who almost to a man come across as thoughtful and realistic about how much easier tax breaks and Social Security make their lives, was about the tax rates corporations pay, which didn't come up in the article at all, but hey: it's the New York Times. I don't expect much from them on that score.
posted by Snarl Furillo at 10:50 PM on February 12, 2012 [4 favorites]

The sad thing about cognitive dissonance is that people won't change their minds after being confronted with the truth. Nobody wants to accept that they've been acting against their own best interests for years. That way lies despair.
posted by Kevin Street at 10:51 PM on February 12, 2012 [13 favorites]

The government helps Matt Falk and his wife care for their disabled 14-year-old daughter. It pays for extra assistance at school and for trained attendants to stay with her at home while they work. It pays much of the cost of her regular visits to the hospital.

“She doesn’t need some of the stuff that we’re doing for her,” said Mr. Falk, who owns a heating and air-conditioning business in North Branch. “I don’t think it’s a bad thing if society can afford it, but given the situation that our society is facing, we just have to say that we can’t offer as much resources at school or that we need to pay a higher premium” for her medical care.

So here's a guy willing to put his own disabled child at risk to help his society, and what does his political party do with him? They assault him on a daily basis with propaganda that is designed to make him feel guilty for accepting help for the basic needs of his child. They are so pathetically servile to greed and power that they're willing to make the sick and elderly feel shame for wanting to be healthy, while they scare them half to death with invented threats of terrorism and moral decay, all to collect a bigger paycheck for themselves.

The true shame is that the people spewing that propaganda do nothing but pay lawyers and lobbyists to find ways to squeeze more money out of society for their own petty desires. They're taking money that could be used for basic health care for disabled children (or veterans care, or more teachers, or more police) and using it to pad their bank accounts with more zeroes. They've convinced their constituents that greed is okay and American, but helping your fellow man is unAmerican.

Unlike human beings, they have no capacity for shame. They are animals, hedonists, charlatans, liars, and they get away with it by carrying crosses around. It is absolutely sickening, and some days I wish there was a hell for them to go to.
posted by deanklear at 10:56 PM on February 12, 2012 [69 favorites]

This country is completely messed up by mind-warping propaganda. This weekend, I got drawn into a chat about hard times with an acquaintance. When I mentioned the privileged 1%, he responded, "yeah, fuck those unions!"
posted by benzenedream at 11:02 PM on February 12, 2012 [15 favorites]

So here's a guy willing to put his own disabled child at risk to help his society

The common thread I got from the people mentioned in the article is that "society" does not equal the sum of all the people living in the country. The society they are worried about preserving is something much more abstract. My question is: what do you want this society to achieve? What is the unifying dream we are pursuing, if it is not helping your fellow man?

I only recently moved to the USA, and yesterday I went to get a haircut. The barber was an old man who could barely stand up, and could not keep his hands still, so he kept making mistakes. In Canada someone like this would be retired. I see so many decrepit, poor, lost souls here.

Amongst the wealthy though, I see some of the most beautiful, smart, effective people I have ever come across. Perhaps they are the gods and goddesses that the tax hating poor wish to subsidize?
posted by niccolo at 11:19 PM on February 12, 2012 [10 favorites]

Ooo, deanklear, you scratch a real itchy spot to bleeding.

The sad thing about cognitive dissonance is that people won't change their minds after being confronted with the truth. Nobody wants to accept that they've been acting against their own best interests for years. That way lies despair.

To me, it's like getting a bad tooth pulled: It hurts going out, then it's a great relief to have it gone. Truth hurts, but then you are better off.

This word "entitlement" is so abused. My reading of the actual real word, is it means it is YOURS. You own title. Somehow, that got twisted around by the nasty accusatory phrase, "Oh, you think you're entitled!". Well people, um, yea. You are entitled. And you can slap the next mofo who comes along and uses that as an accusation.
posted by Goofyy at 11:19 PM on February 12, 2012 [5 favorites]

Raising taxes makes grandma cry?? Even Gingrich and Santorum have more shame than that.

Slow clap for NYT.
posted by drjimmy11 at 11:26 PM on February 12, 2012 [4 favorites]

One of the great deceptions in this country is the belief that everyone got to where they are in life through nothing else but their own hard work.
posted by steamynachos at 11:55 PM on February 12, 2012 [27 favorites]

The striking thing about this article to me is that it profiles residents of what seems to be a very homogenous small town in MN.

The NYT audience is not composed of hard-up small-town residents, so I don't see this as some form of 'propaganda' meant to convince the poor to feel bad for accepting social security. The subjects of the article are likely to be among the few people in their position who read the article.

Rather, I see this as intended for the NYT's audience, an attempt to answer the classic "What's the matter with Kansas" question in a new way, without reference to the culture wars. Of course, to do this and make the subjects sympathetic to liberal educated readers, the NYT chose someplace where circumstances - little diversity or immigration, a big city nearby to drain off the gays and liberals, etc. - make the nasty side of tea party rhetoric irrelevant.

Try this exercise in a small town near New York itself (say, upstate), LA, Atlanta, Dallas, etc.,and it would be much clearer that these anti-tax movements are generally driven by the desire to stop paying for 'other people' who don't deserve benefits because of their origin, race, religious beliefs, behavior, irresponsibility, etc. The guy who feels his own daughter doesn't deserve her school aides (!!) is a rare bird, indeed.

My guess is that the homogeneity of this town means that when these people picture 'others' paying taxes or getting services, they picture people like themselves. The NYT should have been honest enough to point out that that's not the norm, and that most anti-tax activists want to pay less themselves while removing services from the 'other people' they perceive as undeserving.
posted by Wylla at 12:03 AM on February 13, 2012 [21 favorites]

Irrespective of all the bullshit and FUD surrounding the term 'entitlement', it does have a basic practical meaning when applied to government programs. An entitlement program is simply one which the government must provide to those that qualify for it. In other words, if you qualify for Social Security, the government must provide you benefits if you apply---even if they don't have money in the budget to do so. Government programs that are not entitlement programs can turn people away if they run out of money or for other reasons. At least, that's my understanding. I work in child welfare reform, and a big concern around extending foster care to age 21 in some states is that in order to qualify for matching federal funds to do that, they have to guarantee that they will serve every eligible youth which applies, which they don't want to do in this budget climate.

As far as the article's concerned---yes, it's a shame that media has gotten so good at manipulating the perceptions and worldview of such a large percentage of the population, but quite frankly we're allowing them to do it. We are the 99%---as in 99% of the population, as in nobody should be better than grassroots, word-of-mouth outreach as us. The fact that we've allowed our political discourse to be something other people produce and we consume is most of the problem. We need to get past the partisan bullshit and start really thinking about how we can respectfully reach these people, rather than shake our heads and sigh when we see them manipulated by the media machine.
posted by nerdinexile at 12:27 AM on February 13, 2012 [3 favorites]

Having lived in America for over a decade, I could never understand the mental disconnect that otherwise reasonable people would have about social security. It finally dawned on me that there was one underlying belief that almost every American I talked to seemed to have:

If you are poor or sick, you must have done something to deserve it.

As soon as I tried this thought out for size, it clicked into place almost perfectly. There's this underlying assumption that you've failed either morally or spiritually, and that having money or health taken away from you is your punishment from God/karma/$AMERICAN_APPROVED_DEITY.

The concept that you could work hard, be morally upstanding, but still be struck down by a random disease, simply did not fit into many people's world views. I remember watching endless Dateline episodes where you'd see Americans who had done nothing wrong be struck down by a long-term health problem and then be punished by the American health and insurance system. The look of hurt astonishment on their faces as they had the realization that the American system wasn't working for them was heartbreaking.
posted by fishboy at 12:31 AM on February 13, 2012 [21 favorites]

Isn't the term "false consciousness"?
posted by bonefish at 12:36 AM on February 13, 2012 [6 favorites]

If you are poor or sick, you must have done something to deserve it

See the Just-world fallacy / hypothesis.
posted by kithrater at 12:37 AM on February 13, 2012 [1 favorite]

Sadly Twang I don't think that any of the current tax/social insurance paying generation are going to get any of their "entitlements" while the previous generation also collect all the economic rent.
posted by fistynuts at 12:48 AM on February 13, 2012

Higher earners should pay more tax; society as a whole would benefit. If I'm paying more tax next year, it's usually because I'm earning more than I am last year. I'd expect the proportion of the tax to stay the same, but the contributions to increase. Seems only fair - "from each according to his ability, to each according to his need".
posted by arcticseal at 1:37 AM on February 13, 2012 [1 favorite]

Yes, okay, sure, the top income brackets could pay more taxes. Maybe even a lot more.

That would not solve the problem.

The fact we're rapidly having to come to terms with--and that most MeFites abjectly refuse to recognize--is that the benefit levels we've legislated simply cannot be paid for. Under any circumstances. There is simply no tax rate which could possibly make up for the burden that medical care is going to impose. We cannot do this. And "cannot" here does not mean "Should not, because it would be bad," it means "Can not, under any circumstances."

