Obama: Taxes are about fairness

There is a mass concentration of wealth in this country and with the resources we have, it is absurd that people should have to worry about such basic things as housing, health care, and education; whatever mechanism we've had (call it 'capitalism', 'free markets', etc) has failed.

Whether or not lowering tax rates causes in increase in revenue is a long-standing debate in economics; it all boils down to there being too many confounding variables.

If you have only recently been hearing Obama's thoughts on fiscal policy, I'm wondering where you've been for the past year.....heck, I'm wondering if you are even familiar with the fundamental platforms of the dems v gop

obama is friends with lots of chicago economists, so he knows a thing or two about the subject. he's a pragmatist through and through; he'll say lots of dumb populist stuff to get elected, but you can probably expect him to move toward the middle once in office.

ChelseaFC85, i would like to believe that, but it seems to be wishful thinking. Do you really think he will move to the center with a liberal congress urging him for higher taxes and more government programs? Even Bill Clinton, who is a moderate democrat, succumbed to the liberal temptation and gave us the biggest tax increase in U.S. history in 1993.

chicago has a lot of liberal / behavioral economists (becker, thayler, levitt) - it's not purely libertarian.

the question of how much influence congress will have on the obama administration is more interesting - a lot of people are worried that Harry Reid and Nancy Pelosi will steamroll Obama, though I'm not sure of their positions (eg - programs they support and how they propose funding), so I can't comment much further.

But again - jjc: how is this news to you?

I'd submit to you (paraphrased from the immortal words of G.K. Chesterton) the the problem isn't that the free market has been tried and found wanting, it is that it hasn't been tried.

Do some research on the poverty statistics in this country. Abject poverty no longer exists. Poverty in America now means you only have one car and one television. The official poverty line for a U.S. family of four in 2008 is $21,200. Compare that to the fact that FIFTY PERCENT of the world's population survives on $2 a day or less. Not the bottom one percent. Not the Bottom Billion. The bottom FIFTY FUCKING PERCENT. Over 3 billion people.

The only answer to world hunger is capitalism and the free market. Do some research on micro-loans and the impact they have on the 3rd world. Handouts are never the answer; investment is.

Americans need to get real and admit that no one in this country is poor anymore. We are just at different levels of wealth relative to the world around us. This myopic focus on America as the center of the universe is costing us precious capital.

True free market capitalists believe that human beings are intrinsically good and sometimes do evil things. Re-distributionist big government types believe that human beings are intrinsically evil and sometimes do good.

In other words, true capitalists (myself included) believe that if government gets out of the way and stops taxing so much, we could afford to better help the poor on our own. Guys like Obama believe that people must be forced to help one another, and the best way to accomplish that is the wholesale theft known as taxation.

i guess i'm shocked that so many finance professionals, especially in NYC, are supporting Obama, given that his policies will devastate the economy and hence have an extremely negative effect on the city. Chicago support is understandable since this is Obama's home turf.

By the way, Becker has endorsed McCain. He recently signed a letter condemning Obama's economic program.

Obama's main economic advisor, Austan Goolsbee, is a smart guy, but he also adheres to the redistributionist philosophy, which is extremely disturbing.

Nothing proves the point of the liberal hypocrisy of helping the poor more than Joe Biden's tax returns over the past ten years. For someone who really cares about the poor and wants to take more of your money to help the poor and make things more "fair" (awww, I feel like hugging a puppy now...), he sure doesn't let his checkbook do much talking.

The following are this millionaire clayhead's charitable donations over the past ten years:

1998 Income - $215,432 Charitable Donations - $195
1999 Income - $210,797 Charitable Donations - $120
2000 Income - $219,953 Charitable Donations - $360
2001 Income - $220,712 Charitable Donations - $360
2002 Income - $227,811 Charitable Donations - $260
2003 Income - $231,375 Charitable Donations - $260
2004 Income - $234,271 Charitable Donations - $380
2005 Income - $321,379 Charitable Donations - $380
2006 Income - $248,459 Charitable Donations - $380
2007 Income - $319,853 Charitable Donations - $995 (easy, Big Spender...)

