When the Robert's Court, while upholding the most important part of Obamacare, struck down the the penalty to any State not buying into the expanded Medicaid program, they condemned millions of somewhat poor Americans to no chance at healthcare at all unless they move. That is because States were allowed to opt-out of the expanded Medicare program and 14 Conservative Bible-belt governors chose to do just that! As a consequence there is a set of working poor who earn too much money to qualify for Medicaid but not enough to qualify for an Obamacare subsidy (since the law was written with idea these people would be covered by Medicaid).
Well, it is not a surprise the Conservative Conservative government doesn't care about these working people, and my guess is would probably like to see them move anyway, what is a surprise is the deafening silence, except for Rev. Timothy McDonald, a Baptist minister of the First Iconium Baptist Church in Atlanta, from the Fundamentalist and Evangelical leaders in Southern churches all across the South. See http://religion.blogs.cnn.com/2013/11/0 … tors-shun/ for more
Personally, I call that sinful.
First, Obamacare has nothing to do with medicare - you would be better off to get your facts straight.
Second, if you wish to purchase worthless insurance for people, you might consider doing it out of YOUR pocket instead of requiring someone else to do it.
Third, it is obvious from the enactment of Obamacare that the Liberal government doesn't care about anyone at all; this piece of trash will ultimately bankrupt the country if left alone; we can all join the third world where no one gets health care.
Personally, I call that sinful, but it is the way of the libs. Share the wealth until there is none left and then blame the conservatives for not having unlimited funding for liberal projects.
No, but it has a lot to do with Medicaid which I started out with before brainfarting. Fortunately, forums let you edit, thanks for noticing.
I am wondering @Wilderness, are you unhappy humanity discovered agriculture about 12,014 years ago? That was time when people started helping other people at the societal level.
People helped each other long before that; it took a group to take down a Mastodon, not a single person with a spear. But does it mean that Jo-Jo the caveman, sitting in the cave and refusing to help, got fed?
I wonder if you will be so eager to support non-producers when the standard of living has fallen to subsistence, as it will surely do if the trend towards ever more socialism continues much longer. Without a truly massive increase in automation (far, far in the future) half or a quarter of the population simply cannot support the remaining 3/4 in the style we are accustomed to.
Have you checked into this beyond reading your linked article? Did you look to find out why those 14 states refused to participate in expanded Medicaid?
Although the facts of states opting out, and the disparity between state's medicaid qualifications are true - they are subject to quite a bit of spin - depending on your perspective.
You say they show sinful disregard for the poor, but those states are saying "we can not afford the expansion." (The Federal government is only funding the Medicaid expansion for an initial period - after which the states will have to pay for it)
If you look a little deeper than your one article you will discover that Medicaid expenses are already stretching state budgets to their limits, and the only way for them to pay for the expanded Medicaid coverage would be with serious tax increases to their citizens. Should the rest of the state's citizens be disregarded for the benefit of a minority?
Your article pushes one biased perspective - there are others. You should learn more about the issue before forming such a firm opinion.
For instance: (from your article)
One women, (with two kids), is quoted as working at Chick-fil-a for $9 hr. 18,000 p/year.
Says she makes too much to qualify for Medicaid, and too much to qualify for Obamacare premium subsidies. Really? When the Obamacare subsidy schedules show subsidies available for a family of four with incomes up to somewhere around $74,000 - so a family of three is probably not too much less than that. Are you familiar with any of the debates concerning Obamacare other than your article? Do you really think a family of three at $18k, would not qualify for subsidies? Even in Georgia?*
*I have not made the effort to confirm this for this discussion, but I have confirmed it for other exchanges - so I am relatively confident I am not too far off-base
So I have doubt about the truthfulness of her statements - yet your source article used her as an example, and quoted her too.
Like this one;
"“It stinks,” she says. “I’ve been dealing with this hernia for two years now, and I can’t get anyone to help me because I don’t have health insurance. It absolutely stinks.”"
Isn't that statement really saying she can't get anyone to pay for it for her?
And it followed a statement from her that she has received medical care through emergency room visits - to the tune of $20,000. So someone is helping her, she did receive emergency medical care, she was not turned away at the door.
Didn't the tone, and questionable validity of some of its examples and statements give you pause to consider there may be other explanations? After all, to feel as ardent as you apparently do about an issue usually indicates a familiarity with the details.
Perhaps, Quill will pop in with some of his excellent source references that will educate both of us.
If I remember right, the States get a 3-year free ride (welfare in my opinion) and then only pick-up 10% or 20% of the tab. Also, why is it too expensive for 14 states but not the other 36?
You know as well as I that I know quite a bit about these issues, you have read enough of my hubs. It is a matter of philosophical priorities as to what the role of government should or should not be.
No, a family of three will not qualify for subsidies because the law written with the expectation they would be on Medicaid. They made no provisions for the Conservative Court to find that part of the law unconstitutional nor the fact that 14 Conservative Governors and Legislatures would leave their citizens out in the cold like that. Congress would have to pass a law to fix that and you know as well as I the Conservatives wont let that happen, and unfortunately, that one is outside of Obama's Executive powers to solve.
You need to read the law or the many summaries on it dealing with this issue.
Yes, you and I paid for her emergency care, the hospital and insurance companies certainly won't, and she can't. I hope you enjoyed it, I know I didn't.
Quick, jump back in here with me before Quill drops by. Just step over GA's prostrate body, (he tripped over his uninformed opinion)
First, I was badly mistaken about Georgia's Medicaid/Obamacare subsidies issues. And I was mistaken about the number of that lady's kids - she had four not two. And a single mom to boot. Might be some life-choice issues there.
Good news - all her kids qualify for CHIP Medicaid coverage in Georgia. So they have healthcare coverage.
Bad news - Georgia's Medicaid qualification income limits for an adult are $6000 p/year. Tough state! No Medicaid coverage for her
Bad news - By Obamacare's structure - you have to earn at least 100% of the Fed. Poverty level to qualify for subsidies - geesh, talk about a donut hole. Somebody screwed up. *This was an area I was ill-informed on. I did not realize there was a minimum income barrier.
So I have to eat my criticisms of her statements. Done.
I have to rethink my opinion on state's decisions to expand medicaid coverage - or not. Not done yet. I am still digesting that.
Here's why: (and relative to Georgia's decision not to expand)
Everyone throws out numbers that support their position. Proponents toss out a national average for the expanded Medicaid cost increase to state budgets of .1% to 1% - sounds like a no-brainer. But that is a national average if all states expand. Obviously some states have higher cost increases and some states actually have cost decreases. (Vermont actually sees a 7.1% budget decrease due to Federal funding contributions, in dollars that's a $355 million refund from the Feds.!)
But after looking at several perspectives, (Kaiser Foundation and Center for Budget Policies), it appears that Georgia would be looking at an annual state budget increase of 4.1% if it expanded its medicaid program(s) *Even with the Federal funding.
Doesn't sound too bad at first, but a look at the real numbers might present a different picture.
Caveat: These are real seat-of-the-pants calculations, and could be way off, but I think they are close enough for this example.
Georgia's annual state budget is $19.9 billion. A 4.1% increase is approx. $815 million.
Georgia's population is 9.92 million, so that would come to about $82.24 more taxes per person - hmm... maybe not too terrible, - except that is per person, not per taxpayer.
They have a 6% state income tax. With an average tax bill per taxpayer of $726, so it looks like a single taxpayer would see a tax increase of approx 11.3% - Not looking so good now.
But what if you are a family wage earner?
Wife and kid - 3 x $82.24 = $246.72 or 34% tax increase
Wife and two lids, three kids, more? Whew!
