Taxation on the
Knife’s Edge: The Lower Half Will Always Vote for Higher Taxes.
Taxation on the Knife’s Edge: The Lower
Half Will Always Vote for Higher Taxes.
In political
theory there is a theoretical concept whereby your vote has some intrinsic
value in any given election.[1]
This value depends on the relative sizes and number of political parties in the
fray. As such, if you vote in a system that allows only one party, your vote is
meaningless. When the number of parties increases your vote may increase in
value but only when parties approach an equal size. Frequently, splinter
parties may jockey for favors and position and minor concessions and join in
with one of two near-equal parties and become king makers.
The value of your vote is shown in the
following table:
|
No of Parties
|
Party Fractional Distribution
|
Maximum Value of Your Vote
|
Comments
|
|
0
|
0
|
0
|
No chance to vote.
|
|
1
|
100% one party
|
0
|
Don’t bother to vote unless the Commissar is watching
|
|
2
|
90%/10%
|
0
|
Don’t bother to vote.
|
|
2
|
50%/50%
|
1.0 or so
|
Get
to the ballot box!
|
|
3
|
49%/49%/2%
|
1.0
|
Max voting power if you vote in the minority party that provides the
extra majority or plurality votes or provides essential crossover votes.
|
|
4
|
49%/49%/1%/1%
|
1.0
|
Same as above with more technical difficulties. The two 1% parties may
oppose each other and cancel out.
|
[2] On the
Value[lessness] of Your Vote
We certainly do
not have two equally divided parties in this country as independents, arguably,
may form the largest party although they are not a party in the usual
definition. But, we do have an approximately 50% split in a different
dimension, and one that directly influences votes and that is the tax
base. It turns out that the top half in
terms of earnings pays, now, 97% of the federal taxes. Most of the non-taxpayers [read ‘poor’ or
marginalized here] reside in the Party of Democrats, my party, and pay little
tax. The independents seem to be split as most elections on the national level
seem to be populated evenly, or so, by these non party members. The polls show
that the preference for left versus right wing politics is almost exactly
50:50. So, we are nearly equally divided
between those who make their living by capitalism and those who live on
government largess.
Now, the right
wing has been the party of the corporations, business, growth, wealth and
prosperity marked prominently by home ownership. The lower classes were
traditionally renters and held menial jobs or were unemployed. This split can drift to favor the low classes
and that allows the tax mechanisms to run at top throttle toward confiscation
of wealth. The low classes do not pay the high taxes so why should they
complain about getting wealth for nothing but their votes?
So, how do the
two groups, which must transcend actual political party membership in fact,
vote on tax matters where one group gets a financial break from legislation?
The answer comes from the analysis of who pays the tax burden. An arguing
point, and somewhat valid, is that the corporations get the equivalent of ‘corporate welfare’ as they get
government perks that benefit them in the tax sense. Of course, since the corporations and
business pay nearly 100% of the federal and state tax revenues derived directly
from the corporations, the taxes and fees they pay and similar proceeds from
their employees, there really is no ‘welfare’ here. There is only a tax level. No matter, as the
specter of such a bias in government favors a general tendency to drive various
groups, mostly determined by income, into one or other of the two parties. The
opposite argument can be made by the upper half when welfare and other social
programs arise in the voter options.
The current
question then arises concerning who will vote and how they will vote for the
mortgage bailout legislation.[3]
“A massive mortgage rescue bill advanced in
Congress on Wednesday, powered by President Bush’s endorsement but leaving
House Republicans and the administration badly split over the government’s
response to the current housing crisis. -- Housing flip puts Bush in GOP
doghouse By David Rogers 7/24/08.
The right wing point of view:
I am very disappointed,” Minority Leader
John A. Boehner told Politico. The Ohio Republican said he did not learn until
Tuesday night of Bush’s decision to drop his earlier veto threats and embrace
the bill.”-- Housing
flip puts Bush in GOP doghouse By David Rogers 7/24/08. [Emphasis is mine in
all quotes.]This link references all quotes in this essay unless otherwise
stated.
This should not
come as a surprise, except, possibly, for the Bush endorsement. Many think this
legislation is just a new socialist program.[4]
What it calls for is the rescue of persons who could not, for assorted reasons,
pay their monthly mortgage payments and will, or have, lose their homes or
investments. Their rescue is a cause
célèbre for the left.