Total Income - $2,450,042 Total Charitable Donations - $3,690

Way to lead by example, douchebag. I wouldn't watch two monkeys fuck for thirty-seven hundred dollars.

You know what sounds FAIR to me?
The same tax rate for all individuals!

LizzieJane, i agree. a flat tax of 25% across the board would be ideal. privatize social security, cut spending on government entitlement programs like welfare, get rid of deductions for married couples and families, and a flat rate would be able to generate the same amount of tax revenues as the current progressive system. the economy will experience a boom that we have never seen before.

I am not a pure-capitalist or a pure free-marketer; I've never claimed to be. Humans may or may not be inherently good, but they surely are inherently irrational. Pragmatic economists who are interested in results (Becker included) acknowledge a need for some degree of government intervention. Free markets are a good foundation, but there are inherently winners and losers. When we live in a country as rich as ours, there is no reason to not have a safety net to ensure people have their basic needs met. America is the only industrialized country without universal health coverage; that is deplorable. Edmundo - you have a very naive view of poverty in America if you think 1 car and 1 TV mean you've escaped it.

Labor Economists have consistently shown that the #1 determinant of a person's lifetime income is their parents' income - this is not a hallmark of a mobile society that provides opportunity; wealth doesn't 'flow down'. I don't care if the rest of the world subsists at a lesser level than impoverished Americans - we as a country can provide more to our own citizens, and then to the world. There is enough that people shouldn't have to live without basic needs.

The ultimate hypocrisy is the republican establishment which touts itself as 'pro-business' but fails to understand the nature of business - which is investment. Better healthcare coverage, stronger public schools (that are not undermined by vouchers), a smarter foreign policy that acknowledges our military is a limited resource - these are the types of investments that pay-off huge, but aren't easily laid down on accounting statements.

By failing to invest in society through fair laws and taxes, Republicans are building up more costs - throw convicts in jail instead of giving them decent education when they're kids; clean up a shattered city after a hurricane instead of having a proper pre-response system; fight against realistic sex education (resulting in more unwanted pregnancies), then condemn abortion; tell people they're covered because they can go to an ER - instead of paying for modest primary care; build up exorbitant amounts of debt, overextend the military, and give tax cuts to the rich - then give people a $600 handout to buy their votes when the economy is in shambles. These half-assed efforts are attacking the symptom, not the problem.

The majority of financiers I know are liberals because they are smart enough to go beyond basic Econ 101 and they realize that markets aren't perfect. In fact, the finance industry is predicated on markets being imperfect - if 'free markets' were truly efficient, we'd be out of a job. Whether or not you've patronized the tangent I've gone on, what's indisputable is that McCain is going to raise spending as well - the only difference between him and Obama is that Obama's honest and says how he's going to pay for it. Think outside the box

and Edmundo - consider that Biden has spent most of his life giving his time and energy to helping the less fortunate. He's a smart guy - probably could be a top tier banker /consultant/ exec raking in millions. Charity and good intentions can be measured in other means besides cash - I'm not suprised that I know that and you don't.

I don't think pure capitalists are evil - I think they have good intentions, they're just wrong.

obama scares me yes but at my most optimistic, I'm in line with Chelsea's hope that Obama won't stick to his populist talk once in office. because nothing scares me more than palin

and yesman - consider that Biden graduated near the bottom of his class in undergrad and law school (non targets!) - there is minimal chance he wouldve made it to a top tier bank or consulting firm - I'm not surprised that I know that and you don't

I don't think pure capitalists are evil - They have good intentions and ultimately they serve the most return for the most amount of people.

oh and disclaimer: I'm not saying that Biden isn't smart but he was a notorious slacker

b4f - believe it or not, how you did in school isn't a perfect indicator of how good you'll be at your job. It's only been fairly recently (past 20 years) that bank hiring has started waxing so academic. Doing well in school helps you get the job, that's about it. You become an analyst/associate based on where you went and how you did in school, you become a senior person by doing the actual job well.

the arguement is ridiculous - McCain was a legacy shoe-in to the naval academy and graduated 4th from the bottom. Bush was a c-student at yale and got into HBS. John Kerry had worse grades at Yale than Bush (works both ways). In fact, the only exemplary scholar-politician in recent history is Bill Clinton - who you've already discredited. I work with (and have worked with) plenty of top-tier people at my BB who went to state schools and barely passed. Again - you're stuck in your Econ 101 textbook.