*these numbers looked so bad I double checked my math. Who knows maybe I misplaced a decimal point - but my double check missed it if I did.
So, an 11.3% to 34%+ tax bill increase would be a lot of gas to throw on a tax-payer revolt fire. Maybe Georgia had good reason to resist the expanded coverage option.
As you can see, there is much more to this type of discussion than national averages that seem so negligible when compared to the compassionate goal of providing a benefit to the needy.
The drill-down specifics often paint quite a different picture.
All in all I would say I was badly mistaken about the lady and Georgia's Medicaid program, and Obamacare's subsidy structure, but to your point that it is sinful for a state to opt-out, and that the Supreme Court got it wrong - I stand by my guns - you should have checked a little deeper before passing judgement.
But thanks for prodding me to educate myself on a subject I thought I knew something about.
I am not going to doubt your math and appreciate you double checking. My question would be what is it about GA's Medicaid program that would drive such a steep increase even with the Feds picking up such a large portion of the bill?
Oops.... I knew those numbers just did not look right. So I triple checked, and...
The 4.1% increase is still Kaiser's number, but it is an increase to the Medicaid budget expenditures - not the total state budget!
So the new number is a $254 million increase, not $815 million.
Which means the per person cost of the increase is $25.61, not $82
Ipso facto, ala kazamm a 3.5% tax increase for a single taxpayer
For family wage earners it would be:
Wife and kid, 3 x $25.61 = $76.83 or 10.5% increase
Wife and 2 kids, 3 kids, more... getting to be a hefty increase.
Although it is a less catastrophic tax increase, it still illustrates Georgia's reasoning for not expanding their Medicaid program.
Sorry for the bad data.
Hey, in my former life, I was a cost analyst for the Air Force; you have no idea how many iterations and peer reviews I went through before sending my work up the chain (and we are talking the Sec AF or higher on a few occasions). Even after all of that, embarrassments happened, fortunately not the really big ones.
Question, is the 4.1% GAs portion after the Fed's subsidy. Also, like all income tax structures, they are in effect means tested where the higher income earners pay a higher marginal rate than the lower income earners. So if the bill is an extra $254 million, not that it is fair, most of that will probably be paid by individuals and businesses who won't notice it is gone, especially given these are the same people and companies who give that much and more political PACS to influence the vote in State and Federal government (granted that is a voluntary use of their money rather than a tax, but I like the benefit of the involuntary tax much better than hurt of voluntary lobbying; it is all a matter of perspective, isn't it.)
How is it that the people without lots of money figure that the rich "won't notice it is gone" when they take a few thousand or tens of thousands from them?
Of course they'll notice it's gone - it's how they became rich in the first place, by paying attention to what their money is doing! Plus, it may well mean they can't buy that new car or put as much into the PAC that is helping maintain their status of being rich.
Because it works this way @Wilderness. If 254,000 wealthy people in GA, and I know there are at least that many, pay an extra $1,000 in taxes, which they wouldn't, since there are millions of other tax payers, each one of those would probably do what I do each month. Sell 30 Bull Put Vertical Option contracts on $SPY with an expiration date in 45 days or so, assuming the market signs are right, with a $2 spread and they will have just gotten back their $1,000 plus some. If the market signs show the market going down, then then they Sell Bear Call Vertical Option contracts with the same parameters and they still get back their $1,000. If they don't know what the market is going to do, they wait until the next month, which is what I am doing right now.
That is how I know.
But that isn't the real issue is it. The real issue is whether the State and Federal government should tax at all, whether the Preamble to Constitution were just throw-away words with zero meaning and shouldn't have been written at all.
From my point of view, if you don't take those words and verbs it contains to heart and literally, then you don't really believe in the Constitution but something else entirely, probably the Articles of Confederation.
Of course they can pay it, and without going hungry. Will the loss of that $1,000 go unnoticed? Of course not, which is what I said.
And you're counting people, at a quarter million in the state, that do not consider themselves rich. That will absolutely miss that $1,000 (saying they can earn it by more work doesn't mean it isn't gone).
Don't forget that you're already hitting them for tens of thousands more in taxes than the vast majority will ever pay. For exactly the same benefit that everyone gets, and now you want to hit them harder. And don't forget as well that their tax rate is already going to raise considerably to pay for this giant boondoggle called Obamacare (and the associated costs like increased medicaid). You can pretend that because it's federal money the rich aren't going to foot the bill for a massive increase in medicaid, but they are. It can't all come from raiding SS - there isn't that much money there if they took it all.
The 4.1% is the Medicaid costs increase to Georgia after all Fed contributions have been accounted for.
I see Wilderness already hit the next point - but...
"...not that it is fair, most of that will probably be paid by individuals and businesses who won't notice it is gone,..."
Geesh, really? You really want to say it might not be so bad if the rich had to pay it? And you really let the cat out of the bag with your perspective that they won't even notice it's gone.
But that is incorrect even if you thought it might not be so bad. The average taxpayer number of $726 was just that - an average - add up all the high taxpayers and the tax refund receivers, divide by the total number of taxpayers and you get the average - $726
You are right about it being a matter of perspective, as in you seem to believe the extra tax is OK if it achieves something you want, and even more OK if it is the rich that have to pay it. I don't see it that way, and apparently Georgia didn't either.
I probably shouldn't have said "notice" that is a euphemism for "won't be bothered by the loss of it". Of course they will "notice", that is partly the reason they are rich in the first place, it just won't have any impact on their net worth; a drop in the bucket so to speak.
The reason I don't feel badly about the rich paying more is because they have benefited more from the services offered by this country which are not available to people of lesser means, such as, but not limited to access to Congress, and they need to pay their fair share for those services.
Which services did they use more of? Which ones are devoted only to rich people? Services paid for by taxes, of course.
And anyone can write to the congressman or visit congress in session. Beyond that, the rich have paid dearly for their access, and not through taxes.
That is the point, the rich can double down on their money by influencing legislation in a way to benefit them where you cannot, therefore the playing field is not level. When is the last time you got a thoughtful reply from your Congressman when they disagreed with you, all I get is form letters. How much do you think your Congressman is going to listen to you when you visit him or her with only a dollar in your hand, assuming you could afford to even go there in the first place.
You obviously you couldn't wine and dine Congressmen like Bill Gates can to get special breaks for his company; he should have to pay a price to America for that kind of access.
They can also buy a jet plane, and a cruise liner. The playing field is not level.
Give your congressman a couple hundred grand, and you'll get listened to, too, and it won't increase your taxes one little bit. Bill Gates DOES pay a price for that kind of access, and a very high one. One that you couldn't pay if you gave it your whole income. But what does that have to do with raising the taxes of the rich?
Jet planes and cruise liners are the toys their money can buy, more power to them for that, it helps the economy.
But it is when they can use their money or power gained from having that money to influence others in a way to let them make more money and/or power or keep you or others from making more money or power which you don't have the same ability to do because you don't have the money or power yourself, that is a different story altogether.
They should have no more or less access to lawmakers than you or do, but because of their position in society, they do. They need to pay a price for that privilege through a much higher tax rate than those that do not share in that privilege; it shouldn't be free, it shouldn't be welfare for the rich.
From sinful states for not expanding Medicaid to the evil rich for not paying their fair share...
I think I will start a thread on why turnips don't grow on bushes and see how long before the rich get blamed for that.
Same old mantra, over and over and over. For how many centuries now? How many ruling/governmental systems? How many class structures?
Always the same, the have-nots blame the haves. Even when the haves used to be one of the have-nots.
Time to get started on those turnips. Life isn't fair and someone might be me to it if I wait.
What makes you think it is free? Do you just ignore what you don't like to hear - that the rich already pay a very high price indeed for their access to congress?