Here is a grand opportunity to trade tax money for votes.
Basic economics
tells us that in an economy driven by supply and demand functions prices will
rise and fall according to the current economic environment. Housing prices
fell because there were fewer buyers and more sellers and an excess supply of
houses. The difficulty here is that when
a market falls, the investor or buyer is usually forced to take the loss. There
were no howls of protest when housing and real estate values increased steadily
since 1900 with few exceptions. But, when the low class was promised The
American Dream and it has now vanished, for some, the political alarms
sounded with foam and froth and a ‘solution’ to the losses generated a
political hurricane. That solution is to
subsidize failure with more taxes.
““Owning a home lies at the heart of the
American dream.””[5]—President
George Bush 2002
“Oops. While homeownership rose as the
housing bubble inflated, temporarily giving Mr. Bush something to boast about,
it plunged — especially for African-Americans — when the bubble popped.” [6]--Paul
Krugman.
The essay here
is that everybody must be entitled to participate in the American Dream. But
the question arises: who will pay for this? Certainly, the population of the US
is very closely divided and near the 50% level for each half and that
correlates with the tax levels. Can the
upper half pay for the lower half to have a standard of living like they do? We
can ask the following questions if Bush signs this legislation:
What is next? What other loses can we
subsidize? Can we ensure failure with hefty tax subsidies?
A thought: Do
people want some money back when their cars depreciate? Why not?
When people invest
in equities there is yearly tax profit and loss reconciliation option so that
investors only pay taxes on net profits. But, but what could we say about
pension funds that suffer a financial loss during a stock market correction?
Should the pension funds be guaranteed so that retirees get their money? Maybe the government Social Security system,
a terminal cancer upon our society and a slush fund for the legislators, that
has been broke for decades, but is propped up by taxation be expanded. Why not include
illegal aliens? They work and vote, or should as some liberals think. Do we need more programs like that? SS is a
political program to trade money for votes. It is a financial failure, but is a
political success.
When GM and Ford
go bankrupt, as they certainly will given the pressures against the automobile
by the EcoNazis
[7]
and unions, should we subsidize the lost wages of the auto workers? Cars made
in Michigan are not currently price competitive with those produced in Japan,
India or in other production facilities (non union of course) in the US. Why not subsidize labor and pay the
automakers, say, fifteen dollars per hour for each hour worked so that GM and
Ford can lower prices to compete with other car makers? That is what Europe
does with steel, cars and other items. We could expand our union work force
with mere subsidies and achieve political kudos from many sectors. The US government only takes about 26% of the
GDP now and France and Sweden take about twice that. Does that mean that there
is the means to double taxes in the US? Yes, for a socialist that is possible
and very desirable.
If an employee
takes drugs, tears up the office and puts a few fellow employees into the
hospital and loses his or her job should this person’s wages be guaranteed? Why
not just subsidize salaries once a person is hired? If they are fired then they
would continue to draw their salaries.
Whose fault is it when some druggie goes berserk? Whose fault is it if
some company goes broke? The government can guarantee salaries just like Fannie
Mae does for mortgages. The government can guarantee business success as well.
Why not? Why not make work optional?
There is no reason not to make welfare payments equal to the median income in
the US to ‘be fair.’ That is brilliant socialism. That notion will get votes
from the lower half.
In education,
when a minority group fails to complete high school, to the level of 50% or
more as some do now, they are penalized because their education was not
‘successful.’ They cannot get high-paying jobs. Is it their fault if they
failed? Perhaps the system is at fault,
biased and in need of change. Is it fair that others can get through high
school and get good jobs and buy homes and make their mortgage payments until
their homes are paid off? Not necessarily. Is it fair if about half the people
fall in the lower half of any average?
They should be compensated if you believe in the current leftist dogma.
If you flunk out of high school or college then society has failed you and thus
owes you a living.