Ass-backwards, but well said.

As someone who used to own a financial planning firm that sometimes sold American health insurance to Canadians so they could escape the misery of universal health care, I suggest you get an opinion on that matter from someone outside the U.S. who has to deal with the inefficiency of it on a daily basis.

As for your comment about the fundamental need for public education, again the facts disagree with your liberal hypotheses. A little over 100 years ago, before the public education system, this country had a 98% literacy rate. In the century since the government monopolized education (unimpeded by vouchers, I might add), the literacy rate in this country has dropped to 68%, about on par with Uganda. To illustrate the free market in action, private schools achieve demonstrably better results than public schools and spend only 40% of the money on a per student basis that the public education system requires. Figures never lie and liars never figure.

As the wealthy son of a mailman (who worked two jobs as a car mechanic when he was done with his mail route), I humbly submit to you that the liberal economists you reference (probably public college professors themselves) could stand to think outside the box a little.

By the way, aren't you late for Biology?

As far as I'm concerned, the GOP is just as guilty (if not more so) than the Dems when it comes to this stuff.

McCain made it impossible for me to pull the lever for him the other night when he proposed the government buying bad mortgages and re-indexing them to current market values. Sorry, John. Homey don't play that.

funny - I am a canadian dual-citizen, and both my parents worked 2 jobs. Just because you had some clients that wanted out of the system doesn't mean the system is wholly bad Edmundo - representation does not imply causality. Since you are so in love with normative statements on efficiency, consider that if the system were as bad as you say it is, it probably wouldn't exist.

did you ever consider that the literacy rate has fallen becaue of the wave of immigration? have you considered that private schools are better because they're better funded and attract better teachers? (which is not to say public schools suck - they're just neglected). Most people can't afford private schools. Have you ever considered that there are beneficial factors at play besides the free market?

I didn't major in bio - I studied finance, math, and most importantly, econometrics (all at Wharton nonetheless - and I escaped with my liberal ideology in tact). I seem to understand what confounding variables are, and I can avoid making blanket statements about x causing y. and the liberal economists I'm talking about are Paul Krugman, George Stiglitz, Daniel Kahneman.....pretty seminal guys at Ivy League schools. In fact, probably the most important economists of this age.

am I late for bio? nope - just sitting at my terminal on the job.

he is also friends with former domestic terrorists, radical pastors, and ceo's who assisted the irresponsible growth of subprime mortgages

Hey! Let's have a WSO debate!
Y'all can "discuss" it until you're blue in the face and no one remembers the original question. Oh wait...

well, of course - what else are these boards for?

Much like the election/politics in general... Interesting.

Yesman, I'm not trying to be a dick here (Lord knows I don't have to try, just ask anyone who knows me), but I knew the immigrant argument was coming before you even typed it.

The fact is that at the turn of the 20th century this was a country populated almost exclusively by immigrants. Very few Americans at the time were further than 3rd generation. The people of France donated the Statue of Liberty to us (notice I said the people of France, not the French government. A private collection was taken up to pay for it.) because we were such a bastion of immigrant opportunity. Still managed a 98% literacy rate.

As for the argument that private schools are better funded, click HERE for an explanation of the actual figures and the exposition of the fact that public schools get twice the money per student for less than half the results. If only neglecting the public schools were truly an option, this country would be a better place.

I don't think you're trying to be a dick; I think we're just both adamant.

Regarding the 98% literacy rate - are you really stipulating that 98% of legal adults in the US in 1908 could read english? Please cite this.