If you don't like anyone having access, push to get a new law; that all politicians must be barred from talking to anyone but another member of congress. Forget about trying to raise taxes because you think Bill Gates shouldn't be talking to his legislator.
Seem to run out of reply room.
What price do the rich pay besides low taxes? And how can I get laws passed, the rich won't let me.
Who do think pays for the re-election process? Who buys those $500 per plate dinners? Who hires the lobbyists? Hint: it isn't the poor people.
The rich have one vote per person, same as you. You have a platform right here on HP; use it to make new laws with.
More reply space if you will go to "chronological", in the upper right of the page.
Thanks for the hint.
You just hit the nail on the head! The rich do, they hire the lobbyists to pressure mayors, councilpersons, Senators and Representatives to do what is in the best interest of the rich, not you ... plus they cast their vote. They pay oodles of money for fund raisers, etc to get their guy elected, you may send $25 to somebody who won't listen to you because you only sent $25 and you are poor to boot; yet it is true, you each cast your single vote ... the difference is, you didn't cast your 1,000,000 other votes like he did. They also donate anonymously to PACs and they get secret meetings with law makers as well as bribe them in many interesting ways to get a leg up over you; they also get lot's of perks they don't pay for simply because they have the power and the money.
Lobbyists have value and a place in the political system as information providers, but they should not have one-on-one access to lawmakers. Just like with foreign contacts, lawmakers at all levels should report to an ethics committee any and all personal contact with anyone related to a business affected by a committee they are on or a major vote they will cast. Citizens United needs to be overturned. Politicians and bureaucrats at all levels should be barred from accepting jobs at companies for which they had oversight of or regulatory authority over for six years (one Senate term) after they leave their government position ... it used to be something like that until Bush 43. While I am at it, gerrymandering should be made Unconstitutional..
Agree with nearly all that you say here - it's what I've been pointing out.
Now, how does that mean we should raise the taxes on the rich? You have yet to indicate one single thing that their taxes purchase for them that you don't get as well.
Taxes are the only way the wealthy can pay for the advantages they, and only they, receive for living in this society made up of ALL of us and governed by the Constitution. Taxes are the only way they can give back to society for what society provides them.
And no, the wealthy do not necessarily contribute to society as a whole through entrepreneurship if they can help it. Unless forced to, they will pay the lowest possible wage, for the poorest quality product at the highest possible price that they can get away with; that is the essence of pure, raw capitalism. If you look at American industrial society from 1815 to 1941 you will find all of the proof you need to the truth of that assertion. Sure, GDP grew enormously during that period, primarily fueled by the expansion to the West. But, only a small section of the American population benefited from that huge growth, the other thing that grew was income inequality except during the very frequent major recession and depressions during that period where the kind of government the Right wants actually ruled the country and let Americans simply starve and suffer.
I will say, this feature is NOT generally true of small to medium size businesses. They actually care about those they employ, by-and-large, and often go out of their way to do right by their employees, at least today; I suspect that was true 100 years ago because human nature doesn't change much over time.
Taxes do several things, 1) pay for the operations of the government, 2) pay for implementing those things charged to it in the Preamble of the Constitution, and 3) as part of the general Welfare clause, transfer wealth to and from different parts of society. It is this last part where wealthy get to pay for the privileges that is unique to their status in society. It is also where the Right think the transfer is only one-way, from rich to poor; that, of course is simply not true ... just look at the Reagan tax cuts.
You're contradicting yourself pretty badly here - agreeing that the rich pay enormous sums for access to politicians, then again repeating that they pay ONLY through the tax structure. Make up your mind and then we can decide if you're right or not.
And if you look at the growth since 1950, you will undoubtedly make the same claim - that only the rich have benefited. While the luxuries of the plain old middle class have blossomed and bloomed, and everyone lives a much easier life wile working less you will still maintain that everyone lives the life of our parents in 1950. Doesn't work.
Sorry again, but the general welfare clause does not refer to the welfare programs of today, and it does not refer to the welfare of individuals. It refers to the welfare of the country as a whole and does NOT include any sort of give-away concept or redistribution of wealth. And giving tax cuts is not a give-away or welfare. Give the rich a tax cut and they are STILL paying far more than is actually fair - fair being exactly what every other person pays.
Nope, don't think it is contradictory. When they spend money to buy lunch for a politician, it is for the benefit of themselves, to increase their own profits. The taxes the wealthy pay are, in part, a payment or fee, if you will, to society for gaining access to the politician in the first place, simply because they are wealthy. I don't see the contradiction at all.
I agree, "general Welfare" in the Preamble doesn't refer to welfare programs, although welfare programs might be part. probably a small part of the total concept of "general Welfare"; but, technically you are right, because there was no federal government in place to have put a modern welfare program in place to start with ... the need had to arise first for such programs to be develop and made into law. The "general Welfare" clause simply provided the authority and direction to do so should Congress so choose.
Actually, I won't, not from the 1950s anyway. From the 1950s through the early to mid-1980s, most of America benefited about equally from GDP growth, at least that is what the GINI index and other measures of income distribution and productivity seem to show. It is only with the Reagan tax cuts and financial deregulation did income inequality start to really manifest itself again.
Come, come - when the rich take a politician to lunch they are paying for access. Of course it is to make more money - everything they voluntarily pay to any politician is. Only taxes are not paid to gain access; taxes are paid to stay out of jail.
Sorry - "general welfare" has nothing to do with individual citizens, only the country as a whole. The founding fathers did NOT foresee a time when government might want to pay people to sit home and do nothing; the very concept would have been alien to them. The meaning of the words have changed, but that doesn't change the intent of the writers.
So from the early 80's on, it was all about the rich. Tell me, how many of the great unwashed prior to that time had a computer? Even a commodore 64, let alone the thinking machines we have today? How many had a carry around phone that works wherever they are? How many had a tiny computer in their phone? How many had a giant 50" TV? How many had a marvel of engineering in a hybrid car, full of futuristic gadgets like radar, speed and climate control, built in GPS and all the rest?
You forget just what a simple life people in the 70's led, compared to what we have today.
Not even close. You take your US Representative to lunch, then I will believe you. Until then, it is his wealth that gives him free access to the Congressman, a privilege which you do not have (unless you are rich and/or powerful, of course) but that our society provides him free of charge at the moment.
Paying for lunch is his legal or illegal bribe, depending on the cost of the lunch (I was required to pay for mine as a civil servant visiting a contractor facility or function or, on the flip side, when my company took the head of the FRA drug program out for dinner when he spoke at one of our conferences, he paid for his dinner that we had with him) and opportunity to bend the Congressman's ear to convince him or her to vote the way the rich or powerful person wants.
In addition, the cost of the lunch didn't go back to the taxpayer (except in the form of sales and other taxes), it went to the restaurant who provided the service. What did society get except a biased vote and no say in the conversation?
As an alternative to a tax, I would accept a recorded version of each conversation between somebody to tries to lobby a Congressman or his staff that was not requested by government be entered into the public record and made available to the media and all other Americans. That should be true from the parking meter collector on up.
Applause! You've finally understood it!
The rich man buys the dinner for his congressman - he has paid, from his own pocket, the cost of access (especially when he slips out the check to the re-election fund during the dinner). No taxes necessary, no taxes used to grant access and no need to pretend higher taxes are justified to make the rich pay for their access. Just private funds from the rich person buying what that person wants - access to the politician making the law.
Nope, buying the dinner didn't gain him the access, being wealthy and powerful did. He already had gained the access prior to the dinner based on his status; that is what needs to be taxed.
So the politician looked around, found a rich man, and invited him into the office with no expectation of financial reward.