So yes, by all means, let's raise taxes. No way out of our current problem without it. But here's the thing: the Bush Tax Cuts only cost us about $2 trillion over the last decade, and they'll probably cost us another $3 trillion over the next decade. We have a current account deficit of $1.5 trillion annually. That's $15 trillion over ten years. Ending the Bush Tax Cuts, right now, wouldn't even eliminate the deficit, let alone enable us to support the massive increases to spending we're looking at. And raising taxes on top income earners won't solve the problem, as there just isn't enough money there. The top quintile earns about 56% of all income and pays about 69% of all taxes. Could this be more? Yes. Certainly. Ending the Bush Tax Cuts is a great idea. But there's just not enough money there to finance all of the growth in entitlement programs on taxes gathered from the top quintile.

We must, must, cut spending.
posted by valkyryn at 3:07 AM on February 13, 2012 [5 favorites]

I've often thought that we should stamp everything tax dollars pay for with "We, the People" to remind everyone that they didn't make it by themselves, but benefited from the collective power.
Water tap supplying clean water: We, the People
Roads and bridges to get you to work: We, the People
School that takes care of your kids and educates them: We, the People
Businesses that get a benefit for opening in your town: We, the People
Clean energy inventions made by incentives: We, the People
Cell phones which work only because we went to space: We, the People
National parks that preserve natural wonders: We, the People
Courthouses that met justice: We, the People
Police cars that patrol our areas to keep us safe: We, the People
All food that is monitored for safety by the FDA and other similar entities: We, the People

Imagine how many times in every day we'd see the power of our collective dollars. I think it would change how we talk about tax money from "undeserving are taking advantage of me" to "holy cow we are awesome" or at least "huh, I didn't get here all by myself".

I hear people say that if they didn't pay as much in taxes, they could afford to buy lots of things by themselves without assistance. But have they priced out a running mile of road lately? Seems that every time we get hot to spend money, it's for a war. Every time we want a cut, it's for "entitlements". Maybe we'd feel less bad about "entitlements" if we really saw it for what it is -- the price of civilization.

The money spent for the free lunch program is just pennies compared to what we spend on other things. After we cut all programs that help the poor and disadvantaged, we still won't have enough. So what do we cut next? Well, we could stop repairing our aging highway system and roads and bridges, but then we couldn't get to work safely and that diminishes tax receipts. We could shut down public schools, but women you'll be staying at home to take care of the kids and those hard-won equal rights will be pretty much gone. We could shut down the police and courthouses and have a rogue justice. We could stop with the clean water and sewage treatments, and stop monitoring foods and medicines for safety, but then we'll, well, die in large numbers from diseases we haven't had problems with in many years.

Or, rich folk could pony up. If you make more than $400,000 you've got a little spare cash. You really do. Bill Gates, wealthiest American at $59 billion dollars. Billion. He can't spend it all and he's trying. There's a big gap between the average household income and the top 1%. There's an even bigger cap between the top 1% and the top 0.1%. But from the $400,00/year earners to Bill Gates, there's enough money for them to live in absolute luxury and still kick in a little more to make sure that the civilization that they live in, that made them wealthy, that they must have to trickle up even more wealth, continues.
posted by Houstonian at 3:29 AM on February 13, 2012 [16 favorites]

So, valkyryn, I'm curious. How do other countries with medical benefits that so outstrip our own that I honestly do not consider the US to be the same tier of nation do it? If we just absolutely, no way, "can not" can not do it, are they just slouching toward apocalypse? Where's that rhetoric? I just.don't hear it.
posted by adamdschneider at 4:02 AM on February 13, 2012 [4 favorites]

The fact we're rapidly having to come to terms with--and that most MeFites abjectly refuse to recognize--is that the benefit levels we've legislated simply cannot be paid for.

What I've gathered is that the total taxes paid in the US (individually, middle of the road earners. I have no idea about the super wealthy or corporations) is comparable to several European countries. They get nationalized healthcare, we get aircraft carriers. It remains to been seen if either can sustained long term.

But it is worth examining what we get for our tax dollars, and maybe some notions of how the public treasury could be better spent.

This is by no means disagreeing with your assessment, but noticing that cutting spending isn't even close to being equitable, and scant concern is given to who benefits most from these cuts.

Of course there is the issue of how we got into this mess, and that is another subject most here abjectly refuse to recognize as well.
posted by quintessencesluglord at 4:03 AM on February 13, 2012 [1 favorite]

So, valkyryn, I'm curious. How do other countries with medical benefits that so outstrip our own that I honestly do not consider the US to be the same tier of nation do it?

They control costs and pricing. Which will be a non-starter in the US without a total collapse first.
posted by Lentrohamsanin at 4:22 AM on February 13, 2012

valkyryn,

First of all, your link is about federal income tax. If there is one clear lesson from the release of Romney's tax records, it's that federal income tax rates do not capture many of the earnings of the tippy-top wealthy.

Second, the argument that we simply must cut services rests on the assumption that we are efficiently spending money elsewhere; we clearly are not. When we talk about cutting services, we seem to fall into the trap of assuming that the services which must be cut are those that benefit the most vulnerable people in society; what we should consider is whether we can reallocate spending and whether current spending reflects our priorities.

Third, our national discussion about debt is almost entirely blind to the structural/governance decisions that we have been making for the past 22 years. When Reagan decided to implement the neoliberal dream, he did so through a series of very conscious, deliberate, political measures. Conservatives (including, often, Democrats) have built a system that redistributes wealth from the bottom to the top, that punishes small-scale farmers and businesspeople, that renders government programs ineffective through underfunding. In light of this, our discussion should not be some simplified debate between whether to "tax/spend more" or tax/spend less" - it should be about how our government works and whether we are still on board (or were ever really on board) with supply-side economics.
posted by blueberry sushi at 4:35 AM on February 13, 2012 [25 favorites]

So, valkyryn, I'm curious. How do other countries with medical benefits that so outstrip our own that I honestly do not consider the US to be the same tier of nation do it?

They don't. The US is alone in the world in its decision to spend an unlimited amount of money keeping old people alive. Other countries have far better benefits than the US does in terms of family medicine and routine medical care. They can do this because family medicine and routine medical care are cheap. The US isn't a great place to get an ear infection, the flu, or pneumonia.

But it's a great place to get cancer. US cancer survival rates are the best in the world, because cancer is largely a disease of the old, and the old have Uncle Sam stepping in with a blank check. Further, cancer aside, more than half of all medical spending is on the last six months of life. These are people who are going to die, and soon, but whom we keep on ventilators and feeding tubes for another few miserable weeks or months. Other countries don't do this, and we can't keep on doing it.

Remember, the two fastest-growing segments of the federal budget are Medicare, which is almost exclusively for old people, and Medicaid, the majority of which goes to nursing homes.

So yeah, that's how other countries do it. They spend more money than we do on routine medicine, but that's only a fraction of our total health care spending.
posted by valkyryn at 4:52 AM on February 13, 2012 [8 favorites]

have built a system that redistributes wealth from the bottom to the top

You're thinking about this exclusively in terms of financial class, ignoring the fact that it's also a massive transfer from the young to the old. This also lines up pretty well with "bottom" and "top," because young people never has many resources as old people, but phrasing it exclusively in terms of "rich" and "poor" misses the whole picture. We're robbing our children to pay our grandparents.
posted by valkyryn at 4:53 AM on February 13, 2012 [4 favorites]

> In Canada someone like this would be retired.

Our Prime Minister is working on that.
posted by The Card Cheat at 4:59 AM on February 13, 2012 [1 favorite]

valkyryn: not trying to pile on here, but I think you've been lied to about exactly how expensive the major government entitlement programs (Social Security, Medicare, and Medicaid) are. In 2010, the federal government spent $1.42 trillion on those three programs. They also took in $812 billion in payroll taxes for Social Security and Medicare (above and beyond regular income tax). The net cost is only $608 billion. Corporations spent $191 billion in income tax on profits of $1.8 trillion that year. The top 1% of income earners in 2009 (IRS doesn't have 2010 data up for some reason) earned $1.32 trillion and paid $318 billion. All of this is the income reported to the IRS---in other words, this is after tax dodges and offshore accounts. I think the money could easily be found, if the political will was there. In any event, if the federal government is facing imminent fiscal collapse, it's not because of Social Security, Medicare, or Medicaid. (Sources: Office of Management and Budget, IRS [link is to the Tax Foundation because they HTML-ized the spreadsheets the IRS puts out, original source linked there])
posted by nerdinexile at 5:05 AM on February 13, 2012 [8 favorites]

170 years ago, Charles Dickens wrote a story wherein a rich man asked "Are there no prisons?" when confronted with the plight of the poor. These days you could write the same story with a poor man asking the question.
posted by The Card Cheat at 5:05 AM on February 13, 2012 [4 favorites]

The top quintile earns about 56% of all income and pays about 69% of all taxes.

It's not that this is untrue, it's that it's looking at tax revenue from a pointless vantage point. It reminds me of the Bellhop and the Missing Dollar riddle: it's a matter of deliberately making the situation complex when the answer is far simpler. The counter to that is that, however much the rich pay in taxes, they have the lion's share of the assets. And the capital gains taxes are at rock bottom; just ask Mitt Romney. And loopholes and lobbying render any tax law moot anyway, for those at the top. Taxing the 1% will absolutely turn things for the better for the rest of us--I don't buy your "move along, nothing to see here" argument.