Public education. The link you sent is an excerpt from a report from November 1997. I will try to read the full document when I have time (it's 81 pages, not sure when that will be). At first glance, here are my thoughts:

Private schools are not a free market - there is an entrance cost that must be paid, and that entrance cost is the taxes that go first into public schools. A family still pays for public schools, even if they send their kids to private. This entrance cost supports my claim that private schools are able to attract choice students who, for broader socio-economic reasons, perform better. Costs can be maintained and better teachers can be attracted. However, this efficiency arguement deteriorates when you consider expanding the platform to all kids in need of education. Private schools are a niche market.

Both candidates agree (and I agree) that a key to improving school performance is to make the teaching profession more of a meritocracy, namely, through standardized testing administered by a 3rd party. Where McCain differs is in his support of school vouchers.

To be brief, his goal is to create a 'free market' for education. Yes, you're taking away that entrance cost, but I don't see what is to prevent the Darwinian course that will inevitably flow.

So we agree to disagree. Very rare in today's heated political discourse where it seems one must hate one's opponent.

Both Obama and McCain will be disastrous for this country, it is all a matter of degree.

Now let's hug it out, bitch. Lol.

Haha - hug it out we shall. Market practitioners may or may not operate in an efficient paradigm, but I have faith we'll find a way to make a semblance of a spread no matter which of the swine is elected.

Edit - Please don't take any of this personally, I just reread it and realize I come off as quite angry...)

yesman - We've never had real capitalism. What we have is some bullshit welfare state where you are rewarded for failing and demonized for succeeding. And "free markets?" Been watching the news lately?

How on earth is it "fair" for someone to steal from me but unfair for me to want to keep what I earn? The income tax is the biggest crock of shit ever invented. You assume that the government owns 100% of my income, and can let me have whatever they feel like letting me have...when in fact I earn 100% of my income and thus shouldn't have it stolen from me by big government bureaucrats. But right, it's greedy to want to keep what you earn, but not greedy to want to steal from other people because they are more successful than you.

The saddest thing about Obama and his stupid fucking ideas is that he makes successful people seem like the enemy. The "rich," "corporate America," "the oil companies," etc are all fucking evil, but the lazy, jobless fucks being subsidized by the rich to continue being lazy, jobless fucks are the heroes.

Socialism doesn't work (see: France).

(By the way, I think McCain is just as big of a moron as Obama, so don't take this as some partisan rant. I'd almost rather have Obama elected at this point...)

cdw38 - I am not a capitalist or a socialist, and I do not think there has ever been a 'pure' system of either

I do not consider income taxes to be stealing - I see the world as having an amount of resources that are limited, but abundant enough that people can have basic needs met. It is a crime that we allow 'ownership' to allow people to accumulate excessive amounts of these resources. There is no reason that the arbitrary concept of 'ownership' should resign people to destitute lives.

Talk political theory - Adam Smith, John Locke - all you want; social Darwinism does not clean up the streets or the environment, doesn't give people a chance to move upwards, and ultimately, it doesn't save your ass when the Bolsheviks are at your door. Pragmatic - useful - economics considers how the world actually works; it doesn't vomit out esoteric fantasy theories. There are other ways to measure wellness besides cash

...we'd have much lower unemployment with lower or nonexistent federal income taxes? For every $100k first-year banker who only takes home $65k of what he earns, that's an extra $35k available to someone besides government bureaucrats...

And it's not some "espteric fantasy theory" - that would be the policy of well-spoken big-government liberals and academics, where if something doesn't exist the government can simply fix it. Unemployment on the rise? No problem, the government will create jobs. Not feeling like paying your loans this month? No problem, the government can just make it legal for you to not pay your bills (we'll call it a "moratorium" and pretend we aren't helping thieving scumbags keep their homes). Can't afford healthcare? No problem, the government will pay for it...

The fact is that the welfare state has done NOTHING for America (here's a 4-minute debate which pretty much sums it up, if you're interested: http://www.youtube.com/watch?v=2GklCBvS-eI ). Socialist policies are what keep France's unemployment at a perpetual 10% and keep their system of higher education in a perpetual shithole. People advocating these big-government policies think the world is a simpler place than it actually is, and get their way by pretending to be the "practical" people who actually "care" about the bottom 20% and similar.