Sure he did. But we've debated this enough - you insist that the politician did just that, I insist he didn't. Neither of us has seen it done, or not, so perhaps it should end here. You continue to press for higher taxes for the rich, using the excuse that they can call a politician on the phone and need to pay taxes for that bennie, and I'll keep insisting that such a comment is just that; an excuse to ding the rich and ignore any ethical considerations when you do.
Nooo, I know you are pulling my leg, but I need a few more inches any way, the wealthy powerful guy needed something done for him so he used his connections that his status in life gets him and reached out to a politician he has access to that you and I don't, bought him dinner, twisted his arm and got an unfair advantage.
The ethics is they have something for free that you and I don't WHEN there is no particularly good reason you and I shouldn't have exactly the same advantage to the levers of power as they do .. for free. What is it about the rich and powerful that makes them more special than you? I know they are no more special than me and I should be able to walk right up to Senator Ted Cruz and say, "Hey Senator, I have something I need you to do for me on the next vote, let's go have lunch." You know that is not going to happen. But if it is one of the Koch brothers well ...
Since we obviously don't that kind of access, they need to pay a price to us for the access we don't have; they need to pay a price for their unfair advantage over you and me. The form of that price is either in higher taxes used for our benefit to offset the benefit they gain from their privileged access; or public access to the contents of their secret conversations.
The difference is that you think it didn't cost them anything: I think it cost them a great deal of cold, hard cash. Cash for the dinner is just the beginning; the cash into the pac, the check for the election fund is where it's really at, and the place you and I can't begin to enter. Even the $200 a plate dinner is beyond me.
So I think they paid thousands for that little "favor", you think it was the cost of a phone call or quick dinner. We disagree, that's all I can't see the politician handing out those favors without a return of some kind, and the only "favor" that a rich man has is in the form of folding green.
But isn't that the point? I didn't think our founders intended Congressional votes to be bought, which is just what you said they are able to do and you are not.
By paying into PACs and election funds, they are simply paying for votes. They also need to pay back society for the privilege of being able to do that.
There is another more subtle non-money (sort of) approach to this. Let's say brother Koch donated $100 million to your Senate campaign five years ago. He comes to your office unannounced and, of course, is immediately ushered in because of who he is, and he tells you straight out, "if you want to see another $100 million in your campaign next year, you better vote such-and-such a way on this bill" and walks out.
No money has changed hands either to get to see you or to buy your vote, yet the wealth and power of that Koch brother (or pick a Democrat Daddy Warbuck if you will) has just created an ethical dilemma for you. Yet he probably only pays 20% in taxes, if that.
Yes, that was the point. The rich pay, and pay very well, for the privilege of seeing their politician. They don't need taxed to make sure they pay for the privilege as they have already paid.
And in the scenario, that 100 M was paid long ago and favors are still owed. Plus, as you said, the rich man promised more if the politician delivered. You're grasping at straws to say he didn't pay for the privilege this time; he already paid in the past and will pay more tomorrow. Debts are debts, you know, and are collectible if only political.
Yes, they buy votes - that's what I've been saying. Yes, it is wrong, in spite of you wanting to tax them for the privilege. Yes, we should stop it if we can - best bet is to stop hiring politicos that do such things, but of course we keep them on our payroll because they "bring home the bacon", often in the form of the votes that some rich man paid them to do!
So, what is the next best thing, I will change my terminology to fit your description, we will fine them for doing wrong with higher taxes; because, as you said, nothing is going to change. But the bottom line when the whole picture is looked at, and we have been only discussing one small point, is there is an ethical, evening-of-the-playing-field reason for raising taxes on the wealthy more than they are.
There is also another, entirely different reason ... the Conservatives Laffer Curve. When it was first developed for Reagan to show why taxes should be cut, the highest tax rate was to the right of the theoretical rate to generate maximum revenue for the government. Now most studies show, it is too far to the left, meaning the highest marginal tax rate is far too low. It probably needs to raised to around 50% or so to fall in the middle of the range, which goes as high as 70% in one study.
Baloney. Taxes are something everyone pays to support the country; not a fine for supposed wrongdoing that we don't even know happened. You really are grasping at straws, just to get more "free" money out of that evil rich person.
Before you can convince me that we should increase taxes on any specific group you're going to have to justify that move ethically. You've tried really hard here, first by charging the rich for something they've already paid for and then by fining them for something you don't even know if they did or not.
Now it's just a raw grab for their money. Show how that is the right thing to do, ethically, and maybe I'll join your crusade.
ps: Keep in mind that only a fool tries to generate the maximum possible for the government; that is the [/i]last[/i] thing we want to do. Govt. already gets far more than we should have ever allowed; we certainly don't want to maximize the spending habits of our "servants" on Capital Hill.
I absolutely understand the absurdity of the fine thing, but I also understand the absurdity of the wealthy/powerful getting a free ride based on their status in society. Unfettered and unique access to have a hand in the laws that will increase their wealth/power is just but one of the freebies they get; there are many more which all people of wealth and power take advantage of to improve their position that are available only to them, and in cases me, because I have enough money,
For example, let's say you have $10,000 in brokerage account after skimping and saving for ten years because you studied up on option trading. In a constant market, going up or down, it just has to be steady doing, you can earn about $1,000 a month without too much trouble if you are careful and pay close attention to what is going on and don't get greedy. However, you will have to do it on your own.
I come along and win $100,000 in a lottery and put it in the same brokerage account. I don't know diddly-squat about option trading but I am nevertheless savvy enough not to be hoodwinked. I can guarantee you someone from that brokerage firm will come along and help me invest my $100,000, a perk for being rich, while they will ignore you and your $10,000.
Now, while that kind of "perk" doesn't fit into what I have been arguing for, because it is simply a business transaction and you got the short-end of the deal, it does exemplify what goes on where it counts in the policy and laws that regulate their, your, and my life in this society; which, in the long-run is designed to enrich their lives and make yours poorer in the process while they get a free-ride.
Just the fact that "they are allowed" to spend all those millions to buy influence is a free perk that they should be required to pay society for since it is society that allows them to do it in the first place. Of course this is a new idea, which is why it would bother Conservatives so much, it is new. While this isn't an income tax, it is still a tax of some sort; using the income tax is simply convenient.
And here we go. Again.
On the one hand it's "I also understand the absurdity of the wealthy/powerful getting a free ride based on their status in society." but was exactly the opposite when you tell what it is actually costing - a million dollars was the example, though I recognize that access doesn't really cost that much.
Now we're back again to it's free, but costing money at the same time. You really can't have it both ways; either access really is free or it costs, and we both know the answer to that one; we have both mentioned what the rich actually pay for their access. You try to spin the cost into nothing, but also recognize that money DID change hands.
As far as all the other perks of being rich; I can't buy a Lear jet, either. Money talks, and money does indeed have privileges that being poor does not. Lets look at your broker example just a moment; brokers collect fees from both I and the rich man; they might get $100 per year from me and $10,000 from the rich man. Now who do YOU think they would be paying attention to? Which one makes more for their company? Which one puts food on their table? They both take the same amount of broker time, which one earns? Now can you really make the claim that I should get as much of their time as the rich man?
And no, you can't double dip from them; in this country society doesn't charge people for the privilege of spending money. It IS a free economy, after all, and the money that the rich pay DOES end up in the hands of the not so rich. I understand that the idea that some people can afford things you can't really sticks in your craw, but you do NOT have any ethical right to take it from them just because you don't like it. It's the way the world has worked since caveman days; live with it.
In following your exchanges with Wilderness I just lurked because it seemed to be yet another "the rich must pay" chant - which I think Wilderness has more than adequately replied to.