These are people who are going to die, and soon, but whom we keep on ventilators and feeding tubes for another few miserable weeks or months. Other countries don't do this, and we can't keep on doing it.

We can't talk about this. That's become a third rail issue because liars like Sarah Palin and Newt Gingrich came up with "death panels" and now that subject is taboo.

So yeah, that's how other countries do it. They spend more money than we do on routine medicine, but that's only a fraction of our total health care spending.

So they prevent the problems by mandating certain health conditions? You can eat this, you can't eat that, this fatty food has high tax, etc.? An ounce of prevention is a pound of cure, so what is it that France and Sweden and England are doing that we are not?
posted by zardoz at 5:15 AM on February 13, 2012 [2 favorites]

When we meet our first representative of the rich, they're fast and loose with hundreds of years, and the truly rich are sitting on millions of lifetimes.

Those are people who should be paying more, and they've gamed the system to make sure they pay less than everyone else.

I don't think you want to go this route. I don't think you are acquainted with the hours most of the 'rich' put in to make their money. Only a very disciplined, lucky person gains time.
posted by michaelh at 5:19 AM on February 13, 2012

bullshit lying propagandistic articles like this

Did we read a different article? The one I have open on my table is a fascinating account of both cognitive dissonance of the "get the government out of my Medicare" variety, and people agonizing over the difference between their ideals and their actual lives.

The article makes the point that the middle class is more and more reliant on "entitlements," simply to maintain their quality of life. This is more than just the young to old transfers that have been a feature of that system for decades; this is using these programs to prop up a class that previously not had as much need for public assistance.

Of course, this is parallel to (and not at all disconnected from) the massive removal of public subsidies for things that middle class families relied on, like access to cheap and high quality public higher education.
posted by Forktine at 5:30 AM on February 13, 2012 [1 favorite]

We must, must, cut spending.

You know, I don't necessarily disagree with this, broadly speaking. I just wonder where all the conservatives who so loudly want to cut spending NOW were when the country decided to spend billions and billions of dollars on a war of choice in Iraq. Were spending cuts just less important back then, or were they really stupid enough to believe they could invade and pacify a country for nothing?
posted by octobersurprise at 6:03 AM on February 13, 2012 [4 favorites]

You know, I don't necessarily disagree with this, broadly speaking. I just wonder where all the conservatives who so loudly want to cut spending NOW were when the country decided to spend billions and billions of dollars on a war of choice in Iraq. Were spending cuts just less important back then, or were they really stupid enough to believe they could invade and pacify a country for nothing?

There were three main points to the war, none of which had anything to do with foreign policy.

(Wars almost never have anything to do with foreign policy.)

1. Drive support for an unpopular sitting president

2. Enormous deficit driven boost to the economy, see #1

3. By inflating the deficit, eventually will force massive cuts in Govt spending on discretionary programs without it looking like the GOP are the ones forcing it.
posted by unSane at 6:11 AM on February 13, 2012 [1 favorite]

I don't think you are acquainted with the hours most of the 'rich' put in to make their money.

Ha, I certainly am acquainted with those hours and what are you talking about?
posted by unSane at 6:13 AM on February 13, 2012 [1 favorite]

We must, must, cut spending.

We must, must grow the fuck up and distinguish between cost and value.

"A cynic is a man who knows the cost of everything and the value of nothing."
-Oscar Wilde
posted by Benny Andajetz at 6:15 AM on February 13, 2012 [12 favorites]

If you are poor or sick, you must have done something to deserve it.

There is this, but there is also the belief that 'welfare dependency' is a lifestyle choice. This attitude is pretty dominant in the UK and actively encouraged by the government, who describe it as a 'narcotic'.
posted by Summer at 6:25 AM on February 13, 2012

I just wonder where all the conservatives who so loudly want to cut spending NOW were when the country decided to spend billions and billions of dollars on a war of choice in Iraq.

There were a couple members of the 'conservatives' who were not in favour of such military spending.

But the past doesn't change the present situation where calls for "cut spending now" are not followed with "including the military". Its not like there is a grand revelation to the mass of "conservatives" over spending priorities.
posted by rough ashlar at 6:29 AM on February 13, 2012

I don't think you are acquainted with the hours most of the 'rich' put in to make their money.

Speaking from personal experience, yes I do.

Just as an a side, the only thing Jamie Johnson, Ivanka Trump, Georgina Bloomberg, Si Newhouse IV, Cody Franchetti, Luke Weil, etc did in order to obtain more money then millions of Americans will ever see in their lives, was be born.
posted by The Whelk at 6:34 AM on February 13, 2012 [7 favorites]

Most people really, really, really don't understand what the fuck "rich" really is. The CEO of Sprint makes, on the low estimate, $25,000 per day.

PER DAY.
posted by odinsdream at 6:39 AM on February 13, 2012 [8 favorites]

Speaking from personal experience, yes I do.

Just as an a side, the only thing Jamie Johnson, Ivanka Trump, Georgina Bloomberg, Si Newhouse IV, Cody Franchetti, Luke Weil, etc did in order to obtain more money then millions of Americans will ever see in their lives, was be born.

I didn't mean you don't work hard. I didn't think you knew what it's like to be a doctor or an entrepreneur from age 20-40 or more importantly, how common it is. Those people you mentioned above are rare. Any law to take their money on account of their leisure shouldn't be so broad as to also take from people who broke their backs to get to the same place.
posted by michaelh at 6:39 AM on February 13, 2012 [1 favorite]

I would like to think that for every grandma that isn't ever going to say: "Give it to me, and let my grandchildren suffer" there is a grandchild that isn't ever going to say: "Give it to me, and let my grandma suffer".

But the fact is there is quite enough wealth on the planet that nobody has to suffer.
posted by philipy at 6:41 AM on February 13, 2012 [2 favorites]

There is no reason to tax income from capital less than income from any other source. Period.
posted by RandlePatrickMcMurphy at 6:45 AM on February 13, 2012 [3 favorites]

I didn't mean you don't work hard. I didn't think you knew what it's like to be a doctor or an entrepreneur from age 20-40 or more importantly, how common it is. Those people you mentioned above are rare. Any law to take their money on account of their leisure shouldn't be so broad as to also take from people who broke their backs to get to the same place.

Well I am an entrepreneur but never mind, I think we basically agree, when we talk about higher taxes and forcing people to pay a fair share and closing loopholes, we're talking about these people, the people sitting on all the capital, not doctors and lawyers and most business owners. Like I said before, you can make hundreds of thousands of dollars a year and still not be in the class of people who can buy and sell lawmakers and warp the world to make sure they never have to pay a dime more then they have to.
posted by The Whelk at 6:48 AM on February 13, 2012 [6 favorites]

There is no reason to tax income from capital less than income from any other source. Period.

Bu..bu...buutt JOB CREATORS!!!1
posted by odinsdream at 6:54 AM on February 13, 2012 [1 favorite]

The fact we're rapidly having to come to terms with--and that most MeFites abjectly refuse to recognize--is that the benefit levels we've legislated simply cannot be paid for. Under any circumstances. There is simply no tax rate which could possibly make up for the burden that medical care is going to impose. We cannot do this. And "cannot" here does not mean "Should not, because it would be bad," it means "Can not, under any circumstances."

A single payer system with authority to exercise negotiating leverage on drug costs and set rates for procedures solves this overnight. It's not only that America spends more on end of life care, its that we've chosen to make insurance companies, doctors and hosptial networks rich while also spending more on end of life care.

Sure the AMA will wail, but really where are they going to pack up and go Galt to? Europe?
posted by T.D. Strange at 7:06 AM on February 13, 2012 [9 favorites]

Most people really, really, really don't understand what the fuck "rich" really is. The CEO of Sprint makes, on the low estimate, $25,000 per day.

PER DAY.

Mitt Romney makes $57,000 a day ( the median YEARLY family income), and he's "unemployed".
posted by Benny Andajetz at 7:11 AM on February 13, 2012 [8 favorites]

Did we read a different article? The one I have open on my table is a fascinating account of both cognitive dissonance of the "get the government out of my Medicare" variety, and people agonizing over the difference between their ideals and their actual lives.

OK, one example out of the dozens that could be made. From the actual text of the post, so you know I'm not digging here. "We’re not going to say, 'Give it to me and let my grandchildren suffer.' I think they underestimate seniors when they think that way." This represents a 71 year old woman *taking personal responsibility* for a *systemic issue* that she knows *nothing about* and over which she has *no control*. Someone told her that poor people like her are responsible for ruining this country's finances; this kind of makes sense to her because after all she's had to scrimp and as far as she can guess the government's finances are probably just like hers; she thinks that if poor people like her get less, that it will fix those (imaginary) problems; so she believes as a consequence that her own personal deprivation is a *good thing*, a piece of *noble self-sacrifice*. Totally and completely brainwashed. And she just happens to be prominently featured in an article in the most prestigious newspaper in the U.S..
posted by facetious at 7:14 AM on February 13, 2012 [8 favorites]

There is no reason to tax income from capital less than income from any other source. Period.