And I'm hardly going all the way back to Adam Smith and John Locke...more like Milton Friedman, Tom Sowell, Ron Paul, etc...

jjc112: Are you Joe the Plumber?
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"You know I look gangster in my pink polo"

The Economist:

http://www.economist.com/world/unitedstates/displayStory.cfm?story_id=12...

obama wants "his kind" to get to have welfare and food stamps for free. what a sack of shit.

Nice job on the racism. Now please go die.

P.S.: You are the sack of shit.

Bottom line, do not take my money away and give it to someone else that is less fortunate than me. Giving them wealth will not teach them how to improve their lives. With the exception of rare circumstances we all have pretty equal opportunity to make it. This obviously is not my regular account but I will use this for all political posts.

I just do not understand how taking money from those that have worked for it and giving it to those that are less fortunate is making them any better. I come from an area where the inner city schools are in REALLY rough shape. The children essentially run the school. These "thug life" kids would be on the receiving end of my taxes. Chances are they wont do a damn thing to somehow add value to this country. I just cant see to helping out them is fair.

Hi,

I do not have the data for USA, but in France, a traditionally left wing/democrat you name it country, the part of capital revenue in GDP has risen 9% vs the part of work revenues in GDP; and this over the last 10 years.

So I would not worry THAT much, rich always manage to lobby their way to skewing wealth distribution to their side...

Some comments are coming quite scary to me. Even Mr Adam Smith cited functions and services that government should provide (and that have to be paid for): army, police, schools, hospitals... functions that are necessary for the general welfare, but that private inciative won't bother to finance (and yes, I include schools, a school in a crappy zone will never show a profit, but I still believe they are necessary).

You can add to that my favorite: I+D for very long run research (is NASA usefull? I hope it is, because you guys are sinking millions each year in it...).

Wow, I actually agree with you on this, Edmundo. If all schools were private, the cost would be [much] smaller than it is right now. And competition forces schools to be efficient.But then the poor children that couldn't afford it would be assisted by private individuals, and charities
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Your closet will never be the same again.

If you could just point out where I said the federal government shouldn't be responsible for national defense, that'd be great. Or where no level of government should pay for law enforcement and education (through the secondary level). [Hint: you won't find this, so don't bother looking]

Only ~35-40% of the federal government is funded through the federal income tax. The feds should NOT be involved in education - the Department of Education has done NOTHING for America's educational system. Schools should be responsible to parents (through, for example, school choice programs, where, rather than just tossing money at schools for teaching kids to read by the 10th grade, parents are given educational credits and can choose where to send their kids, giving schools both public and private a real incentive to improve), not federal government bureaucrats. They shouldn't be involved in tons of other things - Dept. of Transportation, FEMA, EPA, domestic surveillance, the running of distressed debt and equity hedge funds, TONS of entitlement and welfare programs (that have done NOTHING but make things worse), etc.

Is NASA useful? I'm not sure. If it qualifies as defense spending, then yeah, maybe. But is the NSF useful? No. Why should the federal government be directing fundamental research rather than companies that are directly connected to the market place? Maybe the feds should be investing in fundamental R&D (since the social return of such investments tend to be very high, but the return to the individual providing the initial funds are low), but they don't need an organization run by federal government bureaucrats actually directing the research. It would be much better, for instance, to provide tax breaks/credits to companies investing in fundamental R&D, than to have some government agency trying to direct such expenditures.

I'm not against legal, useful government spending. But Bush increased spending, entitlements, and economic regulation more than any president since LBJ's "Great Society" bullshit. Increased spending, increased entitlements, increased regulation, and increased taxation are not "progressive" or the "change we need." (Or even change at all).

Again, that's a rejection of big-government Republicans is what that is. Not a rejection of real fiscal conservatism (in the Reagan mold)...

Read: http://www.cato.org/pub_display.php?pub_id=9781