But now, I wonder if you feel your rationalization would still stand if it were applied more generally.
As in, do you feel the same for anyone that has an advantage that everyone does not have?
Celebrities and sports stars could be said to have an inside track, (advantage), to coveted big event tickets. Court-side basket ball seats, Inaugural speech front row seats, opera box seats, etc. etc. - should they have to pay "the rest of us" extra, or submit a public transcript of their conversations at the event - because they have that advantage and we don't?
A dedicated and appreciated mayor working 18 hour days for his city or town may get a courtesy call to move his illegally parked car before it is towed. If a dedicated and appreciated family wage earner, working 18 hrs. a day for his family was illegally parked - he probably would not get the same courtesy call. Should the mayor have to pay "the rest of us" extra, or submit a public transcript of his "courtesy" conversation - because he has an advantage of his office that we don't?
You speak of your long military career, so surely you have seen the truth of the adage - "Rank has its privileges..." Do you believe ranking officers should have to "pay extra" to non-officers for the advantages of rank they don't have?
Should anyone, that for whatever reason, doesn't have to stand in the same line as the rest of us, have to pay "the rest of us" extra, or submit a public transcript of conversations that led to their line-status advantage that we don't have?
I realize that your points are directed to the political arena, but it sure sounds like wealth envy to me. And that is pretty hard to rationalize as anything but what it is.
GA, I appreciate you jumping in, it is a good discussion, even if it is off the point somewhat, because it gets down to a couple of different philosophies. First, let me say I am a pragmatist, while I may argue principles, I do know there are reasonableness tests to everything in life.
The principled argument here is if the preferential access that wealth and power in our society, in and of itself, provides a person over and above any other positive contribution that person may have made to earn the preference should be free for the taking when those without wealth and power cannot benefit from the same preference simply because they are not wealthy and powerful. That is the long-winded, convoluted question I am posing. I say the wealthy and powerful must pay for that "service" while Wilderness and yourself, I think, say they should get as a free benny for having attained that status whether they earned it or not. Have I got that right?
Further, I am talking about the private citizen receiving the benefit from the politician in order to become more wealthy and/or powerful, not the other way around; the lawmaker or bureaucrat is just the vehicle for the private citizens self-aggrandizement.
In your celebrities example, is that between private parties or private and public parties? If it is between private parties, then it is between private parties. If it is between private and public parties, then it needs to be scrutinized. I know that if I, as a DoD civil servant, was given such a gift, I would first report it up the chain, and more than likely either have to say no, I can't take it, give it the appropriate office, or pay for it. If I was an elected official, I would probably have to report it to the ethics committee and let them rule on it or report it in some other format. The only thing I was allowed to keep without reporting was small honoraria, like plaques or pens, for making presentations at conferences. I once got a very nice silver plate from a South Korean organization which I gave a talk to that I promptly turned over to my organization where it is stilled displayed today.
As to the illegal parking, that would be a nice gesture in both cases.
The perks we had as officers went along with the responsibilities we had with the job. However, if the perks exceed the acceptable limits, like having enlisted mowing the general's lawn (which happened well into the 1990s), that is unacceptable; I think that practice has stopped now and they hire maintenance workers. Also, if the perks were used for personal gain, you could get court-martialed for that.
Let's take "standing in line". I have to stand in the "gold" line at the casino and sigh as others fly right through the "platinum" line. But then I know they earned that right by putting a lot more money through the slots than I do; not by knowing the owner of the casino. On the other hand, I wouldn't be upset if that is how they got their platinum card in any case because the owner has every right to give platinum cards to whomever he wishes; and if I not the lucky, then I wouldn't be surprised for I am one of the unluckiest people who go to Las Vegas.
As to wealth envy, 'fraid not; so yes, I am talking about possibly raising my own taxes, although I am on the very low end of doing well. But, with a little asset rearrangement, I suspect I could get lunch with one or two low-level Congressmen if I wanted, which fortunately I don't, nor would my wife let me ... she's a smart woman. Alternatively, if the stock market would remain somewhat stable for awhile, I could go to a $1,000/plate dinner per month for as long as it does, but I don't want to do that either, I just wish they would read my hubs.
This data is a bit dated (2007), but it suits he point.
Median U.S. income from example approx. $50k
Federal tax for a $50K salary for a single filer will be $9373.75 (no discussion of deductions)
Median income of top 1% approx. $717k
(The top 1 percent paid an average income tax rate of 24 percent in 2009 - Reuters)
Federal tax for a $717k income, single filer is approx. $172,082.00 (again no deductions discussion)
Median income of top .1% approx. $5.2 million
(Assuming all was capitol gains - 15% tax rate)
Federal tax would be approx. $520,000
All those seat-of-the-pants numbers were only to show that theoretical tax payments from the Average Joe is around $9300, the reviled 1%er is around $172,000, or 18 times more or 1800% more.
And the .1%er - at around $520,000 pays 56 times more, or 5600% more
*Of course I know deductions and loopholes make those numbers suitable for an equity example only
So speaking in terms of actual money changing hands from citizen to government - it looks the those rich folks are already pay more, (a lot more) for their special access. I guess by, your logic, you can see why they get to go through the Titanium line.
From my perspective, in real life, pre-bottom line percentages are only indicators - it is the real bottom line that tells the story.
You keep saying the rich should pay more, or extra, for their privilege of access - but the data says they already are.
So which is more important to you, actual dollars into the Treasury, or percentages?
ps. glad you are doing well enough to grab a Congressman or two. Would you pay extra to the little folks if you did do that?
But the comparison of $9K to $172K to $520K isn't valid. What is valid is looking at percent of disposable income. Let's say to survive one needs $30,000/yr, so in your examples, that leaves our three hypotheticals with disposable incomes of $20K, $697K, and $5.2M.
So, how much does each amount of tax burden mean to each tax burden? Let's see ...
$9K/$20K = 45% of disposable income
$172K/$687K = 25% of disposable income
$520K/$5,200K = 10% of disposable income
So, the way I see the world is our $50K guy contributes 45 cents of each earned dollar to support society while only 10 cents of each unearned dollar (assuming your capital gain scenario) of your top .1%ers goes to support society ... that simply doesn't seem right to me.
If I could pigeon hole some, it would be on topics like these.
No, and that's the point. The rich man owes, ethically, exactly the same amount of national support as the man without a penny to his name. He gets the same benefit (actually far less in our entitlement society); he should help support the same.
That can't work, so we've convinced ourselves that it is fair somehow to charge the rich man far more for the same thing. We don't do it for a Ford or a hamburger, but for taxes we will. Because it reduces our own tax burden and we CAN require it - that's good enough for the twisted and self-serving process most use when it comes to taxing someone else, whether it be income, alcohol, tobacco, gasoline or any other tax. You're trying to turn taxes on the rich into some kind of "sin" tax, like alcohol or tobacco, and that's a sin in itself. The costs of the nation should be born by all, equally.
That that is unworkable is another subject and a solid reason for a graduated tax. It is NOT a reason to simply throw taxes at everyone but ourselves because we don't want to support the country.
Your method - can you define "disposable"? Keeping in mind that there is a man a few miles from me that is a throwback to the original mountain man. He "earns" a handful of dollars each year from selling hides and such, but pretty much lives on $0. If he can do it, so can you and 100% of income is thus "disposable".
And finally, your figures are screwed up and do not reflect tax brackets. Look in the IRS documentation and get the real brackets if you want to throw numbers like that - even with tax loopholes designed to buy specific actions from the rich via a lowering of taxes, they pay more than you are showing.
Of course the dollar amounts are valid. And you mixed up your numbers too. The 9K was tax on 50k, not 20k - I don't know where you got that from. Arbitrarily applying it to what you call disposable income is not any part of the tax burden discussion.