You realize this is definitely not the opinion of people who actually study tax theory professionally? Hell, Diamond and Baez (PDF) (and Baez is positively obsessed with reducing income inequality) don't even go that far--their paper is notable because it suggests that capital be taxed at all. And even that is based largely on manipulations like private equity managers treating what should be labor income as capital gains via carried interest. Lesson 7 of Mankiw, Weinzierl and Yagan (PDF) captures the mainstream view--and how current policy has capital taxes too high according to most tax theorists--quite well. Maybe they'll turn out to be wrong here, but they're not stupid.
posted by dsfan at 7:20 AM on February 13, 2012 [3 favorites]

You're not asking people in general to pay higher taxes, you're asking the big-time earners to pay higher taxes, which they can easily afford.

If the delusion of the right is that taxes are too high and need to stay low, the delusion of the left is that taxes on the rich will be sufficient to deal with the deficit. They won't. Everyone - including the middle class - needs to pay higher taxes. Americans pay some of the lowest taxes of any developed nation. Anericans - of all incomes - seem constitutionally averse to paying for the services they wish to consume. Americans want to be the preeminent military power in the world, have extensive infrastructure, and provide medical care for seniors.

There's no reason America can't do all this, but it can't be done if people aren't prepared to pay for it - and they aren't. They vote for politicians who offer tax cuts, while idolizing abstract "sacrifice" made by someone else - usually soldiers, who are someone else's children. The sacrifice demanded in their own lives - that they forgo a flat-screen television in order to pay for the public goods they partake in - is firmly rejected at the ballot box. It doesn't help that so few Americans travel outside the United States - or that so many seem to have no interest in doing so - so that Americans by and large don't understand that they are exception to successful societies who have found a better balance between encouraging job creation and providing social welfare for their people.
posted by Dasein at 7:20 AM on February 13, 2012 [6 favorites]

Mitt Romney makes $57,000 a day ( the median YEARLY family income), and he's "unemployed".

I should have mentioned that I intentionally chose Sprint because it's a pretty middle-of-the-road company. There are of course people that are severely more wealthy, as you note.
posted by odinsdream at 7:30 AM on February 13, 2012

Americans pay some of the lowest taxes of any developed nation.

When you factor in hidden taxes and an increasing panoply of fees, I think that that is highly debatable.

We, socially, get very little in return for our taxes by comparison.
posted by Benny Andajetz at 7:40 AM on February 13, 2012 [4 favorites]

I am more than willing to pay as much in taxes as other countries, but that's because I want things like subsidized daycare and healthcare for everyone. And because everyone should get paid time off if they qualify for FMLA.

Honestly. I'd like to see HUGE cuts to the defense budget and a ton of that money funneled back into social programs. Our military does not need to be even nearly as huge as it is. There is money in the government. It just doesn't get back to the every day people.....
posted by zizzle at 7:48 AM on February 13, 2012 [2 favorites]

Americans pay some of the lowest taxes of any developed nation.

When you factor in hidden taxes and an increasing panoply of fees, I think that that is highly debatable.

We, socially, get very little in return for our taxes by comparison.

"Americans pay the lowest taxes of any developed nation" and "Americans get too little for the taxes we do pay" are in no way incompatible statements.
posted by Tomorrowful at 7:49 AM on February 13, 2012

How can anyone complain when so many are spending extravagant sums on youth sports and tattoos?

That goes double if they have a Kindle Fire.
posted by one more dead town's last parade at 7:51 AM on February 13, 2012 [2 favorites]

US cancer survival rates are the best in the world, because cancer is largely a disease of the old, and the old have Uncle Sam stepping in with a blank check.

You have to be careful with that argument, which is often used to support the view that the US healthcare system is somehow "worth it." A major reason our cancer survival rates are so high is that we overdiagnose cancer (as we do many diseases). The result is that a lot of people get a diagnosis of cancer who, had the diagnosis never been made, would not have died from the disease (e.g. it was a benign or slow-growing tumor or another illness would likely have killed them first). So these people "survive" cancer, but they would likely have survived anyway. This kind of problem is at the heart of the arguments surrounding things like screening for prostate cancer.
posted by jedicus at 7:58 AM on February 13, 2012 [1 favorite]

But here's the thing: the Bush Tax Cuts only cost us about $2 trillion over the last decade, and they'll probably cost us another $3 trillion over the next decade. We have a current account deficit of $1.5 trillion annually.

If Congress doesn't intervene with tax cuts, the budget deficit goes away, all on its lonesome.
posted by Hypnotic Chick at 8:07 AM on February 13, 2012

This country is completely messed up by mind-warping propaganda. This weekend, I got drawn into a chat about hard times with an acquaintance. When I mentioned the privileged 1%, he responded, "yeah, fuck those unions!"

Unfuckingbelievable.
posted by notreally at 8:34 AM on February 13, 2012

When I mentioned the privileged 1%, he responded, "yeah, fuck those unions!"

Doesn't really surprise me. I suspect that most blue-collar people never really run into anyone from the top 1%, or if they do it's in a pretty abstract or impersonal way. Knowing that Bill Gates is really rich doesn't burn most people in the same way that knowing that their doofus neighbor or that chump they went to highschool with has financial security in the form of a cushy union job when they don't, does. It's a lot more painful to see someone climbing out of your social class than to be abstractly aware that there are classes above it.

The result is that "class warfare" in the US is mostly of the circular-firing-squad variety: it's a lot of people doing whatever they can to ensure that nobody they know gets too much of a leg up on them.

At the end of the day most people -- regardless of how wealthy they are -- don't measure their success on an absolute scale, but rather on a relative one. If you don't think there's a good chance that you could land one of those nice union jobs with the job security and the benefits, then you damn well don't want that asshole next door getting one. After all, Bill Gates may have a private jet, but you don't have to stare it... unlike the neighbor's new F-150.

I don't really see that changing; it seems too much like basic human nature to me. It means that solutions to address inequality need to be basically across-the-board, and can't be piecemeal or incrementalist or otherwise help some workers while ignoring others for the time being (which most union-expansion plans seem to do) -- the excluded workers will tear it apart.
posted by Kadin2048 at 8:58 AM on February 13, 2012 [1 favorite]

You realize this is definitely not the opinion of people who actually study tax theory professionally?

Yes, and in Canada in the 1960s the Carter Commission on Taxation argued that "a buck is a buck" and ought to be taxed accordingly. That commission looked at the opinions of those who study tax theory professionally, as well as professionals in the tax avoidance industry. The point is, the answer to this question depends on who you ask and when. You might argue that economics has progressed--perhaps economists make better predictions than they did 50 years ago. But that isn't at all clear to me. Economists generally make terrible predictions. Furthermore, economists generally don't have a good grasp of how tax law operates in the real world, and that's largely because income tax codes are extremely complex, easily the most difficult pieces of legislation to understand, and because of this also the easiest to exploit. You might say that we should simplify our tax codes. But to do that, to really do it, we would have to erase the distinction between income and capital gains.
posted by smorange at 9:00 AM on February 13, 2012 [3 favorites]

It's a big ol' kettle of crabs, set on the stove and the element turned up high. Every time a crab manages to start pulling itself out of the water, a fellow crab grabs him and pulls him under.

The 0.1% are, of course, not in the kettle. They're too special to boil.
posted by five fresh fish at 9:05 AM on February 13, 2012 [3 favorites]

You realize this is definitely not the opinion of people who actually study tax theory professionally?

I wish I had time to pull up references for the argument that equitable treatment of income leads to stronger and healthier economic growth. Not to mention the political economy common sense that the people with political power are the ones who get the preferential tax treatment - including on capital versus ordinary income - so the fewer opportunities for preferential treatment the better for the economy and health of the political system overall. (N.b: treating all income equally and eliminating deductions is not incompatible with progressive taxation.)

Just glancing at the first paper, it seems like the section on capital gains is mostly an argument against zero taxation on capital, and starts with the disclaimer that: "the literature on saving behavior sees a wide variety of basic behaviors, more widely
varying elasticity estimates, and a complexity that comes from the importance of the
future for decisions affected by capital income taxation. Thus, we limit our discussion to
a single qualitative recommendation: capital income should be subject to significant
taxation. This conclusion is important in light of repeated calls for not taxing capital
income."

Which I would translate to mean: "we really don't know what impact capital taxation has, so all we can say is that there should be some tax on capital."
posted by RandlePatrickMcMurphy at 9:30 AM on February 13, 2012 [2 favorites]

So, valkyryn, I'm curious. How do other countries with medical benefits that so outstrip our own that I honestly do not consider the US to be the same tier of nation do it? If we just absolutely, no way, "can not" can not do it, are they just slouching toward apocalypse? Where's that rhetoric? I just.don't hear it.

Well, in part, they do it by not spending 700 billion dollars a year on the military.
posted by Bulgaroktonos at 9:30 AM on February 13, 2012 [1 favorite]

Between this and the California library thread I just want to go home, crawl in to bed and weep for the rest of the day.
posted by Aizkolari at 9:31 AM on February 13, 2012 [1 favorite]

"Americans pay the lowest taxes of any developed nation" and "Americans get too little for the taxes we do pay" are in no way incompatible statements.