We are at the
brink at this time. The American Dream cannot be funded from only the upper
half of earners in this country for very long as their numbers will soon
decrease with increasing taxes and infernal government rules and
regulations. Once the mathematical ratio
of the haves-to have-nots drops to 0.48 or so the low class majority will have
the winning votes in all cases. That is the end of the American Dream as we
know it. With the psychotic spending, enormous debt, pending tax-funded
bailouts of mortgages, high fuel costs[8]
and wild expansion of the money supply there is nothing but inflation on the
horizon. The phony notion of EcoNazi
carbon taxes will sink our economy for no good reason. [9]
Global temperatures do not follow CO2 levels and that is a fact.[10]
That means that business failures and layoffs and high inflation. Stagflation
is looming on the horizon. The only solutions to relieve a given occurrence of
national inflation are either some foreign subsidy program as we did for the
Germans, twice, or to raise interest rates and that kills off business. Just printing money will not work.
Adam Smith was
asked if democracy would be successful and he replies that it could work until
people found a way to vote money for themselves. We are at that point.
“As much as $300
billion in new loan guarantees would be authorized, with a mandate for
the Federal Housing Administration to step forward to define a floor for the
housing market and help homeowners refinance and avoid foreclosure. Cities and states are promised nearly $4 billion in direct cash to
buy up the foreclosed homes already affecting neighborhoods. And a $15
billion package of tax breaks includes provisions targeted to first-time
homebuyers and working-class taxpayers who now can’t claim any deduction on
their property taxes.”
There is no end
to this. Add on $200 bln on socialized
medicine, the high price of oil, the need for more social programs, the burden
of illegal aliens and the costs of the War on Terrorism, our debt for 2009 will
soar from the current 450 bln to a trillion dollars or more.
The direction of
our economy is clear and it is clearly downward. Oblivion is the next economic
event for us. The current political basis for wealth redistribution is now only
in the income tax realm now, but could easily be expanded to include a general
wealth tax. There is no reason not to calculate an imputed wealth tax on home
owner real estate taxes and the value of IRAs and other equity holdings and
place a tax on those. Why not? Why not put a 100% tax on inheritances? If you get praise and votes for such an
action, as in Europe, who are going broke because of their stupidity[11]
and collapse of their society after several major world wars, then why not vote
for that?
The only way to
escape this current trap is to put your earnings and assets and wealth basis in
a position as to avoid or minimize taxes.
Equities must be selected carefully so that they do not generate high
taxes. High salaries need to be replaced with perks, probably similar to what the
Europeans do in their hyper tax environment.
Holding gold bullion is an excellent way to beat inflation.
There is no
current way to avoid high inflation, unemployment and a stock market crash
punctuated with bank failures. The only hope to correct this mess is to raise
interest rates and curtail this psychotic spending and quit subsidizing failure
with tax hikes. Our economy is now balanced on a knife’s edge and could fall
soon. More taxes can push it over into recession and depression.
We don’t want to fail like
Europe. They are idiots.
rycK
[3] Housing flip puts Bush in GOP doghouse
By DAVID ROGERS | 7/24/08
4:59 AM EST http://www.politico.com/news/stories/0708/12005.html
[Emphasis is mine in all quotes.]This link references all
quotes in this essay unless otherwise stated.
[4] The Redistribution of
Wealth by Subsidizing Urban Mortgage Debt. Raise Taxes!
[5] Home
Not-So-Sweet Home By PAUL KRUGMAN
Op-Ed Columnist Published: June
23, 2008 http://www.nytimes.com/2008/06/23/opinion/23krugman.html?em&ex=1214452800&en=b9018ebc8ffd278f&ei=5087%0A. .”“[5] [Emphasis is mine in
all quotes.] This link references all quotes in this essay unless otherwise
stated.
[6]
http://www.nytimes.com/2008/06/23/opinion/23krugman.html?_r=1&ref=opinion&oref=slogin
[7] The EcoNazis and
Reality: Klaus Offers to Debate Al Gore.
[8] Inflation: Democrats Want Your Gas Prices to Rise and
Will Not Help Out!
[9] EcoNazis and Reality:
Klaus Offers to Debate Al Gore.
The
Blow: All Atmospherics, No Climate. The Facts: None
There Is No End To The Tax-Whoring By Climate
Control Lunatics.
Posted by rycK on Friday, April 04, 2008 10:43:11 AM
[10] 21,000 Scientists Refute
the Phony Global Warming Follies as The Biggest Attempt to Tax The World Has
Even Seen.
[11] Stupid, More Stupid and
the Idiot Europeans Investigated and Explained.
No comments:
Post a Comment