Sticking with an apples to apples comparison keeps the point of the conversation - the rich are already paying more.
I just can't fathom why you would think a percentage number is more important and telling than a real number of actual dollars. Unless of course you don't care about the actual money - just the opportunity to sing the "fairness" song.
And why would you need to look at hypotheticals, when the real numbers are available?
ps. you are right about this being a "pigeon-hole" topic - I think our different perspectives are obvious by my reliance on real numbers, and yours on percentages - looks like we have both been "pigeon-holed."
I got it from looking at 'disposable' income which is income you can do without in a pinch; income you can pay taxes with without starving from doing so.
I speak in percentages for the same reason economists do, it allows for comparison of relative importance when the baseline numbers are different. For example, the debt of the US. If I asked you which was worse, the total debt of the US in 1945, at the end of WW II or 2013, I suspect you would say 2014 ... and you would be wrong because numbers are tricky.
First there is the value of money over time. The debt in 1945 was $258,682,187,409.93 and on Feb 27, 2014 it was $12,443,553,233,585.57 . Clearly, the 2014 number is the winner ,,, well we don't really know because the $259 million is in 1945$ and the $12 trillion is in 2014 current $, So, converting to 2014 constant $, the $259 million grows to $3.36 trillion.
Still much smaller than the $12 trillion, but in my world as a professional cost and economic analyst, it is still meaningless because I don't have anything to compare it to, they are just two numbers, one bigger than the other. The question is, what does each mean relative to the economy at the time, i.e. 1945 and 2014. In the terms of your example, that would be the income levels of disposable income.
So the real answer is what percentage of GDP is the debt and it turns out than in 1945 it was around 145% and today it is about 75% or so, using public debt only, which is the proper measure. Clearly, the debt of 1945 was by far the worse of the two, just like the tax on the $50,000 earner is the worse of the three. That is why you use percentages, it puts everything into perspective.
To put it another way, why to baseball players use percentages, why not just total hits to see who is the better batter?
(BTW, subtracting out the $30,000 survival income is called 'normalizing' the data for it puts each group on equal footing in terms of being able to absorb the tax burden.)
*sigh... OK, to you it is all about percentages - not actual dollars contributed. I guess we end at loggerheads. I continue think you are wrong, just as you think I am.
But... skipping the dissembling GDP lecture - which to me is just an effort to rationalize your manipulation of the real numbers to suit your perspective - let's get back to "your" perspective of the example numbers used.
"So, how much does each amount of tax burden mean to each tax burden? Let's see ...
$9K/$20K = 45% of disposable income
$172K/$687K = 25% of disposable income
$520K/$5,200K = 10% of disposable income
So, the way I see the world is our $50K guy contributes 45 cents of each earned dollar to support society while only 10 cents of each unearned dollar (assuming your capital gain scenario) of your top .1%ers goes to support society ... that simply doesn't seem right to me."
45 cents of every earned dollar? Your 30k "survival" income wasn't earned? Or was that just to escape the true 18% tax rate for that "50K guy?" 18% vs 25%, or even 10%, doesn't sound nearly as lopsided as 45% vs. 10% does it?
Just wondering...Does your emphasis on unearned capital gain dollars mean anything significant to you?
Where did you get that 30K survival number anyway? I bet there are a lot of sub-30K wage earners that would love to have 30K to "survive" on.
"...(BTW, subtracting out the $30,000 survival income is called 'normalizing' the data for it puts each group on equal footing in terms of being able to absorb the tax burden.)"
The discussion was never about "absorbing" the tax burden. It was about your demand that the rich pay more. I have shown that they already do. Are you addressing another issue now?
I think your original contention has been addressed. The tax burden question is for another (debatable) topic. Good luck on that.
We are a Federal Constitutional Republic. The Supreme Court - Roberts sided with the liberal justices in this one - failed to FORCE the states into an Unconstitutional expansion of Medicare at the command of the Federal government. What is the problem? If there is one, then it is up to each state to fix it. Rather than FORCING the states to do YOUR will, why not win a few elections in those states and change their laws, or is that too democratic?
Lefties love to talk about democracy until they can't get their way, then they entreat the least democratic method to change the law - the courts. If lefties actually valued democracy they would change the law through democratic means. Campaign on the merits of their position, convince a large enough portion of voters to get elected and work with like minded legislators to change the law - but no - lets blame or praise the APPOINTED justices of the Supreme Court for by passing the electorate.
There is nothing less democratic than a Supreme Court decision.
My words are nevertheless true. Roberts and the other Conservatives on the Court were well aware of the consequences of their actions, which are philosophically-based, not specifically Constitutionally-based. If they were an absolutely clear violation of the Constitution, then Social Security, Medicare, and Medicaid would have been found to be Unconstitutional in other rulings as well.
No, this is the 5 Justices 'interpretation" of the Constitution; the other 4 Justices saw it the other way. Now, if this had been, say, a 8 - 1 ruling against that portion, you might have a point, but it wasn't, it was 5 very Conservative to mostly Conservative against 4 rather Liberal to very Liberal Justices.
Also, you need to remember, virtually all of those who wrote and signed the Constitution were opposed to "Democracy"; they thought it the worst form of government in both theory AND practice. That is why they really didn't want a popularly elected President and Senate, which, as we all know, didn't start out that way. There was also heavy debate as to whether the House would be elected by the People or State Legislatures; fortunately the People won. As to the Supreme Court - they were intended to be autocratic in their final ruling but democratic in determining the ruling; the final arbiter, the interpreter of the Constitution, and quickly were also the unchallenged adjudicator of whether Congress overstepped its authority vis-a-vis the Constitution.
The fathers distrust of democracy led to America being a Republic, the checks and balances, and the two Houses. There is NOTHING democratic about the House Rules or Senate Procedures; With gerrymandering rampant in America and Citizens United being the Law of the Land, there is nothing democratic in our election process either.
So, trying to use such "bumper sticker" phrases as "There is nothing less democratic than a Supreme Court decision" is meaningless because 1) it wasn't supposed to be and 2) there is nothing democratic about this country at this point in time, and for the most part, it was never intended to be.
As to 'forcing' the States', that started with the ratification of the Constitution itself, didn't it; there were several States that didn't want to go along, but nevertheless had to or be left behind. In this case, the Federal government knew States like Texas and Florida would rather keep doing wrong by American citizens than do right and jeopardize their health care, so force they will ... just like they did when they FORCED them to end slavery. Would you have opposed that too?
This ends the conversation, the scurrilous retreat of the scoundrel - equate any opposition to an intrusive government to support for the most DEMOCRAT of institutions - slavery.
Obviously Retief, you could use a firm refresher in civics. Was I suppose to wait for southern legislatures to abolish JIM cROW IN a segregated south? The courts have a vital role of making sure an oppressive majority do not run rough shod over fundamental constitutional right of others not in the pecking order. Obviously, the rightwinger believes in democracy only for his and her own.
Where is the "FUNDAMENTAL CONSTITUTIONAL RIGHT" to health insurance?
Don't go daft on me, retief, you know what I am talking about, your general attitude about the courts and their function based on your earlier comments. The bait and switch approach will not serve you well here.
Reread the Preamble to the Constitution, @Retief, absorb the true meaning of those words and direction to the perpetual Union of States and Federal governments.
The Federal government, to steal a few words from Abraham Lincoln is Of the People, By the People, and For the People. He did "not" say Of the States, By the States, and For the States; only the first phrase is correct. He chose to use People because that is what the Constitution is all about.
Now, put that in context with the Preamble and you should get an idea how those of us not on the Right think about the purpose of government.