I'm saying that the statement "Americans pay the lowest taxes of any developed nation" is debatable.

Using health care as an example: By the time you have paid your premium, paid your co-pays, and met your deductibles, I would wager advanced European healthcare systems cost little, if any, more.

Also, in Europe, most of your taxes are income tax and VAT. Granted, they are stiff and they are visible. We pay FICA taxes ON TOP of the health expenses above, etc., etc., and still don't receive the same services.
posted by Benny Andajetz at 9:36 AM on February 13, 2012 [1 favorite]

For what it's worth, the Federal budget deficit is expected to be about half of what it is now by 2014, so $15T over the next 10 years isn't the current projection.
posted by ob1quixote at 9:38 AM on February 13, 2012

Using health care as an example: By the time you have paid your premium, paid your co-pays, and met your deductibles, I would wager advanced European healthcare systems cost little, if any, more.

Yeah, but that's irrelevant to the point I was making - which is that Americans pay less tax, not less for healthcare. Healthcare is very expensive in America. It's still a low-tax country, so public services can't be provided by the government at anywhere near the rates of most OECD countries.
posted by Dasein at 9:40 AM on February 13, 2012

It's a big ol' kettle of crabs, set on the stove and the element turned up high. Every time a crab manages to start pulling itself out of the water, a fellow crab grabs him and pulls him under.

The 0.1% are, of course, not in the kettle. They're too special to boil.

Nope, they're the ones standing by the kettle, laughing at the funny crabs while they wait to start eating.
posted by El Sabor Asiatico at 9:42 AM on February 13, 2012 [1 favorite]

I know this isn't the most insightful comment, and apologies in advance for the aside, but did the New York Times really publish an article where they spelled friggin' Chicago wrong?

Dozens of benefits programs provided an average of $6,583 for each man, woman and child in the county in 2009, a 69 percent increase from 2000 after adjusting for inflation. In Chisago, and across the nation, the government now provides almost $1 in benefits for every $4 in other income.

posted by Critical_Beatdown at 9:42 AM on February 13, 2012

Bu..bu...buutt JOB CREATORS!!!1

Exactly. Shit, I'm a job creator! Every single dollar my family earns goes right back out the door, purchasing goods and services. I create jobs in the education industry, the grocery industry, the retail industry. I create jobs for skilled labor every time I take my car to the mechanic, or call a plumber to unstop my drain, or take my son to his occupational therapy. None of my money sits in investments; it all flows out into my community, creating jobs.
posted by KathrynT at 9:44 AM on February 13, 2012 [11 favorites]

smorange and RandlePatrickMcMurphy-

I agree that it's a difficult question, and that like with many difficult economic questions (the value of the economic multiplier, the degree to which minimum wage changes affect employment, etc.), you'll get a variety of answers. But there's very little question to me that the majority of tax economists view capital gains taxes with skepticism, and that should definitely give us pause when saying things like "There is no reason to tax income from capital less than income from any other source." Put differently, if you put together a proposal that said "Reduce capital gains taxes and offset it equally with a progressive consumption tax on people who consume over, say, $250,000," I am fairly confident both liberal and conservative economists would by and large say this is a superior policy.
posted by dsfan at 9:45 AM on February 13, 2012

did the New York Times really publish an article where they spelled friggin' Chicago wrong?

The article is about people in Chisago County, Minneapolis. Read the paragraph above the one you quoted.
posted by peeedro at 9:55 AM on February 13, 2012 [1 favorite]

I know this isn't the most insightful comment, and apologies in advance for the aside, but did the New York Times really publish an article where they spelled friggin' Chicago wrong?

Chisago, MN. That's why it's constantly described as small town, rural, leaning toward Republican. Exactly none of those things apply to Chicago, you may have noticed as you read the whole article before commenting.
posted by librarylis at 9:56 AM on February 13, 2012

duh, Minneapolis is not a state but a state of mind.
posted by peeedro at 9:57 AM on February 13, 2012

Ahh. My bad.
posted by Critical_Beatdown at 10:01 AM on February 13, 2012

Put differently, if you put together a proposal that said "Reduce capital gains taxes and offset it equally with a progressive consumption tax on people who consume over, say, $250,000," I am fairly confident both liberal and conservative economists would by and large say this is a superior policy.

Yes, I think that's probably an accurate summary of the field, and even sounds reasonable to me. I don't think that these theoretical ideas are all that complex, really. I'm just not sure that the theory is all that operable in the real world because of administrative problems.
posted by smorange at 10:10 AM on February 13, 2012

Yeah, but that's irrelevant to the point I was making - which is that Americans pay less tax, not less for healthcare. Healthcare is very expensive in America. It's still a low-tax country, so public services can't be provided by the government at anywhere near the rates of most OECD countries.

And I'm saying you are making a blanket statement that cannot be accepted at face value.

Federal withholding (both employee and employer), State withholding (same), FICA (same plus a cap for the wealthy), Medicare tax (same), sales tax, property tax, gas tax, phone tax,etc., etc.

Add everything up before you call them low.
posted by Benny Andajetz at 10:15 AM on February 13, 2012

A single payer system with authority to exercise negotiating leverage on drug costs and set rates for procedures solves this overnight.

No, it doesn't. The reason single-payer systems overseas isn't because they tend to get better prices on supplies, it's because they simply refuse to provide lots of procedures and treatments that Americans want. Particularly where imaging studies, cancer treatments, chronic pain management, and end-of-life care are concerned. Europe just does less of those sorts of things than we do. The real squeeze isn't on the supply side, but the demand side.

If you accept that as an acceptable value of "solved," then yes, single-payer would solve a lot of our current problems. But it does so not by maintaining our current level of benefits at a more efficient price, but by doing what I'm arguing for here, i.e. drastically cutting spending on lots of very expensive but not terribly effective treatments and procedures.

Which is why I'm not actually opposed to a single-payer system, as it'd be a much, much more effective way of rationing care. Which is something else I favor, to be honest. We're already starting to do it under other names.
posted by valkyryn at 10:17 AM on February 13, 2012

In 2010, the federal government spent $1.42 trillion on those three programs. They also took in $812 billion in payroll taxes for Social Security and Medicare (above and beyond regular income tax). The net cost is only $608 billion.

You're playing a very sneaky game with those numbers, and I'm not buying it.

First of all, you're lumping all social programs into a single account, then saying that it's mostly paid for. This is a bad way of doing it. The vast majority of payroll taxes are from Social Security, and if you'll notice, both I and the article took the position that Social Security, while not in the best of financial health, is more-or-less okay for at the least the intermediate term. This is because Social Security is mostly paid for by payroll taxes. Employees pay 6.2% (now 4.2%, and we'll see if that "temporary" tax is temporary) of their income up to $106,800, and employers contribute another 6.2%. But Medicare is only 2.9%, split evenly between the employer and employee. So Social Security gets three quarters of all payroll taxes, and Medicare gets one quarter (2.9% of wages compared to 12.4%), despite the two programs currently being about the same size. But while the total Social Security has grown, slowly but steadily, for the past few decades, Medicare has doubled about every four years since its inception, and this growth is accelerating. So the "net cost"--which is a silly way of putting it, because payroll taxes are taxes that could be spent elsewhere--is divided very unevenly between Social Security and Medicare, and the focus of the article was Medicare. You're borrowing financial security from one program and applying it to another.

Second, as I've said, if we pulled in all of the possible income from rich people and corporations, we could maybe, possibly, fix our current budget deficit. Cutting defense spending, which I also favor, would make that easier. But that still won't pay for Medicare to keep growing the way it's growing.

Third, Medicaid is especially problematic, because most of that spending is actually by the states, and thus doesn't show up in the federal budget at all. It's a gigantic unfunded mandate. We're already seeing providers refusing to accept Medicaid patients or capping the number of such patients they will serve because the reimbursement is so horribly bad.
posted by valkyryn at 10:33 AM on February 13, 2012

Add everything up before you call them low.

You list a number of taxes that are lower in the U.S. than what you find in other countries. The U.S. has no federal sales tax. Its gas tax is laughably low, yet Americans still complain about how much gas costs and resist any talk of higher gas prices. Americans are not heavily taxed by the standards of comparable countries. If you'd like to present some actual evidence to the contrary, that might be interesting.
posted by Dasein at 10:58 AM on February 13, 2012

Put differently, if you put together a proposal that said "Reduce capital gains taxes and offset it equally with a progressive consumption tax on people who consume over, say, $250,000," I am fairly confident both liberal and conservative economists would by and large say this is a superior policy.


I don't know. In practice that would only encourage what you're seeing now, which is very rich people shifting earnings from income to capital gains.

Consumption taxes are a whole different kettle of fish. They're usually regressive, since you can tax a product, not the person who is buying it. How would you make a consumption tax progressive? Would people have to state the percentage of their income that was not saved that year and then pay a tax on that? Wouldn't that have the perverse effect of reducing incentives to savings?
posted by RandlePatrickMcMurphy at 11:00 AM on February 13, 2012

So they prevent the problems by mandating certain health conditions?