Yes, that it is a religious calling to compel everyone to live within the rich fantasy world you have created. Perhaps reacquainting yourself with Amendment 10 will clear things up for you. It is the States that created the United States, history is rather clear on this.
Now you just shush, Retief. We know the conservatives want to see people die because they follow the law, and that's just how it is. If they really cared, they would ignore the laws of both the Constitution and US as well as the laws of economics, physics and everything else, and make sure the poor always have a lavish lifestyle to enjoy.
After, all that's what the people loving liberals do, isn't it? Ignore the constitution as they bankrupt the country with Obamacare?
As you well know,m @Wilderness, it has never been about " make sure the poor always have a lavish lifestyle to enjoy.", it has always been about "preventing those who can from making sure the poor don't have a lavish lifestyle, if they can."
You see, the difference between you and me is we both don't wan't any restrictions on somebody doing as best they can given their ability and determination. But you seem to go one step further, you don't want to put any restrictions on somebody from unfairly preventing others from using their abilities and determination to get ahead as well
It is OK with you for a wealthy guy to use his wealth to unfairly rig the deck against you without paying a price for doing so.
Not at all; we just disagree on what is "unfair". I try to live in reality while you want to live in a make believe world where money doesn't buy anything but necessities of life. Plus, of course, whatever else you want; the yachts and jets that some want should not be available because it takes too much money and some people can't have a big screen TV as a result of others buying that yacht.
That and a hatred for anyone you consider rich. There seems to be an automatic assumption that anyone with more money than you have got it both illegally and immorally. I do not find it such, and firmly believe that there are ethical rich people; nearly as many as unethical ones.
I don't like the rich being unfair (although buying things with their money is not "unfair" somehow) but refuse to descend to their level in a misbegotten effort to "make things right" according to my definition of "right". You don't; you are more than willing to get right down in the mud with them, using the power of the masses to take what is plainly theirs to "level the playing field". Well, let me tell you - the playing field is already level. That they have built a mountain on one end doesn't mean that at the bottom of their accomplishments it isn't level.
Where have I ever said "... the yachts and jets that some want should not be available because it takes too much money and some people can't have a big screen TV as a result of others buying that yacht"? They can buy anything they want that makes them happy ... except politicians and monopolies, price gouging, price cutting to force others out-of-business, deceptive advertising, defective products to increase profits, paying subsistence wages because the labor has no choice but to work at them, and any similar thing where others don't have the same opportunity to return the favor of ruining their life.
I don't hate people who are rich, otherwise I would hate myself ... and I don't. I do hate, however, rich people who are unethical and unfair and use their power(which I am not) and wealth in unfair, unethical, and immoral ways. By opposing me, you are declaring that you don't.
In your last paragraph you just defined the difference between a minimal-state liberal (liberal because you care about individual rights) and active-state liberal. President Grover Cleveland was a minimal-state liberal, President Abraham Lincoln was an active-state liberal, and Thomas Jefferson was both, depending on the issue and his mood; just to give you two historic reference points.
I have some hubs on the two types of liberalisms and give and overview of the two men who were most responsible for formalizing and promoting each view back when. If you look at them, you might discern your argument in one and mine in the other.
But if their money goes to yachts and jets, it cannot end up in your grasp to do with as you please. No more excessive entitlements, no more extreme taxation of the rich. The money that "should have" gone to help the poor is already spent on "worthless" items.
If you don't hate rich people, why do you wish to punish them all with extra taxation, (to make up for their unethical access and buying of politicians) regardless of any wrongdoing?
As a financial conservative, I cannot understand the desire to take what others have to re-distribute it to the "poor" or "less fortunate". I understand the desire to distribute my OWN money that way, but not to forcibly take from others to do it. That is, IMHO, called theft and is immoral. So no, I cannot identify with either liberal as both will re-distribute to suit their desires and buy votes.
How about because they are "unfairly" taking it from the poor, working, and middle classes and redistributing it to themselves in the first place. I am just proposing to return it from where it came. That which they "fairly" earned, they can keep.
If someone robs a bank, they must return the money, shouldn't they? Or, do they get to keep it since it is theirs now?
It is as simple as that to me.
How about defining "unfairly" - so far you have been very reticent to do that, but if you're going to make a claim like that you're going to have to define the terms.
You don't mean to return it from where it came, because it "came" under 100% agreement from the one giving it. A sale is usually that way; not a gun held to the head while the contract is signed.
As simple as that, yes, as long as you define a simple buy/sell contract between two consenting adults as theft because you don't like it. You don't have that right.
It always ends up here with the liberals, doesn't it? "I don't like that the rich have money, so will make up baseless accusations (theft, unfair) as excuses to force their money from them at gunpoint. You want the money of the rich, ethically, find the law they violated and prosecute them in a court for it. Until then, we are a nation of law, not vigilante action, no matter how large the group of thieves is. You've gone from punishing them with higher taxes to pay for something they already bought and paid for (access) to raising taxes because they are "unfair" when a buyer agrees to the terms and on to the final excuse that they stole with every transaction. All excuses, all baseless, and all just spin to justify legal theft from someone that has more than you do.
So I imagine it IS just that simple - the rich have what you want and you will take if you can.
You have a independent gas station on one corner and make a nice living from it by charging a fair price; you could charge more, but you choose not to because the area you have your station in isn't that well off.
I open up a brand name franchise and have a ton of money. So I cut my price to $.10 below cost until such time as you are forced out of business go bankrupt and on welfare. Once you are out of business and because I now have no competition, I raise my prices to $.50 above what you were charging and get it. If someone comes in and tries to compete, I drop my prices down to where they can't and leave.
That is real life where there are no laws preventing it and that is unfair.
Another example, is I own the gas station on the corner and you want to come into compete. I use my power and money to influence the local government to rezone the land around me so you cannot compete and I keep my prices high. That is also unfair.
By keeping my prices unfairly high, I am taking money from individuals who were purchasing gas at a lower price from you and potential rivals and putting it my pocket. There are no contracts in these real life scenarios, there are no arms distance transactions, it is simply using power and money to strong-arm you out of the way so I can gouge the locals.
So the real problem is that government can determine who can and cannot compete in the market and that government is for sale, yet it is government you want to correct the problem. This is internally logical to you? It is madness. The stupidity of any company harming its own profit margin solely to gain a monopoly is pursuing a fools errand. Monopolies ALWAYS fail, in time.
Perhaps a little economics education would help.
Oops.... you are right, maybe a little history and economics education would help. Then maybe a little modification of your statement might be in order.
There are just too many real-life current examples that show your statement to be incorrect. Sort of like "Lose the battle to win the war..."
Although I disagree with My Esoteric's premise, and his philosophy behind it - his example is not a far-fetched never-happens scenario.
Monopolies may get "broken-up" by government entities - but they do not always fail. Chances are very good that you have to look no further than your local community, (at least non-metropolis areas), cable TV service to see a government condoned monopoly in action.
Name a monopoly, one neither public nor sustained by government intervention, that hasn't faded? At one time A&P and J.C.Penney were retailers as potent as Wal-Mart is today, what happened? Monopolies do not last without external maintenance from political entities. Breaking up monopolies is an unwarranted intrusion in the market. Even Wal-Mart is vulnerable, as Amazon poised to illustrate.
What constitutes a monopoly?What company has absolute control of its market? At one time Olivetti had a near perfect monopoly in the electric typewriter market, after nearly everyone switched to computers. Why was it not broken up or attacked by the government, like Microsoft.
Monopoly, like price gouging or, even more so, like fairness are all subjective terms which politicians want writ as objective so they can make an electoral constituency feel good. It has little real meaning without the power of government to enforce it. An artisan bakery in a small town has a virtual monopoly over bread from scratch, is that worth our attention? Isn't his monopoly ephemeral? Much like Starbucks, it won't be long before McDonald's and the local gas/convenience store offers something comparable at a savings.
Well, I had an nice long response that just went into bit heaven.
It is hard to find true monopolies today, but they keep trying, and they do get government help sometimes like with GA's cable example, although that is being challenged more and more. More to the point, Maryland, for one, had to pass a law to prevent what I used an example with the gas stations (which is what made me think of using it); I think California did as well.
But, before President T. Roosevelt began cracking down, the most well known monopolies were Standard Oil, J.P. Morgan & Son, U.S. Steel; all were broken up. The government helped create the AT&T monopoly, but broke it up years later. Microsoft was another long-term monopoly before the U.S and European governments began to bring legal action against them. Even today, they are still an effective monopoly.
Wal Mart is still an effective monopoly when measured against small, resource-limited competitors in the downtown and surrounding area of small to medium-sized towns, easy pickens for a company like Wal Mart. The only protection these businesses have is to get the towns to keep Wal Mart out; some have been successful, some have not. When measured against similar type stores such as Costco or Target, they are just the winner of the competition, a very big winner given Wal Mart's total sales exceed the combined sales of all its other competitors. By the way, in this field, J.C. Penny and A&P were never monopolistic, there were many competitors, big and small; down towns were safe from decimation.
What isn't safe are farms, once upon a time the best example of the free market system. Soon, this will no longer be true. The small farmer, even though they still own 90% of farms, are succumbing to high expenses and low or no profits ... as well as the encroachment of "agribusiness" owned by corporations. These corporations five (it used to be four) have long controlled grain trading and now they have grain production and distribution in their sights; this isn't just U.S. but worldwide.
Now while monopolies aren't all that common anymore, oligopolies are. Oligopolies such as the Big Three auto makers for 59 years until arrogance mixed with incompetence and the Great Recession brought them down; until then, they kept the U.S. auto market to themselves. That is now starting to happen with the airline industry as the power has concentrated down to three entities; Southwest, American Air-U.S. Air, Delta, and Continental-United; they now control almost all of the the major national and U.S. international routes.
The financial industry is going the same route. This isn't the 1960s anymore, it is the 1890s all over again.
Damn! Once more I seem to have stumbled into a fog of semantics. Was the intent of your original statement MONOPOLIES, or monopolies, or both? Or was the concept of monopolizing a market part of it too?
Your discussion of the BIG MONOPOLIES in your follow-up comment seems to show they don't always fail - the appearance is that they are so successful they have to be dismantled.
Regarding the small-term monopolies, where you cite Walmart - isn't that more inline with monopolizing a market, rather than being a monopoly? And they certainly aren't failing.
Your Artisan baker might be a better example of a small-term monopoly - but what good is a monopoly if there is no market? Odds are that if a market did develop their monopoly would soon be challenged by competitors.
The ill-effects of corrupting financial and political power which My Esoteric, and yourself speak to are very real problems. But my response was to the statement that Monopolies always fail - which your further response seems to contradict as well.
A replay of the 1890s business tactics? You might have a good point, but it would be a replay with a sophistication that the 1890s would never have thought of.
ps. I have lost a few good ones to that bit-heaven too
Wal Mart is an extremely interesting case study.
1) As I said earlier, with respect to small and mid-size downtown and suburban merchants who compete merchandise-wise, Wal Mart is a true monopoly in that there can be no competition from these retailers; it is impossible for them to meet Wal Mart's prices. Consequently, they go out of business leaving Wal Mart sometimes the only game in town. If Wal Mart did its demographics correctly, they can keep it that way, for there won't be a large enough population base to attract Costcos, Targets, and other Wal Mart wannabes to that territory.
2) Where there is a large enough population base to support other Wal Mart-type stores, they do show up and compete.
3) Wal Mart is also a monopsony; it dictates prices to its suppliers. I only picked up on that term about a year ago when researching. I suspect that was covered in my econ classes, but it faded from memory. But being a monopsony, where others cannot be, is another way of establishing monopolistic control (or at least oligopolistic control) in a market.
4) Wal Mart still controls its own distribution and warehouse system, long after many competitors gave up, at least in the distribution (trucking) part.
5) Wal Mart now has an established brand of products which competes well with other products, but at discounted prices. I don't know if Wal Mart has completed the vertical integration by going into providing the raw materials for its products, but who knows what the future holds.
Do I think Wal Mart will become a monopoly in the true sense of the word ... I doubt it. But we are now at the stage where if Wal Mart wags its tail, others have to move out of the way or get crushed.
Well, maybe it is semantics after all... from monopoly to monopsony. It still doesn't alter my original response. It is just another conversation, which also has a problem or two.
For instance, your #1 reason for Walmart's monopolistic power...
"...there can be no competition from these retailers; it is impossible for them to meet Wal Mart's prices. Consequently, they go out of business leaving Wal Mart sometimes the only game in town. "
Perhaps if price alone was the only strength of their business, then maybe it is not Walmart's fault they went out of business.
There have been more than a few case examples of Walmart-impacted businesses changing their business model and doing very well - instead of failing.
In my area of the country, Ace Hardware is a prime example of small business going head to head with a big box business. Instead of being put out of business by Lowes and Home Depot arrivals, Ace changed its business model to focus on customer service and convenience - and is thriving and expanding. So.... #1 seems to be a constricted view.
Aren't the rest of your listed reasons just smart business practices?
I have an Ace down the street in my little town of Keystone and another in Starke 15 miles away; and you are right, they fall all over themselves with service (except when 'I' need it). But, the closest Lowe's is 30 miles away making the price differential go away due to the cost of gas. If there were one 10 miles away, they would have my business because I have always found Lowe's service excellent (HD a little less so) and Ace's prices are astronomical be comparison.
As a consequence, Ace would get my small business, but Lowe's would get my big business. However, having said that, Lowe's and Home Depot have found the magic which Wal Mart has in keeping their operating costs lower still to expand their foot prints around the country.
Back in Woodbridge, VA, South of D.C., I would by-pass Ace in a heartbeat.
Sorry @relief, it is you who may need the education; I already have a certification in Cost and Economic Analysis from the Air Force Institute of Technology and then 21 years in the field. This is addition to the multiple courses in various aspects of economics while earning other degrees. I am quite satisfied with what I know about this field.
Companies harm themselves all of the time in the short-run if it provides a long-term gain in the end. Google the term "loss-leader", for a simple example.
I get so angry at the demonization of the working poor in this country. When you take everything from people and then scream at them to just "pull themselves up by the bootstraps" - it does nothing to help them. Most of the people who do this have never understood what it's like to lose everything, or to not have family available who can help, or to live in an economically depressed area where all the good jobs have gone overseas. It's not as simplistic as it's made to sound. I know quite a few with advanced degrees who can't find work - and it isn't because they are lazy or not determined, it's because no one will hire them when they can get a kid fresh out of college cheap or outsource the work overseas.
If we really wanted to be the compassionate people we claim to be, we'd institute better programs to help these people, but it seems to be the hip trend now to turn on the poor - that way the attention is diverted from the real "welfare queens" - the giant corps whose employees often have to depend on govt. assistance since they are not payed a living wage or offered decent benefits.
Sad state of affairs to deny medicaid to people.
We did, but the Conservatives on the Supreme Court found it Unconstitutional and 14 Conservative States took advantage of it.
How would you suggest we help? Just throw money at them?
How about giving each and every one a job - sweeping streets at $15 per hour. They maintain their dignity by staying off charity, contribute to society in a useful way, and are still able to get along, albeit without the luxuries they are used to.
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