No. They simply don't treat, or treat less aggressively, conditions that US patients and physicians will go all out in fighting. The French and Scandinavians die just often per capita as Americans, at about the same age, and of largely the same causes--heart disease and cancer, with pneumonia and strokes competing for distant third--they just don't spend a quarter-million dollars a pop trying to prolong the inevitable.
posted by valkyryn at 11:00 AM on February 13, 2012

"Second, as I've said, if we pulled in all of the possible income from rich people and corporations, we could maybe, possibly, fix our current budget deficit."

For this year.

Next year? That asset pool wouldn't be available, and the persistent overspending would remain unchanged, so the deficit would continue to grow.

http://www.youtube.com/watch?v=661pi6K-8WQ

Like it or not, something's going to snap. Look at Greece - that's the future. All the rioting in the world won't do one bit of good if the money isn't there. Yes, burn shit down because there's no money and your credit rating stinks - that'll show the greedy bastards in the rest of the EU and get the money flowing again!

I give the EU about another two years before fiscal issues shatter it. I give us about 10, if we don't get spending under control, and realize that "must have" items in the budget are quite different than "nice to have" - and that our financial problems occured when too many people defined "nice to have" as "must have", and figured they could just put it on the credit card for the future to pay.

Well, here it is in the future, and the bill's come due. But the politicians think if they can just make it through one more election cycle and then retire, they'll have handed the problem off to someone else and it won't be their responsibility any more - just like your roomate who drank all your beer and puked on the floor right before he moved out.

Solutions? No easy ones - we're WAY past the 'easy' fixes, that should have been started a couple of decades back. One thing for sure - the current level of spending WILL have to be slashed, and not in the "Oh, we're only taking an 8% increase in next year's budget instead of 10%" way the government's used to doing things. 10% solid cut across the board this year, and for the next 5 might work - it'll hurt, but it'd work.

But I don't think our politicians have the guts for it.
posted by JB71 at 11:02 AM on February 13, 2012

How would you make a consumption tax progressive? Would people have to state the percentage of their income that was not saved that year and then pay a tax on that? Wouldn't that have the perverse effect of reducing incentives to savings?

No, it increases the incentives to savings, because you aren't taxed on it. Think about how mortgage interest is tax-deductible, this is an incentive to spend more on mortgages, right? Same basic principle, not being taxed on savings is an incentive to save. Robert Frank is probably the most prominent proponent, here is a decent summary. In principle it's not any harder than making an income tax as progressive or regressive as desired--you just have the issue of identifying savings vs. consumption, which may have problems at the margin, but isn't at all an unsolvable problem.
posted by dsfan at 11:09 AM on February 13, 2012

So they prevent the problems by mandating certain health conditions?

No. They simply don't treat, or treat less aggressively, conditions that US patients and physicians will go all out in fighting. The French and Scandinavians die just often per capita as Americans, at about the same age, and of largely the same causes--heart disease and cancer, with pneumonia and strokes competing for distant third--they just don't spend a quarter-million dollars a pop trying to prolong the inevitable.
posted by valkyryn at 2:00 PM on February 13 [+] [!]

Life expectancy is lower in the United states than it is in most OECD countries. (if you look at the 2011 OECD Health Data, the United States comes 26 out of 34 on a ranking of life-expectancy from highest to lowest.)

But that may be because of income inequality, rather than healthcare.

Infant mortality is also higher in the US.
posted by jb at 11:15 AM on February 13, 2012

People with capital gains income over $100,000 per year do not need an incentive to save.

In fact, they need a serious incentive to spend, because the economy is in a serious demand crisis.
posted by jb at 11:17 AM on February 13, 2012

The French and Scandinavians die just often per capita as Americans

Let me guess—one per capita?
posted by one more dead town's last parade at 11:53 AM on February 13, 2012 [3 favorites]

Valkyryn: your entire post is a crock.

1) It is factually incorrect. You assert that "We have a current account deficit of $1.5 trillion annually." The CIA World Fact Book estimate is just under $600B (2011 numbers). If you have a more up to date number, please cite it.

2) It makes an irrelevant comparison. Conceptually the current account is "the sum of the balance of trade (exports minus imports of goods and services), net factor income... and net transfer payments...." (Wikipedia). That is, for the entire USA, including both public and private sectors. The comparison you have made is akin to observing that a given town raises a certain amount in tax revenue and spends it, but the private citizens of the town have maxed out their credit cards beyond their ability to pay, and therefore the town budget (e.g. cops and teachers) must be cut. The two are conceptually unrelated. To retreat from the metaphor, the direct way to "fix" a current account deficit (assuming it needs to be fixed) is to increase exports, NOT cut the government budget. Another indirect way is to devalue the currency.

3) Returning focus to actual budget deficits, as the CBO's Budget and Economic Outlook (PDF) shows, under the current law "Baseline Scenario," the medium-term budget deficit, from about 2015 out to 2022, would be around 2% of GDP, which is lower than the historical norm from the 70s until present (excepting the Clinton surplus, of course). Specifically, compare slides 9-12; it is abundantly clear that the vast majority of the "alternative scenario" deficits would in fact be mitigated by a return to pre-Bush tax policy - which would remove not only the light blue bars, but also most of the green bars, since those come from servicing the huge debt (caused by the tax cuts). Since this includes, among other things, letting the AMT extend to the upper middle class, I am not saying it is realistic politically. But as an accounting matter it is entirely feasible.

4) Finally, the proper way to assess debt and deficit is in percentage of GDP, not raw dollars, for several reasons. Tax revenue historically varies directly with GDP - if you have more growth you can pay for more government programs (quite reasonably). Consequently, any amount of trillions in either debt of deficit is mostly a scare number divorced from context. And as a secondary effect, the spending cuts that you are implicitly calling for would have the near-certain effect of reducing GDP - i.e., reversing economic growth. Which makes programs harder to pay for. Which requires further cuts. Etc. This is a vicious circle that is not at all required by the fiscal situation, but rather which is aggravated by those with a political posture against government programs.
posted by rkent at 12:32 PM on February 13, 2012 [7 favorites]

How would you make a consumption tax progressive?

Tax credits for low-income people.
posted by Dasein at 12:41 PM on February 13, 2012

valkyryn, I think you're glossing over another big factor in medical spending in the US:

Americans spend twice as much as residents of other developed countries on healthcare, but get lower quality, less efficiency and have the least equitable system, according to a report released on Wednesday.(Sorry, 2010 article, but anyway.)

Yes, excessive spending on end-of-life care is a factor, but having a system where much of your healthcare spending ends up as excessive (and poorly taxed) insurance company profits is a big part of the reason why the system has sustainability problems, and why US medical care compared to other first world countries is poor.
posted by sneebler at 12:45 PM on February 13, 2012 [8 favorites]

How would you make a consumption tax progressive?

Tax credits for low-income people.

That's exactly how you do it. I read recently (I'm searching for the link and will post if if I find it) that the average line worker in Sweden - to most Americans, the ultimate socialist welfare nanny-state - pays no federal income tax at all. Granted, Sweden has high provincial taxes, also, but...
posted by Benny Andajetz at 12:54 PM on February 13, 2012

U.S. Expat in Canada here.

Canada doesn't exactly have a single-payer system. Each province has their own provincial health insurance. However, in all of my health care experiences so far, I have gotten comparable or better coverage than in the U.S., for significantly less money. Friends from the U.S. have come up to visit me and have had occasion to visit a doctor while here (cold/flu, injury), and have had comparable coverage. Being from the U.S. and not covered under Canadian provincial insurance, they've had to pay for the entire cost of their care themselves. It was 1/2-1/3 of the cost of the same care in the U.S.

I (and the friends from the U.S. who have visited and been to a doctor up here) am young-ish (under 35) and in generally decent health, so I suppose I'm in the population that valkyryn says is better served under such a system anyways. However I know or know of a number (seven in my immediate circle of acquaintances and friends of friends) of people who have had cancer in Canada, all of whom have had good quality, and in a third of those cases cutting-edge, treatment. Anecdotes do not make data, but they do make me quite wary of valkyryn's claims.
posted by eviemath at 1:31 PM on February 13, 2012 [1 favorite]

I didn't mean you don't work hard. I didn't think you knew what it's like to be a doctor or an entrepreneur from age 20-40 or more importantly, how common it is. Those people you mentioned above are rare. Any law to take their money on account of their leisure shouldn't be so broad as to also take from people who broke their backs to get to the same place.
posted by michaelh

This is part of the point though: doctors and people who own their own small businesses are not even in the 1% in many/most cases, let alone the 0.1%.
posted by eviemath at 1:33 PM on February 13, 2012

Corporations need to actually be forced to *pay* taxes, that'd be something new and exciting. As for the arguments about "the rich", America has just as many useless aristos as did the French before the revolution. We have an entire class of landed nobility that did nothing but be born into aristocracy. But, being Americans, we all somehow think there is this magic button that will let us join them, so we don't break out the pitchforks.

Nothing will change here until we can disrupt the propaganda that maintains the haves and "soon to haves" fiction.
posted by dejah420 at 1:53 PM on February 13, 2012 [2 favorites]

Corporations need to actually be forced to *pay* taxes, that'd be something new and exciting.

The federal tax rate on most corporate income in the U.S. is 34%. In Canada, it's 15%. Canada offers significantly more social services and, as a result of its tax rates, is significantly more competitive in attracting business. The problem in the U.S. is that the biggest businesses can avoid paying tax through all kinds of deductions which are not available to less sophisticated corporations. America actually ends up hurting job growth small and medium-sized businesses with its corporate tax rates. There should be lower corporate tax and fewer deductions if the U.S. wants to encourage business growth. Taxing capital gains, as someone suggested upthread, at a much higher rate, would kill the incentive for people to invest in businesses, a bad idea for job creation.
posted by Dasein at 2:10 PM on February 13, 2012 [2 favorites]

In 2010, the federal government spent $1.42 trillion on those three programs. They also took in $812 billion in payroll taxes for Social Security and Medicare (above and beyond regular income tax). The net cost is only $608 billion.

The problem is not the current spending on Medicare and Medicaid, it's the projected growth, as the article makes clear.
posted by palliser at 2:35 PM on February 13, 2012

Dasien, two thirds of American corporations paid zero taxes. The tax rate is irrelevant, if nobody pays it.
posted by dejah420 at 2:43 PM on February 13, 2012 [3 favorites]

The federal tax rate on most corporate income in the U.S. is 34%. In Canada, it's 15%. Canada offers significantly more social services and, as a result of its tax rates, is significantly more competitive in attracting business.

U.S. Corporate Tax Rate Plunges To 40 Year Low Of 12.1 Percent

Why would Canada charge 15% (even with NO loopholes), when their next door neighbor beats that by almost 3 points? Wouldn't that kill the incentive for people to invest in businesses, making it a bad idea for job creation?
posted by Benny Andajetz at 2:57 PM on February 13, 2012

Why would Canada charge 15% (even with NO loopholes), when their next door neighbor beats that by almost 3 points?

Well, there are tax deductions in Canada, too. Your link is misleading - the nominal rate isn't 12.1%, that's the effective rate at which taxes are paid. As I said, the problem is that the nominal rate is subject to deductions, which unevenly affect businesses in unfair ways. If those deductions aren't available to your business, you're paying an income tax rate that's the second-highest in the OECD, next to Japan. If you need to get to an effective tax rate of 12% in Canada to be competitive, that's a lot easier to do, even with relatively few deductions, if you're being taxed at 15% rather than 34 or 35%.

Some deductions are legitimate - if a business is paying dividends to its shareholders, it makes sense to tax those in the hands of shareholders and give businesses a deduction, or you would be double-taxing the money and reducing the incentive of people to invest. But deductions like accelerated depreciation don't have that social utility, and mainly just allow companies to pay too little tax.
posted by Dasein at 3:28 PM on February 13, 2012

Dasien, two thirds of American corporations paid zero taxes. The tax rate is irrelevant, if nobody pays it.

It's not that "nobody" pays it, it's that some of the biggest corporations don't pay it. Smaller companies — who are the real job creators — end up getting the shaft, while big business, with their armies of lobbyists and accountants and lawyers, don't.

Unless there is a very serious effort to eliminate all the loopholes (and that's a process that has to start with removing the opportunities for corruption that create the loopholes in the first place), all that's going to happen is that small and medium businesses are going to get squeezed harder while the big companies cruise right along.

It's not taxes, or the economy, it's the corruption, stupid. But don't expect anybody who has made it into the rarefied air of Washington to say much about that. They're interested in rearranging some deck chairs, not stopping the leak that's sinking the boat.
posted by Kadin2048 at 3:54 PM on February 13, 2012 [3 favorites]

Yes, excessive spending on end-of-life care is a factor, but having a system where much of your healthcare spending ends up as excessive (and poorly taxed) insurance company profits is a big part of the reason why the system has sustainability problems

Health insurers aren't that profitable. Wellpoint makes about 4% annually. Sure, maybe we could knock that out, but completely eliminating all health insurer profits wouldn't even slow the growth of health care appreciably, much less do anything to lower costs.

In terms of overhead, much of what they do would need to be done anyway, and billing Medicare and Medicaid is, if anything, harder than billing private insurers. Single-payer would change this somewhat, but only somewhat, as tracking expenses and services provided in NHS-type systems is still something that has to be done. The patient may perceive it as walking up to a service provider, getting free care, and going home, but there's a huge bureaucracy that goes into creating that illusion.

So no, they aren't a big part of the problem.
posted by valkyryn at 4:10 PM on February 13, 2012

The federal tax rate on most corporate income in the U.S. is 34%. In Canada, it's 15%. Canada offers significantly more social services and, as a result of its tax rates, is significantly more competitive in attracting business.

U.S. Corporate Tax Rate Plunges To 40 Year Low Of 12.1 Percent

Why would Canada charge 15% (even with NO loopholes), when their next door neighbor beats that by almost 3 points? Wouldn't that kill the incentive for people to invest in businesses, making it a bad idea for job creation?

It's 12.1% from the perspective of what the government collects, not from the perspective of an individual business owner. Some businesses are paying the full 35%, others are paying nothing.
posted by gjc at 4:24 PM on February 13, 2012

valkyryn: So no, they aren't a big part of the problem.

This article disagrees:

Achieving a High-Performance Health Care System with Universal Access: What the United States Can Learn from Other Countries

Check out Figure 3: Percentage of national health expenditures spent on health administration and insurance, 2003. (US: 7.3% vs Canada: 2.6%, for example)

And they certainly have money to spend:
The industry and interest groups have spent $380m (£238m) in recent months influencing healthcare legislation through lobbying, advertising and in direct political contributions to members of Congress
posted by sneebler at 6:34 PM on February 13, 2012 [1 favorite]

Robert Frank is probably the most prominent proponent, here is a decent summary.

Interesting. Thanks. I'd support that too. Who do I vote for who's willing to push any of these ideas? Oh. Never mind.
posted by RandlePatrickMcMurphy at 6:51 PM on February 13, 2012

Yes, okay, sure, the top income brackets could pay more taxes. Maybe even a lot more... That would not solve the problem.

If we return to the tax rate paid in the early 1990s, just before we started running a surplus, the top 400 households would see their tax rates almost double. That's why they are fighting so hard. They haven't been paying their fair share for years, and they'd like to keep it that way. According to the CBO, the difference over 10 years just for the increase in the top income tax rate would be 700,000,000,000. That's nothing to sneeze at, and should be in conjunction with paying realistic taxes on money purposefully funneled through dividends and capital gains tax to avoid contributing. Paying taxes is patriotic. Love it for leave it.

The top quintile earns about 56% of all income and pays about 69% of all taxes.

And since 1980 they have seen their incomes double (or triple for the top 10%) while the rest of American incomes have remained flat. Their effective tax rates have dropped dramatically, and for the top 400 filers, went from 29.3% in 1993 to 17.7% in 2006.

They don't want to pay Carter era taxes, or Reagan era taxes, or Bush era taxes. Sounds to me like they don't want to pay taxes. Typically we throw tax dodgers in prison until they change their minds, but the wealthy have the resources to change the laws instead of breaking them.

We must, must, cut spending.

We need to adjust spending. We must join the rest of the civilized world and pay for health care by keeping people healthy instead of charging them for procedures, which is why our system is so expensive. Cutting services is just going to exacerbate our decaying infrastructure and failing social programs. Adjusting our budget, raising taxes, and ending needless military expenditures are a lot easier than overcoming the consequences of two or three generations of workers who can't compete because we've gutted our civilization.

I think any statement which pretends that the richest people are being rewarded for hard work and being burdened unfairly by society is simply untrue. They've had the best tax situation they've ever had in our history, and they're convincing everyone of the opposite. The truth is that voting yourself raises on all of the corporate boards you sit on by pilfering pension accounts and buying politicians to give yourself tax breaks on interest earned isn't work. That's crime and corruption, not an honest day's labor, and they shouldn't be rewarded for it. In fact, I think most people would agree that they need to be punished instead.
posted by deanklear at 11:38 PM on February 13, 2012 [12 favorites]

I have never argued in this thread that we don't need to raise taxes. I have argued that we do.

I have also argued that raising taxes will not permit us to sustain our current policies, because they are simply too expensive. The only real option is to cut spending.

I have implied that we should probably be spending more on some things than we are now, but this should not mean that our net spending stays the same. I am somewhat ambivalent on that point, but such a policy would be consistent with the positions I've taken here. But the fact remains that our total spending must go down.

Why is this hard for people to get their heads around? Everyone is responding to my arguments as if I'm saying that rich people shouldn't be taxed. I have not said that here.
posted by valkyryn at 2:53 AM on February 14, 2012

"Why is this hard for people to get their heads around? Everyone is responding to my arguments as if I'm saying that rich people shouldn't be taxed. I have not said that here."

No, you haven't. But it doesn't MATTER what you say, the reflex is there that if you're talking about tax reform, if you don't come out front and say in bold print that you'd like to see everyone above $XX income taxed into oblivion you're arguing that the rich should get a tax cut.

I know - how very binary, right? There's (A) - Tax the bastards into the poorhouse, and (B) you're saying don't have 'em pay a cent. Nothing between, at all, ever, don't even consider it, because even if you DO say you want to tax the rich, we know what you really mean because you didn't advocate stripping them of their wealth.

Such is the state of political discourse here. (Shrug.)

You're arguing, if I see it right, that everyone needs to have skin in the game, and that our net spending MUST go down. I agree with both points.

I also think that politically they're death to anyone who proposes them, on either side. Look at what's happening in Athens - and they're only a bit worse off than we are, percentage-wise. Propose cuts in spending, and riots break out.

It's a very pretty trap we've built ourselves. "Well, this program won't cost all that much. And that entitlement won't cost all that much. And the economy's always growing, so even if it does cost a lot down the line we can afford it. And it's important to the voter it look like we're looking out for them, so we'll pass this bill and that entitlement, and a handful of programs, and a few things that sound good... and worry about the costs later."

A very pretty trap indeed, constructed for all the best, most humanitarian of reasons... (to buy votes as the primary one, all other actual outcomes being secondary - he thought cynically) that may well end up killing us.
posted by JB71 at 4:43 AM on February 14, 2012 [1 favorite]

Such is the state of political discourse here.

Nonsense. You cannot ignore the context in which arguments like these take place.

People are rightly suspicious of any conservative call to cut spending because it has suddenly and very obviously become a part of the right-wing talking point play-book worldwide. To anyone with an ounce of common sense, it is highly suspicious that as soon as faith in right-wing nostrums about the market solving everything collapse, they are immediately replaced with a phalanx of arguments that we cannot now afford to spend. It starts to look like a section of the political spectrum will always reach for any argument to maintain that government does not work, spinning on a dime when reality refutes one claim to reach for another - heads I win, tails you lose. You cannot trust a person or a political movement that argues like that. Asking people to do so is asking them not to learn from experience.

So, it is only natural that someone who argues that spending cuts are necessary and inevitable will be grilled about the substance of his points.

But all that is going on here is that people are questioning the points that Valkyryn has made and disputing some of his claims. For example, saying that the rich pay most of the taxes in the country is obviously a problematic statement because it draws attention away from the underlying social and economic shift that means that the rich have most of the assets and income that could be taxed - and so people rightly picked up on that.

He, in turn, seems to be doing a credible job of defending his point of view.

Please don't insult people who are just engaging with the issue but happen to be on the other side by claiming that they are doing so because of a "reflex". It is just possible that they are as intelligent as you are and happen to rationally disagree.
posted by lucien_reeve at 5:41 AM on February 14, 2012 [6 favorites]

And it's just as possible that you're disagreeing out of ideological reflex, no matter how intelligent you are. Intelligence doesn't preclude reflexive disagreement - or agreement, for that matter.

Look, you've got your points of view. 'Suddenly' overspending's a problem? Hell, overspending's been a problem for DECADES. People have been complaining about it since the '70s.

But there's overspending for the RIGHT things, which is entirely okay and perfectly justifiable - and there's overspending for WRONG things, which is horribly wrong and perfectly evil - and which thing is which is almost entirely ideological any more. At least, in political discourse.

Either way - nothing's going to get cut. Republicans will fight the Democrats, Democrats will fight Republicans - and the bills keep stacking up.

I don't give a damn about how 'good' or 'bad' the spending is - the problem is that we're spending too damn much.

We're bringing in $2 tril a year. We're spending $3+ trillion a year. We're in debt up to our eyeballs, so to speak - at $15 trillion so far even if we were to take our entire taxable income and use it to pay down it'd take well over 7 years to pay off the national debt. Not the DEFICIT - the DEBT.

And people talk about how this program will pay for itself down the line, and that program will pay for itself in (enumerated benefits here) - ignoring the fact that we simply don't have the money.

It's like a guy with $20k/year income and $150k debt trying to decide whether to buy a 55" or 60 " flatscreen, based on how much money he'll save by not going to the movies. It's not, all things considered, a terribly rational argument. An emotional argument? Sure. Rational? Iffy.

He's decided he's going to buy that flatscreen. It doesn't matter at that point what his debt/earnings ratio is, it doesn't matter whether he's ever going to make more than $20k/year in his job. He wants the flatscreen, he can justify it to himself at that moment.

Take a real good look at Greece. That's the future of our economy. There shouldn't be (in my opinion, your mileage may vary) any real question that we've got to rein in spending.

'Soak the rich' raise-tax rhetoric (again, in my opinion) attempts to stall off any real discussion about cuts. EVERYTHING is vital, NOTHING can be cut, but it can all be paid for and expanded if the rich just paid their 'fair share', right?

I'm sorry - but the numbers simply aren't there. The total net worth of the Forbes Top 10 is only $316 billion - there's not that many 'rich' people overall. You MIGHT be able to force a confiscation of their wealth - but I'd be surprised if you got more than a trillion or two... and what would you do the next year?

We have to seriously cut spending - across the board. If we're going to piss people off with reductions, let's piss off EVERYONE.

And we might, just might, avoid going the way of Greece.
posted by JB71 at 6:38 AM on February 14, 2012

It is politically impossible for the US (or indeed any other nation with a fiat currency) to cut spending and/or raise taxes meaningfully without a fiscal crisis.

That is the brutal fact of the situation.

All the rest is hot air.

Because otherwise you just get a series of deficit-financed 'recoveries' like the current one.

Structural problems require structural solutions.

It's a useful exercise to go into any of the many US budget simulators there are out there, and see if you can avert the crisis. It's not particularly difficult. But now imagine trying to politically achieve the results you're after.

When Democrats start talking about cutting entitlements and Republicans (who aren't Ron Paul) start talk about slashing military spending, then you'll know Shit Got Real and buckle up.
posted by unSane at 7:50 AM on February 14, 2012 [2 favorites]

Changing spending habits won't do much if structural changes aren't made.

Frank-Dodd to replace Glass-Steagall? Really? Give me a break. Real savings passed over.

It doesn't matter what we spend on healthcare if a huge chunk of it is just going to go to basically unaccountable profit-driven middlemen or pharmaceutical companies. Real savings passed over.

It doesn't matter what the corporate tax rate is if legislators keep giving ludicrous loopholes that give most of the money back. Real savings passed over.

It doesn't matter how much of the middle class we can get (re)employed if we keep cutting their ability to organize for living wages. If the middle class can't amass enough disposable income to support our economy we're screwed. Real savings passed over.

How much we spend is important, but how we spend what we spend is much more important. Growing the economy should be Job#1 right now, and that takes big, smart spending.
posted by Benny Andajetz at 12:51 PM on February 14, 2012 [2 favorites]

It doesn't matter what we spend on healthcare if a huge chunk of it is just going to go to basically unaccountable profit-driven middlemen or pharmaceutical companies.

Again, it isn't really. Health insurers take about 4-5% of their revenues in profits. Big pharma tends to be more profitable, partly because they get paid largely by insurance companies, so the latter have to fund both their own profits and drug companies, but drugs aren't the largest part of medical care, not by a long shot.

Just look at Medicare's spending proportions. Medicare A and B, which cover hospital stays and outpatient procedures, cost the government a combined $347 billion a year. Add in Medicare C, which is sort of a federal health insurance program, and we're up to $479 billion. Medicare D? The part that pays for prescription drugs? $72 billion. Thirteen percent of the total. So eliminating all of big pharma's profits would save maybe 10-20% of 13%, or about 1-2% of the total.

No, your "profit-drive middlemen" are mostly doctors, nurses, and hospitals. In other words, not middlemen at all, but service providers. Yelling about profit-driven services is a great talking point, but it's like complaining about the budget for coffee in the break room when your department is a hundred grand in the red. True, there's money to be saved, but even getting that part 100% correct wouldn't be a colorable start on the actual issue.
posted by valkyryn at 5:31 PM on February 14, 2012

"The total net worth of the Forbes Top 10 is only $316 billion - there's not that many 'rich' people overall."

But the 400 richest Americans control at least $1.37 trillion of our country's wealth. And then there are others who are very rich, but though they are not in the top 400 and may not be billionaires but merely millionaires, there are many, many more of them.

So there's more for us to work with, and we should take much much more of it to ensure that security and comfort are available for the greatest number possible.
posted by univac at 11:36 PM on February 14, 2012

Here is a sort of inside-baseball look on how the Times decided to write the piece liked in the FPP
posted by edgeways at 7:18 AM on February 16, 2012 [3 favorites]

Paul Krugman: Moochers Against Welfare

...Cornell University’s Suzanne Mettler points out that many beneficiaries of government programs seem confused about their own place in the system. She tells us that 44 percent of Social Security recipients, 43 percent of those receiving unemployment benefits, and 40 percent of those on Medicare say that they “have not used a government program.”

Presumably, then, voters imagine that pledges to slash government spending mean cutting programs for the idle poor, not things they themselves count on. And this is a confusion politicians deliberately encourage. For example, when Mr. Romney responded to the new Obama budget, he condemned Mr. Obama for not taking on entitlement spending — and, in the very next breath, attacked him for cutting Medicare.

The truth, of course, is that the vast bulk of entitlement spending goes to the elderly, the disabled, and working families, so any significant cuts would have to fall largely on people who believe that they don’t use any government program.
posted by flex at 7:13 AM on February 22, 2012 [1 favorite]